The rules say no more than two shirt buttons may be undone
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More than 80 taxi drivers have signed a petition after being told to smarten their dress or face losing their licences.
Blaenau Gwent Council said the rules, introduced in August, helped "portray a better image" of the service.
But angry drivers said wearing clothing like tracksuits should be allowed.
Tracksuits and football tops are not permitted, shirts must not carry any words or pictures other than logos, and non-religious headwear is also banned.
Councillor Derek Morris, Chairman of Blaenau Gwent Council's Licensing Committee, said the petition was received "some time ago" and was reviewed by the committee.
But he added: "It was decided that no further action will be taken with regard to the recent amendments to the licence conditions.
"The current licence conditions came into force in 1978 and have only been periodically modified since that time."
Alan Oldham, of Alan's Taxis in Ebbw Vale - who likes wearing a tracksuit to work - said many drivers had been angered by the rules.
'Nanny state'
He added: "The passengers don't really take much notice of what you're wearing, unless it's really outlandish and then of course you'll lose that customer if it's that far-out.
"I've had no complaints whatsoever, and as far as I can make out within the borough there have been no complaints made about the style of dress of any of the taxi drivers.
"As far as we're concerned it seems to be we're having a nanny state whereby we're being told what we can wear, what we can't wear.
"Their priority should be, is the driver licensed, has he got proper insurance on the vehicle?"
Cllr Morris said the new rules were brought in to "raise standards".
He added: "The introduction of a dress code will ensure that all taxi drivers portray a better image of the valuable service they provide for the public.
"The overall response to the new guidelines has been generally positive."
Tailored shorts
Among other rules, the council states that male drivers must wear, as a minimum, a shirt or t-shirt with trousers or denim jeans and tailored shorts having a fly fastening and capable of being worn with a belt.
Shirts or t-shirts must cover shoulders and no more than the collar button and neck button must be undone.
Female drivers face the same rules, "with the substitution of blouse for shirt and the addition of skirt to tailored shorts or trousers".
The rules also state that "to avoid any doubt, tracksuit tops and trousers and football shirts shall not be permitted."
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