Chapter 16

Barangay Micro Business Enterprise (BMBE)

RA 9178, otherwise known as the "Barangay Micro Business Enterprises

(BMBEs) of 2002", encourages the formation and growth of barangay micro

Act
Act
iSiness enterprises
by granting them incentives and other benefits. The
us

micro enterprises in the informal sector into the

nrimarily aims to integrate
more jobs and
nainstream of the economy. Strengthening BMBEs would mean
better quality of life for Filipinos.
ivelihood, and a
on
The Act signedinto law by President Gloria Macapagal-Arroyo
was
which was
Its Implementing Rules and Regulations (IRR)
November 13, 2002.
isued on February 7, 2003.

Definition
in production,
A BMBE is defined as any business enterprise engaged
as well as
or manufacturing of products, including agro-processing,
processing,
than P3 million. Such assets shall
and services, with total assets of not more
trading and equipment
but not the land on which the plant
include those arising from loans rendered
of the Act, "services" shall exclude those
are located. For the purpose
the govemment after having passed
a
by any one, who is duly licensed by
connection with the exercise
of one's
government licensure examination, in Order
profession (e.g., Accountant, Lawyer, Doctor,
etc.). The DOF Department
it is
enterprise can only qualify for registration if
NO.17-04 also provides that, an
scale enterprise and its policies
nOT a branch, subsidiary, division or office of a large
or by
ad business modus operandi are not
determined by a large scale enterprise
franchises).
I S W h o are not owners or employees
the enterprise (i.e.,
of

571
BMBE
BMBE Generally, the income of BMBE from their operations is exempt, hence
Registration and Fees.
city or municipality shall. awcluded from gross income subject to regular income tax. Only those income from
each
of enable the BMBE ton eg
Treasurer
Office of the
BMBEs The issue
and a Certificate of Authority to er the lated activities are exempted. In lieu of ITR, BMBE files Annual Information
Dotur, For self employed individuals, use BIR Form 1701-AIF. For corporations
Any such application
shall be processed within ft. Re

benefits under this Act. (15) as well as cooperatives, use BIR Form 1702-AIF.
of complete documents. Otherwise h and partnerships,
submission
working days upon
or City Mayor may appoint
MBEs
shall be deemed registered. The Municipal a
from the coverage of the Minimum Wage Law. BMBE employees will
shall be under
the Office of the Treasreer. 2.
Exemptior

Registration Officer who Local social security and health benefits other
etill receive the
same care as
government units (LGUs) are encouraged to establish a One-StoD-Re
Isiness
employees).
Center tohandle the efficient registration and processina
Registration
shall make a periodic evaluation ce"
permits/licenses of BMBEs. Likewise, LGUs
ne
special credit windo set up specifically for the financing
status for monitoring and repoting purposes Priority to a
BMBEs' financial requirements of BMBEs

credit window for BMBEs

The LGUs shall issue the Certificate of Authority promptly and free Funding Agencies designated to set-up special
bf
Land Bank of the Philipines;
administrative costs of registering and monitorina
charge. However, to defray the Development Bank of the Philippines
the BMBEs, the LGUs may charge a fee not exceeding One Thousand Pesns
Smail Business Guarantee and Finance Corporation;
shall be effective for a period of two (2) years
(P1,000). The Certificate of Authority People's Credit and Finance Corporation;
renewable for a period of two (2) years for every renewal. As much as possible
BMBEs shall be subject to minimal bureaucratic requirements and reasonable fees Quedan and Rural Credit Guarantee Corporation;

Govemment Service Insurance System (for members only); and Social Security System
and charges
(for members only)

Who are Eligible to Register?

and marketing
or association, having the 4. Technology transfer, production and management training,
Any person, natural or juridical, or cooperative,
qualifications provided under the law may apply for registration as BMBE assistance programs for BMBE beneficiaries.
in the areas of technology transfer, production and
Agencies mandated to provide assistance
Incentives of BMBEs management training, marketing assistance

REGISTERED BMBES CAN AVAIL OF THE FOLLOWING INCENTIVES:

DepartmentofTradeandindustry(DTI)
Department of Science and Technology (DOST)
1. Income tax exemption from income arising from the operations of the enterprise. University of the Philippines Institute for Small Scale
Industries (UP-ISSI)
CooperativeDevelopmentAuthority(CDA)

To avail of the benefits and privileges of a BMBE, an applicant must secure

a Technical Education and Skils Development Authority (TESDA)
or
certificate of authority to operate and be registered as a BMBE from the Ofice TechnologyandLivelihoodResourceCenter(TLRC)

the Treasurer of the City or Municipality that has jurisdiction. Once the Certificate
amount of local taxes,
of Authority is secured, the applicant must submit the same to the BIR and apply 5. The LGUs are also encouraged to either reduce the
from local taxes, fees, and
for Income Tax Exemption. fees, and charges imposed or exempt the BMBEs
charges.

572 573
BMBE
Revocation of BMBE Tax Exemptions

Change of business address

Value of assets exceeds P3,000,000
of Authority
Voluntary surrender of the Certificate
Death of the sole proprietor
Merger or consolidation with an entity not registered as BMBE
Sale or transfer of the BMBE enterprise
Falsification of documents
Retirement from business, or cessation/suspension of operations for
year

574