New Filipino lawmakers are urging by Harvard University tax experts to prioritize supporting MSME’s economic reforms and attract foreign investment
Mon Abrea, trained by Harvard University tax expert and chief tax advisor to the Asia Consulting Group (ACG), called on newly elected Filipino lawmakers to speed up critical economic reforms that will not only attract foreign investors, but also foreign investors, but also protect and support micro, small and medium-sized enterprises (MSMES).
Mr Abrea stressed that MSME, which accounts for more than 99% of the Philippines’ businesses, is the backbone of the economy. However, they often face disproportionate tax compliance, which can hinder their growth and competitiveness. To address these challenges, Mr. Aberia advocates the following reforms:
- Revised MSME classification: Increase the revenue and asset threshold for micro-enterprises from P5 million to P5 million, and eliminates outdated and redundant bookkeeping requirements, as VAT taxpayers have submitted the Summary List of Sales and Purchases (SLSP) to the Internal Revenue Agency (BIR).
- The uniform tax rate for small businesses is 10%: Implement a simplified tax system for small businesses, with annual sales of pesos or less, with a minimum tax rate of P10,000 and a maximum tax rate of pesos 10 million without the need for a large amount of documentation or audit.
- Risk-based audit: Adopt a risk-based audit system that prioritizes high-risk taxpayers, reduces compliance burden on MSMES, and focuses resources on identifying large-scale tax evaders.
- Authorized Investment Promotion Agency (IPA): Grants more authority and autonomy to IPAs such as the Philippine Economic Zone Authority (PEZA), allowing them to handle all government and regulatory requirements for registered commercial enterprises (RBES), including taxes.
- Completely automated or abolish BIR: Implement full automation of tax management or consider abolishing BIR to address bureaucracy and corruption, thereby inspiring voluntary compliance and attracting more foreign investors.
Mr. Abrea’s advocacy is consistent with his previous contribution to tax reform, including his consultative role in amending businesses and in the revisions of tax benefits for businesses to maximize the economic (create more) Act (create more) Act, and he recommends the creation of a separate VAT refund center and electronic tax profit and loss system. ACG plays an important role in shaping priorities transparency and business interests.
“The proposed reforms are crucial to creating a business-friendly environment that supports MSME and attracts foreign investment.” “By simplifying tax compliance and authorizing IPAs, we can promote economic growth and create jobs.”
ACG continues to interact with policy makers and stakeholders to advocate for these reforms and ensure they are implemented quickly.
Media interview, please contact Rafael James Suarez, Executive Assistant of Asia Consulting Group:
Email: rafael@acg.ph
Tel: 0917-116-9864
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