Pandemic gives rise to new entrepreneurs
More than 900,000 new trade names registered by DTI in 2020
More than 916,000 enterprises registered and renewed their business names under the Department of Trade and Industry (DTI) last year, driven mostly by pandemic-weary entrepreneurs who wanted to start their own mom-and-pop stores or sell products online.
According to the DTI’s Business Name Registration (BNR) Division, total registrations last year reached 916,163, of which 91 percent were considered new while the rest were renewals. This is nearly 44-percent higher than the total registration in 2019 at 637,567.
Trade and Industry Secretary Ramon Lopez referred to these figures during the virtual launch of RCBC’s digital banking app called DiskarTech on Wednesday. The data were then shared by the DTI BNR division when asked for further information about the numbers.
“Amid the pandemic, there are still many opportunities that we can find and discover. In fact, during the pandemic, [the number of] newly registered businesses [went up to 916,163 as of December]. That’s the highest growth rate since 2010,” Lopez said.
A newly registered business name, however, does not automatically mean the enterprise is already operational. They still need to get a business permit in order to start their operations. The DTI BNR said they do not have any data on how many of these already started operations.
Nevertheless, DTI BNR data suggested that many entrepreneurs turned to retail—either online or brick-and-mortar stores—to make ends meet last year as the pandemic dragged the country to its worst recession in decades. Of the total, 140,371 business names were for sari-sari stores while 88,574 names for online stores.
Calabarzon topped the list with the most number of registrations at 183,876, followed by Metro Manila at 157,886; Central Luzon (119,708), Central Visayas (57,692) and Western Visayas (49,718), according to DTI BNR data.
Elsewhere, however, the numbers are grim.
The bill is the latest iteration of a tax reform package that sought to cut corporate taxes and rationalize tax breaks. Since the package was first introduced about three years ago, the draft has gone through several revisions. CREATE is the version of the tax package passed by Senate in November last year. It is considered the most balanced of all versions of the tax package to the extent that the Senate bill even won over some of its critics. Under the Senate’s version, the country’s corporate income tax of 30 percent—which is one of the highest in Southeast Asia—will be cut to 25 percent and eventually to 20 percent by 2027. For micro, small and medium-sized enterprises with an annual income below P5 million, that tax rate is immediately reduced to only 20 percent. The bill will also rationalize tax breaks, but give companies with existing tax perks 10 years to transition to the new rules.
Timing is just as important as passing the right bill. The Department of Finance is pushing Congress to pass the bill before the end of the month so that taxpayers can do the necessary adjustments in their tax returns before the tax filing season ends in April. CREATE’s lower tax rates would apply starting July 2020.
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