Last week, the bicameral conference committee gave the go ahead signal for the Go Negosyo Act of 2013 and is now awaiting President “Noynoy” Aquino’s approval. Authored by Sen. “Bam” Aquino, the bill aims to promote the establishment of MSME’s in the country, therefore providing employment to the unemployed thus reducing poverty.
Go Negosyo Bill
So What Is the Go Negosyo Act of 2013?
The Go Negosyo Act of 2013 also known as Senate Bill 2046 is an amendment to Republic Act No. 9178 commonly known as the “Barangay Micro Business Enterprises (BMBE) Act of 2002” and Republic Act No. 9501 – the “Magna Carta for Micro, Small and Medium Enterprises (MSME’s)”.
Go Negosyo Act of 2013 amends Section 4 of RA9178 which is “Registration and Fees”. Section 4 of RA9178 states that the registration of BMBE’s will be processed by a person designated by the municipality/city mayor as BMBE Registration Officer under the Office of the Treasurer. LGU’s are likewise encouraged to establish One-Stop Business registration centers. As amended on the Go Negosyo Act of 2013, instead of registering to the BMBE Registration Officer, registration will be done on Negosyo Centers that are to be put up by the DTI and registration fees are lowered to Php 500 from Php 1,000 in RA9178.
Application of MSME’s to this program must submit completed requirements and meet the criteria as based on Section 5 of RA9178 and Section 4 of RA9501.
Section 5 of RA9178 – Who are Eligible to Register – Any person, natural or juridical, or cooperative, or association, having the qualifications as defined in Section 3(a) hereof may apply for registration as BMBE.
Section 3. Definition of Terms – As used in this Act, the following terms shall mean:
(a) “Barangay Micro Business Enterprise,” hereinafter referred to as BMBE, 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 including those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, shall not be more than Three Million Pesos (P3,000,000.00) The Above definition shall be subjected to review and upward adjustment by the SMED Council, as mandated under Republic Act No. 6977, as amended by Republic Act No. 8289.
For the purpose of this Act, “service” shall exclude those rendered by any one, who is duly licensed government after having passed a government licensure examination, in connection with the exercise of one’s profession.
Section 4 of RA9501 – Eligibility for Government Assistance. – To qualify for assistance, counseling, incentives and promotion under this Act, businesses falling under the above definition must be:
a) duly registered with the appropriate agencies as presently provided by law: Provided, That in the case of micro enterprises as defined herein, registration with the office of the municipal or city treasurer shall be deemed sufficient compliance with this requirement;
b) one hundred percent (100%) owned, capitalized by Filipino citizens, whether single proprietorship or partnership. If the enterprise is a juridical entity, at least sixty percent (60%) of its capital or outstanding stock must be owned by Filipino citizens;
c) a business activity within the major sectors of the economy, namely; industry, trade, services, including the practice of one’s profession, the operation of tourism-related establishments, and agri-business, which for purposes of this Act refers to any business activity involving the manufacturing, processing, and/or production of agricultural produce; and
d) it must not be a branch, subsidiary or division of a large scale enterprise.
Further, the Go Negosyo Act of 2013 added “Section 6 – Start-Up Funds for MSME’s” as an additional benefit.
“The MSMED Council through DTI and appropriate financing institutions, shall establish a Start-up Fund for MSME’s to provide financing for the development and promotion of MSME’s in priority sectors of the economy as specified by the MSMED Plan.”
Other sections that the Go Negosyo Act of 2013 amends are sections 7A and 7B of RA 6977, as amended by RA 8289 and RA 9501, which consist of the composition of the Small and Medium Enterprise Development Council.
Section 12 of RA 9178 is also amended, which consist of the “Information Dissemination” clause.
As reported in an article at Pinoy-Business.com, the Go Negosyo Act of 2013 also substitutes a number of proposed laws at the senate:
• Senate Bill 169 – Philippine Business Registry Databank (PBRD) Act
• Senate Bill 253 – Jobs Act of 2013
• Senate Bill 615 – Expanding the Coverage of Micro Enterprises
• Senate Bill 1028 – Go Negosyo Act of 2013
• Senate Bill 1254 – Magna Carta for Small Enterprises
• Senate Bill 1593 – Business One-Stop Shop (BOSS) Center Act of 2013
Also, there is an interesting tidbit as reported on Sun Star’s article in regards to allowed deductions in response to the hiring of additional employees.
“Registered small and medium enterprises, which shall hire additional employees subsequent to its registration under the Act, shall be allowed a deduction of Php 40,000 from its gross income for each employee hired in a given taxable year, provided that the maximum allowable deduction from the gross income shall not exceed Php 80,000” – Senator Ralph Recto
Further benefits as stated on the same article are exemptions from the minimum wage law and exemption from the Value Added Tax (VAT) and other percentage tax.
Having these enhancements by the Go Negosyo Act would or would not these encourage existing MSME’s to have their businesses registered? And would these develop courage for more MSME’s to arise in the future?