A measure that exempts small businesses from the 2% minimum corporate income tax has been filed in the House of Representatives.

Under House Bill No. 10464, authored by Marikina 1st District Representative Marcy Teodoro, the micro and small corporations will no longer pay the 2% minimum corporate income tax (MCIT) starting January 1, 2027.

According to Rep. Teodoro, it is crucial to support small businesses because they create jobs and contribute to the development of local communities across the country.

“Micro and small enterprises are the backbone of our economy. They create jobs, fuel innovation, and keep local communities thriving,” he said

He emphasized that the government must ensure tax policies foster business growth rather than serve as an added burden for small business owners.

“At a time when many are still recovering from economic challenges, government must ensure that our tax policies help businesses grow instead of placing additional burdens on them,” he said

Under the current National Internal Revenue Code, a 2% MCIT is imposed on the gross income of the corporation to help fund government public services.

However, the lawmaker stressed that this tax serves as a burden, particularly for businesses with low income or those recovering from economic hardships.

The bill aims to provide fiscal relief to small businesses, allowing them to utilize their earnings to expand their operations, boost productivity, and improve competitiveness in the market.