Legitimizing small businesses through BMBE
OVER a decade ago when I first worked with the trade and industry sector of the Philippine Government, the Barangay Micro Business Enterprise (BMBE) was newly passed as a law that seeks to encourage small entrepreneurs and help legitimize their trade. Other than that, the BMBE also provides incentives such as tax holidays and other exemptions as provided for by law. What seems to be the drawback then was the scarcity of takers or registrants as the forms needed to be filled up were not available or for some reasons were not facilitated in the local government units. With the recently passed Go Negosyo Act that institutionalizes provincial business centers throughout the regions, one can now get BMBE certification in all these negosyo centers if they can’t have it in their respective localities.
In a nutshell, BMBE or Republic Act No. 9178 is an act that promotes the establishment of Barangay micro business enterprises that provides incentives and benefits to valid applicants. Section 2 of said law states through its Declaration of Policy that it is the policy of the State to “hasten the country's economic development by encouraging the formation and growth of Barangay micro business enterprises which effectively serve as seedbeds of Filipino entrepreneurial talents, and integrating those in the informal sector with the mainstream economy, through the rationalization of bureaucratic restrictions, the active intervention of the government specially in the local level, and the granting of incentives and benefits to generate much needed employment and alleviate poverty”
Under the Definition of Terms of the act, the BMBE can register any business entity or enterprise engaged in the production, processing or manufacturing of products or commodities, including agro-processing, trading and services, whose total assets including those arising from loans but exclusive of the land on which the particular business entity's office, plant and equipment are situated, shall not be more than Three Million Pesos.
As a matter of incentive, the BMBE act exempts from taxes and fees all kinds of properties, real or personal, owned and/or used by the BMBE for the conduct of its business as defined by the SMED Council. Any person, natural or juridical, cooperative or association, or business entity or enterprise engaged in production, processing, manufacturing of products or commodities, including agro-processing, trading and services may apply for Certificate of Authority as a BMBE provided that they should have at least a total asset value, including those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, of not more than Three Million Pesos (P3,000,000.00) .
In order to avail a BMBE Certification, applicants must secure some documentary requirements that includes; a duly filled up and signed application form in triplicate, three passport size pictures, a DTI registration for sole proprietorship, SEC registration for corporations, partnerships or association, CDA registration for cooperatives and lastly, the Mayor’s permit. These documents must be filed with the Office of the Treasurer of each city or municipality which registers the BMBEs and issue a Certificate of Authority to enable the applicant to avail of the benefits under the law. It usually takes approximately fifteen working days upon submission of complete documents for the whole process. The validity of the Certificate of Authority is good for a period of two years and renewable for a period of two years. During the period of coverage of the BMBE, the registered entrepreneur can now avail exemption from income tax arising from the operations of the enterprise, exemption from the coverage of the Minimum Wage Law, provided, that all employees covered under this Act shall be entitled to the same benefits given to any regular employee such as social security and healthcare benefits. Also, the BMBE registered entrepreneur can have access to financial assistance by designated financial institutions as well as access to training and technology transfer assistance by the government.
So, whether you are already engaged in a legitimate business in your locality and for as long as your total assets and capitalization do not exceed P3 million, you can already avail of some exemptions and use the savings derived from them to expand your trade. Once you have already attained the comfortable level of competency and surpassed the business start-up blues, don’t forget to get back to your city and municipal offices and pay your taxman a visit.