Bureau of Local Government Finance Opinion

September 12, 2014 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Asst. Dir. Jerry T. Clavesillas OIC, BSMED-DTI Head, MSMED Council Secretariat 5F Trade & Industry Building 361 Sen. Gil J. Puyat Ave., Makati City Dear Dir. Clavesillas : This refers to your emailed letter of September 10, 2014 request for inputs/comments on the draft Implementing Rules & Regulations (IRR) of Republic Act (R. A.) No. 10644 otherwise known as the "Go Negosyo Act". At a glance, this Bureau has no further comment on the draft IRR of R. A. No. 10644. However, we would like to be clarified on the registration process under Rule 4, Section 1 (b) of the draft IRR, which provides: HSAcaE "(b) Certificate of Authority for Barangay Micro Business Enterprises (BMBEs) The DTI, through the Negosyo Center in the city or municipal level, shall have the sole power to issue the Certificate of Authority for BMBEs to avail of the benefits provided by Republic Act No. 9178, otherwise known as the Barangay Micro Business Enterprises (BMBEs) Act of 2002". Upon the approval of registration of the BMBE, the Negosyo Center shall issue the Certificate of Authority, renewal every two (2) years. The DTI, through the Negosyo Center may charge a fee which shall not be more than One Thousand pesos (P1,000.00) to be remitted to the National Government. In this regard, Sections 3, 6 and 7 of Rule II on the Registration of BMBE, DTI Department Order No. 01, series of 2003, are hereby amended accordingly to change the responsibility to issue the Certificate of Authority from the City or Municipal Treasurer to the Department of Trade and Industry." In relation to the above, Section 1(3) provides: "(3) Should the concerned business permits and licensing offices (BPLO) fail to process the application, whether filed directly with the LGU or through the Negosyo Center, within fifteen (15) days, the MSME shall be deemed registered for a period of one (1) year: Provided, however, That within a period of thirty (30) days from the date of application of an MSME, any business permit or licensing office shall have the authority to revoke the permit or license upon determination that an MSME has not met the requirements and qualifications imposed by the office. Provided, further, that the BPLO shall immediately inform the applicant by way of a written revocation. . . .." The abovequoted provisions of the draft IRR will involve a particular department or office of a local government unit (LGU), more specifically the Business Permit and Licensing Office (BPLO). However, Section 1 (b) provides that the proposed fee of not more than P1,000.00 will be remitted to the National Government. For the guidance of LGUs, particularly the BPLOs and Local Treasury Offices, it may be worth clarifying, so as to avoid any confusion, that the proposed fee of not more than P1,000.00, which will be remitted to the National Government, refers purposely to the issuance of the Certificate of Authority for BMBE registrants by the Negosyo Center in order to avail of the incentives provided by R. A. No. 9178 (BMBE Law). In this regard, it is our view that if the MSME applicant will file the application for registration with the Business Permit & Licensing Office (BPLO) of the LGU concerned, the applicant will be assessed and be liable to pay for the regulatory fees that the LGU may imposed pursuant to its duly-enacted revenue code or tax ordinance. HESIcT In any case, it is suggested therefore that the matter be included in the draft IRR for the information and guidance of all concerns. Very truly yours, (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director