The process of securing a Mayor’s Permit (Business Permit) and Health Certificates in the Philippines is governed by a intersection of the Local Government Code of 1991 (Republic Act No. 7160) and the Code on Sanitation of the Philippines (Presidential Decree No. 856).

For entrepreneurs, understanding the cost breakdown is essential for compliance and financial planning. Below is a comprehensive legal and procedural overview of these requirements.

1. The Legal Basis: Power to Tax and Regulate

Under the Local Government Code (LGC), Local Government Units (LGUs)—specifically cities and municipalities—have the inherent power to create their own sources of revenue and to levy taxes, fees, and charges.

Mayor’s Permit Fee: This is a regulatory fee imposed for the privilege of conducting business within the LGU’s jurisdiction.
Business Tax: Unlike the permit fee, this is a tax based on the gross sales or receipts of the preceding calendar year (for renewals) or capitalization (for new businesses).

2. Breakdown of Business Permit Costs

The total amount paid at the "Business One-Stop Shop" (BOSS) during the January renewal period or upon initial registration is not a single fee, but a consolidation of several charges:

Local Business Tax (LBT)

New Businesses: Usually based on a percentage of the capital investment.
Renewals: Calculated based on the Gross Sales/Receipts of the prior year. The rate varies depending on whether the business is a manufacturer, retailer, wholesaler, or service provider, as defined in the LGU's specific Local Revenue Code.

Regulatory Fees and Charges

Aside from the LBT, the following fees are typically itemized in the Statement of Account (SOA):

Mayor’s Permit Fee: The core fee for the permit itself.
Garbage Fee: A charge for waste management services, often scaled to the size or type of business.
Sanitary Inspection Fee: For the inspection of the premises to ensure compliance with P.D. 856.
Building Inspection/Electrical Inspection Fees: To ensure the structural and fire safety of the establishment.
Zoning/Locational Clearance: To verify that the business is operating in an appropriately zoned area.

Third-Party and Statutory Costs

Fire Safety Inspection Certificate (FSIC) Fee: Collected by the LGU but remitted to the Bureau of Fire Protection (BFP). It is generally 15% of all fees charged by the LGU.
Barangay Clearance Fee: While some LGUs integrate this into the BOSS, it remains a separate legal requirement under the Ease of Doing Business Act (R.A. 11032).

3. Health Certificate Fees and Requirements

Per P.D. 856, all employees, especially those in food handling, salons, and public-facing industries, must secure a Health Certificate from the City or Municipal Health Office.

Cost Components

The cost of a Health Certificate is generally affordable (ranging from ₱100 to ₱500), but the ancillary medical tests add to the total expense:

Chest X-Ray: To screen for tuberculosis.
Fecalysis/Urinalysis: To screen for parasites or infections.
Hepatitis A Screening: Often required for food handlers.
Drug Testing: Some LGUs require this under local ordinances.

Validity

Health certificates are valid for one year and must be displayed or kept on-site. Failure to produce these during a sanitary inspection can lead to the suspension of the business permit.

4. The Impact of the Ease of Doing Business Act (R.A. 11032)

The Ease of Doing Business and Efficient Government Service Delivery Act of 2018 has standardized certain aspects of the permit process:

Unified Form: LGUs must use a single application form for business permits.
Standard Processing Time: Simple transactions must be completed within 3 working days; complex ones in 7 working days.
Electronic Boss (e-BOSS): Many LGUs now allow for online assessment and payment of fees to reduce "fixer" interventions and corruption.

5. Table: Estimated Cost Spectrum

Note: Exact figures depend on the specific Local Revenue Code of the City/Municipality.

Component	Basis of Calculation	Estimated Range
Business Tax (New)	% of Capitalization	1/10 of 1% to 3%
Business Tax (Renewal)	% of Gross Sales	Varies by LGU & Category
Mayor's Permit Fee	Fixed based on Industry	₱500 – ₱10,000+
Sanitary Fee	Type of Business/Area	₱200 – ₱2,000
Health Certificate	Per Employee	₱100 – ₱300 (excl. labs)
Fire Inspection (FSIC)	15% of LGU Fees	Varies

Legal Warning: Operating a business without a valid Mayor’s Permit or employing personnel without Health Certificates constitutes a violation of local ordinances and national laws. This can result in administrative fines, closure orders (Padlock), and potential criminal liability for the business owner.

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