Register online to unlock benefits

TO BENEFIT from tax exemptions, special credit programs and government support, online sellers and digital entrepreneurs in Cebu are asked to register their business names through the Business Name Registration System (BNRS) at bnrs.dti.gov.ph and Barangay Micro Business Registration Online for Enterprises (BMBE) at bmbe.dti.gov.ph.

The Cebu Department of Trade and Industry said these steps are crucial amid the implementation of the Internet Transactions Act and new BIR regulations – Tax Rules 15-2024 and 16-2023 – that impact e-commerce platforms and digital financial service providers.

DTI Cebu Director Rose Mae Quinañola said both the BNRS and BMBE-Online systems are fully digital, offering entrepreneurs the convenience of 24/7 access to register their business from anywhere in the country.

“This makes the registration process more efficient by eliminating the need for in-person visits to DTI offices and enabling faster processing times,” she said. “The new BIR regulations and Internet Transactions Act strongly encourage companies to comply with tax regulations and take advantage of the benefits available through BMBE registration.”

The BMBE program is a government initiative aimed at supporting micro-enterprises. The DTI Cebu chief said registration as a BMBE provides access to tax exemptions, special loan programs and government support services.

Quinañola said the registration of businesses, especially online sellers and digital entrepreneurs, is crucial to formalizing the growing digital economy. This initiative allows businesses to operate legally, contributing to the economy by creating more jobs, generating additional income and ensuring consumer protection.

Benefits

Registered BMBEs are exempt from paying income tax on business income. They are also exempt from a one percent withholding tax on half of gross payments required by e-commerce platforms and digital financial service providers.

BMBEs are exempt from the Minimum Wage Act, but are still obliged to provide social security and health benefits. They can also access government lending programs, including low-interest loans, and receive priority for financial assistance.

BMBEs can benefit from government technology programs and skills development support to improve their production, processing and business operations. Complying with the Internet Transactions Act helps ensure that online businesses operate legally, increasing consumer confidence and protecting their rights.

New BIR policy

Meanwhile, under the new BIR regulation, RR 15-2024 requires all enterprises to register with the BIR within 10 days of starting operations. Failure to comply may result in penalties including a fine of up to P20,000.

On the other hand, RR 16-2023 requires e-commerce platforms and digital financial service providers to withhold one percent of half of gross payments for companies earning more than P500,000 per year. However, companies registered with the BMBE are exempt from this tax, which is a relief for micro-enterprises and online sellers.

DTI says e-commerce platforms such as Shopee and Lazada have started levying a single tax on half of gross remittances to online sellers whose annual earnings exceed P500,000 from July 15, 2024.

On October 12, digital financial services providers such as GCash and Maya will start levying the same withholding tax on companies whose remittances exceed £500,000.

The DTI reported a six percent increase in business name registrations in the first half of 2024, reaching 679,118, largely driven by the surge in e-commerce, with 17,000 online businesses registered in the first half of the year, almost as many as 18 000 registered in 2023.

DTI said this trend highlights the growing importance of the digital economy and the shift towards online commerce. Last year, the country’s digital economy contributed 8.4 percent to the country’s gross domestic product of P2.05 trillion, up 7.7 percent in 2022. / BLANKET