A Barangay Micro Business Enterprise (BMBE) is any business enterprise engaged in production, processing, manufacturing, trading, or services with total assets of not more than ₱3 million (excluding land).
What Incentives Can You Get?
- Income tax exemption from income arising from business operations
- Exemption from Minimum Wage Law coverage (employees retain SSS and PhilHealth benefits)
- Priority access to special credit windows for financing
- Technology transfer, production and management training, and marketing assistance
- LGUs are encouraged to reduce or exempt BMBEs from local taxes, fees, and charges
Important: The income tax exemption does NOT cover VAT, Percentage Tax, Withholding Taxes, or Documentary Stamp Tax.
Who Qualifies?
- Sole proprietorships (DTI-registered)
- Corporations and partnerships (SEC-registered)
- Cooperatives (CDA-registered)
EXCEPT: Licensed professionals rendering services requiring government licensure (accountants, lawyers, doctors, etc.)
Is Income Tax Exemption Automatic?
No. To avail of the exemption, you must:
- Visit your Revenue District Office
- Complete BIR Form 1905 (Update and Correction)
- Present your BMBE Certificate
- Surrender your original Certificate of Registration (BIR Form 2303)
- Await the updated form indicating income tax exemption
Other FAQs
- Must income tax returns still be filed? Yes, or penalties for open cases will apply.
- Is minimum wage exemption retroactive? No — it applies only to employees hired after BMBE registration.
- Can you claim the 8% flat tax rate? No — individual sole proprietors registered as BMBE cannot use the 8% option.