As issued by the Department of Finance (DOF) in the Local Finance Circular (LFC) 1-2019, self-employed professionals, such as doctors, accountants, and lawyers, are exempted from paying business permit fees. Though their business permits are free, the operation of their offices still requires securing necessary permits from their respective LGUs.
The registration, as well as renewal of their clinics and offices, should be at no cost, provided that the practice of their profession is still under the regulation of the respective agencies or regulatory boards authorized by law to supervise and regulate professions.
Meanwhile, once the professional is verified to be engaged in selling, trading or distributing goods of any kind or involved in trade and other business activities that don’t comprise the practice of his or her profession, a business permit fee may be imposed during the renewal of registration of the office or clinic of the said professional.
Professionals are those individuals granted with licenses by the Philippine Regulatory Commission (PRC) that allow them to practice their respective occupation legally.
The said exemption from payment of business permit fee is among the ongoing efforts to streamline government transactions and aid in improving the ease of doing business in the Philippines. The LFC 1-2019 was issued to eradicate complaints of “improper imposition of local taxes, fees and other charges by LGUs.”
Stated in the LFC 1-2019, the LGU’s profession tax should “not exceed P300 or the rate provided under a duly enacted local ordinance, subject to adjustment not exceeding 10 percent every five years.”
In the case of multiple practice of professions, the professional must pay the professional tax for each profession.
For those professionals who are employed in both private and government offices, they are imposed with professional tax, while those who are exclusively employed in the government are exempted from payment of professional tax except if the practice of the profession was duly authorized outside of their official roles.
In terms of community taxes, the LFC indicated that individuals, including professionals and corporations, must be charged no more than P5000. The general professional partnerships (GPPs) are exempted from payment of the community tax.
While the business permit fee is for free, the “LGUs may impose and collect other applicable fees and charges (i.e. garbage fee, sanitary inspection fee, occupancy permit fee, etc.), the amount of which shall be reasonably commensurate to the cost of regulation or provision of service, as may be provided under a duly enacted local ordinance; provided, however, that no service charge shall be based on capital investments or gross sales or receipts of the persons or business liable therefor.”