BUSINESS PERMIT AND

LICENSES

RICARDO L. BOBIS, JR.

Municipal Treasurer
San Antonio, Zambales
AUTHORITY OF LGUs TO COLLECT TAXES
Emanates from
Republic Act 7160
also known as the
Local Government Code of 1991

Book II.
LOCAL TAXATION AND FISCAL MATTERS
Title One
LOCAL GOVERNMENT TAXATION
Chapter I. General Provisions

Sec. 129. POWER TO CREATE SOURCES OF REVENUE. Each

local government unit shall exercise its power to create its own
sources of revenue and levy taxes, fees and charges subject to
the provisions herein, consistent with the basic policy of local
autonomy. Such taxes, fees, and charges shall accrue
exclusively to the local government units.

Sec. 132. LOCAL TAXING AUTHORITY. The power to impose a

tax, fee or charge or to generate revenue under this Code shall
be exercised by the sanggunian of the LGU concerned through
an appropriate ordinance.
 vests the power to impose
taxes and generate revenues in
the sanggunians.

However, taxing and revenue-

generating powers shall be
exercised through appropriate
ordinances.
Two Major Sources of Income

Externally Sourced

Internally Sourced
Externally Sourced Income
consists of share in BIR gross
collection or IRA,

a share in the proceeds from

utilization & development of the
national wealth,

loans, credits and bonds,

and grants or subsidies.

Internally Sourced Income

Business Tax & other local taxes,

Real Property Taxes,

Income from economic enterprises,

Fees and charges.

PRINCIPLES OF TAXATION
Taxes must be equitable

Based on the taxpayers ability to pay

Levied and collected only for public

purposes

Must not be unjust, excessive, oppressive,

or confiscatory

Must not be contrary to law, public policy,

national economic policy, or in restraint of
trade
Levels of Taxing Power

Provinces

Municipalities

Cities

Barangays
For Municipalities
Tax on Business

Fees and Charges

Community Tax Certificate

Fees for Sealing and Licensing of Weights and

Measures

Fishery Rentals, Fees and Charges

Motorized Tricycle Operators Permit (MTOP)

TAX ON BUSINESS

Manufacturers
Wholesalers

Exporters

Manufacturer, Wholesaler, or
Retailers of Essential Commodities
Retailers

Contractors

Banks and other Financial

Institutions
COMMON FEES AND CHARGES

Regulatory Fees
Mayors Permit
Garbage Collection Fee
Zoning/Locational Clearance

Other Fees & Charges

Real Property Tax Clearance
Fire Inspection Fee
Sanitary Inspection Fee
Occupancy Permit
Occupation/Calling Fee
PROGRESSIVE TAX STRUCTURE

Calibrated/GraduatedScale of
Gross Sales or Receipts

Percentage Base
GRADUATED SCALE
Manufacturer
With Gross Sales or Receipt for the Amount of Tax
Previous Year in the amount of per annum

Less than 30,000 484.00

30,000 or more but less than 40,000 726.00
40,000 or more but less than 50,000 907.00
50,000 or more but less than 75,000 1,452.00
:: :: ::
5,000,000 or more but less than 6,500,000 26,812.00
6,500,000 or more 0.4125%
of Gross Sales
PERCENTAGE BASE
Retailers of Other Commodities
With Gross Sales or Receipt for the Rate of Tax
Previous Year in the amount of per annum

400,000 or less 2.2%

More than 400,000 1.1%
PHILIPPINE DEFINITION OF BUSINESS SIZE

Characteristics Asset Size Number of Workers

Cottage PhP 500,000 and below 1-10

Small PhP 500K - PhP 5M 11-99
Medium PhP 5M - PhP 20M 100-199
Large Over PhP 20M 200 & above
BASES OF TAXATION

For Newly started Business

Based on Capital Investment

For Renewal
Based on Gross Sales or Receipts
of the preceding calendar year
RETIREMENT OF BUSINESS
A business subject to tax shall, upon
termination, submit a sworn
statement of its gross sales or
receipts for the current year.

If the tax paid during the year be less

than the tax due on said gross sales
or receipts of the current year, the
difference shall be paid before the
business is considered officially
retired.
PAYMENT OF BUSINESS TAX

Taxes imposed shall be payable for

every separate or distinct
establishment or place where
business subject to the tax is
conducted and one line of business
does not become exempt by being
conducted with some other
businesses for which such tax has
been paid.

The tax on a business must be paid

by the person conducting the same.
TAX PERIOD AND MANNER OF PAYMENT

thetax period of all local taxes,

fees and charges shall be the
calendar year.

Such taxes free and charges

may be paid in quarterly
installments.
ACCRUAL OF TAX

all local taxes, fees and charges

shall accrue on the 1st day of
January of each year.

New taxes, fees, and charges or

changes in the rates thereof, shall
accrue on the 1st day of the quarter
next following the effectivity of the
ordinance imposing such new levies
or rates.
TIME OF PAYMENT

All local taxes, fees, and charges

shall be paid within the first twenty
(20) days of January or of each
subsequent quarter, as the case may
be.

The sanggunian may, for a justifiable

reason or cause, extend the time for
payment of such taxes, fees or
charges without surcharges or
penalties, but only for a period not
exceeding six (6) months.
SURCHARGE AND PENALTIES

The sanggunian may impose a

surcharge not exceeding twenty-five
percent (25%) of the amount of
taxes, fees or charges not paid on
time and an interest at the rate not
exceeding two (2%) per month of the
unpaid taxes, fees and charges
including surcharges, until such
amount is fully paid but in no case
shall the total interest on the unpaid
amount or portion thereof exceed
thirty six (36) months.
 SITUS OF TAX
Manufacturers,
Wholesalers,
Contractors,
Banks, etc.

w/ Branch or Sales w/out Branch or

Outlet in Sales Outlet in
Municipality Municipality

Record Sales in Record Sales in

Branch or Outlet in Principal Office in
Municipality Municipality

Pay Tax to Pay Tax to

Municipality where Municipality where
Branch of Sales Principal Office is
outlet is located located
DISTRIBUTION OF TAXABLE 70%

Manufacturer Prorate taxable percentage

has 2 or more Yes among LGUs where factories, etc.
factories, etc. in are located according to
different respective volumes of production
localities during taxable period

No

Plantation & Yes 70% Taxable by Municipality

factory located in
where factory, etc. is located
same LGU

No

42% Taxable by Municipality where

factory is located
28% Taxable by Municipality where
plantation is located
THE BUSINESS PERMIT
AND LICENSES OPERATION
Before the Operation of any
business or of an entity to engage in
any business, within its taxing
powers, one must Apply for Mayors
Permit to Operate Business

Upon its Expiration and or

Before the retirement of Business

BASIC REQUIREMENTS
Community Tax Certificate of the Owner

Barangay Business Clearance

BIR Registration

DTI Registration

For Corporation, SEC Registration

Certificate
BASIC STEPS

APPLICATION.
The Applicant shall secure and
prepare the Basic Requirements
in the Checklist

Checklist of Basic Documentary

Requirements:
.Community Tax Certificate
.Barangay Business Clearance
.BIR Certificate of Registration
.DTI Certificate of Registration
.For Corporation, SEC
Registration Certificate
STEP 2. REVIEW
REVIEW.
Secure and fill out Application
form from the Mayors Office.
Upon initial review of the
License Officer, comply/secure
additional requirements, if any.
Other Requirements :

Building Permit
Occupancy Permit
Locational/Zoning Clearance
Environmental Compliance
Certificate (ECC)
SSS/PhilHealth Certificate of
Contribution
Real Property Tax Clearance from
Municipal Treasury Office
Other documents as maybe required
depending on the nature of business
STEP 3. ASSESSMENT
ASSESSMENT.
Submit Application Form
together with the Requirements to
the Treasurers Office for
Assessment.
Sample of Assessment
Mayors Permit Fee: 2,000.00
Nature: Retailer of Essential Comm.
Classification: Small
Business Tax: 1,815.00
Gross Sales or Receipt for the
Previous Year PhP230,000.00
Regulatory Charges:
Police Clearance 100.00
Sanitary Inspection 100.00
Business Plate 150.00
Service Charges:
Health Examination 100.00
Garbage Collection Fee 400.00
Occupation/Calling Fee 100.00
4,765.00
Fire Inspection (10%) 476.50
TOTAL AMOUNT DUE: 5,241.50
STEP 4. PAYMENT
PAYMENT
NO PAYMENT shall be
made or collected
OUTSIDE of the
TREASURERS OFFICE
and without corresponding
OFFICIAL RECEIPT.
STEP 5. INSPECTION
INSPECTION.
Present Official Receipt and
Application Form to the
1.) Municipal Health Office for
the Issuance of Application for
Sanitary Permit
2.) Bureau of Fire Protection
Office for the Issuance of
Application for Fire Safety
Inspection

These Offices shall schedule

inspection of the business prior
to the release of certificate.
STEP 6. RELEASE
RELEASE.
Release of Mayors Permit
to Operate and Business
Registration Plate.
OFFICES INVOLVED IN THE BPLS

Mayors Office
Issuance/Release of Application for Permit to Operate

Treasurers Office
Issuance of CTC & Real Property Tax Clearance
Assessment, Payment and Recording

MPDO
Zoning/Locational Clearance

Engineering Office
Issuance/Release of Application for Building/Occupancy Permit

Municipal Health Office

Issuance/Release of Application for Sanitary Inspection/Health
Certificate

Bureau of Fire Protection

Issuance/Release of Application for Fire Safety Inspection