BSP exempts SMEs from ITR and AFS requirements
Iloilo City (6 October) -- Micro and small entrepreneurs in the country will now have easy and greater access in obtaining loans from banks as submission of some documents required before granting of such transaction has been exempted by the Bangko Sentral ng Pilipinas (BSP).
Recently, the Monetary Board of the BSP has approved a two-year exemption of micro and small enterprises from the submission of income tax return (ITR) and/or audited financial statement (AFS) as proof of financial capacity when they apply for bank loans.
The submission of said financial documents is required under Circular No 472 issued by the BSP last January 20, 2005.
In a press report, the BSP said that since last year they have been in consultation with the Bureau of Internal Revenue (BIR) over this matter. Recently it received a word from the BIR that it poses no objection to the issuance of a regulation exempting small enterprises, along with micro enterprises, from complying with the subject documentary requirements.
However, the BSP clarified that this relief should not be confused with the exemption from the filing of ITRs and the payment of appropriate taxes for entrepreneurs who are not otherwise exempted from income tax pursuant to the provisions of the National Internal Revenue Code, and other laws, general or special.
The BSP recognizes that micro and small entrepreneurs play a significant role in the economic and social development of the country.
In one of her speeches, President Gloria Macapagal Arroyo said that entrepreneurship is not only the key to economic growth and stability but the ultimate solution to poverty. With the economy on a bullish run, her administration is continuously working to expand its pro-poor programs to ensure that the masses feel the results of the country's economic gains.
According to BSP this temporary exemption from existing regulations is aimed at finding ways to help these entrepreneurs obtain greater access to credit in terms of less documentary requirements that usually characterize bank loans even while they prepare and put their records in order to enable them to comply with the required submission of their financial documents when the two-year exemption period expires. (PIA) [top]