Bureau of Local Government Finance Opinion

January 31, 1997 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully returned, thru the Provincial Treasurer, Masbate, Masbate, to the Municipal Treasurer of Cawayan, same province. This refers to the letter dated October 24, 1996 of Mr. Juan S. Maloboco, SB Member of Cawayan, inquiring whether a gasoline station with franchise from the Energy Regulatory Board (ERB) may still be required to secure a business permit from the local government unit where it is operating its business and where to pay the corresponding local tax. It is represented that one gasoline station with a franchise from ERB is operating in Barangay Divisoria, that municipality. However, it has not secured a business permit since 1989 up to present. Thus, the above query. In this connection, it is informed that under Section 147 of the Local Government Code of 1991 (LGC), it is mandatory for the operator of any business or calling to secure a Mayor's permit to operate. Hence, the non-issuance of such a permit may constitute sufficient ground for closure and stoppage of the operations of a business or establishment. On the other hand, it may be worth mentioning that any business engaged in the production, manufacture, refining, distribution or sale of oil, gasoline and other petroleum products shall not be subject to any local tax. (Art. 232(h), IRR). It bears emphasis, however, that the sales/receipts of a gasoline station for dealing in, or selling tires, batteries, and accessories (TBA) as well as for other services that are rendered to its customers or clientele shall be taxable by the locality where said station is located. IaEHSD Accordingly, this Bureau expresses the view that the subject gasoline station is liable to the payment of Mayor's permit and other regulatory fees, as well as the business tax on gross receipts from TBA sales and Services rendered to customers, if any, imposed by the municipality of Cawayan under a duly enacted tax ordinance. (SGD.) LORINDA M. CARLOS Executive Director