A senator of the Philippines reportedly has introduced a bill to lower the tax rate on microenterprise development institutions from an unspecified rate to 2 percent “of their gross income in lieu of all national and local taxes”. The proceeds would go to the People’s Development Trust Fund, which provides financial and technical support to microenterprises. The bill also creates an “accrediting body to be chaired by the National Anti-Poverty Commission (NAPC) tasked to identify and recognize micro-development institutions and to monitor their activities pursuant to the provisions of the act.” The intent of the tax rate reduction is to reduce poverty and increase access to credit [1].
Approximately 90 percent of enterprises in the Philippines are classified as microenterprises [2]. As of 2010, the 93 microfinance institutions (MFIs) in the Philippines that report to the US-based nonprofit Microfinance Information Exchange (MIX) have an aggregate gross loan portfolio of USD 632 with 3 million active borrowers and deposits of USD 454 with 3.7 million depositors.
By Brendan Millan, Research Associate
Sources and Resources:
[1] Manila Bulletin Publishing Corporation: “Lower Tax on Microenterprises Proposed” by ChinoLeyco. http://www.mb.com.ph/articles/356492/lower-tax-on-microenterprises-proposed
[2] The Daily Guardian: “Bill Lowering Taxes on Microenterprises Hailed” by Francis Angelo. http://thedailyguardian.net/index.php/local-news/9296-bill-lowering-taxes-on-microenterprises-hailed
MicroCapital.org Article, March 1, 2012, “Philippine Government Promotes Microinsurance with Support from Asian Development Bank”, https://www.microcapital.org/microcapital-brief-philippine-government-promote-microinsurance-with-support-from-asian-development-bank-adb/
MicroCapital.org Article, February 9, 2012, “Microfinance Credit Bureau (MiDAS) Launched by Microfinance Institutions in the Philippines”, https://www.microcapital.org/microcapital-brief-microfinance-credit-bureau-midas-launched-by-microfinance-institutions-in-philippines/
MicroCapital.org Article, December 12, 2011, “Philippine Central Bank May Raise Microfinance Loan Ceiling, Roll Out Central Credit Information Corporation (CCIC) by Year End”,https://www.microcapital.org/microcapital-brief-philippine-central-bank-may-raise-microfinance-loan-ceiling-roll-out-central-credit-information-corporation-ccic-by-year-end/
MicroCapital.org Article, January 19, 2011, “Bankers Association of the Philippines – Credit Bureau Incorporated (BAP-CB) Offers Rural Banks, Microfinance Providers Access to Credit Information System”, https://www.microcapital.org/microcapital-brief-bankers-association-of-the-philippines-bap-to-launch-online-credit-information-bureau-run-by-microfinance-institutions-mfis/
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