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Monday, April 21, 2003
Millan: Breathing space
By Tai-pan Millan
SMOKE still covers the skyline of the battleground. Rioting and looting still rule the major thoroughfares. But the end of the war is near, if it isn't practically over yet. At least the world can somehow go on with its life now, albeit uncertainties still lie ahead.
This war was a real major issue, dividing peoples, dividing nations. With all the chaos and the confusion came hesitation and apprehension. Businesses went from bad to worse, except for those related to the war effort.
Now that it has almost reached its conclusion, it is hoped that businesses will once again rise above the ruins of the conflict. With the renewed confidence in the business environment should come government support, most especially to small businesses.
This is where the Barangay Micro Business Enterprises Act (RA 9178) finds most meaning and relevance. This relatively new legislation aims to provide the necessary boost to micro businesses, among others so that they can at least survive the onslaught of the war and make themselves viable and competitive amidst all the challenges of the crisis.
Those covered by the law are barangay micro enterprises. These are business entities engaged in the production, processing or manufacture of goods and services with total assets not exceeding 3 million pesos.
The said law provides two major incentives for barangay micro enterprises. First, small businesses are exempted from paying tax and other fees for income arising from the operation of their enterprise. Second, small businesses are exempted from the Minimum Wage Law.
As for the first, the exemption from payment of tax and other fees would spell a whole lot of difference in the viability and competitiveness of small businesses, especially at an uncertain time such as now. They deserve such a tax exemption, if only to give them time to first be stable and secure.
As for the second, while employers will definitely benefit from the exemption from payment of the minimum wage, the employees will be facing difficulties of their own, down as they already are. The caveat of the law, however, is that while barangay micro enterprises are exempted from the coverage of the Minimum Wage Law, all the employees of these small enterprises shall be entitled to the same benefits given to any regular employee such as social security and health care benefits. The strict implementation of the provision of these benefits must be ensured, if only to protect the welfare of our lowly workers.
Furthermore, there are three other important areas in the said law that deserves attention. These areas are basically the support systems that would complete the incentive package for micro businesses.
First, local government units are encouraged to significantly reduce the amount of local taxes, fees and charges imposed or to outrightly exempt these small businesses from local taxes, fees and charges.
Second, government lending institutions shall set up a special credit window that will service the financing of small businesses.
Third, government shall also set up an endowment fund of 300 million pesos for small businesses to be taken from the proceeds of Pagcor.
Given all of the above, micro businesses must now take advantage of this singular opportunity to jump into the ring again and fight joblessness and helplessness. For many others who have long been planning, or dreaming, to start their own small businesses, now is the time.
The Barangay Micro Business Act is truly a timely piece of legislation. It gives back hope to the hopeless. It gives us some major breathing space. (Comments are most welcome. Please send them to tai-pan@brains-for-hire.com)
(April 21, 2003 issue)
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