MANILA, Philippines – The Department of Finance (DOF) issued a new set of guidelines to local government units (LGUs), exempting professionals like doctors, accountants, and lawyers from paying business permit fees.

Finance Undersecretary Antonette Tionko said on Tuesday, July 2, that the new local finance circular (LFC) addresses complaints received by the DOF on the improper imposition of local taxes, fees, and other charges on professionals by LGUs.

While professionals still need to secure a business permit from LGUs, it should be issued for free, since “such permits cannot regulate the practice of their profession.”

The DOF pointed out that only regulatory boards or agencies authorized by law can regulate professions.

Meanwhile, local business tax may be imposed on professionals if they are engaged in selling, trading, or distributing goods of whatever kind, or are 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 LFC also specifies that professional tax for employed professionals in both the private and public sectors shall not exceed P300 or the rate provided under a duly enacted local ordinance. This tax is subject to adjustment not exceeding 10% every 5 years.

For individuals practicing multiple professions, he or she must pay the professional tax for each.

“A lawyer who is also a certified public accountant must pay the professional tax imposed on each profession, if he or she is to practice both professions,” the DOF said.

As for the community tax on individuals, including professionals, it was set at P5 plus P1 for every P1,000 of income from the exercise of profession. It must not exceed P5,000. – Rappler.com