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 revenuegenerating powers shall be exercised through appropriate ordinances.

Two Major Sources of Income

Externally Internally

Sourced 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/Graduated

Scale of Gross Sales or Receipts Base

Percentage

GRADUATED SCALE
Manufacturer With Gross Sales or Receipt for the Previous Year in the amount of Less than 30,000 30,000 or more but less than 40,000 40,000 or more but less than 50,000 50,000 or more but less than 75,000 :: :: 5,000,000 or more but less than 6,500,000 6,500,000 or more Amount of Tax per annum 484.00 726.00 907.00 1,452.00 :: 26,812.00 0.4125% of Gross Sales

PERCENTAGE BASE
Retailers of Other Commodities With Gross Sales or Receipt for the Previous Year in the amount of 400,000 or less More than 400,000 Rate of Tax per annum 2.2% 1.1%

PHILIPPINE DEFINITION OF BUSINESS SIZE

Characteristics Cottage Small Medium Large Asset Size Number of Workers

PhP 500,000 and below 1-10 PhP 500K - PhP 5M 11-99 PhP 5M - PhP 20M 100-199 Over PhP 20M 200 & above

BASES OF TAXATION
For

Newly started Business

on Capital Investment

Based

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

the

tax period of all local taxes, fees and charges shall be the calendar year. taxes free and charges may be paid in quarterly installments.

Such

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 Outlet in Municipality

w/out Branch or Sales Outlet in Municipality

Record Sales in Branch or Outlet in Municipality

Record Sales in Principal Office in Municipality

Pay Tax to Municipality where Branch of Sales outlet is located

Pay Tax to Municipality where Principal Office is located

DISTRIBUTION OF TAXABLE 70%

Manufacturer has 2 or more factories, etc. in different localities

Yes

Prorate taxable percentage among LGUs where factories, etc. are located according to respective volumes of production during taxable period

No

Plantation & factory located in same LGU

Yes

70% Taxable by Municipality where factory, etc. is located

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: Nature: Retailer of Essential Comm. Classification: Small Business Tax: Gross Sales or Receipt for the Previous Year PhP230,000.00 Regulatory Charges: Police Clearance Sanitary Inspection Business Plate Service Charges: Health Examination Garbage Collection Fee Occupation/Calling Fee Fire Inspection (10%) TOTAL AMOUNT DUE: 2,000.00 1,815.00

100.00 100.00 150.00 100.00 400.00 100.00 4,765.00 476.50 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