THE Department of Trade and Industry (DTI) wants more micro businesses to avail of income tax exemptions.
Through Republic Act 9178 or the Barangay Micro Business Enterprise (BMBE) Act of 2000, a micro enterprise engaged in the production, processing, or manufacturing of products including agro-processing, as well as trading and services, with total assets of not more than P3 million are exempted from paying income tax and from paying the minimum wage.
While this has not been fully maximized before, DTI Cebu Business Development Chief Elias Tecson said the trade agency will ensure that many more micro-enterprises will benefit from the incentives.
The power to issue BMBE certificates of authority used to be with the local government units, but this has been transferred to DTI recently when Republic Act 10644 or the Go Negosyo Act was implemented, said Tecson.
The Go Negosyo Act states that the DTI, through the Negosyo Center in cities and municipalities, have the sole power to issue a certificate of authority for BMBEs to avail of benefits provided under RA 9178. In the whole of Cebu, DTI has granted certificates of authority to 34 BMBEs since June.
BMBEs will also be prioritized for the government’s financing programs, technology transfer, production and management trainings, and marketing assistance programs. DTI believes that the BMBE act will allow micro enterprises in the informal sector to take part in the mainstream economy. Strengthening BMBEs would mean more jobs and livelihood, the trade agency said.
Within 15 working days from receipt of BMBE application, the DTI is mandated to issue the BMBE certificate of authority, otherwise the certificate is deemed approved.
The BMBE certificate is effective for a period of two years and can be renewed every two years, but subject to eligibility requirements of the law. DTI-Cebu clarified that the registration and issuance of the certificate is free.
Currently, Tecson said DTI Cebu has not yet identified a target in terms of the number of issued BMBE certificates, but he assured that the local trade agency will make sure micro-enterprises in Cebu will avail of it.
On July 15, newly-appointed DTI Secretary Ramon Lopez will be in Cebu to discuss MSME-related matters at the Robinsons Galleria Cebu, which is expected to gather 200 participants.