A NOTEWORTHY bill in the Senate—Senate Bill 2643 or the Jobs Act of 2011—deserves the support of rural community members since it is expected to provide the much needed and timely boost to small businesses.
Sen. Ralph Recto, who sponsored the bill, said the measure aims to harness the potential of 783,000 micro, small and medium enterprises (MSMEs) in creating jobs. This would be done through additional incentives and easier registration requirements for newly formed MSMEs.
The bill recognizes the strength of small businesses, given their sheer number, in providing jobs.
In sponsoring the bill, Recto said the MSME sector has the potential of addressing the unemployment problem with the combined wallop of a corporate giant’s total workforce if the jobs to be created were put together.
He noted, for instance, that if each of the 783,000 MSMEs hires just one more worker, this would have the combined effect of employing 783,000 Filipinos.
Recto cited government figures showing that in 2006, newly established MSMEs altogether employed 3.3 million individuals compared with 1.6 million jobs provided by bigger enterprises.
Several laws have been enacted to enhance the capability of MSMEs, such as Republic Act (RA) 6977 or the Magna Carta for Small Enterprises, RA 9178 or the Barangay Micro Business Enterprises Act of 2002, and RA 9501 or the Magna Carta for Micro, Small and Medium Enterprises. Despite these, the growth of MSMEs has been slow.
The basic problem for MSMEs is the gauntlet of red tape they encounter in business registration, one reason for many of them not to register and remain part of the underground economy.
Under the bill, small enterprises with assets not exceeding P5 million will be exempt from income tax payments, the minimum wage law, value added tax (VAT) registration and percentage tax payments that would drastically reduce paper work for small firms as well as provide them more capital to grow their businesses.
Micro-enterprises will be required only to register with the city or municipal treasurer to be formally enlisted as an ‘MSME’ while small and medium enterprises (SMEs) will have to register with the Department of Trade and Industry (DTI) to avail of incentives and benefits under the bill.
Recto noted that under the current set up, the energy and enthusiasm of an entrepreneur are already sapped out by the time they start business with the dizzying requirements.
SMEs, or those with assets of between P5 million and P15 million for small businesses, and from P15 million to P100 million for medium-sized businesses, would also be exempt from registering for VAT payments if their annual sales do not exceed P3 million.
The bill also allows SMEs five years tax deduction for up to two new workers hired at P40,000 each or a maximum of P80,000 in allowable tax cuts. The deductions would apply only if the two new hires would remain employed for at least a year.
MSMEs will also be entitled to a single registration effective for two years to avoid the tedious yearly registration. MSMEs would also be given access to cheap loans by mandating lending institutions like banks to set aside eight percent of their loan portfolio to the sector.
Banks, in return, would be exempt from paying gross receipts tax (GRT) for loans extended to MSMEs.
Latest government statistics show that the number of unemployed Filipinos stood at 2.86 million, of which 80 percent is between the ages of 15 and 34.
The bill thus makes it imperative for the state to facilitate the generation of jobs for its citizens through any means within its power.
This can be done more effectively by giving small businesses around the country the capability to employ more Filipinos.
Short URL: http://www.manilatimes.net/?p=2921
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CARLOS ANI - SEEDFINANCE Corporation - http://www.seedfinance.net
Email: carlosani@seedfinance.net
Landline: +63495010127 Cellphone: +639152919580
DEVJOBS - http://www.devjobsmail.com
PHILDEVFINANCE - http://phildevfinance.posterous.com http://phildevfinance.wordpress.com
CONSULTING - http://www.carlosani.com
My Clippings - http://www.myclipps.posterous.com
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