While change has long been overdue on the government’s updating of the current tax scheme, small and medium businesses remain confident that the administration will make good in its promise to create and implement a better tax program that can attract more foreign investors to the country and encourage more Filipinos to explore entrepreneurship.
These concerns were raised by the Association of Filipino Franchisers Inc. (AFFI) in a recent meeting with Bureau of Internal Revenue commissioner Caesar Dulay. The trade organization known for its support of micro, small and medium enterprises expressed its support of the government’s efforts in prioritizing the modernization of the two-decade-old tax system.
“We’ve been proposing these reforms for the longest time, and we’re really happy to be seeing some action finally happening. We’re still in the very early stages but, at least, we’ve already taken the first steps,” said tax expert and AFFI vice president for government relations, Raymond Abrea of the Center for Strategic Reforms Philippines (CSR Philippines).
Government agencies like the Department of Finance, Department of Trade and Industry, Bureau of Customs, and Bureau of Internal Revenue have started working in the past months to prepare for the submission of a comprehensive tax reform package this September.
Some of the most anticipated areas from the plans are the reduction of the corporate and individual income tax rates to 25 percent, tax amnesty and the implementation of the Tax Incentives and Management Act (TIMTA).
The simplification of the tax system, cutback on income tax and the purging of graft and corruption in government agencies involved in business processing and management, are keys to persuading more small and medium enterprises (SMEs) to register and comply with BIR regulations, according to AFFI president Jerry Ilao.
“SMEs account for about 99 percent of businesses in the country, and that’s a big help in terms of GDP contribution and job creation. But in return, small businesses also need all the help they can get, especially from the government. That’s why we place high hopes in the passing of this tax reform package in the earliest possible time,” said Ilao.
Along with discussing the most pressing concerns of the business community with regards to the current tax scheme, the association has also encouraged BIR Commissioner Dulay to continue ridding the revenue-collecting agency of red tape and corruption.
“A lot of people have this concept of how businessmen and tax collectors are always at the opposite ends of the spectrum. That should not be the case if we really want inclusive growth for the country. Entrepreneurs and the government should always be willing to work side by side to improve the lives of the people,” stressed Ilao.