Small businesses have been given additional tax relief after lawmakers included deficiencies incurred in 2021 in the five-year extension of the net operating loss carry-over (NOLCO).
“The original law, which is the Bayanihan Law, covers the 2020 losses from the (coronavirus disease 2019) pandemic but we also cover now 2021, considering that the pandemic has continued until 2021. So, it’s now 2020 and 2021 losses after five years of NOLCO on small businesses,” Finance Assistant Secretary Dakila Elteen M. Napao told journalists in a virtual briefing on Friday.
Under the National Internal Revenue Code, the NOLCO can be stretched only for three years.
However, the Department of Finance (DOF) proposed to extend this to five years to aid small businesses vis-à-vis the impact of the pandemic.
Earlier, the DOF said this move would cost the government about PHP139.6 billion worth of foregone revenues.
Under this measure, taxes due from small firms will be collected from them over five years, which Finance Secretary Carlos G. Dominguez III earlier said would help buoy businesses during this challenging time.
The DOF earlier placed the losses of small businesses in 2020 at about PHP461 billion, as a result of the movement restrictions.
The government has been providing tax relief and capital boosts to small businesses, considering that the sector accounts for about 99 percent of firms in the country.
Source: Philippines News Agency
