Cheers!! We've just started 2018 and with this New Year comes another chance to make things right. Since it is time for new beginnings, for a lot of people, the New Year implies the possibility of exploring new things, while for others, it is a great opportunity to renew old ties.
Speaking of renewals, the month of January is a busy period for renewal of various licenses which include business permits. The Local Government Units (LGUs) require this yearly so as for them to continue the operations of the respective business establishments through the power that has been bestowed to them by the Local Government Code (LGC).
But first things first, what is a business permit? While many know what this is especially those who are into business, some of us confuse business permits with business taxes. The main difference between the two is that a business permit is requisite for regulatory purposes and it is based on the exercise of police power, while a business tax is assessed to generate revenue based on the power of taxation. Another significant dissimilarity is the effect of its non-payment. When business tax is not paid, it does not make the business illegal but it could be a ground for criminal prosecution. On the contrary, business becomes illegal if one does not pay for the business permit.
Now, on to the process of securing that all important business permit renewal. The process of renewing business permits can be summarized in the 3 major steps outlined below:
Step 1: Renewal of Barangay Permit
- Previous year’s barangay permit (original)
- Previous year’s official receipt (proof of payment)
- Submit your accomplished application form together with the requirements at the Barangay Permit Division
- Wait for the assessment
- Pay corresponding fees
- Release of Barangay Permit, securing of Barangay Permit can be done within a day.
Step 2: Renewal of Mayor’s/Business Permit
- New Barangay Permit
- Previous year’s Mayor’s Permit / Business Permit (original)
- Previous year’s official receipt / proof of payment (original)
- Previous year’s Income Statement (audited or unaudited)
- Contract of Lease (2018, or covering stay during 2018)
- Local Insurance (Paid at City Hall or external companies)
- Community Tax Certificate (CTC) / Cedula (Paid and acquired at City Hall)
- Submission of application form
Submit accomplished application form together with the complete requirements for evaluation. Application form is available at the Business Permits and Licensing Office of City Hall
Assessment of necessary fees at the Business Permits and Licensing Office
Payment of fees is made at the City Treasurer’s Office
After processing of payment the City Treasurer’s Office will give you a receiving copy. The receiving copy of payment will be presented upon claiming of Mayor’s Permit
Release of Mayor’s Permit
Present the proof of payment at Business Permits and Licensing Office to claim your renewed Mayor’s Permit.
Releasing of renewed Mayor’s Permit will takes 1 to 2 weeks depending on the volume of renewal transactions.
Step 3: Renewal of Registration with the BIR
- Accomplished BIR form 0605
- Go to officer-of-the-day in your RDO for assessment
- Pay the annual registration fee amounting to P 500.00 at any BIR-accredited bank in your RDO
Please take note that the requirements for renewing your Busisness Permit or Mayor's Permit would depend on what city you are in. Big cities require more detailed documents such as occupancy permits, Certificate of Gross Sales, Fire Safety Certificates, lease contracts and others. This is to ensure that your business is legitimate and operating.
So don't be surprised if they would ask you additional documents. Representatives of government agencies like the Barangay, Bureau of Fire Protection, SSS, PHIC, HDMF, and DTI are present in one stop shops for your convenience. Thus, it is best that you know where your city's one stop shop is located.
Complying with the requirements of renewing the business registration with the LGUs and the BIR is definitely a surefire way to make sure that “you’ll end the year right” because “you started it right.”