Aside from reducing personal income tax, the government must also provide small businesses with lower income tax rate and a simplified tax process to stimulate their growth, Senator Bam Aquino said over the weekend.
While he is certain that the personal income tax reform will be passed, the senator said the government must include tax reform for small businesses in its tax reform package.
“With all the support from the executive, we’re certain the personal income tax reform will be passed. What we should also focus on is the Small Business Tax Reform Act to help our small businessmen,” said Aquino, referring to his Senate Bill No. 169.
Aquino’s bill seeks to provide small businesses with a lower income tax rate, VAT exemption and simplified filing of taxes.
Under the measure, all small businesses shall be exempt from payment of income tax for the first three years of operation from the date of establishment and will be subjected to lower income tax rates beginning on the fourth year.
Small businesses earning less than P300,000 will be exempted from income tax while those with income ranging P300,000 up to P10,000,000 will be subjected to a 10-percent income tax rate.
“This bill also proposes the lowering of the income tax rate for MSEs [micro and small enterprises] and an exemption from VAT, among other methods to help our small businesses grow,” he said.
He also stressed the need for simpler taxation, saying the Philippines placed 126th out of 189 economies in the Ease of Paying Taxes 2016 study.
“This must change. The Small Business Tax Reform Act will simplify tax procedures and unburden our small businesses of the complex tax process,” he said.