Starting a small food and beverage (F&B) business in the Philippines—whether a carinderia, café, milk tea kiosk, bakery, food cart, or small restaurant—usually requires a Mayor’s Permit, often called a Business Permit. “Fees” tied to the Mayor’s Permit are rarely a single payment. In practice, you’ll encounter a bundle of local taxes, regulatory fees, and service charges imposed and collected by the local government unit (LGU) where you operate.

This article explains (1) the legal basis for Mayor’s Permit fees, (2) what you will typically pay for small F&B businesses, (3) how amounts are computed, (4) the permitting process and timelines, and (5) practical and legal tips when fees seem excessive or inconsistent.

1) What the “Mayor’s Permit” really is

A Mayor’s Permit/Business Permit is the LGU’s authorization for a business to operate within its jurisdiction (barangay/municipality/city). It is issued by the city or municipal government (often through the BPLO or Business Permits and Licensing Office) after you meet local requirements and pay the corresponding charges.

For F&B, the Mayor’s Permit is usually tied to local regulation of:

public safety and fire safety,
sanitation and public health,
zoning and land use,
local revenue (business tax and fees),
signage, waste disposal, and similar local services.

2) Legal framework (Philippine context)

A. Local Government Code (LGC) — Local taxing and regulatory powers

LGUs have authority to:

levy local business taxes (generally based on gross sales/receipts, with caps and classification rules), and
impose fees and charges for regulation and for services rendered, through ordinances enacted by the local sanggunian (city/municipal council).

Key practical point: Your LGU’s Revenue Code or tax ordinance controls the detailed schedule of fees, classifications, rates, and penalties.

B. Ease of Doing Business / Anti-Red Tape rules (ARTA environment)

National policy requires LGUs to streamline business permitting. In general, you should expect:

publicly posted requirements and fee schedules,
standardized steps and processing times,
reduced discretion and fewer repeated documents.

Key practical point: Even with streamlining, LGUs still collect lawful local taxes/fees. What changes is how they process and disclose them.

C. Sector-specific rules that commonly intersect with local permits (F&B)

F&B businesses often trigger requirements under:

Fire safety compliance (inspection and certification),
Sanitation rules (sanitary permit, health certificates),
Zoning and occupancy rules (location clearance, occupancy permit).

These are not merely “red tape”; they also drive many of the “fees” you see at permitting.

3) The usual fee bundle for small F&B businesses

Below are the most common items that appear in LGU assessments for small F&B. Names vary by LGU, but the categories are familiar across cities/municipalities.

A. Local Business Tax (often the biggest recurring charge)

Typically computed as a rate applied to gross sales/receipts from the preceding year.
For new businesses, computation is commonly based on capitalization or a presumptive schedule until you have actual gross receipts.

F&B classification matters. A small café may be taxed as a “restaurant,” “eating place,” “caterer,” “food franchise,” or “retailer,” depending on the ordinance.

B. Mayor’s Permit / Business Permit Fee (regulatory fee)

Often a fixed fee or tiered by capitalization/size, sometimes described as:

Mayor’s permit fee,
business permit fee,
regulatory fee,
licensing fee.

C. Barangay Clearance and related barangay fees

A Barangay Business Clearance is commonly required before the city/municipal permit is released. Barangays may charge fees authorized under local rules.

D. Sanitary Permit and Health Certificate-related fees (critical for F&B)

Common items include:

Sanitary Permit fee (establishment-level),
Health Certificate fees for food handlers (may be per employee),
fees for seminars/orientation required by local health offices,
fees for laboratory tests (often routed through city health procedures).

For staffing-heavy F&B, employee health-related charges can meaningfully increase the total.

E. Fire Safety Inspection Fee / Fire Certificate (often paid through the permitting workflow)

F&B sites (especially those with cooking equipment, LPG, electrical load, seating areas) frequently require inspection and certification.

F. Garbage / Solid Waste / Environmental or “Ecology” fees

Many LGUs charge:

garbage fee (fixed or size-based),
environmental fee (varies),
sometimes special charges depending on waste volume or location type (commercial strips, markets, etc.).

G. Signage fees (if you install signs)

If you have:

lighted signs,
large tarpaulins,
projecting signages,
multiple signboards, expect fees assessed per size/type.

H. Zoning / Location clearance and, when applicable, building/occupancy-related fees

Depending on whether you are:

newly constructing,
renovating,
changing use (residential to commercial),
operating in a regulated zone, you may encounter:
zoning fee / locational clearance fee,
occupancy permit fee (usually for new/modified buildings),
building permit fees (if construction/fit-out requires it).

I. Other possible LGU assessments (case-by-case)

Examples:

delivery vehicle stickers / permits,
use of sidewalk/space permits (for carts),
market stall/space fees (public markets),
weighing/measuring device sealing (if applicable),
music/entertainment permits (if you host live music),
liquor permit (if you serve alcohol—often a separate track).

4) What makes small F&B “different” in fee impact

Compared with many micro-retail businesses, F&B tends to draw heavier compliance because of:

Food safety and sanitation (permits + employee health requirements),
Fire safety (kitchens, LPG, electrical load),
Waste disposal (wet waste, packaging),
Occupancy and seating (customer areas can trigger stricter checks).

Even a small kiosk may feel “permit-heavy” because the category is risk-sensitive.

5) How the main charges are usually computed

A. Business tax: gross receipts model (typical)

A simplified model many LGUs use:

Business Tax = (tax rate) × (gross sales/receipts for the preceding calendar year)

The rate and bracket depend on the LGU ordinance and business classification.

New business scenario: Many LGUs assess:

a fixed amount by capital bracket, or
a percentage based on capital temporarily, subject to adjustment once actual sales are known.

B. Regulatory and service fees: fixed, tiered, or per unit

fixed fees (one amount for a permit),
tiered by size/capitalization,
per-employee (health certificates),
per square meter (signage),
per service event (inspection/clearance).

C. Renewals are annual (most of the time)

Most LGUs require annual renewal, usually concentrated early in the year. New businesses pay upon application; renewals pay upon renewal.

6) Timing, renewal, and penalties (what to watch)

A. Renewal season is strict

Renewals are commonly expected in January (and many LGUs publicly announce renewal periods and deadlines). If you miss deadlines, expect:

surcharges,
interest,
compromise penalties, depending on local rules and the nature of the charge.

B. Late payment can snowball

Even when the base tax is modest, repeated months of interest/surcharge can compound. For small businesses, renewing early is often one of the best cost-control practices.

C. Closure risk

Operating without a valid Mayor’s Permit can expose you to:

notices of violation,
closure orders,
fines/penalties.

7) The permitting workflow (what you’ll typically do)

For new applications (high-level)

Barangay clearance (common first step).
Submit application to BPLO (or equivalent).
Pay initial assessments (varies by LGU).
Comply with required inspections/clearances (health/sanitation, fire, zoning, etc.).
Pay final assessed amounts.
Receive Mayor’s Permit/Business Permit and plate/sticker (if applicable).

For renewals (high-level)

File renewal application and update business details (address, lines of business, signages, employees).
Declare gross receipts (as required by ordinance).
Pay business tax + fees/charges.
Receive renewed permit.

Practical note: Some LGUs do “post-audit” inspections after issuance. Keep your documents ready even after you get the permit.

8) Common document triggers that affect fees

Small changes can change your assessment. Examples:

Adding a line of business (e.g., “catering” in addition to “restaurant”).
Expanding seating capacity or floor area.
Installing additional signage.
Increasing number of employees (health certificate impact).
Switching locations (zoning/location clearance again).
Renovation/fit-out (building/occupancy implications).

If you’re trying to budget, disclose planned changes early so you’re not surprised mid-process.

9) Practical budgeting guide (without guessing your LGU’s exact numbers)

Because amounts vary widely by LGU, the most reliable budgeting method is to plan by components, not by “one total.”

For a small F&B, plan for:

Business tax (annual; biggest variable),
Mayor’s permit/regulatory fee (annual),
Barangay clearance (annual),
Sanitary permit + health certificates (annual; scales with staff),
Fire-related charges (often annual/renewal-linked),
Garbage/environmental fees (often annual),
Signage fees (if any).

If you’re pre-revenue, assume your first year is often assessed on capitalization plus fixed regulatory and health/sanitation charges.

10) Transparency: your rights and what LGUs should provide

Even without litigating anything, you can (and should) expect:

an itemized assessment (not just a lump sum),
issuance of official receipts,
clear explanation of your business classification and rate bracket,
access to the relevant ordinance/revenue code provisions used for computation,
publicly posted checklists/fees (common ARTA practice).

If staff can’t explain why an item appears, request the legal basis (ordinance section) politely but firmly.

11) When fees feel excessive or inconsistent: legal and administrative options

If you believe you were charged improperly, your remedies depend on whether you are contesting:

the validity of the ordinance (a legal challenge to the law itself), or
the correctness of your assessment (how the LGU applied the law to you).

Common practical steps (often used before escalating):

Request a recomputation and written breakdown.
Confirm your classification (restaurant vs retail vs caterer matters).
Correct declared data (gross receipts, capitalization, floor area, signage).
Use formal channels: treasurer’s office/BPLO supervisors.

For disputes involving local taxes, Philippine local tax practice often involves “pay under protest” style procedures and administrative review paths. The exact method and deadlines can be technical and case-specific, so consult a local lawyer or CPA/tax practitioner if the amount is significant.

12) Special situations for small F&B businesses

A. Home-based or “online only” food businesses

Even if you sell through social media and delivery apps, you may still be considered “doing business” in an LGU (where production occurs, where pickups happen, etc.). Zoning and barangay rules can become tricky in residential areas.

B. Food cart / sidewalk / pop-up

Expect additional permitting if you use public space or operate in regulated vending zones. Many LGUs regulate vending more strictly than fixed establishments.

C. Operating inside a mall or private complex

Malls often require their own compliance documents. The LGU may still require Mayor’s Permit; zoning/location steps might differ because the building already has occupancy permits.

D. Commissary + multiple branches

Multiple sites can mean:

separate permits per location,
shared commissary requiring its own permits,
separate employee compliance documentation.

13) A practical checklist to avoid surprises

Before you file:

Identify your exact business address and confirm zoning compatibility.
Decide your lines of business (don’t casually add “catering” if you won’t do it).
Estimate number of employees (health certificate cost scales).
Plan your signage (or delay permanent signage until after permitting if the LGU practice makes this easier).
Keep documentation consistent across DTI/SEC, BIR, and LGU records (name/address/owner).

During assessment:

Ask for itemization.
Verify your classification and bracket.
Keep copies of everything and official receipts.

After issuance:

Maintain sanitation and fire compliance; inspections can happen later.
Calendar the next renewal (and renew early).

14) Key takeaways

“Mayor’s Permit fees” are usually a package: business tax + regulatory fees + sanitation/health + fire + barangay + waste + other add-ons.
F&B businesses tend to pay more “compliance-linked” charges because of public health and safety regulation.
Exact amounts vary by LGU ordinance, but the components are predictable—use them to budget.
Demand transparency and itemization. Classification errors are a common source of overcharging.
Renew on time; penalties can add up quickly.

General information disclaimer

This article is for general educational guidance in the Philippine context and is not legal advice. Local rules and fee schedules vary by LGU and may change through ordinances and administrative issuances. For a specific estimate or a dispute, consult your LGU’s published revenue code/assessment and consider professional advice from a lawyer or accountant familiar with local taxation and business permitting.