A frequent point of friction for companies launching in Metro Cebu (Cebu City, Mandaue, Lapu-Lapu) or Davao City is local government jurisdiction.
The Short Answer
Yes, you still need a Mayor’s Permit (Business Permit), but your local tax obligations are drastically reduced.
Understanding the Dual Jurisdiction
While PEZA governs your fiscal incentives and national tax status, the Local Government Unit (LGU) where your office is located retains regulatory mandate over local health, safety, fire, and zoning compliance.
What Changes for PEZA Enterprises?
Exemption from Local Business Tax (LBT): RBEs paying the 5% Special Corporate Income Tax (SCIT) in lieu of national taxes are statutory exempt from Local Business Taxes usually levied by cities.
Regulatory Fees Still Apply: You must still pay administrative LGU fees, such as:
Annual Sanitary Inspection Fees
Fire Safety Inspection Certificates (FSIC)
Local Garbage & Environmental Fees
Zoning Clearance Fees
The LGU Processing Workflow
Present your PEZA Certificate of Registration (COR) and Certificate of Entitlement to Tax Incentives (CETI) to the Cebu or Davao City Hall Treasurer’s Office. This ensures the LGU zero-rates your Local Business Tax assessment while issuing your operational Mayor’s Permit.
Key Takeaway: PEZA status shields your business from local commercial taxes, but you must maintain an active Mayor’s Permit annually to remain fully compliant in Cebu and Davao.
Leave a Reply