Bam wants lower income tax, VAT exemption for small businesses

To further stimulate the growth of small businesses in the country, Sen. Bam Aquino is pushing for a measure that provides them with lower income tax rate, VAT exemption and other privileges.

Under Sen. Bam’s Senate Bill No. 169 or the Small Business Tax Reform Act, all small businesses shall be exempt from payment of income tax for the first three years of its operation from date of establishment and will be subjected to lower income tax rates thereafter.

 As defined in the bill, small businesses are micro and small enterprises whose annual gross revenue does not exceed P50,000,000.

“This bill also proposes the lowering of the income tax rate for MSEs and an exemption from VAT, among other methods of stimulating growth in MSEs as opposed to hindering it,” said Sen. Bam.

 The measure also pushes for simpler bookkeeping, a special lane and assistance desk for MSEs, exemption from tax audit, annual filing of returns, and payment in installment.

 Sen. Bam stressed the need for a simpler taxation, saying a joint study by PWC and the World Bank, Paying Taxes 2016, placed the Philippines 126th out of 189 economies in Ease of Paying Taxes.

 “This must change, which is why we are asserting the Small Business Tax Reform Act as a measure to simplify tax procedures and unburden our small businesses of the complex tax process,” said Sen. Bam.

 By streamlining the country’s tax system, it will boost the chances of our local enterprises to succeed and, in turn, generate prosperity and livelihood for more and more Filipino families.

Sen. Bam Welcomes APEC’s ‘Stamp of Approval’ on MSMEs

Sen. Bam Aquino called the Asia-Pacific Economic Cooperation’s (APEC) recognition of micro, small and medium enterprises’ role in poverty eradication as “stamp of approval” on the Senate’s work to strengthen entrepreneurship in the country.
In a joint communiqué at the conclusion of the APEC Summit, the 21 APEC leaders recognized the significance of MSMEs in poverty eradication and inclusive growth and committed to work for their globalization.
“Practically, lahat po ng tinututukan namin sa Senado, inclusive finance, support for MSMEs at E-commerce, nahagip siya sa APEC na ito. Nagkaroon siya ng stamp of approval na itong ginagawa ninyo, talagang mahalaga ito sa kapakanan ng ating bayan at APEC economies,” said Sen. Bam.
A former social entrepreneur and a staunch advocate of MSMEs as chairman of the Senate Committee on Trade, Commerce and Entrepreneurship, Sen. Bam said APEC’s recognition solidified his long-standing belief and advocacy that empowering MSMEs can help eradicate poverty.
Sen. Bam pushed for the passage of Republic Act No. 10644 or the Go Negosyo Act, which provides for the establishment of Negosyo Centers in all provinces, cities and municipalities in the country to help MSMEs.
“Through some of our programs like the Negosyo Centers, sinisikap po natin na nandiyan ang support for our MSMEs. Sa ngayon, mayroon na tayong 116 Negosyo Centers sa buong Pilipinas,” the senator said.
“Nandiyan po iyan para magbigay ng training, capacity building, market linkage at financing sa ating MSMEs,” he added.
Aside from the Go Negosyo Law, Sen. Bam also worked for the passage of other laws that support MSMEs in the country.
Among them are Republic Act No. 10693 or the Microfinance NGO Act, Republic Act No. 10667 or the Philippine Competition Act, Republic Act No. 10668 or the Foreign Ships Co-Loading Act and Republic Act No. 10679 or the Youth Entrepreneurship Act.

Is crowdfunding the future of businesses in PH?

MANILA, Philippines – How does crowdfunding work? What solutions can it offer business startups and social enterprises in the Philippines?


According to Senator Bam Aquino, the current banking system makes it very difficult for small and medium enterprises (SMEs) and business startups to get the financing they need. But for large corporations, it is very easy to get loans – in fact, banks knock at their doors with offers.


“If you’re a micro to pre-medium business and you need around P500,000 to P5 million but you don’t have collateral – even if you have a contract, idea or a business model – you still won’t get the financing you need,” the senator added.


This is why Filipinos need to look for alternative finance sources like crowdfunding, Aquino noted.


During the 1st Philippine Crowdfunding Conference in Manila on Wednesday, March 18, business experts and successful entrepreneurs discussed crowdfunding and crowdsourcing and how these concepts can be applied in Philippine businesses.


Crowdfunding for small businesses


Crowdfunding is the thriving practice of funding a venture through raising monetary contributions from a group of people. The advancement of social media has particularly made this practice successful for business startups in other countries.


Aquino believes it can work for the Philippine economy.


“As we go around different areas, we find that putting up a small enterprise is becoming the best solution for Filipinos. But they need the right support to be able to turn their ideas into fruition. Crowdfunding might be the best way to move this sector forward,” Aquino said.


The senator, who authored the Go Negosyo Act of 2014, emphasized the importance of empowering social enterprises and SMEs in promoting inclusive growth in the country.


“If we will support our SMEs, who’s to say that we can’t enter the next phase of where the Philippines should be – a middle income economy where opportunities are (available) for more Filipinos?” Aquino said.


He added: “Each part of the chain of our countrymen should be able to get that opportunity to put up their business and turn their ideas into fruition. This is the best place for crowdfunding to come in.”


Crowdfunding and social media


Crowdsourcing Week Founder Epi Nekaj says crowdsourcing and crowd funding are causing disruptions in the world’s finance systems.

Epi Ludvik Nekaj, founder of Crowdsourcing Week, said crowdfunding started because of two major factors – social media and the world financial crisis in 2008, which gave birth to crowd companies.


“Millions of people right now are becoming bankers. That’s why banks right now are trying to figure out if their business model is broken or outdated,” he said.


The Internet continues to contribute to the growth of crowdsourcing and crowdfunding. According to experts, everyone will be connected to the Internet by 2035.


“This means the future of content is human-powered content. Who runs the Internet? There’s no single entity that runs it. You are the Internet. We are the Internet,” Nekaj said.


He added: “Crowdsourcing is about passion. It’s about talents, skills, and resources. When we talk about crowdsourcing and crowdfunding, we need to make sure that we’re really tapping the resources that the crowds have.


Crowdsourcing spawns innovation and social media spawns connection.”

Nekaj said that there are 4 types of crowdfunding platforms. These are:


  • Donation – the crowd gives money or other resources to support the cause.
  • Reward-based – the crowd gives money in exchange for a reward (a product or service) that the company will provide or produce
  • Equity-based – the members of the crowd become part-owners of the company raising funds
  • Lending – the company merely borrows the money from the crowd with a legally binding contract that the loan will be repaid


In Asia, Nekaj noted that crowdfunding is more inclined toward equity and lending. This is because these systems challenge founders to finish the project – since 70% of crowdfunding programs do not deliver on time.


“There is so much potential in Asia. By 2025, the volume of investment crowdfunding will be $92 billion, according to experts,” he added.


Harnessing the power of the crowds


Crowdsourcing efforts have actually been used in past projects in the Philippines. Rappler’s investigative desk editor Chay Hofilena discussed how the news website has utilized crowdsourcing in its past efforts.


In Football for Peace, Rappler and the Philippine marines were able to raise 2,400 indestructible balls for kids in conflict areas through donations.

Meanwhile, Project Agos constantly calls out for volunteers who help scan social media for calls of help during disasters.

All these campaigns were amplified by social media.


“We’ve seen that social media has the potential for social change. It’s a mobilization tool we can use to harness the good in people,” Hofilena said.


Crowdsourcing has also democratized the way media organizations cover news.

“It’s no longer a top-down editorial approach. Now, the public can set the news agenda by stating the issues that concern them and issues that matter to them. It has allowed the media to become real agents of change,” she added.


The way of the future


Nekaj believes crowdfunding will continue to change the world’s finance systems in the future.


“A bank is a place that will lend you money if you can prove that you don’t need it. Alternative financing is developing because of this. We don’t need more banks. We need more banking,” he added.


While social media has become a powerful tool in crowdsourcing and crowdfunding, people still need to wield it carefully he said.


“There’s nothing wrong with social media, but we have to be socially productive. You should be that entity that thinks forward. We need to be part of a socially productive ecosystem in crowdsourcing,” Nekaj stressed.


Source: Rappler



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