Airon T. Alcazar Store

December 23, 2008 BIR RULING [DA-(OSL-019) 568-08] R.A. No. 9178; BIR Ruling No. DA-129-2005 Airon T. Alcazar Store Magdugo, Toledo City Cebu Attention: Mr. Airon T. Alcazar Proprietor Gentlemen : This refers to your letter dated August 20, 2008 requesting for a renewal of exemption from the payment of income tax pursuant to the provisions of Republic Act (R.A.) No. 9178. HTCAED Documents show that Airon T. Alcazar Store is registered with the Department of Trade and Industry under Certificate No. 00283379 dated December 12, 2005 and the Bureau of Internal Revenue, Revenue District Office No. 80, Mandaue City under Certificate of Registration No. 2RC0000043197. On August 7, 2006, it was awarded a Certificate of Authority for Barangay Micro Business Enterprise pursuant to R.A. No. 9178, otherwise known as "An Act to Promote the Establishment of Barangay Micro Business Enterprise, Providing Incentives and Benefits Therefore, and for Other Purposes," entitling it to all benefits and incentives subject to the terms and conditions set forth in the said law. The aforesaid Certificate expired on August 7, 2008. On November 7, 2006, BIR Revenue Region No. 13, Cebu City issued a BIR Ruling exempting it from payment of income tax. On August 14, 2008, Airon T. Alcazar Store was again issued a Certificate of Authority for Barangay Micro Business Enterprise which will expire on August 14, 2010. In reply, please be informed that Sections 3 (a), 4 and 7 of R.A. No. 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) 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. 4. Registration and Fees . xxx xxx xxx The Certificate of Authority shall be effective for a period of two (2) years, renewable for a period of two (2) years for every renewal. xxx xxx xxx SEC. 7. Exemption from Taxes and Fees . All BMBE's shall be exempt from income tax for income arising from the operations of the enterprise. ETDHaC 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 Airon T. Alcazar Store is a registered BMBE and was awarded BMBE Certificate of Authority by the City of Mandaue, it is therefore exempt from the payment of income tax for income arising from the operations of the enterprise for a period of another two (2) years or until August 14, 2010 (BIR Ruling No. DA-129-2005 dated April 6, 2005). 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 as null and void. Very truly yours, (SGD.) JAMES H. ROLDAN Assistant Commissioner Legal Service