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BBUSINESS PERMIT ANDUSINESS PERMIT AND
LICENSESLICENSES
RICARDO L. BOBIS, JR.RICARDO L. BOBIS, JR.
Municipal TreasurerMunicipal Treasurer
San Antonio, ZambalesSan Antonio, Zambales
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AUTHORITY OF LGUs TOAUTHORITY OF LGUs TO
COLLECT TAXESCOLLECT TAXES
Emanates fromEmanates fromRepublic Act 7160Republic Act 7160
also known as thealso known as the
Local Government Code of 1991Local Government Code of 1991
Book II.Book II.
LOCAL TAXATION AND FISCAL MATTERSLOCAL TAXATION AND FISCAL MATTERS
Title OneTitle OneLOCAL GOVERNMENT TAXATIONLOCAL GOVERNMENT TAXATION
Chapter I. General ProvisionsChapter I. General Provisions
Sec. 129.Sec. 129. POWER TO CREATE SOURCES OF REVENUEPOWER TO CREATE SOURCES OF REVENUE. Each. Eachlocal government unit shall exercise its power to create its ownlocal government unit shall exercise its power to create its ownsources of revenue and levy taxes, fees and charges subject tosources of revenue and levy taxes, fees and charges subject to
the provisions herein, consistent with the basic policy of localthe provisions herein, consistent with the basic policy of localautonomy. Such taxes, fees, and charges shall accrueautonomy. Such taxes, fees, and charges shall accrueexclusively to the local government units.exclusively to the local government units.
Sec. 132.Sec. 132. LOCAL TAXING AUTHORITYLOCAL TAXING AUTHORITY. The power to impose a. The power to impose atax, fee or charge or to generate revenue under this Code shalltax, fee or charge or to generate revenue under this Code shallbe exercised by the sanggunian of the LGU concerned throughbe exercised by the sanggunian of the LGU concerned through
an appropriate ordinance.an appropriate ordinance.
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vests the power to imposevests the power to impose
taxes and generate revenues intaxes and generate revenues in
thethe sanggunianssang
gunians..
However, taxing and revenue-However, taxing and revenue-
generating powers shall begenerating powers shall be
exercised throughexercised through appropriateap
propriate
ordinances.ordinances.
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Two Major Sources of IncomeTwo Major Sources of Income
Externally SourcedExternally Sourced
Internally SourcedInternally Sourced
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Externally Sourced IncomeExternally Sourced Income
consists of share in BIR grossconsists of share in BIR grosscollection or IRA,collection or IRA,
a share in the proceeds froma share in the proceeds fromutilization & development of theutilization & development of thenational wealth,national wealth,
loans, credits and bonds,loans, credits and bonds,
and grants or subsidies.and grants or subsidies.
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Internally Sourced IncomeInternally Sourced Income
Business Tax & other local taxes,Business Tax & other local taxes,
Real Property Taxes,Real Property Taxes,
Income from economic enterprises,Income from economic enterprises,
Fees and charges.Fees and charges.
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PRINCIPLES OF TAXATIONPRINCIPLES OF TAXATION
Taxes must be equitableTaxes must be equitable
Based on the taxpayers ability to payBased on the taxpayers ability to pay
Levied and collected only for publicLevied and collected only for publicpurposespurposes
Must not be unjust, excessive, oppressive,Must not be unjust, excessive, oppressive,or confiscatoryor confiscatory
Must not be contrary to law, public policy,Must not be contrary to law, public policy,national economic policy, or in restraint ofnational economic policy, or in restraint oftradetrade
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Levels of Taxing PowerLevels of Taxing Power
ProvincesProvinces
MunicipalitiesMunicipalities
CitiesCities
BarangaysBarangays
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For MunicipalitiesFor Municipalities
Tax on BusinessTax on Business
Fees and ChargesFees and Charges
Community Tax CertificateCommunity Tax Certificate
Fees for Sealing and Licensing of WeightsFees for Sealing and Licensing of Weightsand Measuresand Measures
Fishery Rentals, Fees and ChargesFishery Rentals, Fees and Charges
Motorized Tricycle Operators PermitMotorized Tricycle Operators Permit
(MTOP)(MTOP)
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TAX ON BUSINESSTAX ON BUSINESS
ManufacturersManufacturers
WholesalersWholesalers
ExportersExporters
Manufacturer, Wholesaler, orManufacturer, Wholesaler, or
Retailers of Essential CommoditiesRetailers of Essential Commodities
RetailersRetailers
ContractorsContractors Banks and other FinancialBanks and other Financial
InstitutionsInstitutions
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COMMON FEES AND CHARGESCOMMON FEES AND CHARGES
Regulatory FeesRegulatory Fees Mayors PermitMayors Permit Garbage Collection FeeGarbage Collection Fee
Zoning/Locational ClearanceZoning/Locational Clearance
Other Fees & ChargesOther Fees & Charges Real Property Tax ClearanceReal Property Tax Clearance
Fire Inspection FeeFire Inspection Fee Sanitary Inspection FeeSanitary Inspection Fee Occupancy PermitOccupancy Permit Occupation/Calling FeeOccupation/Calling Fee
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PROGRESSIVE TAX STRUCTUREPROGRESSIVE TAX STRUCTURE
Calibrated/Graduated Scale ofCalibrated/Graduated Scale of
Gross Sales or ReceiptsGross Sales or Receipts
Percentage BasePercentage Base
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GRADUATED SCALEGRADUATED SCALE
ManufacturerManufacturer
With Gross Sales or Receipt for theWith Gross Sales or Receipt for the Amount of TaxAmount of Tax
Previous Year in the amount ofPrevious Year in the amount of per annumper annum
Less than 30,000Less than 30,000 484.00484.00
30,000 or more but less than 40,00030,000 or more but less than 40,000 726.00726.00
40,000 or more but less than 50,00040,000 or more but less than 50,000 907.00907.00
50,000 or more but less than 75,00050,000 or more but less than 75,000 1,452.001,452.00
:::: :::: ::::
5,000,000 or more but less than 6,500,000 26,812.005,000,000 or more but less than 6,500,000 26,812.00
6,500,000 or more6,500,000 or more
0.4125%0.4125%
of Gross Salesof Gross Sales
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PERCENTAGE BASEPERCENTAGE BASE
Retailers of Other CommoditiesRetailers of Other Commodities
With Gross Sales or Receipt for theWith Gross Sales or Receipt for the Rate of TaxRate of Tax
Previous Year in the amount ofPrevious Year in the amount of per annumper annum
400,000 or less400,000 or less 2.2%2.2%More than 400,000More than 400,000 1.1%1.1%
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PHILIPPINE DEFINITION OF BUSINESS SIZEPHILIPPINE DEFINITION OF BUSINESS SIZE
CharacteristicsCharacteristics Asset SizeAsset Size Number of WorkersNumber of Workers
CottageCottage PhP 500,000 and belowPhP 500,000 and below 1-101-10
SmallSmall PhP 500K - PhP 5MPhP 500K - PhP 5M 11-9911-99
MediumMedium PhP 5M - PhP 20MPhP 5M - PhP 20M 100-199100-199
LargeLarge Over PhP 20MOver PhP 20M 200 & above200 & above
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BASES OF TAXATIONBASES OF TAXATION
For Newly started BusinessFor Newly started BusinessBased on Capital InvestmentBased on Capital Investment
For RenewalFor RenewalBased on Gross Sales or ReceiptsBased on Gross Sales or Receipts
of the preceding calendar yearof the preceding calendar year
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RETIREMENT OF BUSINESSRETIREMENT OF BUSINESS
A business subject to tax shall, uponA business subject to tax shall, upontermination, submit a sworntermination, submit a swornstatement of its gross sales orstatement of its gross sales orreceipts for the current year.receipts for the current year.
If the tax paid during the year be lessIf the tax paid during the year be lessthan the tax due on said gross salesthan the tax due on said gross sales
or receipts of the current year, theor receipts of the current year, thedifference shall be paid before thedifference shall be paid before thebusiness is considered officiallybusiness is considered officiallyretired.retired.
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PAYMENT OF BUSINESS TAXPAYMENT OF BUSINESS TAX
Taxes imposed shall be payableTaxes imposed shall be payable forforevery separate or distinctevery separate or distinctestablishment or place whereestablishment or place wherebusiness subject to the tax isbusiness subject to the tax is
conducted and one line of businessconducted and one line of businessdoes not become exempt by beingdoes not become exempt by beingconducted with some otherconducted with some otherbusinesses for which such tax hasbusinesses for which such tax hasbeen paid.been paid.
The tax on a business must be paidThe tax on a business must be paidby the person conducting the same.by the person conducting the same.
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TAX PERIOD AND MANNER OF PAYMENTTAX PERIOD AND MANNER OF PAYMENT
the tax period of all local taxes,the tax period of all local taxes,
fees and charges shall be thefees and charges shall be the
calendar yearcalendar year..
Such taxes free and chargesSuch taxes free and charges
may be paid inmay be paid in quarterlyquarterly
installmentsinstallments..
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ACCRUAL OF TAXACCRUAL OF TAX
all local taxes, fees and chargesall local taxes, fees and chargesshall accrue on theshall accrue on the 11stst day of Januaryday of Januaryof each year.of each year.
New taxes, fees, and charges orNew taxes, fees, and charges orchanges in the rates thereof, shallchanges in the rates thereof, shallaccrue on the 1accrue on the 1stst day of the quarterday of the quarter
next following the effectivity of thenext following the effectivity of theordinance imposing such new leviesordinance imposing such new leviesor rates.or rates.
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TIME OF PAYMENTTIME OF PAYMENT
All local taxes, fees, and chargesAll local taxes, fees, and chargesshall be paidshall be paid within the first twentywithin the first twenty(20) days of January(20) days of Januaryor of eachor of eachsubsequent quarter, as the case maysubsequent quarter, as the case may
be.be.
The sanggunian may, for a justifiableThe sanggunian may, for a justifiablereason or cause, extend the time forreason or cause, extend the time for
payment of such taxes, fees orpayment of such taxes, fees orcharges without surcharges orcharges without surcharges orpenalties, but only for a periodpenalties, but only for a period notnotexceeding six (6) monthsexceeding six (6) months..
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SURCHARGE AND PENALTIESSURCHARGE AND PENALTIES
The sanggunian may impose aThe sanggunian may impose asurchargesurcharge not exceedingnot exceeding twenty-fivetwenty-fivepercent (25%)percent (25%) of the amount ofof the amount oftaxes, fees or charges not paid ontaxes, fees or charges not paid on
time and an interest at the rate nottime and an interest at the rate notexceedingexceeding two (2%) per monthtwo (2%) per monthof theof theunpaid taxes, fees and chargesunpaid taxes, fees and chargesincluding surcharges, until suchincluding surcharges, until suchamount is fully paid but in no caseamount is fully paid but in no case
shall the total interest on the unpaidshall the total interest on the unpaidamount or portion thereofamount or portion thereofexceedexceedthirty six (36) monthsthirty six (36) months..
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SITUS OF TAXSITUS OF TAXManufacturers,
Wholesalers,Contractors,
Banks, etc.
w/ Branch or Sales
Outlet in
Municipality
Record Sales in
Branch or Outlet in
Municipality
Pay Tax to
Municipality where
Branch of Sales
outlet is located
w/out Branch or
Sales Outlet in
Municipality
Record Sales in
Principal Office in
Municipality
Pay Tax to
Municipality where
Principal Office is
located
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DISTRIBUTION OF TAXABLE 70%DISTRIBUTION OF TAXABLE 70%
Prorate taxable percentage
among LGUs where factories, etc.
are located according to
respective volumes of production
during taxable period
Manufacturer
has 2 or more
factories, etc. in
different
localities
Yes
No
Plantation &
factory located in
same LGU
Yes 70% Taxable by Municipalitywhere factory, etc. is located
No
42% Taxable by Municipality where
factory is located
28% Taxable by Municipality where
plantation is located
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THE BUSINESS PERMIT ANDTHE BUSINESS PERMIT AND
LICENSES OPERATIONLICENSES OPERATION
Before the Operation of any businessBefore the Operation of any business
or of an entity to engage in anyor of an entity to engage in any
business, within its taxing powers,business, within its taxing powers,
one must Apply for Mayors Permit toone must Apply for Mayors Permit toOperate BusinessOperate Business
Upon its Expiration and orUpon its Expiration and or
Before the retirement of BusinessBefore the retirement of Business
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BASIC REQUIREMENTSBASIC REQUIREMENTS
Community Tax Certificate of the OwnerCommunity Tax Certificate of the Owner
Barangay Business ClearanceBarangay Business Clearance
BIR RegistrationBIR Registration
DTI RegistrationDTI Registration
For Corporation, SEC RegistrationFor Corporation, SEC RegistrationCertificateCertificate
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BASIC STEPSBASIC 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, SECRegistration Certificate
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STEP 2. REVIEWSTEP 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 OfficeOther documents as maybe required
depending on the nature of business
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STEP 3. ASSESSMENTSTEP 3. ASSESSMENT
ASSESSMENT.
Submit Application Form
together with the Requirements to
the Treasurers Office for
Assessment.
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Sample of AssessmentSample of AssessmentMayors Permit Fee:Mayors Permit Fee: 2,000.002,000.00
Nature:Nature: Retailer of Essential CommRetailer of Essential Comm..Classification:Classification: SmallSmall
Business Tax:Business Tax: 1,815.001,815.00
Gross Sales or Receipt for theGross Sales or Receipt for the
Previous YearPrevious YearPhP230,000.00PhP230,000.00
Regulatory Charges:Regulatory Charges:
Police ClearancePolice Clearance 100.00100.00
Sanitary InspectionSanitary Inspection 100.00100.00
Business PlateBusiness Plate 150.00150.00
Service Charges:Service Charges:
Health ExaminationHealth Examination 100.00100.00
Garbage Collection FeeGarbage Collection Fee 400.00400.00Occupation/Calling FeeOccupation/Calling Fee 100.00100.00
4,765.004,765.00
Fire Inspection (10%)Fire Inspection (10%) 476.50476.50
TOTAL AMOUNT DUE:TOTAL AMOUNT DUE: 5,241.505,241.50
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STEP 4. PAYMENTSTEP 4. PAYMENT
PAYMENTNO PAYMENT shall bemade or collected
OUTSIDEof the
TREASURERS OFFICE
and without correspondingOFFICIAL RECEIPT.
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STEP 5. INSPECTIONSTEP 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 ProtectionOffice for the Issuance of
Application for Fire Safety
Inspection
These Offices shall schedule
inspection of the business prior
to the release of certificate.
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STEP 6. RELEASESTEP 6. RELEASE
RELEASE.
Release of Mayors Permit
to Operate and Business
Registration Plate.
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OFFICES INVOLVED IN THE BPLSOFFICES INVOLVED IN THE BPLS
Mayors OfficeMayors Office Issuance/Release of Application for Permit to OperateIssuance/Release of Application for Permit to Operate
Treasurers OfficeTreasurers Office Issuance of CTC & Real Property Tax ClearanceIssuance of CTC & Real Property Tax Clearance Assessment, Payment and RecordingAssessment, Payment and Recording
MPDOMPDO Zoning/Locational ClearanceZoning/Locational Clearance
Engineering OfficeEngineering Office Issuance/Release of Application for Building/Occupancy PermitIssuance/Release of Application for Building/Occupancy Permit
Municipal Health OfficeMunicipal Health Office
Issuance/Release of Application for Sanitary Inspection/HealthIssuance/Release of Application for Sanitary Inspection/HealthCertificateCertificate
Bureau of Fire ProtectionBureau of Fire Protection Issuance/Release of Application for Fire Safety InspectionIssuance/Release of Application for Fire Safety Inspection