Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

SEVENTEENTH CONGRESS
First Regular Session

House Bill No, 498 3

Introduced by DIWA Part;

ist Representative Emmeline Y. Aglipay ~ Villar

EXPLANATORY NOTE

According to the World Bank in its recent report, Philippine economic growth accelerated
to 7.2%. in 2013 despite the impact of typhoon Haiyan (Yolanda) and other natural disasters
during the year. The country’s strong macroeconomic fundamentals supported domestic demand
and shielded the economy from the lingering weakness of the global economy. !

Purther, robust performance of consumption fueled by strong remittances and services
supported by investment and manufacturing expansion, boosted growth.

This economic growth and the hugely improved business climate in the Philippines
encourages individuals or firms to start a business capitalizing on developing a product or service
for which they believe there is a demand. Due to limited revenue or high costs, most of these small
scale operations are not sustainable in the long term without government support or without
additional funding from venture capitalists,

This bill proposes a tax exemption for Start Ups for the first two years of operation provided
that these enterprises ate duly registered businesses that are not affiliates, subsidiaries or franchises
of any existing company and do not have any previous or other registered businesses,

This measure encourages Start-ups to get organized, and establish their business operations
and market base, It will give these enterprises the proper time to stand on its own,

‘The previous Congress have passed bills in support of small businesses like the “Go
Negosyo Law”, and “Microfinance NGO Act”. This representation continues to support this

* http://www. worldbank.org/en/country/philippines/publication/philippine-economic-update-2014-pursuing-
economic-growth-through-sustainable-reconstruction-and-job-generation.
Ibid,

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advocacy, and make our country conducive to business enterpri
medium enterprises, as this advocacy will also alleviate poverty

especially to micro, small and

In light of the foregoing, the passage of this bill is highly recommended.

Lutes . Kalen
EMMELINE Y. AGLIPAY - VILLAR
Representative, DIWA Party-list

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Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City, Metro Manila

:VENTEENTH CONGRESS
First Regular Session
4983

House Bill No.

Introduced by DIWA Party-list Representative Emmeline Y, Aglipay — Villar

AN ACT
EXEMPTING START-UP ENTERPRISES FROM TAXES ARISING FROM THE
FIRST TWO YEARS OF OPERATION

Be it enacted by the Senate and the House of Representatives of the Philippines in Congress
assembled.

SECTION 1. Short Title. — This Act shall be known as the “Start-Up Business Bill”.

SEC. 2. Declaration of Policy. — It is hereby declared the policy of the State to foster
national development and promote inclusive growth by encouraging the creation of enterprises
that facilitate job creation, production, innovation and trade in the country. To this end, the State
shall provide incentives to encourage and remove constraints to the start up, incubation, and
development of enterprises and the proliferation of a more entrepreneurial culture in Philippine
society.

SEC. 3. Start-Up Enterprises. ~ “Start-Up Enterprises” shall refer to newly registered
businesses engaged in industry, agribusiness and/or services, whether a single proprietorship,
cooperative, partnership or corporation.

SEC. 4, Exemption from Taxes and Fees for Start-up Enterprises, ~ A start-up enterprise
shall be exempt from all national and local taxes for the first two years of its operation, provided
that:

a) The start-up enterprise is not an affiliate, a subsidiary, or a franchise of any existing
company:

b) In the case ofa sole proprietorship or partnership, the proprietor or the partners of the
Start-up enterprise shall not have any previous or other existing registered companies,
partnerships or businesses; and

©) In the case of a corporation, each stockholder of the start-up enterprise shall have at
least a five (5%) share in stocks and the corporation shall have no nominal stockholders

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or stockholders holding the shares in trust for others Provided further that, all
stockholders of the start-up enterprise shall not have held shares of any previous or
existing corporation with at least a five percent (5%) share therein, nor registered any
former or existing sole proprietorship or partnership.

EC. 5. Implementing Rules and Regulations, ~ The Bureau of Internal Revenue (BIR) in
coordination with the Department of Trade and Industry (DTI) and Securities and Exchange
Commission (SEC) shall promulgate not later than thirty (30) days upon the effectivity of this Act
the necessary rules and regulations for its effective implementation.

SEC. 6. Separability Clause, ~ If any provision of this Act is subsequently declared invalid
or unconstitutional, other provisions hereof which are not affected thereby shall remain in full
force and effect.

SEC. 7. Repealing Clause. ~ All laws, acts, presidential decrees, executive orders,
issuances, presidential proclamations, rules and regulations or parts thereof which are contrary to
and inconsistent with any provision of this Act are hereby repealed, amended or modified
accordingly.

SEC. 8. Effectivity. ~ This Act shall take effect fifteen (15) days after its complete
publication either in the Official Gazette or in at least two (2) newspaper of general circulation

Approved,

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