BIR Ruling [DA-372-05]

August 30, 2005 BIR RULING [DA-372-05] Department of Finance Roxas Boulevard Corner Vito Cruz Street Manila Attention: Ms . Ma . Lourdes B . Recente Director IV Research and Information Office Gentlemen : This refers to your letter dated May 9, 2005 relative to the petition of Cagayan de Oro Chamber of Commerce and Industry Foundation, Inc. entitled "Petition to Require the Lead Agencies to Fully Implement Republic Act No. 9178, Otherwise Known as the "Barangay Micro Business Enterprises (BMBEs) Act of 2002", more particularly as to who decides the eligibility under BMBE law, the BIR or the City Treasurer? In reply, please be informed that Sec. 4 of Republic Act No. 9178 provides, viz : "SEC. 4. Registration and Fees . The Office of the Treasurer of each city or municipality shall register the BMBEs and issue a Certificate of Authority to enable the BMBE to avail of the benefits under the Act. Any such application shall be processed within fifteen (15) working days upon submission of complete documents. Otherwise, the BMBEs shall be deemed registered. The Municipal or City Mayor may appoint a BMBE Registration Officer who shall be under the Office of the Treasurer. Local government units (LGUs) are encouraged to establish a One-Stop-Business Registration Center to handle the efficient registration and processing of permits/licenses of BMBEs. Likewise, the LGUs shall make a periodic evaluation of the BMBEs' financial status for monitoring and reporting purposes. 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) aETDIc The Certificate of Authority shall be effective for a period of two years, renewable for a period of two (2) years for every renewal. As much as possible, BMBEs shall be subject to minimal bureaucratic requirements and reasonable fees and charges." In addition, Sections 3 and 6(c) and (d), Article II of the Implementing Rules and Regulations of R.A. 9178 provide viz : "Sec. 3. Place of Registration . The Office of the Treasurer of each city or municipality shall register BMBEs and issue a Certificate of Authority (CA) to enable the BMBE to avail of incentives under the Act; Provided, That only one Certificate of Authority shall be issued for each BMBE and only by the Office of the Treasurer of the city or municipality that has jurisdiction over the principal place of business of the BMBE." "Sec. 6. Procedures for Registration . The following are the procedures when applying for registration as BMBE: xxx xxx xxx (c) the Municipal or City Treasurer evaluates the application. Application shall be processed within fifteen (15) working days upon submission of complete documents. Otherwise, the BMBEs shall be deemed registered; and (d) a registered BMBE shall be issued a CA as proof of registration, which will be effective for a period of two years, renewable for a period of two (2) years for every renewal. In view thereof, for purposes of availment of exemption granted under the law, it is the LGU concerned thru the designated officer under the Office of the City or Municipal Treasurer who is responsible for the determination of eligibility of an establishment as a barangay micro business enterprise, simply because they have the first hand knowledge/information of the enterprises' activities. However, it is the Bureau of Internal Revenue that confirms the said tax exemptions. Very truly yours, (SGD.) JOSE MARIO C. BUAG OIC-Commissioner of Internal Revenue