Senator Sherwin Gatchalian underscored Wednesday the need to simplify the procedures and reduce the transaction costs to encourage Micro, Small, and Medium Enterprises (MSMEs) to seek government loans to restart their businesses which in turn will help shore up the economy.
Gatchalian, chairman of the Senate Subcommittee on Banks, Financial Institutions and Currencies, issued the statement as his subcommittee started public hearing on the proposed Government Financial Institutions Unified Initiatives to Distressed Enterprises for Economic Recovery (GUIDE) bill.
The measure, according to Gatchalian, seeks to provide aid to companies severely impacted by the COVID-19 pandemic, including the MSMEs, by reducing taxes and transaction costs, making it easier on the pockets to secure a loan.
This would make borrowings cheaper for small businesses through the Land Bank of the Philippines (LDP) and Development Bank of the Philippines (DBP), he said.
“The documentary stamp tax, capital gains tax, creditable withholding income tax, value-added tax, gross receipts tax are usually shouldered by the borrowers. If these will be lifted, it will lower the overall cost of borrowings of MSMEs and entice them to seek financial assistance from government banks. I also hope that the bill will effectively streamline the process,” Gatchalian said. (Mario Casayuran)
