A bill seeking to grant tax exemptions for startup businesses in the Philippines during their first two years of establishment is seen to “lead to the introduction of seed capital into Philippine SMEs (small and medium sized enterprises),” the Hong Kong-based Dezan Shira and Associates said.
Dezan Shira and Associates was referring to Senate Bill 2217 or the Startup Business Bill, which was filed by Sen. Paolo Benigno Aquino, chair of the Senate committee on trade, commerce and entrepreneurship.
“This sort of incentive is great news for Philippine entrepreneurs,” Chris Devonshire-Ellis of Dezan Shira and Associates was quoted in a statement as saying.
“The country tends to encourage a lot of innovation and imagination among many of its bright students, and the fact the government recognizes this is a major step forward to enable young talent to develop into tomorrow’s generation of successful and innovative Asian businesses,” he added.
According to the statement, the proposed two-year tax exemption will apply only to startups that are not an affiliate, a subsidiary, or a franchise of any existing company. They must also not have any other existing registered companies, partnerships or businesses in the case of sole proprietorships.
The said bill by Aquino was reportedly meant to “provide the opportunity for startups to get organized and establish their business operations and market base” and to “legitimize the role of startups in the economy, and acknowledge the state’s commitment to innovation.”
Citing a portion of the bill, the statement noted that startups “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. The establishment and growth of startups would therefore be beneficial to more Filipinos who have the innate talent for shaping contemporary ideas while working with limited resources.”