Sen. JV Ejercito has filed a bill seeking to grant temporary tax relief and employment incentives to micro, small and medium enterprises.
Senate Bill 1622, filed on December 16, proposes a three-year income tax exemption for qualified MSMEs, along with an additional 25 percent deduction on labor expenses for every employee hired. The measure covers single proprietorships, cooperatives, partnerships, and corporations classified as MSMEs.
In the bill’s explanatory note, Ejercito cited Philippine government data showing that MSMEs account for about 99.6 percent of all registered business establishments nationwide. The sector employs a large share of the country’s workforce and represents the bulk of enterprises operating at the local level.
“Despite their vital contribution to the economy, MSMEs continue to face serious challenges that threaten their growth and sustainability,” Ejercito said in the bill.
The proposal lists limited access to financing, high operating costs, regulatory and compliance requirements, lack of business knowledge, competition from larger firms, and limited market access as continuing constraints faced by smaller enterprises.
Under the bill, MSMEs would be exempt from paying income tax for three years, allowing them to retain more capital for operations and hiring. The additional labor expense deduction is intended to encourage employers to expand their workforce.
The measure also notes the existence of government programs supporting MSMEs through financing and capacity-building initiatives, while calling for additional legislative support as the economy becomes more technology-driven and integrated with global markets.
“This bill will help them continue operating, create more jobs, and expand their businesses,” Ejercito said.
The proposed measure has been filed for consideration in the Senate.
