TARLAC STATE UNIVERSITY - COLLEGE OF BUSINESS AND ACCOUNTANCY
2ND SEMESTER ACADEMIC YEAR 2021-2022
TAX 3 – SPECIAL TAXATION
BMBE ACT OF 2002 (RA 9178)
Barangay Micro Business Enterprises (BMBE) – refers
to 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 (P3,000,000.00). The above definition shall be
subject to review and upward adjustment by the Small
and Medium Enterprise Development (SMED) Council.
Any person, natural or juridical, or cooperative, or
association, having the qualifications may apply for
registration as BMBE.
Services (for purposes of this Act) shall exclude those
rendered by any one who is duly licensed by the
government after having passed a government
licensure examination, in connection with exercise of
one’s profession.
Certificate of Authority is the certificate issued
granting the authority to the registered BMBE to
operate and be entitled to the benefits and privileges
accorded thereto.
The Certificate of Authority shall be effective for a
period of two (2) years, renewable for a period of two
(2) years for every renewal.
Registration and Fees
Registration fee must not exceed P1,000 (Go Negosyo
Act of 2014) under the Department of trade and
Industry – Negosyo Centers
INCENTIVES AND BENEFITS OF BMBES
A. Exemption from Taxes, Fees, and Charges
1. BMBEs shall be exempt from income tax for
income arising from the regular business
operations. However, the BMBE is not
exempt from income taxes imposed to
passive income subject to final taxes, capital
gain tax and all other forms of passive
income and income from revenues not
effectively connected with or arising from
operations of the BMBEs as such.
The BMBE shall register as such with the BIR
RDO where the principal office or place of
business of the BMBE is located.
2. The LGUs are encouraged wither to reduce
the amount of local taxes, fees and charges
imposed or to exempt the BMBEs from local
taxes, fees and charges.
3. The exemption covers only the income
taxes enumerated under Title II of the NIRC
of 1997 which includes the schedular rate,
the improperly accumulated earnings tax,
the final taxes on passive income, the
various capital gains taxes, etc.
4. BMBEs, however, are also not exempted
from the payment of other internal revenue
taxes such as the value-added tax (VAT), the
percentage taxes, the documentary stamp
tax, transaction tax, etc.
B. Exemption from the Coverage of Minimum
Wage Law – Provided, that all employees of
the BMBE shall be entitled to the same benefits
given to any regular employee such as social
security and healthcare benefits.
C. Credit Delivery – The Land Bank of the
Philippines (LBP), the Development Bank of the
Philippines (DBP), the Small Business
Guarantee and Finance Corporation (SBGFC),
and the People’s Credit and Finance
Corporation (PCFC)) shall set up a special credit
window that will service the financing needs of
BMBEs. The Government Service Insurance
System (GSIS) and Social Security System (SSS)
shall likewise set up a special credit window for
its regular members.
D. Technology Transfer, Production and
Management Training, and Marketing
Assistance
A BMBE Development Fund shall be set up with
an endowment of Three hundred Million Pesos
(P300,000,000.00) from the Philippine
Amusement and Gaming Corporation
(PAGCOR) and shall be administered by the
SMED Council.