This Tax Alert is issued to remind all concerned on the requirement to renew LGU registration this January.
The Local Government Code (LGC) requires every business establishment to annually renew its registration with the Local Government Unit (LGU) that has jurisdiction over its place of business.
Renewal consists of, but is not limited to the payment of local business tax (LBT), mayor’s permit fee, sanitary inspection fee, garbage fee, building inspection fee, electrical inspection fee, mechanical inspection fee, plumbing inspection fee, fire inspection fee, personnel fee, business plate registration fee and other charges being assessed by the concerned LGU. Mayor’s permit and other fees and charges, are usually charged as a fixed amount by LGUs.
LBT is imposed upon the company’s gross sales/receipts of the preceding year. Rates vary depending on the establishment’s activities as categorized under the Local Revenue Code of the LGU. Situs and allocation rules apply if a specific company maintains a branch, factory, warehouse, or plantation in various localities.
Payment of LBT may be done annually or quarterly (January 20, April 20, July 20 and October 20) depending on the schedule of payment chosen by the business. The annual and first quarter local taxes and fees are due on or before January 20, 2017.
A 25% surcharge on the unpaid amount plus 2% interest per month, on top of the unpaid amount is typically imposed by the LGUs for payment beyond January 20. Also, failure to renew business permits may result to issuance of an order for the closure of the business.
Knowing the rules and early preparation for the renewal of business registration is necessary to avoid mistakes and late payment penalties. If you need assistance in renewing your LGU registration, please feel free to e–mail lea.roque@ph.gt.com or call us at 988 2288 loc. 550.