The Monetary Board, the policy-making body of the Bangko Sentral ng Pilipinas (BSP) approved a two (2) year exemption of micro and small enterprises from the submission of income tax return (ITR) and/or audited financial statements (AFS) as proof of financial capacity when they apply for bank loans. The submission of said financial documents is required under Circular No. 472.
The BSP recognizes that micro and small entrepreneurs play a significant role in the economic and social development of the country. This temporary exemption from existing regulations is aimed at finding ways to help these entrepreneurs obtain greater access to credit in terms of less documentary requirements that usually characterize bank loans even while they prepare and put their records in order to enable them to comply with the required submission of their financial documents when the two-year exemption period expires.
The BSP has been in consultation with the Bureau of Internal Revenue (BIR) since last year over this matter and earlier this week, it received word from the BIR that the latter poses no objection to BSP’s issuance of a regulation exempting small enterprises, along with micro enterprises, from complying with the subject documentary requirements. This relief, however, should not be confused with the exemption from the filing of income tax returns and the payment of appropriate taxes for entrepreneurs who are not otherwise exempted from income tax pursuant to the provisions of the National Internal Revenue Code, and other laws, general or special.