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Business

New DOF guidelines exempt professionals from paying business permit fees

Philstar.com
Carlos Dominguez III
In a statement sent to reporters Tuesday, the DOF said among the salient features of Local Finance Circular (LFC) 001-2019 is the exemption of professionals from paying business permit fees.
The STAR / Kriz-John Rosales

MANILA, Philippines — Professionals are now exempt from paying business permit fees for the operation of their offices or clinics after the Department of Finance issued a new set of guidelines to local government units on imposing and collecting taxes and other charges on professionals.

In a statement sent to reporters Tuesday, the DOF said among the salient features of Local Finance Circular (LFC) 001-2019 is the exemption of professionals from paying business permit fees.

The LFC was signed by Finance Secretary Carlos Dominguez III last June 12.

“Under the guidelines, while professionals still need to secure business permits from LGUs, such should be at no cost at all during the registration or renewal of the operation of their clinics or offices, given that such permits cannot regulate the practice of their profession,” the DOF explained.

“This is because regulations over the practice of professions are within the exclusive domain of the respective agencies or regulatory boards empowered by law to supervise and regulate professions,” it added.

According to the DOF, LGUs may impose a local business tax on professionals if they are verified to be engaged in selling, trading or distributing goods of whatever kind or “involved in trade and other business activities that do not constitute the practice of their professions.”

“In this case, the LGU can impose a business permit fee during the registration and renewal of the operation of the office or clinic of the concerned professional,” the DOF said.

The Finance department said the new set of guidelines seeks to address reports and complaints on improper imposition of local taxes, fees and other charges on professionals by LGUs. 

“The LFC’s objective is to ensure the ‘fair, uniform and proper implementation’ of the provisions of the Local Government Code  governing the taxability of professionals relative to the practice of their profession, and to complement  efforts in streamlining and facilitating government transactions, as mandated under Republic Act 11032 or the Ease of Doing Business Law,” it added. — Ian Nicolas Cigaral

DEPARTMENT OF FINANCE
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