Senate passes ‘Go Negosyo’ bill to boost job creation-A A +A
Monday, February 24, 2014
THE Senate approved Monday a bill seeking to boost job creation by promoting the development of small business enterprises.
Senator Paolo Benigno "Bam" Aquino IV, sponsor of Senate Bill 2046, also known as the Go Negosyo Act of 2013, said the proposed legislation seeks to create more jobs around the country by boosting support for micro, small and medium enterprises (MSMEs).
The chairperson of the Senate committee on trade, commerce and entrepreneurship, added that at least 66 percent of all jobs in the labor force are created by the SME sector.
"The numbers show that boosting the MSME sector will help us create more decent, sustainable jobs that can lift many Filipinos out of poverty,” said Aquino.
He added that to create more jobs, government must help micro enterprises grow and enter the formal economy.
"Our goal should be to help the micro 'graduate' into small, and the small graduate to medium, so that they grow and generate revenue and jobs for our communities," he added.
Senate President Franklin Drilon commended the passage of the bill, saying, "It is a welcome and timely development, and will be vital in expanding inclusive growth across socioeconomic classes."
"This bill is one of the most effective steps towards that goal," he said.
Under the bill, Negosyo Centers shall be established in all cities and municipalities to be supervised by the Department of Trade and Industry (DTI). The centers will assist entrepreneurs on how to set up and manage their businesses, and also facilitate business registrations.
In addition, Aquino said the centers will also help prospective and current entrepreneurs look for different forms of financing.
The Go Negosyo Centers will also provide courses and development programs, training, give advice on business conceptualization and feasibility, financing, management, capability building, human resources, marketing and other services to support the needs of the MSMEs.
"At the heart of the Go Negosyo Bill is infrastructure and support for MSMEs at the city and municipal level so that each local government is able to boost MSME growth and provide jobs and livelihood for their constituents," Aquino said.
Senate President Pro-Tempore Ralph Recto, who introduced amendments to the bill, said the government will play a more active role in the development of the MSME sector.
Recto said that under the proposed legislation all micro enterprises shall be exempted from paying income tax with respect to income received from the operations of the enterprises.
Recto added that all micro enterprises shall be exempted from the coverage of the minimum wage law, provided that their employees will be covered by Social Security System, housing and health care benefits.
He said registered small and medium enterprises, which shall hire additional employees subsequent to its registration under the Act, shall be allowed a deduction of P40,000 from its gross income for each employee hired in a given taxable year, provided that the maximum allowable deduction from the gross income shall not exceed P80,000.
To avail of the tax exemption benefit, Recto said the entrepreneurs should employ its worker for at least a year. The incentive, he further said, can only be availed for five years from the effectivity of the law.
Recto said the MSME shall also be exempted from the Value-Added Tax (VAT) and other percentage tax as long as their gross annual sales shall not exceed P3 million.
Local government units are also encouraged either to reduce the amount of applicable local taxes, fees and charges imposed or to exempt the MSMEs from the payment of local taxes, fees and charges, Recto added.
Several other incentives in loan financing shall be made available to the MSME sector to encourage them to set up their businesses and to ensure that they are successful in their endeavor.
Aside from Aquino and Recto, the Go Negosyo bill is co-authored by Senators Sergio Osmeña III, Miriam Defensor Santiago, Jinggoy Ejercito Estrada, Loren Legarda, Grace Poe, and Cynthia Villar. (Camille P. Balagtas/Sunnex)