Did you know about the Barangay Micro Business Enterprises (BMBEs) Act of 2002, which provides an exemption for paying taxes for the beneficiaries and more? If not, this article is for you!

This blog tackles the law, its benefits, and how to become one of the beneficiaries through the Department of Trade and Industry’s (DTI) Negosyo Centers.

What is BMBE?

Any business entity or operation that meets the requirements listed below is qualified for Barangay Micro Business Enterprises Certificate of Authority:

• Assets with a maximum value of Php 3M (assets resulting from loans are included, excluding the land where the plant and equipment are located)
• The business entity produces, processes, or manufactures goods, including commerce, services, and agro-processing.
• Registered with the DTI for sole proprietorships; for juridical persons: with the SEC (Security and Exchange Commission), for corporations, partnerships and associations; and with the Cooperative Development Authority for cooperatives.

Note: “services” must not include any services provided in conjunction with the practice of a profession by anybody holding a valid government license obtained through successful completion of a government licensing examination.

What are the benefits of BMBE?

Those registered as a BMBE are granted the following benefits:

• Income tax exemption from income of the business;
• Minimum Wage Law exemption (granted that BMBE employees still receive the same social security and health care benefits like others);
• Access to special credit window made for BMBE;
• Training in technology transfer, production, and management as well as marketing assistance;
• Reduced or exempted from local taxes, fees, and charges imposed by the LGU where the enterprise is located.

BMBE Registration

Applications for the Barangay Micro Business Enterprise Certificate of Authority must be submitted to the Negosyo Centers set up in each province, city, or municipality or to the DTI offices in places where no Negosyo Centers exist. 

What are the requirements for BMBE registration?

The following documents must be presented with the adequately completed BMBE application form: 

1. The Department of Trade and Industry’s (DTI) Certificate of Business Name Registration; or
2. Certificate of Registration from Securities and Exchange Commission (SEC); or
3. Cooperative Development Authority (CDA) issued Certificate of Registration. 

How much is the BMBE registration fee?

The Certificate of Authority will be provided for free when it has been registered. 

How to register a business as BMBE?

The applicant must complete the procedures listed to apply for the Barangay Micro Business Enterprise Certificate of Authority (CA):

1. Complete and submit the BMBE Certificate of Authority application form;
2. Submit the requirements to the Negosyo Center/DTI Office where the business is located.

The DTI will assess the application through the Negosyo Center to determine eligibility and qualifications as a BMBE;

3. Having determined that the applicant is eligible and competent, DTI issues the CA from BMBE within fifteen (15) working days after receiving the application with all requirements. In the absence of this, the Certificate of Authority shall be presumed authorized (where in such cases, it becomes ministerial on the part of DTI to issue the BMBE Certificate of Authority).

What are the requirements to avail of Income Tax Exemption in the BIR?

The following documents to be submitted to the BIR to avail of Income Tax Exemption are the following:

1. Copy of the BMBEs Certificate of Authority
2. Sworn Asset Statement of the BMBE and its affiliates, accompanied by all necessary documentation
3. A certified list of all the branches, stores, production sites, a storage locations
4. Certified Affiliates List
5. Latest audited financial statements, account information forms or other equivalent documents. 

How to avail of Income Tax Exemption in the BIR?

The Barangay Micro Business Enterprise registers with the BIR Revenue District Office (RDO) in the district where its office or place of business is situated and submits all proper documents. 

How long is the validity of the BMBE Certificate of Authority?

The BMBE Certificate of Authority will be valid for two (2) years starting on the date of issuance. 

Subject to the applicant’s continuous compliance with the eligibility requirements established by law and DTI Department Administrative Order (DAO) No. 16-01 Series of 2016.

Barangay Micro Business Enterprise Certificate of Authority Renewal

Every two (2) years, the BMBE Certificate of Authority must be renewed. Find out how below:

What are the requirements for BMBE renewal?

The following essential requirements are to be submitted for Barangay Micro Business Enterprise Certificate of Auhthority renewal: 

1.   Two (2) copies of the BMBE application form with a photocopy

2.   Business Name certificate with photocopy

3.   Valid ID with a photocopy

4.   Annual Income Tax with a photocopy

How to renew the BMBE Certificate of Authority?

To renew the BMBE Certificate of Authority (CA), the applicant must complete the procedures listed below:

1. Complete and submit the BMBE Certificate of Authority application form;
2. Submit the requirements to the Negosyo Center/DTI Office where the business is located.

The DTI will assess the application through the Negosyo Center to determine eligibility and qualifications as a BMBE;

3. Having determined that the applicant is eligible and competent, DTI issues the CA from BMBE within fifteen (15) working days after receiving the application with all requirements. In the absence of this, the Certificate of Authority shall be presumed authorized (where in such cases, it becomes ministerial on the part of DTI to issue the BMBE Certificate of Authority).

With some assistance from support organizations, micro companies can grow, provide income for the owners, add to the employment market, and aid the overall economy.

 However, they must first come forth and be acknowledged legally to enjoy the benefits provided by the government. 

For more information about BMBE, check out the FAQs section of DTI today. –WhatALife!/Brix

Source: (1), (2)

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Also read: 11 Basic Requirements to Start a Small Business in the Philippines