2019News

Innovative Startup bill targeted for approval Feb. 6

By Charmaine A. Tadalan, February 3 2019; Business World

https://www.bworldonline.com/innovative-startup-bill-targeted-for-approval-feb-6/

Image Credit to Rappler

THE Bicameral Conference Committee tasked to reconcile the disagreeing provisions of the proposed Innovative Startup bill targets ratification by Wednesday, Feb. 6.

Parañaque-2nd district Rep. Gus S. Tambunting of the House contingent said the bill has “big chances” of being enacted before the 17th Congress adjourns.

“It is a priority and we are trying to bring it for plenary ratification by Wednesday,” Mr. Tambunting said in a phone message Sunday.

House Bill No. 8862, or the proposed Innovative Startup Act of the Philippines, was passed on third reading last week, with 179 affirmative and zero negative votes. Its counterpart measure, Senate Bill No. 1532, sponsored by Senator Paolo Benigno A. Aquino IV, was approved on third reading in May 2018.

Congress is set to go on a break on Feb. 6 for the election campaign period and will resume on May 20. From then on, the 17th Congress will be left with three weeks, or nine session days, to finish legislative work before concluding on June 7.

The bills defines an innovative startup as a registered business entity “within the sixty months of its business operation,” involved in creating an “innovative product, process, or business model.”

Among the conflicting provisions in the bills are the tax exemption on “income tax arising from the operation of the enterprise” and “value-added tax for the sale and lease of goods, properties or services arising in the course of trade or business of the enterprise or percentage tax,” both carried in the Senate version.

National Tax Research Center Officer-in-Charge Deputy Executive Director Donaldo M. Boo said the House provision was deleted, to make the bill “consistent with the TRABAHO (Tax Reform for Attracting Better and High-quality Opportunities) bill.”

“The sector, the stakeholder signified that it’s not the tax provision that they really need, it’s more on the ease of doing business,” Mr. Boo said in an interview on Jan. 28.

The TRABAHO Bill, embodied in House Bill No. 8083, is the second package of the Duterte administration’s comprehensive tax reform program. It proposes to gradually reduce corporate income tax to 20% from 30% and streamline fiscal incentives.

Moreover, both versions propose to establish an Innovative Startup Development Program, which shall provide benefits and incentives to startups or support service providers.

If enacted, the consolidated bill will waive registration fees, expedite processing of business permits and required certifications, and provide grants in aid of research and development and expansion projects.

It will also exempt startups from fees and charges levied by the national government for using equipment, facilities and other services availed of as well as subsidize visa applications, renewal and extension. A provision securing the intellectual rights of covered businesses is also present in both the House and Senate bills.

It will also establish an Innovative Startup Visa for foreign investors to be exempted from securing an Alien Employment Permit, as issued by the Department of Labor and Employment. The visa will be valid for a period of five years, but may be renewed or extended for another three years.

Another provision in the Senate bill is the creation of a P10-billion Innovative Startup Venture Fund.

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