Loren bats for more perks for SMEs

Sen. Loren Legarda, vice presidential bet of the Koalisyon ng Nagkakaisang Pilipino, has proposed more incentives for small and medium enterprises (SMEs) in order to encourage them to expand and employ more workers.

In Senate bill No. 777 which she authored, Legarda noted that unemployment is increasing annually. She declared that one of the means to promote more employment is to strengthen SMEs in their capacity to hire more workers.

In this connection, she proposed amendments to the Labor Development Act of the Philippines of 2001 which aims to boost employment by providing incentives to business to hire more workers.

Among her proposals was that registered enterprises operating for more than two years shall be entitled to additional deductions from income tax withheld based on the enterprises’ increase in the number of direct labor employed as compared with their number of employees the previous year.

For the first 10 percent increase in employed workers, Legarda proposed an additional deduction of 12.5 percent from tax withheld; for the next 10 percent to 30 percent, the additional deduction shall be 37.5 percent, and in excess of 40 percent labor increment, the deduction shall be 50 percent.

For expenses incurred for local manpower training and special studies for the development of skills, the registered enterprises shall be entitled to a special deduction from gross income of 100 percent of the total expenses over and above the ordinary and necessary business deductions allowable under the National Internal Revenue Code.

Legarda, who is running with presidential candidate Fernando Poe Jr. under the KNP ticket, said that if the FPJ-Loren tandem is elected, they would make the increase in employment opportunities one of their top priorities of government.

Legarda deplored that because of the failure of the administration to set up safety nets against globalization, as required by law, unemployment has increased to more than 10 percent of the labor force. Should the rate of underemployment be taken into account, the number of unemployed persons would soar above 25 percent of the labor force, she bewailed.