1,489 businesses in Manila operating without city permits; 5,432 without barangay clearances

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by Allan Yves Briones

The Commission on Audit (COA) flagged the city government of Manila for its failure to adequately regulate its business sector.

According to the commission’s annual audit report, a total of 1,489 business establishments in 92 barangays were “not found in the city database”, meaning they’re operating “without the required city permits contrary to law.”

Under the Local Government Code, Section 143 (h), taxes may be imposed on any business the government deems proper to tax. Such rate of tax should not exceed 2% of gross sales of the preceding year.

In the same report, state auditors found that in investigating the listing of business establishments from 92 barangays that secured clearances, over 5,432 businesses were not on the list.

Source: 2018 Annual Audit Report on the City of Manila

Under Section 152 of the same government code, it requires that business owners secure barangay clearances which are required for the processing of business permits and licenses. According to the code, barangay clearances are “essential in the grant of permit to operate business in the city.”

According to state auditors, the presence of 5,432 businesses who haven’t secured the necessary clearances may have started with a number operating without the required permits of the payment of taxes. Or even worse, that the city government itself has began a practice of not requiring barangay clearances before issuing permits.

“The practice deprived the city of revenue opportunities that it is mandated to impose and generate,” said COA.

The commission ordered the city government to direct responsible officials with the assessment and collection of uncollected business taxes, even the filing of appropriate charges against businesses operating without the authority of the aforementioned permits.

Just a week ago, newly elected Mayor Isko Moreno took to the streets to rid Divisoria and Carriedo of their informal vendor community.