The Davao City Chamber of Commerce and Industry, Inc. (DCCCII) has pushed for a relaxation of Net Operating Loss Carry-Over (Nolco) for companies that are incurring losses due to the lockdown imposed during the COVID-19 pandemic.
During its first online general membership meeting last Tuesday, DCCCII President John Carlo Tria said the business group has included the proposal, which was also among the proposed interventions of the Department of Finance (DoF), in its business recovery agenda.
“These kinds of efforts will help us manage our tax requirements and allow us to carry-over losses over several years–which in effect will allow us lower corporate income taxes,” he said.
According to Section 34-D.3 of the National Internal Revenue Code, Nolco is the “ excess of allowable deductions over business gross income in a taxable year.”
Tria added the DCCCII will propose the advocacy to the Philippine Chamber of Commerce and Industry which is creating a position paper on tax-related matters.
“Moving forward, our next steps in our recovery agenda will be to develop industry specific approaches that combine capacity building and training in developing innovations in the businesses to enable them to prosper and generate revenue under new normal. This makes it easier to obtain financing to use this to move forward,” Tria said.
Last Monday, DoF Secretary Carlos Dominguez III pushed for the extension of Nolco to five years from its current three-year period and such extension shall require for the approval of the Congress.
“We will propose to Congress an extended Nolco of five years for net losses that will be incurred in 2020. This means that a small business’ losses this year may be deducted from their income for up to the next five years for tax purposes,” he said.
It was estimated by the DoF that small companies have so far lost about P465.3 billion due to the lockdown which puts their business transactions to a temporary standstill or forcing them to employ a skeletal force.
Among the P465.3 billion, small businesses that operate in shopping malls and other outlets are expected to incur P461 billion losses due to cessation of its transactions and P4.3 billion for those that continued to operate but at reduced capacity.
Dominguez said that the extension of Nolco will result in a combined estimated total of P139.6 billion worth of lowered tax payments between 2021 and 2025 from affected small businesses.
Albay Representative and House Economic Stimulus Cluster Co-Chairman Jose Maria Clemente S. Salceda said that the Nolco extension provision shall be included in the proposed Economic Stimulus Act bill.
- Campaign highlights importance of supporting children, says WV
- Airline heeds call for faster vaccine rollout
- The mom, her 3 kids and the work that gave her more
- Mask for a Cause at Kultura
- Editorial Cartoon of the Day
- `E-sabong’ gets nod
- NO TO MIXING | Expert urges residents to register for jabs, warns vs vaccine mixing
- EastMinCom units rewarded with cash
- High infection rate indicates better approach vs virus, say
- 2 nabbed, P1-M in shabu seized