Senator Bam Aquino on Monday filed a bill seeking two-year tax exemptions for new businesses, saying such tax holidays are needed to encourage entrepreneurship among Filipinos.
Aquino said Senate Bill 2217, also known as the Start-Up Business Bill, would provide these new enterprises the proper time to stand on their own as they try to create a niche in the market.
“The intervention provides the opportunity for these start-ups to get organized, establish their business operations and market base,” said Aquino, chairman of the Committee on Trade, Commerce and Entrepreneurship.
The measure proposes a tax exemption from operations for two years, given that these enterprises are not an affiliate, a subsidiary or a franchise of any existing company.
Also, these start-ups must not have any other existing registered company in case of a sole proprietorship.
“They should have at least five percent share with no nominal stockholders and a in case of a corporation, a venture capitalist should only have up to fifteen percent of total outstanding shares,” Aquino said.
The senator believes that the passage of his bill will legitimize the start-ups’ role in the economy and the acknowledgement of the State’s commitment to innovation.
“Start-ups have the potential to spur and spread such innovation. As these enterprises have likewise the appetite to take on more risks, they would fuel creativity and challenge existing ways of doing business,” he said.
Aquino added that the growth of start-ups would be beneficial for more Filipinos who have the innate talent of working with limited resources but able to fashion out contemporary ideas.
“Let them grow, and by the end of two years, they will be able to pay the right taxes and join the formal economy,” the lawmaker stressed.
“The idea is not to exempt businesses, but to give them space to grow,” he said.
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