Bureau of Local Government Finance Opinion

April 29, 2003 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 2nd Indorsement Respectfully returned to the OIC-Regional Director for Local Government Finance, Cordillera Administrative Region (CAR), 2nd Floor, LBP Building, Harrizon Road, Baguio City, the herein preceding indorsement dated February 5, 2003 regarding Resolution No. 103-2001 of the Sangguniang Bayan of the municipality of Buguias, Benguet relative to the issue on whether or not the said municipality may impose an Annual Occupation Tax on each person engaged in the exercise of or practice of his profession within the municipality. CDAcIT Section 147 of the Local Government Code (LGC) of 1991 provides as follows: "Section 147. Fees and Charges . The municipality may impose and collect such reasonable fees and charges on business and occupation and, except as reserved to the province in Section 139 of this Code, on the practice of any profession or calling, commensurate with the cost of regulation, inspection and licensing before any person may engage in such business or occupation, or practice such profession or calling." It is the contention of that Office that under the aforequoted provision, the municipality is authorized to impose reasonable fees and charges on professionals which do not require government examination in the exercise of their professions. This Bureau concurs therein. It is suggested, however, that the imposition shall be denominated as fee not tax. In addition, it is worth mentioning that professionals, who are paying the professional tax like doctors and dentists, may be considered exempt from the Mayor's permit fee. However, if they maintain a clinic, the operation of such clinic shall be subject to the payment of Mayor's permit fee, the business tax based on gross receipts, as well as the regulatory fees or service charges imposed under a duly-enacted tax ordinance of the municipality. Be guided accordingly. (SGD.) MA. PRESENTACION R. MONTESA Executive Director