TAXATION

BARANGAY MICRO BUSINESS ENTERPRISES (BMBES)

LECTURE NOTES
Any existing laws to the contrary notwithstanding,
A. BARANGAY MICRO BUSINESS ENTERPRISE, interests, commissions and discounts derived from the
DEFINED (SEC. 3, R.A. 9178) loans by the Land Bank of the Philippines (LBP),
Development Bank of the Philippines (DBP), People’s
"Barangay Micro Business Enterprise," hereinafter Credit and Finance Corporation (PCFC) and Small
referred to as BMBE, refers to any business entity or Business Guarantee and Finance Corporation (SBGFC)
enterprise engaged in the production, processing or granted to BMBEs as well as loans extended by the
manufacturing of products or commodities, including GSIS and SSS to their respective member-employees
agro-processing, trading and services, whose total under this Act shall be exempt from gross receipts tax
assets including those arising from loans but exclusive (GRT).
of the land on which the particular business entity's
office, plant and equipment are situated, shall not be E. Document to be filed with BIR by an income tax
more than Three Million Pesos (P3,000,000.00). The exempt BMBE
above definition shall be subject to review and upward Instead of an income tax return, an income tax
adjustment by the SMED Council, as mandated under exempt BMBE is required to submit an Annual
Republic Act No. 6977, as amended by Republic Act Information Return. This is filed on or before the 15th
No. 8289. day of the 4th month after the close of the taxable
year with an Account Information Form, which
For the purpose of this Act, "services" shall exclude contains data from its financial statement and Sworn
those rendered by any one, who is duly licensed by Statement of Assets Owned and/or Used.
the government after having passed a government
licensure examination, in connection with the exercise F. Revocation of Certificate of Authority
of one's profession. However, while a registered BMBE could be
exempt from income tax, its Income Tax Exemption
B. REGISTRATION AND FEES (SEC. 4, R.A. 9178) privilege may be revoked for any of the following
reasons:
The Office of the Treasurer of each city or municipality 1. Transfer of place of business
shall register the BMBEs and issue a Certificate of 2. Value of its total assets exceeds P3M
Authority to enable the BMBE to avail of the benefits 3. Voluntary surrender of the Certificate of Authority
under this Act. Any such application shall be processed 4. Death of the registered individual owner of the
within fifteen (15) working days upon submission of BMBE; violation or noncompliance with the provisions
complete documents. Otherwise, the BMBEs shall be of R.A. 9178
deemed registered. The Municipal or City Mayor may 5. Merger or consolidation with an entity which is not
appoint a BMBE Registration Officer who shall be eligible to be a BMBE
under the Office of the Treasurer. Local government 6. Sale or transfer of the BMBE, if it is a sole
units (LGUs) are encouraged to establish a One-Stop- proprietorship without prejudice to the transferee
Business Registration Center to handle the efficient applying for registration
registration and processing of permits/licenses of 7. Submission of fake or falsified documents;
BMBEs. Likewise, LGUs shall make a periodic 8. Retirement from business, or cessation/suspension
evaluation of the BMBEs' financial status for of operations for one year; and
monitoring and reporting purposes. 9. Making false or omitting required declarations or
statements.
The LGUs shall issue the Certificate of Authority
promptly and free of charge. However, to defray the
administrative costs of registering and monitoring the
BMBEs, the LGUs may charge a fee not exceeding One
Thousand Pesos (P1,000.00).

The Certificate of Authority shall be effective for a

C. EXEMPTION FROM TAXES AND FEES (SEC. 7, R.A.

All BMBEs shall be exempt from income tax for income

The LGUs are encouraged either to reduce the amount

D. EXEMPTION FROM GROSS RECEIPTS TAX OF

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