BIR Ruling [DA-582-04]

November 12, 2004 BIR RULING [DA-582-04] R.A. 9178 GTM Castillo Construction Supply 121 Corner Sampaguita St., Ligas I, Bacoor, Cavite Attention: Gloria M. Castillo Proprietress Gentlemen : This refers to your letter dated March 10, 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 Enterprises, Providing Incentives and Benefits Therefor, and for other Purposes," you were awarded the Certificate of Authority for Barangay Micro-Business Enterprise last November 17, 2003 entitling you to all benefits and incentives subject to the terms and conditions set forth in the said law, which will expire on November 7, 2005. 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 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 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. EAISDH xxx xxx xxx "SEC. 7. Exemption from Taxes and Fees . All BMBEs 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 GTM CASTILLO CONSTRUCTION SUPPLY is a registered BMBE and was awarded BMBE Certificate of Authority by the Municipality of Bacoor, Province of Cavite, it is therefor exempt from the payment of income tax for income arising from the operations of the enterprise for a period of two (2) years from November 17, 2003 or until November 17, 2005. It is required, however, for you to register with the Revenue District Office having jurisdiction over you. 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. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JOSE MARIO C. BUAG Deputy Commissioner Legal and Inspection Group