THE GOVERNMENT ARM THAT SUPPORTS SMES
Many say that the government is ineffective and inefficient, and that there is much left to be desired with regards to the performance of those who work in it. I’d like to believe that this is not true for all government employees, and that there are still those in government who try to get things done and truly desire to help the Filipino people.
When businesses fail and people lose jobs, it is easier to blame the government for it than for the businessmen to accept the fault for mismanagement. For those of you who are about to start a business or are operating a small one, here is a fairly new law that you might want to consider and apply for. It just might save you some money and unnecessary headache in the future.
This one law encompasses all possible business ideas one can start with at home. It is Republic Act No. 9178, commonly known as the Barangay Micro Business Enterprise (BMBEs) Act of 2002. This policy was signed into effect last November, 2002 to promote the growth of the small cottage industries in the hope that this will spurt growth and hasten the economic development of the country. By definition, the Barangay Micro Business Enterprise “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 from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, shall not be more that Three Million Pesos (P3,000,000.00)”.
I suggest that once you have your business plan in place and ready to begin, make a trip to your Municipal Hall and apply for the BMBE. Obtain a registration form at the Office of the City Treasurer; once all the required documents have been submitted, you are issued a Certificate of Authority which will automatically qualify you for all the benefits granted by this Act.
So what are the benefits and incentives offered by this Act? First and foremost is the Exemption from Taxes and Fees (Sec. 7). Although all BMBEs are exempt from paying income tax for income derived from the business, depending on the concerned local government units, they may still have to pay a reduced amount for the local taxes, fees and charges.
Second is the Exemption from the Coverage of the Minimum Wage Law (Sec. 8). This states that the enterprise is not obliged to pay its employees the prescribed minimum wage; however, all employees should be entitled to all the benefits given a regular employee such as social security, healthcare, and others.
The third benefit is in Section 9 of this Act which is for Credit Delivery, listing down the institutions that are authorized to service the financing needs of the BMBEs and “all loans from whatever resources granted to BMBEs under this act shall be considered as part of alternative compliance to Presidential Decree No. 717, otherwise known as the Agri-Agra Law, or to Republic Act No. 6977, known as the Magna Carta from Small and Medium Enterprises, as amended”.
The fourth is the provision in this Act of a Three Hundred Million Pesos (P300,000,000.00) BMBE Development Fund from the Philippine Amusement and Gaming Corporation to be administered by the SMED Council for Technology Transfer, Production and Management Training, and Marketing Assistance (Sec. 10). These may be done through and in cooperation with the Department of Trade (DTI), the Department of Science and Technology (DOST), the University of the Philippines Institute for Small Scale Industries (UP ISSI), Cooperative Development Authority (CDA), Technical Education and Skills Development Authority (TESDA), and the Technology and Livelihood Resource Center (TLRC).
Last in the list would be the Trade and Investment Promotion (Sec. 11) wherein all data/information from the registrations “shall be made accessible to and shall be utilized by private sector organizations and non-government organizations for purposes of business matching, trade and investment promotion”.
I’ve mentioned time and again that one should be diligent in doing his homework before starting a business. Doing your homework does not only mean research on the business idea but on all the factors that can or may affect it, government initiatives and laws included. If you want to find out more about this law and others like it, check out the websites of the Board of Investments and the Department of Trade and Industry.
I’ve come to realize that one’s success can only be determined by one’s self and brought about by one’s own perseverance, diligence and hard work. No one else can give you success. Make the choice to succeed and be smart going about it.
I toast to your successful journey!!!
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