Tarrosa Poultry Farm

December 28, 2007 BIR RULING [DA-695-07] R.A. 9178; DA-471-2007 Tarrosa Poultry Farm Cotmon, Camalig Albay Attention: Mr. Neil P. Tarrosa Owner/Manager Gentlemen : This refers to your letter dated October 25, 2007 requesting for exemption from the payment of income tax pursuant to the provisions of Republic Act (RA) No. 9178. It is represented that pursuant to RA 9178, "An Act to Promote the Establishment of Barangay Micro Business Enterprises (BMBEs), Providing Incentives and Benefits Therefor, and for Other Purposes," you were awarded the Certificate of Authority for BMBE last June 22, 2007 entitling you to all the benefits and incentives subject to the terms and conditions set forth in the said law which will expire on June 22, 2009. In reply, please be informed that Sections 3 (a) and 7 of RA 9178 provide, 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. 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. DaIACS 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 Tarrosa Poultry Farm is a registered BMBE and was awarded BMBE Certificate of Authority by the Office of the City Treasurer, Camalig, Albay, it is therefore exempt from the payment of income tax and consequently from the 1% withholding tax for income arising from the operation of the enterprise for a period of two (2) years from June 22, 2007 or until June 22, 2009. (BIR Ruling No. 471-2007 dated August 24, 2007) It is required, however, for you to register with the Revenue District Office (RDO) having jurisdiction over your place of business. This ruling is being issued on the basis of the foregoing facts as represented. However, if upon investigation, it will be ascertained that the facts are different, then this ruling shall be considered as null and void. Very truly yours, Commissioner of Internal Revenue By: (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service