1
Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____ 
Introduced by CIBAC Party-List Representative 
HON. EDUARDO “BRO. EDDIE” C. VILLANUEVA 
AN ACT 
PROVIDING FOR SIMPLIFIED REGISTRATION, FILING OF 
RETURNS AND PAYMENT OF INCOME AND PERCENTAGE TAXES 
AND PROVIDING TAX RELIEF FOR MICRO-ENTERPRISES, 
AMENDING FOR THE PURPOSE SECTIONS 74, 128 AND 236 OF 
THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED 
EXPLANATORY NOTE 
Micro-enterprises play a huge role in developing the Philippine 
economy. According to the Philippine Statistics Authority List of 
Establishments, there are 977,670 micro- enterprises in the country in 
2021, constituting 90.5% of all business enterprises in the country.1 They 
also generate a total of over 2.5 million jobs.2  
Republic Act No. 9501 or the Magna Carta for Micro, Small and 
Medium Enterprises (MSMEs) passed in 2007, declared it the policy of 
the state to promote, support, strengthen, and encourage the growth and 
development of MSMEs in the country. Considered a landmark legislation, 
it recognizes this sector's role in economic growth and employment, and 
therefore seeks to shape a conducive business environment, by 
1“More than 1.08 million Establishments Operated in 2021 which Generated Total Employment of 8.57 million (2021 Updating of 
the List of Establishments Preliminary Results).” Retrieved from https://psa.gov.ph/content/more-108-million-establishments-
operated-2021-which-generated-total-employment-857-million (date last accessed: July 29, 2022). 
2 “2020 MSME Statistics” Retrieved from https://www.dti.gov.ph/resources/msme-statistics/ (date last accessed: July 29, 2022) 
January 30, 2023
8:00 am
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facilitating access to funds, offering entrepreneurship and skills training, 
and improving government efficiency and effectiveness in providing 
assistance, among others.  
However, the country still has a long way to go. Based on the Doing 
Business 2020 Report by World Bank, the Philippines ranks 171st out of 
190 countries in terms of starting a business. The country also ranks 
relatively low in terms of enforcing contracts (152nd), getting credit 
(132nd), registering property (120th), trading across borders (113th), and 
paying taxes (95th). Payment of taxes is also cumbersome, with around 
171 hours spent per year on tax-related transactions.3 
Overall, the World Bank ranks the Philippines 7th out of the 10 
ASEAN member states, in terms of ease of doing business—lagging 
behind Singapore, Malaysia, Thailand, Cambodia, Lao PDR, and 
Myanmar for both 2019 and 2020.4  
Further, the COVID-19 pandemic has been particularly difficult for 
micro-enterprises, which generally run their operations on very low level 
of liquidity. According to the Department of Trade and Industry (DTI), over 
half of MSMEs in the Philippines fully stopped or closed their operations 
due to the pandemic.5 In a study conducted by the Asian Development 
Bank Institute in February 2021, it was found that 61.7% of micro-sized 
businesses had little to zero revenue and were forced to temporarily  close 
at the advent of the pandemic. 6  In addition, 68% of micro-sized 
businesses were constrained to retrench their employees. 7 To make 
matters worse, MSMEs have recently had to endure further business 
losses as a result of natural calamities such as typhoons and global 
economic events such as the Russia-Ukraine conflict, unprecedented 
inflation and rising fuel prices. 
Hence, in order to spur recovery for the sector consistent with the 
goal of the Magna Carta for MSMEs Law and the spirit of bayanihan in 
such a difficult time in our history, this bill provides for (i) a more 
convenient procedure for annual payment and filing of income tax returns 
and percentage tax returns, (ii) income tax relief for three years for micro 
3
 “World 
Bank 
Doing 
Business 
2020” 
Retrieved 
from 
https:/Awww.doingbusiness.org/content/dam/doingBusiness/country/p/philippines/PHL.pdf (date last accessed: July 29, 2022).  
4 Id.  
5  “DTI: 
Over 
half 
of 
MSMEs 
in 
PH 
fully 
stopped 
operations 
due 
to 
virus 
outbreak.” 
Retrieved 
from 
https://business.inquirer.net/296227/dti-over-half-of-msmes-in-ph-fully-stopped-operations-due-to-virus-outbreak 
(date 
last 
accessed: July 29, 2022).  
6 “COVID-19 Impact on Micro, Small, And Medium-Sized Enterprises Under The Lockdown: Evidence From A Rapid Survey In 
The Philippines.“ Retrieved from https://www.adb.org/sites/default/files/publication/677321/adbi-wp1216.pdf (date last accessed: 
July 29, 2022).  
7 Id. 


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enterprises employing less than 10 individuals, and (iii) a simplified online 
registration process for taxpayers.  
Taxation and business processes remain a critical factor affecting 
the competitiveness of enterprises. Reducing the cost of completing a 
business transaction is crucial to microenterprises, as they employ, on 
average only two to three workers.8 Providing tax relief in the first three 
years of the enterprise also allows them to survive and establish 
momentum.  
This bill hopes to provide small businesses with accessible, 
affordable and more efficient ways to do business through government 
support, ensuring their longevity and development during these difficult 
times.  
In view of the foregoing, the immediate passage of this bill is 
earnestly sought.  
EDUARDO “BRO. EDDIE” C. VILLANUEVA 
8 Supra note 5. 


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Republic of the Philippines 
HOUSE OF REPRESENTATIVES 
Quezon City, Metro Manila 
NINETEENTH CONGRESS 
First Regular Session 
HOUSE BILL NO. ____ 
Introduced by CIBAC Party-List Representative 
HON. EDUARDO “BRO. EDDIE” C. VILLANUEVA 
AN ACT 
PROVIDING FOR SIMPLIFIED REGISTRATION, FILING OF 
RETURNS AND PAYMENT OF INCOME AND PERCENTAGE TAXES 
AND PROVIDING TAX RELIEF FOR MICRO-ENTERPRISES, 
AMENDING FOR THE PURPOSE SECTIONS 74, 128 AND 236 OF 
THE NATIONAL INTERNAL REVENUE CODE, AS AMENDED 
Be it enacted by the Senate and House of Representatives of the 
1 
Philippines in Congress assembled: 
2 
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SECTION 1. Declaration of Policy. – It is hereby declared the 
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policy of the State to have a national economy that provides for a more 
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equitable distribution of opportunities, income and wealth; a sustained 
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increase in the amount of goods and services produced by the nation for 
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the benefit of the people; and an expanding productivity as the key to 
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raising the quality of life for all, especially the underprivileged. Towards 
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these ends, the State shall provide an environment that will enable small 
10 
businesses to flourish by providing them with accessible, affordable and 
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more efficient government processes to enable them to engage in 
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entrepreneurship and other productive activities. 
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SEC. 2. Simplified Filing of Returns and Payment of Income 
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Tax. — Section 74(B) of the National Internal Revenue Code, as 
16 
amended, is hereby amended to read as follows:  
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Section 74. Declaration of Income Tax for Individuals. —  
1 
 
2 
x x x 
3 
 
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(B) Return and Payment of Estimated Income Tax by 
5 
Individuals. — The amount of estimated income as defined in 
6 
Subsection (C) with respect to which a declaration is required 
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under Subsection (A) shall be paid in four installments. The first 
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installment shall be paid at the time of declaration and the 
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second and third shall be paid on August 15 and November 15 
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of the current year, respectively. The fourth installment shall be 
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paid on or before May 15 of the following calendar year when 
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the final adjusted income tax return is due to be filed; 
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PROVIDED, 
THAT 
SELF-EMPLOYED 
INDIVIDUALS 
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REGISTERED AS SOLE PROPRIETORS OF MICRO- 
15 
ENTERPRISES 
EMPLOYING 
LESS 
THAN 
TEN 
(10) 
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EMPLOYEES SHALL ONLY BE REQUIRED TO FILE A FINAL 
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OR ANNUAL INCOME TAX RETURN ON MAY 15 OF THE 
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FOLLOWING CALENDAR YEAR; PROVIDED FURTHER, 
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THAT SELF-EMPLOYED INDIVIDUALS REGISTERED AS 
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SOLE 
PROPRIETORS 
OF 
MICRO- 
ENTERPRISES 
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EMPLOYING LESS THAN TEN (10) EMPLOYEES SHALL BE 
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EXEMPT FROM PAYMENT OF INCOME TAXES WITHIN THE 
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FIRST THREE YEARS OF THEIR REGISTRATION AS 
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TAXPAYERS.  
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SEC. 3. Simplified Filing of Returns and Payment of Percentage 
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Taxes. — Section 128(A)(1) of the National Internal Revenue Code, as 
28 
amended, is hereby amended to read as follows:  
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SEC. 128. Returns and Payments of Percentage Taxes. —  
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(A) Returns of Gross Sales, Receipts or Earnings and Payment 
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of Tax. —  
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(1) Persons Liable to Pay Percentage Taxes. — Every person 
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subject to the percentage taxes imposed under this Title shall 
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file a quarterly return of the amount of his gross sales, receipts 
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or earnings and pay the tax due thereon within twenty-five (25) 
39 
days after the end of each taxable quarter: Provided, That in the 
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case of a person whose VAT registration is cancelled and who 
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becomes liable to the tax imposed in Section 116 of this Code, 
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the tax shall accrue from the date of cancellation and shall be 
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paid in accordance with the provisions of this Section; 
1 
PROVIDED, 
THAT 
SELF-EMPLOYED 
INDIVIDUALS 
2 
REGISTERED AS SOLE PROPRIETORS OF MICRO-
3 
ENTERPRISES 
EMPLOYING 
LESS 
THAN 
TEN 
(10) 
4 
EMPLOYEES SHALL ONLY BE REQUIRED TO FILE A FINAL 
5 
OR ANNUAL TAX RETURN.  
6 
 
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SEC. 4. Simplified Registration Process. — Section 236(A) of the 
8 
National Internal Revenue Code, as amended, is hereby further amended 
9 
to read as follows:  
10 
 
11 
Section 236. Registration Requirements. —  
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(A) Requirements. — Every person subject to any internal tax 
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shall register once with the appropriate Revenue District Officer:  
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(1)  Within ten (10) days from date of employment, or 
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(2)  On or before the commencement of business, or 
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(3)  Before payment of any tax due, or  
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(4) 
Upon filing of a return, statement, or declaration as 
20 
required in this Code.  
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22 
 
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The registration shall contain the taxpayer's name, style, place 
24 
of residence, business and such other information as may be 
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required by the Commissioner in the form prescribed therefor: 
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Provided, That the Commissioner shall simplify the business 
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registration, and REGISTRATION AND tax compliance 
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requirements of self-employed individuals and/or professionals, 
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INCLUDING 
THE 
ESTABLISHMENT 
OF 
AN 
ONLINE 
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REGISTRATION, FILING AND PAYMENT SYSTEM.  
31 
 
32 
A person maintaining a head office, branch or facility shall 
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register with the Revenue District Officer having jurisdiction over 
34 
the head office, branch or facility. For purposes of this Section, 
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the term ‘facility’ may include but not be limited to sales outlets, 
36 
places of production, warehouses and storage places.  
37 
 
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SEC. 5. Implementing Rules and Regulations. — Within sixty (60) 
39 
days from the effectivity of this Act, the Bureau of Internal Revenue, upon 
40 
consultation with relevant stakeholders, shall issue the rules and 
41 
regulations for the effective implementation of this Act.  
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SEC. 6. Separability Clause. — Any portion or provisions of this 
1 
Act that may be declared unconstitutional or invalid shall not have the 
2 
effect of nullifying other portions and provisions hereof as long as such 
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remaining portions or provisions can still subsist and be given effect in 
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their entirety.   
5 
 
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SEC. 7. Repealing Clause. — All laws, decrees, executive orders, 
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rules and regulations or part thereof deemed inconsistent with the 
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provisions of this Act are hereby repealed or modified accordingly.  
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SEC. 8. Effectivity Clause. — This Act shall take effect fifteen (15) 
11 
days after its publication in the Official Gazette or in at least two (2) 
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newspapers of general circulation.  
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Approved. 
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