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PIA Press Release

Government eases BMBE certificate requirements

by Rey Anthony Chiu

Tagbilaran City (25 October) -- Over the crucial roles of small and medium enterprises (SME) in developing miracle economies, the government is now into simplifying processes to help them and gain active local development in return.

The step also runs consistent with the drive that the country has engaged in to come out with strong while neighboring Asian economies bear the brunt of the global oil crisis.

Entrepreneurs have earlier complained that getting their Certificate of Authority to operate as a Barangay Micro-Business Enterprise from the local government units is restrictive, tedious and often discouraging.

From a perceived list of nine requirements before SMEs could get their Certificates of Authority, the government through the Department Of Finance (DOF) has cut down the list into two.

The certificate allows the holder enterprise the eligibility for government-packaged incentives

The DOF acted favorably on the request from SMED Councils in 2004, requesting them to simplify the requirements.

A DOF order now needs only two requirements: a registration as a business entity and a municipal permit.

Stipulated in DOF's Department Order No. 31-05 is the order to simplify the documentation requirements for registration of BMBEs with P300T or less assets.

It may be recalled that in November of 2002, President Gloria Macapagal-Arroyo signed into law Republic Act 9178 which facilitated the establishment of Barangay Micro Business Enterprises (BMBEs) and provided ways for incentives and benefits for them.

Many entrepreneurs initially saw the move as brilliant, but retracted when the requirements were stringent.

The Department of Trade and Industry (DTI) issued the Act's Implementing Rules and Regulations as DTI DAO No. 01, series of 2003.

The DOF consequently issued its own implementing rules and regulations in Department order No. 17-04, dealing with specific portions of the Law. Section 3 of the Order says BMBE registrants need at least nine documents.

Such include registration as business entity, Tax Identification Number, Bureau of Internal Revenue Certificate, municipal business permit, sworn affidavit that the barangay enterprise is barangay-based and micro-business in nature, sworn statement of assets and liabilities, pictures of the place of business, copy of loan contracts and Income Tax Returns.

The stringent requirements make it hard for most registrants to register or obtain a Certificate of Authority.

With the problem, the SME Development Council in September 2004 asked the Department of Finance (DOF) to ease the requirements for BMBE registrations. (PIA) [top]

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