BIR Ruling [DA-083-05]

March 11, 2005 BIR RULING [DA-083-05] R.A. 9178; DA-582-2004 Browvin's Food Products And General Merchandise Blk. 13, Lot 5 Casimiro Townhomes Naga Road, St. Joseph Subdivision Pulanglupa II, Las Pias City Attention: Ms. Rowena de Guzman-Ortega Proprietor Gentlemen : This refers to your letter dated December 13, 2004 requesting exemption from the payment of income tax pursuant to the provisions of Republic Act No. 9178. It is represented that pursuant to Republic Act No. 9178, otherwise known as "An Act to Promote the Establishment of Barangay Micro Business Enterprise, Providing Incentives and Benefits Therefor, and for other Purposes," you were awarded the Certificate of Authority for Barangay Micro Business Enterprise last November 13, 2002 entitling you to all benefits and incentives subject to the terms and conditions set forth in the said law, which will expire on November 1, 2006. In reply, please be informed that Sections 3(a) and 7 of R.A. 9178 provides, viz : "SEC. 3. Definition of Terms. As used in the Act, the following terms shall mean: (a) "Barangay Micro Business Enterprise," hereinafter referred to as BMBE, refers to any business entity or enterprises 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 definition shall be subject to review and upward adjustment by the SMED Council, as mandated under Republic Act No. 6977, as amended by Republic Act No. 8289. xxx xxx xxx "SEC. 7. Exemption form Taxes and Fees. All BMBE's shall be exempt from income tax for income arising from the operations of the enterprise. The LGUs are encouraged either to reduce the amount of local taxes, fees and charges imposed or to exempt the BMBEs from local taxes, fees and charges." Inasmuch as BROWVIN'S FOOD PRODUCTS & GENERAL MERCHANDISE is a registered BMBE and was awarded BMBE Certificate of Authority by the City of Las Pias, it is therefore exempt from the payment of income tax for income arising from the operations of the enterprise for a period of four (4) years from November 13, 2002 or until November 1, 2006. It is required, however, for you to register with the Revenue District Office having jurisdiction over you. (BIR Ruling No. DA-582-2004 dated November 12, 2004) This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation it will be disclosed that the facts are different, then this ruling shall be considered null and void. acHTIC Very truly yours, (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group