Senate President Francis “Chiz” Escudero has filed several bills aimed at strengthening micro, small, and medium enterprises (MSMEs) by reducing their tax burden and improving access to credit.
The pro-MSME bills, among Escudero’s top 10 legislative priorities for the 20th Congress, highlight the sector’s vital role in the economy, accounting for 67% of total employment nationwide.
Key proposals include a three-year income tax exemption for MSMEs and a 25% deduction from taxable income based on labor expenses. The senator from Sorsogon also seeks to cut the optional tax on gross sales or receipts from 8% to 5%.
To simplify compliance, he proposes reducing creditable withholding tax rates to two: 1% for goods and property purchases, and 2% for services.
Another measure would reinstate the mandatory credit allocation for MSMEs by all lending institutions for 10 years, improving access to much-needed financing.
“These will allow our MSMEs, particularly those that are struggling financially, to continue their operations, hire more people and even consider an expansion in the future,” the Senate President said.IMT
