{"id":253259,"date":"2020-04-27T06:00:48","date_gmt":"2020-04-27T10:00:48","guid":{"rendered":"https:\/\/canadianinquirer.net\/v1\/?p=253259"},"modified":"2020-04-27T06:00:48","modified_gmt":"2020-04-27T10:00:48","slug":"dof-seeks-to-give-small-businesses-more-time-to-recoup-losses","status":"publish","type":"post","link":"https:\/\/canadianinquirer.net\/v1\/2020\/04\/27\/dof-seeks-to-give-small-businesses-more-time-to-recoup-losses\/","title":{"rendered":"DOF seeks to give small businesses more time to recoup losses"},"content":{"rendered":"
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FILE: Finance Secretary Carlos Dominguez III in Malaca\u00f1ang on January 8, 2018. TOTO LOZANO\/Presidential Photo<\/figcaption><\/figure>\n
MANILA<\/strong>\u00a0\u2013 The Department of Finance (DOF) has proposed to extend the net operating loss carry-over (NOLCO) for small businesses to five years, with the government absorbing as much as PHP139.6 billion in the form of foregone tax payments to help these enterprises recoup their losses resulting from the economic fallout triggered by the coronavirus disease 2019 (Covid-19) pandemic.<\/div>\n
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Finance Secretary Carlos Dominguez III said stretching the NOLCO by two more years, which, under the National Internal Revenue Code (NIRC), is up to three taxable years only, would require Congressional approval.<\/div>\n
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\u201cWe will propose to Congress an extended NOLCO of five years for net losses that will be incurred in 2020. This means that a small business\u2019 losses this year may be deducted from their income for up to the next five years for tax purposes. The purpose of extending NOLCO is to give them more time to recoup their losses arising from implementation of the enhanced community quarantine (ECQ) and other measures to contain the spread of Covid-19,\u201d Dominguez said.<\/div>\n
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Dominguez said DOF estimates show that financial losses of small businesses will amount to PHP465.3 billion as a result of the ECQ and other containment measures that have forced them to temporarily close shop or to continue operating but with only a skeletal force.<\/div>\n
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\u201cThe longer NOLCO period will have the effect of lowering the tax payments between 2021 and 2025 of affected small businesses by a combined estimated total of PHP139.6 billion,\u201d the finance chief said.<\/div>\n
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DOF estimates show that small businesses operating in malls and other retail outlets would incur losses of about PHP461 billion, while those that have remained open but on skeletal force capacity will lose around PHP4.3 billion.<\/div>\n
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Dominguez said the enhanced NOLCO for small enterprises to cover losses in 2020 is similar to the tax relief measures being adopted in the United States (US) and China to provide relief to their respective business sectors.<\/div>\n
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Based on the existing provisions of the NIRC, net operating losses, which had not been previously offset as a deduction, shall be carried over as a deduction from gross income for the next three taxable years immediately following the year of such loss.<\/div>\n
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Dominguez said the DOF\u2019s enhanced NOLCO proposal forms part of the three-pronged rescue program to help small businesses and their workers survive the economic repercussions of the Covid-19 pandemic.<\/div>\n
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The finance secretary tackled this proposal briefly during a recent virtual meeting of the economic stimulus cluster of the House of Representatives’ Defeat Covid-19 Committee (DCC) chaired by Speaker Alan Peter Cayetano and co-chaired by Majority Leader Ferdinand Martin Romualdez.<\/div>\n
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Dominguez said the first measure launched by the government under the Small Business Relief Program (SBRP) is the Small Business Wage Subsidy (SBWS) program, which will provide around 3.4 million workers in the formal sector with salary subsidies amounting to a combined PHP51 billion for two months.<\/div>\n
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The wage subsidies range from PHP5,000 to PHP8,000 per month per employee for two months, depending on the minimum wage levels in the regions where the workers are employed.<\/div>\n
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Of the 3.4 million employees, 2.6 million are in the BIR alpha list and will be given first priority to incentivize compliance of registering businesses with the Bureau and with the Social Security System (SSS).<\/div>\n
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The remaining 800,000 employees are not in the alpha list, and will be given second priority.<\/div>\n
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Another measure is to provide credit guarantees for up to PHP120 billion worth of loans to small businesses most affected by the sudden stop of economic activity resulting from the ECQ and other containment measures.<\/div>\n
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\u201cThe credit guarantee program will provide small businesses easier access to bank financing, which tends to contract during crisis periods,\u201d Dominguez said.<\/div>\n
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Dominguez said the guarantees extended by the government will help improve the cash position of small businesses to enable them to pay for fixed costs such as wages, rental, amortizations and interest payments.<\/div>\n
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The expanded budgetary powers granted by Congress to the President a week after the implementation of the ECQ has enabled the government to formulate a four-pillar socioeconomic strategy to blunt the impact of Covid-19 on the Filipino people and the economy.<\/div>\n
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This four-pillar strategy now has a combined value of USD29.3 billion (PHP1.49 trillion) or about 8 percent of the country\u2019s gross domestic product (GDP).<\/div>\n
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Dominguez said it covers providing poor and low-income households, small-business employees and other vulnerable groups emergency and wage subsidies; marshaling the country\u2019s\u00a0 medical resources and ensuring the safety of its healthcare front-liners; fiscal and monetary actions to finance emergency initiatives and keep the economy afloat; and\u00a0 an economic recovery plan to create jobs and sustain growth under a post-quarantine scenario.<\/div>\n","protected":false},"excerpt":{"rendered":"

MANILA\u00a0\u2013 The Department of Finance (DOF) has proposed to extend the net operating loss carry-over (NOLCO) for small businesses to …<\/p>\n","protected":false},"author":33,"featured_media":222278,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[19],"tags":[],"class_list":["post-253259","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","mauthors-philippine-news-agency"],"_links":{"self":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/253259","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/users\/33"}],"replies":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/comments?post=253259"}],"version-history":[{"count":1,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/253259\/revisions"}],"predecessor-version":[{"id":253260,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/posts\/253259\/revisions\/253260"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media\/222278"}],"wp:attachment":[{"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/media?parent=253259"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/categories?post=253259"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/canadianinquirer.net\/v1\/wp-json\/wp\/v2\/tags?post=253259"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}