In Celebration of SME month

Last month, the Department of Trade and Industry (DTI) led the celebration of SME Month. Maybe we were all too preoccupied to even notice it, but since CSR Philippines is on a mission to empower MSMEs toward inclusive growth, we are extending the celebration of SME Month this August.

We are giving free business and tax seminars, round table discussions on tax strategies, and executive business coaching to enjoy a tax-free lifestyle (by appointment only) on a first come, first served basis. Better be ready than sorry as the Bureau of Internal Revenue (BIR) is already set for its nationwide audit. As per RMO 4-2013, all taxpayers are considered possible candidates for audit. Although priority is given to professionals and sole proprietors whose income tax due is less than P200,000, the hit list covers almost all sectors.

Barangay Micro Business Enterprises

With the aim of integrating microenterprises into mainstream economy, Republic Act 9178 or the Barangay Micro Business Enterprises (BMBE) Act was signed into law on November 13, 2002. After more than a decade, very few are aware of its existence and its benefits that are supposed to encourage formation and growth among local micro businesses.

It always comes as a surprise to starting entrepreneurs every time I mention the BMBE law. Despite the relentless efforts of the DTI through its Bureau of Micro, Small and Medium Enterprises Development (BMSMED), many are still reluctant due to either the bureaucracy in the registration process or overwhelming BIR compliance. Both are considered unreasonably pricey for startups, resulting in insolvency or discontinuance of the business even before it makes profit. This, however, is contrary to the very reason the BMBE law was enacted, which is to encourage increasing micro enterprises, including sari-sari stores, ambulant vendors, and other self-employed individuals, to register and to give their share in inclusive growth.

Exclusions, Exemptions

BMBE refers to any business entity or enterprises engaged in the production, processing, manufacturing of products or commodities, including agro-processing, trading and services, whose total assets should not be more than P3 million.

However, licensed professionals like doctors, lawyers, accountants and engineers in connection with the exercise of their profession are excluded. Furthermore, a branch, subsidiary, division or office of a large scale enterprise, or those establishments whose policies are determined by large scale enterprises or by persons who are not owners or employees (such as franchises) are part of the exclusions.

As provided in the BMBE law, the following incentives and benefits are available to those who will be given the BMBE Certificate of Authority, which shall be effective for a period of two years and renewable for a period of two years for every renewal:

1. Exemption from taxes and fees. All BMBEs shall be exempt from income taxes. Unfortunately, LGUs are simply encouraged to reduce the amount of local taxes, fees and charges they impose. In view of this, I fully support House Bill 1742 granting BMBEs exemptions from local business taxes. Active intervention and participation of LGUs in granting incentives and benefits to BMBEs will help generate much needed employment and alleviate poverty. In fact, the creation of One-Stop Business Registration Center in all LGUs to handle the efficient registration and processing of permits and licenses for BMBEs is also mandated.

This, however, is yet to be observed as there are very few LGUs who have implemented the BMBE law. In Quezon City, which is the case study area of the World Bank in the ease-of-doing-business report, the One-Stop Business Registration Center only operates during the first quarter of the year.

2. Exemption from the coverage of the Mininum Wage Law. The BMBE shall be exempt from the coverage of the Minimum Wage Law, provided that all their employees shall be entitled to the same benefits given to any regular employee, such as social security and healthcare benefits.

3. Access to financial assistance. The Land Bank of the Philippines (LBP), the Development Bank of the Philippines (DBP), the Small Business Guarantee and Finance Corporation (SBGFC), and the People's Credit and Finance Corporation (PCFC) shall set up a special credit window that will service the financing needs of BMBE. The Government Service Insurance System (GSIS) and Social Security System (SSS) are also mandated to do the same for their members who wish to establish a BMBE.

The concerned financial institutions are encouraged to wholesale the funds to accredited private financial institutions, including community-based organizations such as credit, cooperatives, non-government organizations (NGOs) and people's organizations, which will in turn directly provide credit support to BMBE. Let us hope appropriated funds will not go to bogus NGOs or dummy corporations like what happened to the pork barrel.

4. Access to training and technology transfer. A BMBE Development Fund amounting to P300 million from PAGCOR shall be set up and shall be administered by SMED Council.

The DTI, 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 Technology and Livelihood Resource Center (TLRC) may avail of the said fund for technology transfer, production and management training, and marketing assistance to BMBEs.

The DTI, in coordination with the private sector and non-government organizations (NGOs) like the CSR Philippines, shall explore the possibilities of linking BMBEs with other enterprises.

Social Entrepreneur-Senator

On the first day of the 16th Congress, Senator Bam Aquino filed seven bills that aim to empower the poor through jobs and livelihood opportunities. This is why I supported his candidacy. I am really looking forward to seeing him as a champion of the micro, small and medium enterprises (MSMEs)-the great propeller of the country's economy. With much hope and vigor, I support the bills he filed, particularly those directly supporting the MSMEs:

1. The Go Negosyo Bill, which expands Republic Act 9184, otherwise known as the Magna Carta for Micro, Small, and Medium Enterprises (MSMEs), and supports MSMEs with incentives and makes it easier for them to start up;

2.The Microenterprise Development Institutions (''MicroDev'') Bill, which supports micro-finance and micro-enterprise support groups;

3. The Youth Entrepreneurship Bill, which proposes the inclusion of entrepreneurship in secondary and post-secondary education curriculum, as well as the creation of a national program to promote youth entrepreneurship;

4. An expansion of the Poverty Reduction through Social Entrepreneurship Bill (PRESENT), filed in the 15th Congress, which supports the creation of social enterprises and offers incentives and benefits to business that genuinely help the poor.

While remaining vigilant, as it will take a while before these bills get enacted into law, I enjoin all administration critics in its battlecry, ''Kung walang corrupt, walang mahirap'', to support the young senator in his quest to empower entrepreneurs. I find these bills more sustainable and strategic, as empowering our people to do some serious work is key, not just in addressing poverty, but also in ousting corrupt officials from government. As the good senator said, ''The bottom line of these bills is that we have to create more support for micro and small businesses because they are the ones that create jobs for our people (not the politicos).''

PNoy should support Sen. Bam Aquino in his laudable action. And if PNoy is really serious in fighting against corruption, I have five suggestions, which will test his political will: Abolish the pork barrel; abolish the Bureau of Customs; stop the nationwide BIR audit (focus on risk-based, computer-aided audit on pre-select industry instead); do not make government agencies as withholding tax agents (they do not remit anyway); and computerize the tax system, including customs.

Loading...

Editor’s note:Yahoo Philippines encourages responsible comments that add dimension to the discussion. No bashing or hate speech, please. You can express your opinion without slamming others or making derogatory remarks.

  • Indonesia defiant as UN leads condemnation of looming executions
    Indonesia defiant as UN leads condemnation of looming executions

    Indonesia on Sunday signalled it was determined to push ahead with the execution of eight foreign drug convicts, despite a growing wave of global condemnation led by United Nations chief Ban Ki-moon. Authorities on Saturday gave formal notice to the eight -- from Australia, Brazil, Nigeria and the Philippines -- that they would be executed by firing squad imminently, along with an Indonesian prisoner. The group have been moved to the high-security prison island of Nusakambangan, where …

  • Philippines calls on ASEAN to urge China to halt land reclamation
    Philippines calls on ASEAN to urge China to halt land reclamation

    The Philippines called on its Southeast Asian neighbours to unite in urging China to halt reclamation of land in the South China Sea, but the call failed to raise widespread support ahead of a regional summit. China claims 90 percent of the South China Sea, which is believed to be rich in oil and gas. Its claims overlap with those of Brunei, Malaysia, the Philippines, Vietnam and Taiwan. Recent satellite images suggest China has made rapid progress in filling in land in contested territory …

  • Philippines urges ASEAN to stop China in South China Sea
    Philippines urges ASEAN to stop China in South China Sea

    KUALA LUMPUR, Malaysia (AP) — The Philippines on Sunday urged its fellow Southeast Asian countries to take immediate steps to halt land reclamation by China in the disputed waters of the South China Sea, warning that failure to do so will see Beijing take "de facto control" of the area. …

  • Philippines urges Southeast Asia to rally to halt China reclamation in disputed waters
    Philippines urges Southeast Asia to rally to halt China reclamation in disputed waters

    The Philippines on Sunday called on neighbouring Southeast Asian nations to push for an immediate halt to China's reclamation in the disputed South China Sea ahead of a regional summit. China claims 90 percent of the South China Sea, which is believed to be rich in oil and gas, with overlapping claims from Brunei, Malaysia, the Philippines, Vietnam and Taiwan. Recent satellite images suggest China has made rapid progress in building an airstrip suitable for military use in contested …

  • President to appeal for Filipina's life at Malaysia summit
    President to appeal for Filipina's life at Malaysia summit

    The Philippine president said Sunday he would appeal for mercy for a Filipina who is due to be executed in Indonesia in two days' time. President Benigno Aquino said he would take the opportunity to seek clemency for Mary Jane Veloso, who is due to be put to death on Tuesday, while in Malaysia for a regional summit Monday. "Once I am there, I will try to speak to President Joko Widodo of Indonesia to appeal once more for her case," Aquino said. She was arrested in 2009 with 2.6 kilograms …

  • U.N. chief appeals to Indonesia not to carry out executions
    U.N. chief appeals to Indonesia not to carry out executions

    United Nations Secretary-General Ban Ki-moon appealed to Indonesia on Saturday not to execute 10 prisoners, including two Australians, for drug-related crimes. Indonesia has so far informed seven of the 10 death row inmates, including the Australians and one Nigerian, that they will be executed in a matter of days, possibly as soon as Tuesday. Nationals from Brazil, Ghana and the Philippines are also on Indonesia's death row. A temporary reprieve was granted to a French citizen who will not …

  • Beijing 'poised to take de facto control' of S. China Sea'
    Beijing 'poised to take de facto control' of S. China Sea'

    Beijing is poised to take "de facto control" of the South China Sea, the Philippines warned Sunday, but its call for a robust Southeast Asian response at a regional summit was shot down. Vietnam, the Philippines, Malaysia and Brunei claim parts of the strategic body of water, but Beijing claims nearly all of it, and its increasingly strident territorial assertions have caused concern in the region and beyond. "(China) is poised to consolidate de facto control of the South China Sea," …

  • US eyes access to Phl bases in 8 locations
    US eyes access to Phl bases in 8 locations

    The United States has asked for access to Philippine military bases in eight locations to rotate troops, aircraft and ships as Washington shifts its forces to Asia and as China expands its military presence in the South China Sea. US Defense Secretary Ash Carter, in a speech in Arizona, has outlined Washington’s next phase in its Asia “pivot,” deploying its most sophisticated destroyers, bombers and fighters to the region. The Asia “pivot” has already seen US Marines rotating through the …

POLL

Should Aquino be held accountable over the Mamasapano operations?

Loading...
Poll Choice Options