Below is a practitioner-style explainer that gathers—in one place—virtually everything a Philippine retailer of ready-to-wear (RTW) garments needs to know about mayor’s permit (business permit) fees, together with the closely allied charges commonly settled at the Business Permits and Licensing Office (BPLO). Where figures or time periods vary by locality, I flag the statutory ceiling or the most common ranges and explain how to look up the exact numbers in your own city or municipality’s Revenue or Business Tax Ordinance.
1. What a Mayor’s Permit Is—and Is Not
| Item | Key Points |
|---|---|
| Nature | A regulatory fee (not an income tax) imposed by every city/municipality under the Local Government Code of 1991 (LGC, R.A. 7160). It authorizes the operation of a business within the LGU’s territorial jurisdiction. |
| Legal bases | LGC §§16, 129, 147, 153 & 458; accompanying local revenue + licensing ordinances; DILG Memorandum Circulars (e.g., 2019-177 on streamlined permitting); Anti-Red Tape Act (ARTA, R.A. 11032). |
| Coverage of an RTW shop | Classified as Retail (sometimes “Retailer, Non-Food” or “Dry Goods”). Size or capitalization determines the bracket. |
| Separate from | (a) Business tax on gross sales (LGC §143); (b) BIR internal revenue taxes; (c) other regulatory clearances (Fire, Sanitary, etc.). All are usually paid at the same one-stop shop during application/renewal, so traders informally call them all “permit fees.” |
2. Core Elements of the Mayor’s Permit Fee
Who may levy: Your city or municipality’s Sangguniang Panlungsod/Bayan by ordinance. Barangays may not impose a mayor’s permit fee; they issue a Barangay Business Clearance (separate ₱₅₀–₱500 fee).
How it is fixed:
- Regulatory ceiling: Fee must be “reasonable” and no higher than the cost of regulation/inspection (LGC §147(b)).
- Common approach: Tiered schedule based on capitalization at start-up (for new stores) or the latest annual gross sales (for renewals).
Typical 2025 metro-city ranges for RTW (illustrative):
Capitalization / Prior-year Sales Mayor’s Permit Fee (₱) ≤ ₱100,000 2,000 – 2,500 ₱100,001 – ₱500,000 2,500 – 4,000 ₱500,001 – ₱5 M 4,000 – 8,000 > ₱5 M 8,000 – 15,000 Smaller 4th–6th class municipalities may run from ₱300 to ₱3,000 for the same brackets.
When due:
- New business – before opening to the public.
- Renewal – Jan 1–20 each year (LGC); some LGUs extend to 31 Jan by ordinance.
Surcharges/interest: 25 % surcharge plus 2 % interest per month of delay (LGC §168).
Validity: Calendar year only; lapses automatically on 31 Dec.
3. Companion Regulatory Fees Paid Simultaneously
Although separate legal bases apply, they are assessed in one billing order at the BPLO counter or the electronic Business One-Stop Shop (eBOSS):
| Fee | Statute/Issuing Office | Typical Range (₱) | Notes for RTW Stores |
|---|---|---|---|
| Business tax | LGC §143(a) | ¼ %–2 % of prior-year gross sales, paid quarterly | Often the single biggest line item. |
| Barangay Clearance | LGC §152 | 50–500 | Secure first, show receipt to BPLO. |
| Fire Safety Inspection Fee (FSIF) | Fire Code (R.A. 9514) | 10 % of mayor’s permit fee plus schedule based on floor area | BFP also bills 10 % surcharge on all other fees it collects. |
| Sanitary Permit/Health Card | Sanitation Code (P.D. 856) | 200–1,000 permit + 150–500 per food handler | Textile retail usually requires only store permit. |
| Solid Waste/Environmental Fee | LGU ordinance | 300–2,000 | Sometimes folded into business tax. |
| Occupancy / Building Use Fee | National Building Code & local ordinance | 1–2 ₱/m²/year | Needed only once unless renovations occur. |
| Signage / Advertising Fee | LGC §149 | 100–1,000 per sign | Based on square footage of store façade signage. |
4. Step-by-Step Compliance Guide
A. New RTW Store
Name & form: Register with DTI (sole prop) or SEC (partnership/corporation) → secure Certificate of Registration.
Location clearance / zoning permit (City Planning Office).
Barangay Business Clearance.
Gather core documents:
- Lease Contract or Land Title & Tax Declaration (if owned).
- Government-issued ID of the signatory.
- DTI/SEC docs, BIR Form 2303 (Certificate of Registration).
- Sketch or floor plan (some LGUs).
Online or on-site filing at BPLO: fill out Unified Application Form; upload PDFs if using eBOSS (required under ARTA §11 by June 17 2021).
Assessment of fees: BPLO consolidates all line items, issues Order of Payment.
Pay → submit proof; release of Provisional Permit within 1 business day (ARTA).
Post-inspection (Fire, Health, Engineering) within 30 days; if compliant, receive Final Mayor’s Permit sticker/card.
B. Annual Renewal
- Update gross sales figure (attach BIR 1701/Q or Audited FS/Sworn Declaration).
- Clear any previous tax delinquencies.
- Settle within Jan 1–20 to avoid surcharges; many LGUs offer early bird or online payment discounts.
- Display new permit in a conspicuous area (LGC §192).
5. Computation Example (Medium-Size Boutique in Quezon City-level LGU)*
| Basis | Amount (₱) | Rate | Fee (₱) |
|---|---|---|---|
| Mayor’s Permit Fee | Capitalization 1.2 M | fixed by bracket | 5,500 |
| Business Tax | Prior-year sales 3.8 M | 1 % | 38,000 (pay quarterly) |
| FSIF | 5 % of above + floor area 80 m² | 1,975 | 1,975 |
| Sanitary Permit | store only | — | 600 |
| Signage Fee | 2 signs × 1 m² × ₱400 | — | 800 |
| Garbage Fee | ordinance schedule | — | 1,200 |
| TOTAL due at filing | ₱10,075 |
*Illustrative; actual ordinance figures differ.
6. Special Statutes and Incentives Affecting Mayor’s Permit Fees
Barangay Micro Business Enterprises Act (BMBE, R.A. 9178)
- Who qualifies: Asset size ≤ ₱3 M.
- Effect: Exempt from local business taxes but not from regulatory fees such as the mayor’s permit.
Ease of Doing Business / ARTA (R.A. 11032)
- Mandates one-stop shop, 3-step maximum, and express issuance of a Provisional Permit once fees are paid.
- If the LGU fails to act within 3–7–20 days (simple/complex/highly technical), the application is deemed approved.
Ecozones & Freeports
- Some zones (e.g., SBMA, Clark) issue a Certificate of Registration & Tax Exemption (CRTE) in lieu of mayor’s permit; however, if you operate outside the fenced area, the host LGU will still collect.
7. Jurisprudence & Administrative Opinions
| Ruling | Gist for RTW Retailers |
|---|---|
| City of Manila v. Coca-Cola Bottlers (G.R. 181845, 2016) | Local fees must relate to the cost of regulation; exorbitant increases can be struck down. |
| Atty. Del Rosario Opinion (DILG Legal, 2020-01) | Even with ARTA provisional permits, LGUs may still inspect post-issuance and revoke for violations. |
| BIR Ruling DA-163-05 | Mayor’s permits are deductible business expenses; VAT input not creditable because fee is outside VAT system. |
8. Common Pitfalls & Practical Tips
- Under-declaring sales or capital → low fee now, but exposes you during inspection; LGU can reassess and impose ★25 % surcharge + 2 %/month interest.
- Late renewal after 20 Jan → surcharge applies to all items in the billing, not just mayor’s permit.
- No signage permit for window decals or hanging tarps → separate citation by the Engineering Office.
- Fire inspection first: Scheduling BFP early prevents hold-ups in getting the final permit.
- Check for amnesty or tax relief ordinances—common during election years or post-calamity—for possible waiver of interest/penalties.
9. Emerging Trends (2024–2025)
| Development | Implication |
|---|---|
| eBOSS adoption | 98 % of cities now accept online filing; physical presence often required only for final sticker pick-up. |
| Uniform Zoning Codes | LGUs moving toward standardized land-use classifications; off-the-rack clothing falls under C-2 Commercial Zone, easing approvals. |
| Green Fees & ESG reporting | Large malls pass on new LGU-mandated environmental fees (e.g., plastic bag recovery, energy benchmarking) to sub-lessee tenants. |
| Digital Payment Discounts | Many LGUs (e.g., Pasig, Valenzuela) offer 5 %–10 % reduction in mayor’s permit fee for payments via GCash/LandBank Link.Biz. |
10. Checklist—What to Post or Keep on-site
- ✔ 2025 Mayor’s/Business Permit (laminated or under acrylic frame)
- ✔ Official Receipt for all regulatory fees
- ✔ FSIF Certificate of Inspection
- ✔ Sanitary Permit & Health Cards (if selling food supplements)
- ✔ DTI/SEC registration displayed at cashier (required by DTI Dept. Admin. Order 10-03)
- ✔ BIR Certificate of Registration plus “Ask for Receipt” notice
11. Key Take-Aways
- Plan for two cost buckets—the mayor’s permit fee itself (a relatively modest, bracket-based charge) plus the often larger business tax and allied regulatory fees.
- Early January is critical; missing the 20 Jan statutory deadline multiplies your bill overnight.
- Know your bracket: capitalization for start-ups, gross sales for renewals. Provide honest figures—you can be tax-mapped anytime.
- Use the eBOSS wherever available to shorten queues and lock in a “deemed approved” status under ARTA.
- Stay alert to ordinance updates—LGUs may tweak rates yearly during third-quarter budget sessions; watch the city website or social-media page.
Final word
While the mayor’s permit fee for an RTW retailer is usually the smallest line on the annual billing sheet, it is the gateway to lawful operation—failure to secure or renew it empowers the LGU to padlock the store. Treat the January renewal window as non-negotiable, keep complete documentation on display, and monitor ordinance changes so that surprises never cut into your first-quarter sales.