Senator Mark Villar has filed Senate Bill No. 2362, a measure that seeks to exempt micro, small, and medium enterprises (MSMEs) from the Minimum Corporate Income Tax (MCIT), saying the proposal will provide much-needed tax relief to businesses that serve as a key driver of the Philippine economy.
According to latest data, MSMEs accounted for 99.63 percent of all registered business establishments in the country in 2024. Previous data reported that the sector contributed an estimated 35.7 percent of the Philippines’ Gross Domestic Product (GDP) and provided employment to 63.19 percent of the national workforce, making it one of the country’s largest sources of jobs and economic activity.
Despite their significant contribution, Villar noted that many MSMEs continue to grapple with rising production costs, persistent inflation, and other economic pressures. These challenges were further aggravated when inflation climbed to 7.2 percent in April 2026 following the declaration of a national energy emergency, leaving many small businesses struggling to sustain their operations.
“Our MSMEs are the backbone of the Philippine economy. They provide livelihood to millions of Filipinos, fuel local industries, and keep our communities economically active,” the veteran legislator said.
“By giving them meaningful tax relief, we allow them to reinvest in their businesses, create more jobs, and contribute even more to our country’s development.”
“By giving them meaningful tax relief, we allow them to reinvest in their businesses, create more jobs, and contribute even more to our country’s development,” the seasoned lawmaker added.
To help address these challenges, the senator’s bill proposes exempting qualified MSMEs, as defined under the Magna Carta for MSMEs, from the Minimum Corporate Income Tax by amending the relevant provisions of the National Internal Revenue Code.
The measure aims to reduce the tax burden on small businesses, enabling them to retain more capital for expansion, innovation, and job generation while improving their competitiveness and resilience in a challenging economic environment.
“This measure is about giving our entrepreneurs the support they need to grow and helping ensure that economic progress reaches every community.”
“When our small businesses succeed, more Filipinos benefit through new jobs, stronger local economies, and increased opportunities for families. This measure is about giving our entrepreneurs the support they need to grow and helping ensure that economic progress reaches every community,” the senator added.
He expressed hope that the measure would empower more MSMEs to expand their operations, improve productivity, and continue driving inclusive economic growth across the country.
