Wednesday, February 15, 2012

Radical changes in BMBE law to benefit SMEs-Casiño

The House Committee on Small Business and Entrepreneurship Development is eyeing radical changes to Republic Act 9178 or the Barangay Micro Business Enterprises (BMBE) Act of 2002 once the amendatory bill is approved.

“We are looking at very radical revisions in the BMBE Law that will strengthen the small and micro entrepreneurs in the country once the amendments are approved,” Committee chairperson, Representative Teddy Casiño said yesterday during a public hearing on the amendatory bill held at the Grand Menseng Hotel in Davao City.

This is the third leg of a series of public hearings held in Congress and in Cebu last year. The fourth and last public hearing will be held in Central Luzon, after which the amendatory bill is expected to be passed on third reading at the plenary.
Casiño said it is high time to amend the BMBE Law as it has been a failure and has failed to live up to its goals of providing incentives to the small and medium entrepreneurs. He said that in Davao City alone, only 44 entrepreneurs have registered under the program out of the thousands of small business owners in the city. Of this, he added, only seven have been granted income tax exemptions in 2011.

“There are many complaints about the implementation of the BMBE Law and one of this is the P1,000 payment for the certificate which is required to be registered under the law,” Casiño said. And even if the entrepreneurs get registered under the program, he added, they do not get tax exemptions from the national government because of the strict policies of the Bureau of Internal Revenue when it comes to tax exemptions.

He said the small businesses do not even enjoy benefits in the local level because they do are still required to pay local taxes and fees. They do not even have benefits in terms of credit, he added, because the Bangko Sentral ng Pilipinas reported that no special facilities were created for them under the program.
“Small businesses in Davao have to wait for a long time for the approval of their applications for tax exemptions since these are being processed in the national level,” he said.

The amendatory bill is pushing for the automatic exemption of the small businesses under the BMBE Law both in the local and national taxes and fees for a period of between two to six years. Once this is implemented, he said, small businesses no longer have to pay certain fees to the local government like Mayor’s permit, business permit, garbage and other fees.

“We want them to be automatically exempted from the local charges and taxes but this is where the problem comes in since most local government units are apprehensive about the possible reduction in their income,” he said.

Casiño however said that a consensus among the LGUs they have talked to during the public hearings show that the exemptions may be allowed for small business with capitalization of less than P200 thousand and for a specified period only. After the maximum six-year period of exemption, then they have to pay, headed.

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