5 Key Legislations to Encourage Entrepreneurship and Livelihood Endeavors – There are many government support programs already in place to encourage self-employment but unfortunately, not everybody is aware of them. Below are some of the major legislated measure that were passed during the last few years for the benefit of those who would like to start a small business or business enterprises on their own.
1. The Magna Carta for MSMEs under RA 9501 was amended early last year to promote, support, strengthen and encourage the growth and developments of MSMEs in partnerships wit the private sector. Banks (both private and and government) are mandated to increase their loan portfolios from 6 to 8 percent for micro and small and maintain the 2 percent allocation for medium-sized companies. The penalty for non-compliance is not below P500,000. To avail of this financial assistance, these enterprises must be registered first with appropriate government agencies (DTI, SEC, CDA, LGUs).
2. The Cooperative Code was amended early this year under RA 9520. The revise code will strengthen the organizational structure of a cooperative by professionalizing its management and operation to enable the system to contribute to economic growth. The new law retains the earlier provisions to exempt cooperative from paying income tax, VAT, percentage tax, documentary stamp tax, and annual registration fees. Cooperative who bid for government contracts are also given preference under the law.
3. Barangay Micro Business Enterprise (BMBE) under RA 918. While this was passed way back in 2002, not many are aware of its benefits. Provided its capital or assets do not exceed P3 million, a registered enterprise is entitled to the following:
(a) guaranteed registration approval within 15 working days
(b) reduced local taxes and fees
(c) exemptions form income tax and and minimum wage
(d) availability of special financing and credit guarantees windows under DTI’s SME Unified Lending Opportunities for National Growth (SULONG) program
(e) technology transfer; product and management training, and marketing assistance.
4. RA 9281 was signed in early 2004 to “Strengthen Agriculture and Fisheries Modernization”amending RA 8435 that was passed in 1997. Duly registered enterprises are exempted from paying tariff and duties for importation of all type of agriculture and fisheries inputs, equipment and trucks, farm implements and machineries, harvesters, etc. there is also a continuing appropriation of not less than P17 billion in addition to the annual budget of the Department of Agriculture to cover funding support for various agriculture and fisheries modernization programs.
5. RA 9509 mandates the creation of Livelihood and Skills Training Centers for 4th, 5th and 6th municipalities. This was passed in October 2008 to ensure that all livelihood and skills training being offered by the government are more community-based and properly coordinated and implemented at the municipal and barangay levels. These centers may also offer training in backyard gardening, aquaculture and livestock raising, product design and development, among others, depending on specific needs.
The above key legislations were promulgated to encourage entrepreneurship and livelihood endeavors especially in the countryside. In turn, various government agencies like DTI, DOST, TESDA, DSWD or Department of Agriculture) are tasked to support the MSMEs including farmers, fishermen, and indigenous communities by providing livelihood training, financing, science and technology-enabling tools to improve their productivity and value generation.