The Department of Trade and Industry (DTI) and Go Negosyo, the advocacy arm of the Philippine Center for Entrepreneurship (PCE), in partnership with local chambers of commerce, have launched a laudable project to empower Micro and Small Enterprises (MSEs) by encouraging entrepreneurship in the country. Called the “Mentor Me Program,” it aims to help MSEs improve their entrepreneurship fundamentals to scale up and sustain their businesses by providing them with the needed skill sets by way of conceptual discussions and mentoring sessions.
Under this Program, the DTI will select the MSEs to be enrolled as mentees, while the local chamber of commerce will choose the mentors. The mentors will be chosen based on their specific expertise, though most of them will come from various successful companies and reputable professional firms. I am honored to be one of the mentors chosen by the Cebu Chamber of Commerce and Industry.
The Program runs 11 modules for 10 weeks before the graduation of the mentees. Since my expertise is taxation, I handled and conducted the module on basic taxation. I discussed the basic rules on taxation, from registration to the preparation of tax returns. I emphasized that paying the right taxes was the right thing to do for the growth of our country, as well as for the continuous growth of their respective business enterprises. I realized that the mentees were very interested in the topic as most of them have experienced problems on taxation based on the many tough questions they raised.
The MSEs clearly showed a strong desire to learn new things, as they have to comply with regulatory requirements and try to save on taxes legally while leading their businesses. Let me elaborate on those desires below:
Desire to learn new things. I sensed the palpable hunger of the MSEs to learn new things. The room was packed with mentees listening intently to the mentors. Also, the mentees frequently asked the mentors on several items that they hoped would shed light on their problems.
Desire to comply and save on taxes legally. I noticed that there was a natural desire to comply with the regulatory requirements, especially the tax rules. But a common problem is the lack of knowledge on these tax rules, even about the most basic, which is the need to register a business with the Bureau of Internal Revenue.
Some do not even know, for tax purposes, if they are selling goods or services, as well as the corresponding documents to issue; either a sales invoice or an official receipt.
MSEs also desire to save taxes so they can maximize their limited capital and still expand their business. I discussed the tax incentives under the Barangay Micro Business Enterprise, as well as the non-taxable de minimis benefits for their employees. But I told them that the best way to save on taxes (especially the unnecessary tax expenses, like the penalties and interests) is to properly comply with the tax rules.
I believe that the mentoring program is very useful and effective for the success of MSEs. However, here are some suggestions:
The creation of the Negosyo Centers (NCs) nationwide, including the institutionalization of the mentoring program, is very necessary and helpful to the growth and success of MSEs. However, the presence of 260 NCs all over the country as of August 2016 is still not enough to cater to the many MSEs that would want to be mentored but have no access to these NCs. Local government units (LGUs) should be encouraged and tapped to bring this advocacy to their constituents. I heard some LGUs are already doing this and I hope other LGUs will follow suit. The other problem of this mentoring program is the availability of the mentors or experts, particularly in the rural areas. Maybe LGUs can identify qualified representatives as possible mentors and send them to the mentoring program for training so that they can later mentor the MSEs on the basic aspects of business.
Perhaps, DTI may run a separate mentoring program to mentor the future mentors, particularly the designated representatives from rural LGUs.
Another good option is for DTI to consider standardizing some basic modules and offer such modules online. In this way, the MSEs can access these online modules anywhere and anytime, even if there are no available mentors in their area.
I hope this Mentor Me Program will be sustained, strengthened and expanded to speed up the growth and success of MSEs in our country. When majority of the MSEs succeed and move up the next level of becoming medium and large enterprises, they will definitely contribute to the creation of more sustainable jobs, faster development of the countryside, improvement of the lives of many ordinary Filipinos and the acceleration of our economic growth. If this happens, it will surely lead to greater and more inclusive growth for the country.
Wendell D. Gahinhin is a Partner, Tax & Outsourcing, Cebu and Davao Branches of P&A Grant Thornton. P&A Grant Thornton is one of the leading Audit, Tax, Advisory and Outsourcing firms in the Philippines, with 21 Partners and over 800 staff members.
As published in The Manila Times, dated 7 December 2016