Business Tax

Source: Revenue Code of 2007

There is hereby imposed on the following persons who establish, operate, conduct or maintain their respective business within the City a graduated business tax in the amounts hereafter prescribed:

Tax on Newly-Started Business

In the case of a newly started business under this Article, the tax shall be one-twentieth of one percent (1/20 of 1%) of the capital investment. In the succeeding calendar year, regardless of when the business started to operate, the tax shall be based on the gross receipts for the preceding calendar year or any fraction thereof, as provided in the pertinent schedules in this Article.

Tax on Renewed Business
(a) On manufacturers, assemblers, repackers, processors, brewers, distillers, rectifiers, and compounders or liquors, distilled spirits, and wines or manufacturers of any article of commerce of whatever kind or nature. In accordance with the following schedule:

Amount of Gross Sales/Receipts for the Preceding Calendar Year	Amount of Tax per Annum
Less than 10,000.00	247.00
10,000.00 or more but less than 15,000.00	330.00
15,000.00 or more but less than 20,000.00	453.00
20,000.00 or more but less than 30,000.00	660.00
30,000.00 or more but less than 40,000.00	990.00
40,000.00 or more but less than 50,000.00	1,237.50
50,000.00 or more but less than 75,000.00	1,980.00
75,000.00 or more but less than 100,000.00	2,475.00
100,000.00 or more but less than 150,000.00	3,300.00
150,000.00 or more but less than 200,000.00	4,125.00
200,000.00 or more but less than 300,000.00	5,775.00
300,000.00 or more but less than 500,000.00	8,250.00
500,000.00 or more but less than 750,000.00	12,000.00
750,000.00 or more but less than 1,000,000.00	15,000.00
1,000,000.00 or more but less than 2,000,000.00	20,625.00
2,000,000.00 or more but less than 3,000,000.00	24.750.00
3,000,000.00 or more but less than 4,000,000.00	29,700.00
4,000,000.00 or more but less than 5,000,000.00	34,650.00
5,000,000.00 or more but less than 6,500,000.00	36,562.50
6,500,000.00 or more	At a rate of fifty-six and one-fourth (56.25%) of one percent (1%)

The preceding rates shall apply only to amount of domestic sales of manufacturers, assemblers, repackers, processors, brewers, distillers, rectifiers and compounders of liquors, distilled spirits, and wines or manufacturers of any article of commerce of whatever kind or nature other than those enumerated under paragraph (c) of this Article.

(b) On wholesalers, distributors, or dealers in any article of commerce of whatever kind or nature in accordance with the following schedules:

Amount of Gross Sales/Receipts For the Preceding Calendar Year	Amount of Tax per Annum
Less than 1,000.00	27.00
1,000.00 or more but less than 2,000.00	49.50
2,000.00 or more but less than 3,000.00	75.00
3,000.00 or more but less than 4,000.00	108.00
4,000.00 or more but less than 5,000.00	150.00
5,000.00 or more but less than 6,000.00	181.50
6,000.00 or more but less than 7,000.00	214.50
7,000.00 or more but less than 8,000.00	247.50
8,000.00 or more but less than 10,000.00	280.50
10,000.00 or more but less than 15,000.00	330.00
15,000.00 or more but less than 20,000.00	412.50
20,000.00 or more but less than 30,000.00	495.00
30,000.00 or more but less than 40,000.00	660.00
40,000.00 or more but less than 50,000.00	990.00
50,000.00 or more but less than 75,000.00	1,485.00
75,000.00 or more but less than 100,000.00	1,980.00
100,000.00 or more but less than 150,000.00	2,805.00
150,000.00 or more but less than 200,000.00	3,630.00
200,000.00 or more but less than 300,000.00	4,950.00
300,000.00 or more but less than 500,000.00	6,600.00
500,000.00 or more but less than 750,000.00	9,900.00
750,000.00 or more but less than 1,000,000.00	13,200.00
1,000,000.00 or more but less than 2,000,000.00	15,000.00
2,000,000.00 or more	At a rate of seventy-five percent (75%) of one percent (1%)

The businesses enumerated in paragraph (a) above shall no longer be subject to the tax on wholesalers, distributors, or dealers provided in this Article.

(c) On exporters, and on manufacturers, millers, producers, wholesalers, distributors, dealers or retailers of essential commodities enumerated hereunder at a rate not exceeding one-half (1/2) of the rates prescribed under subsections (a), (b), and (d) of this Article;

1. Rice and Corn;
2. Wheat or cassava flour, meat, dairy products, locally manufactured, processed or preserved food, sugar, salt and agricultural marine, and fresh water products, whether in their original state or not;
3. Cooking oil and cooking gas;
4. Laundry soap, detergents, and medicine;
5. Agricultural implements, equipment and post-harvest facilities, fertilizers, pesticides, insecticides, herbicides and other farm inputs;
6. Poultry feeds and other animal feeds;
7. School supplies; and
8. Cement

For purposes of this provision, the term exporters shall refer to those who are principally engaged in the business of exporting goods and merchandise, as well as manufacturers and producers whose goods or products are both sold domestically and abroad. The amount of export sales shall be excluded from the total sales and shall be subject to the rates not exceeding one half (1/2) of the rates prescribed under paragraphs (a), (b), and (d) of this Article.

(d) Retailers

Gross Sales/Receipts for the Preceding year	Rate of Tax per Annum
More than P 50,000 but not over P400,000.00	2.5%
More than 400,000.00	1.25%

The rate of two point five percent (2.5%) per annum shall be imposed on sales not exceeding Four Hundred Thousand Pesos (P 400,000.00) while the rate of one and one-half percent (1 1/2%) per annum shall be imposed on sales in excess of the first Four Hundred Thousand Pesos (P 400,000.00). However, barangays shall have the exclusive power to levy taxes on stores whose gross sales or receipts of the preceding calendar year does not exceed Fifty Thousand Pesos (P50,000.00) subject to existing laws and regulations.

(e) On contractors and other independent contractors, in accordance with the following schedule:

Gross Sales/Receipts for the Preceding Calendar Year	Amount of Tax per Year
Less than 5,000.00	41.25
5,000.00 or more but less than 10,000.00	92.40
10,000.00 or more but less than 15,000.00	156.75
15,000.00 or more but less than 20,000.00	247.50
20,000.00 or more but less than 30,000.00	412.50
30,000.00 or more but less than 40,000.00	577.50
40,000.00 or more but less than 50,000.00	825.00
50,000.00 or more but less than 75,000.00	1,320.00
75,000.00 or more but less than 100,000.00	1,980.00
100,000.00 or more but less than 150,000.00	2,970.00
150,000.00 or more but less than 200,000.00	3,960.00
200,000.00 or more but less than 250,000.00	5,445.00
250,000.00 or more but less than 300,000.00	6,930.00
400,000.00 or more but less than 500,000.00	12,375.00
500,000.00 or more but less than 750,000.00	13,875.00
500,000.00 or more but less than 750,000.00	13,875.00
500,000.00 or more but less than 750,000.00	13,875.00
750,000.00 or more but less than 1,000,000.00	15,375.00
1,000,000.00 or more but less than 2,000,000.00	17,250.00
2,000,000.00 or more	At a rate of seventy-five percent (75%) of one percent (1%)

Provided, that in no case shall the tax on gross sales of P2,000,000.00 or more be less than P17,250.00. For purposes of this section, the tax on general engineering, general building, and specialty contractors shall initially be based on the total contract price, payable in equal annual installments within the project term.

Upon completion of the project, the taxes shall be recomputed on the basis of the gross receipts for the preceding calendar years and the deficiency tax, if there be any, shall be collected as provided in this Code or the excess tax payment shall be refunded.

(f) On banks and other financial institutions, at the rate of seventy-five percent (75%) of one percent (1%) of the gross receipts of the preceding calendar year derived from interest, commissions and discounts from lending activities, income from financial leasing, dividends, rentals on property, and profit from exchange or sale of property, insurance premium. All other income and receipts not herein enumerated shall be excluded in the computation of the tax.

(g) The same rates of graduated taxes, viz.:

Gross Sales/Receipts for the Preceding Calendar Year	Amount of Tax per Year
Less than 5,000.00	41.25
5,000.00 or more but less than 10,000.00	92.40
10,000.00 or more but less than 15,000.00	156.75
15,000.00 or more but less than 20,000.00	247.50
20,000.00 or more but less than 30,000.00	412.50
30,000.00 or more but less than 40,000.00	577.50
40,000.00 or more but less than 50,000.00	825.00
50,000.00 or more but less than 75,000.00	1,320.00
75,000.00 or more but less than 100,000.00	1,980.00
100,000.00 or more but less than 150,000.00	2,970.00
150,000.00 or more but less than 200,000.00	3,960.00
200,000.00 or more but less than 250,000.00	5,445.00
250,000.00 or more but less than 300,000.00	6,930.00
300,000.00 or more but less than 400,000.00	9,240.00
400,000.00 or more but less than 500,000.00	12,375.00
500,000.00 or more but less than 750,000.00	13,875.00
750,000.00 or more but less than 1,000,000.00	15,375.00
1,000,000.00 or more but less than 2,000,000.00	17,250.00
2,000,000.00 or more	At a rate of seventy-five percent(75%) of one percent (1%)

Provided, that in no case shall the tax on gross sales of P2, 000,000.00 or more be less than P17,250.00 are hereby imposed on the businesses hereunder enumerated:

1. Restaurants, cafes, cafeterias, carinderias, eateries, food caterers, ice cream and other refreshment parlors, and soda fountain bars;
2. Amusement places, including places wherein customers thereof actively participate without making bets or wagers, including but not limited to night clubs, or day clubs, cocktail lounges, cabarets or dance halls, karaoke bars, skating rinks, bath houses, swimming pools, exclusive clubs such as country and sports clubs, resorts and other similar places, billiard and pool tables, bowling alleys, circuses, carnivals, merry-gorounds, roller coasters, ferris wheels, swings, shooting galleries, and other similar contrivances, theaters and cinema houses, boxing stadia, race tracks, cockpits and other similar establishments.
3. Commission agents
4. Lessors, dealers, brokers of real estate;
5. Travel agencies and travel agents
6. Boarding houses, pension houses, motels, apartments, apartelles, and condominiums
7. Subdivision owners/ Private Cemeteries and Memorial Parks
8. Privately-owned markets;
9. Hospitals, medical clinics, dental clinics, therapeutic clinics, medical laboratories, dental laboratories;
10. Cockpit operations (to include plasada and cockpit rentals)
11. Operators of Cable Network System
12. Operators of computer services establishment
13. General consultancy services
14. All other similar activities consisting essentially of the sales of services for a fee.

Provided, that in no case shall the tax on gross sales of P2, 000,000.00 or more be less than P17,250.00.

(h) On peddlers engaged in the sale of any merchandise or article of commerce, at the rate of Seventy-five pesos (P75.00) per peddler annually. Delivery trucks, vans or vehicles used by manufacturers, producers, wholesalers, dealers or retailers enumerated under Section 141 of R.A. 7160 shall be exempt: from the peddlers tax herein imposed. The tax herein imposed shall be payable within the first twenty (20) days of January. An individual who will start to peddle merchandise or articles of commerce after January 20 shall pay the full amount of the tax before engaging in such activity.

(i) On operators of public utility vehicles using public and private area for transportation terminals or waiting for the purpose of carrying passengers from this city under a certificate of public convenience and necessity or similar franchises:

Public Utility Vehicles	Mayor's Permit	Tax Per Annum
With capacity of 10-30passengers	500.00	1,000.00
With capacity of 31passengers and above	1,000.00	2,000.00
Taxi for Hire and Rent-A-Car	500.00	1,500.00

Presumptive Income Level

For every tax period, the Treasurer’s Office shall prepare a stratified schedule of "presumptive income level" to validate the declarations of gross receipts of each business classification.

Time of Payment

The tax shall be paid once within the first twenty (20) days of January or in quarterly installments within the first twenty (20) days of January, April, July, and October of each year. The Sangguniang Panlungsod may, for a justifiable reason or cause, extend the time for payment of such taxes without surcharges or penalties, but only for a period not exceeding six (6) months.

Mayor's Permit Fee on Business

There shall be collected an annual fee for the issuance of a Mayor's Permit to operate a business, pursue an occupation or calling, or undertake an activity within the city. The permit fee is payable for every distinct or separate business or place where the business or trade is conducted. One line of business of trade does not become exempt by being conducted with some other business of trade for which the permit fee has been obtained and the corresponding fee paid for. For purpose of the Mayor’s Permit Fee, the following Philippine definition of business size is hereby adopted:

Characteristics	Asset Size	Number of Workers
Cottage	PhP 500,000 and below	1-10
Small	Over PhP 500,000 to PhP 5M	11-99
Medium	Over PhP 5M to PhP 20M	100-199
Large	Over PhP 20M	200 and above