Salceda encourages online MSMEs to register

House Committee on Ways and Means Chairman Rep. Joey Salceda has called on the Department of Trade and Industry (DTI) and the Bureau of Internal Revenue (BIR) to encourage micro, small, and medium enterprises (MSMEs) that trade online to register and become part of the formal economy in order to avail of the benefits in the upcoming stimulus programs.

Salceda said “the widest and most liberal” implementation of exemptions under the Barangay Micro Business Enterprises (BMBE) Law, the Tax Reform for Acceleration and Inclusion (TRAIN) Law, and the Customs Modernization and Tariff Act (CMTA) should be given to MSMEs.

“Online MSMEs are saviors of the economy in this time of the pandemic. In the countryside, like Albay, they are becoming the motive force of the economy in these difficult conditions,” said Salceda.

The solon also said MSMEs are very effective in translating economic stimulus programs and recovery plans into tangible growth and dynamism in the economy.

“They (MSMEs) move faster than most bigger enterprises. They require very little capital to operate. They employ even stay-at-home mothers. And they encourage people to stay at home. I can’t think of a more efficient recipient and multiplier of our supply-side interventions,” said Salceda.

The Albay representative estimates that one million informal MSMEs are doing business online and that most of them qualify for tax exemptions provided in the law. He encouraged these MSMEs to register with the DTI to “provide proof of their existence as a business.”

Salceda also said the DTI through its Negosyo Centers can give good advice on tax compliance and exemptions.

The TRAIN law allows companies with gross sales under P3,000,000 to not register for VAT. Under the BMBE Law (Republic Act 9178), companies with gross assets of less than P3,000,000 are exempt from income taxes. 

 

“Also, while BIR encourages enterprises to file tax returns, note that those earning less than P250,000 are exempt from filing and payment of any income taxes,” added Salceda.

He continues to urge companies already registered with the DTI and whose income threshold has surpassed the amount stated in the above laws to register with the BIR. 

Salceda also explained that Revenue Memorandum Circular 60-2020 of the BIR is not an added burden, but actually gives amnesty to registrants. “ If you register by July 31, your penalties and surcharges for not registering before are forgiven,” he said.

“We need more online MSMEs registered. Kahit wala tayong makolektang buwis ngayon (even if we collect no taxes now). The economic benefits are beyond taxes. My office is doing a policy briefer on the implications of regularizing MSMEs. When they are registered duly, they can borrow. When they can borrow, the liquidity we released in the banking system is maximized. It’s a win for all of us, even without tax collections from MSMEs. I was the first to introduce the concept in our country’s stimulus plans, so we are watching this sector very closely,” he added.