BIR Ruling No. 249-11

July 26, 2011 BIR RULING NO. 249-11 R.A. 9178; BIR Ruling No. DA-(OSL-029) 434-09 Cotabato's Pride Food Products, Inc. Alonzo Bldg., Quezon Avenue Cotabato City Attention: Atty. Ramon T. de la Fuente President Gentlemen : This refers to your letter dated May 12, 2010 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 (BMBEs), Providing Incentives and Benefits Therefor, and for other Purposes", Cotabato's Pride Food Products, Inc., with Tax Identification (TIN) No. 006-138-488, was awarded a BMBE Certificate of Authority last February 1, 2010; and that this will have a term of two (2) years or until February 1, 2012. 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 asset 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. 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." cASIED Inasmuch as Cotabato's Pride Food Products, Inc. is a registered BMBE and was awarded BMBE Certificate of Authority by Cotabato City, it is therefore exempt from the payment of income tax for income arising from the operations of the enterprise for a period of two (2) years from February 1, 2010 or until February 1, 2012. (BIR Ruling No. DA-(OSL-029) 434-09 dated August 3, 2009) 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 null and void. Very truly yours, (SGD.) KIM S. JACINTO-HENARES Commissioner of Internal Revenue