This Tax Alert is issued to remind all concerned on the required renewal of local government unit (LGU) registration for taxable year 2022.
Under the Local Government Code (LGC), all business establishments are required to renew their registration with LGUs on an annual basis on or before January 20 of the following year. The annual renewal of business registration consists of, but is not limited to, 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 imposed by the different LGUs.
The LBT is based on gross sales/receipts while the applicable LBT rate varies depending on the trade or commercial activity undertaken by the business establishment per LGU. Situs rules apply if your company maintains a branch, factory, warehouse, or plantation in different localities. For the mayor’s permit and other fees and charges, these are usually imposed at a fixed amount by LGUs.
LGUs impose surcharges and penalties for failure to pay LBT within the prescribed period. The LGU will impose a twenty-five percent (25%) surcharge on the tax assessed, plus an additional two percent (2%) penalty for every month until LBT is paid.
Knowing the rules and preparing early for the renewal of your business registration is necessary to avoid mistakes and late payment penalties. If you have any questions regarding the LGU registration renewal process, please feel free to e-mail lea.roque@ph.gt.com or des.politado-aclan@ph.gt.com or call us at 988 2288.