PROFESSIONALS are now exempted from paying fees to obtain business permits for the operation of their offices or clinics under a new circular of the Department of Finance (DoF).

In a statement on Tuesday, the DoF said that “while professionals still need to secure business permits from LGUs (local government units), 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,” in reference to the Local Finance Circular (LFC) 001-2019.

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

The DoF clarified that local governments may impose local business tax on professionals who conduct trading and other business activities that are outside the scope of their professions, payment of which can be collected during registration or renewal.

The same circular also covers imposition of the professional tax on professionals employed in the private and public sectors.

Professionals who are employed exclusively by the government are exempted from paying professional tax “unless he or she has been duly authorized to practice the profession outside of one’s official functions”.

An individual or corporation employing a person subject to the professional tax should require payment by that person of the tax on his/her profession before employment and annually thereafter.

In case the individual practices multiple professions — a certified public accountant and a lawyer at the same time, for example — he or she is required to pay the professional tax imposed on both professions, according to the circular.

The professional tax, however, should “not exceed P300 or the rate provided under a duly enacted local ordinance, subject to adjustment not exceeding 10% every five years.”

The circular also stated that the community tax on individuals, including professionals, and corporations does not cover general professional partnerships, which are therefore exempt from paying this levy.

Moreover, the community tax will be “P5 plus P1 for every P1,000 of income from the exercise of profession” but should not exceed P5,000.

The circular also states that LGUs may collect garbage fees, occupancy permit fees and sanitary inspection fees and other charges, “the amount of which shall be reasonably commensurate to the cost of regulation or provision of service… provided under a duly enacted local ordinance,” provided that no service charge will be based on capital investments or gross sales or receipts of the persons or businesses concerned.

In the statement, DoF Undersecretary Antonette C. Tionko — who heads the department’s Revenue Operations Group — said that the circular was issued in order to address complaints about improper imposition of local taxes and other charges on professionals. — RJNI