Bureau of Local Government Finance Opinion

February 25, 2015 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Dr. Anthony Asis Councellor, Trece-Indang Dental Circle Cavite Dental Chapter 2960 2nd Floor LPR Merchandise Trece-Tanza Road Barangay San Agustin Trece Martires City Cavite Sir : This refers to your letter dated January 28, 2015, requesting clarification on whether or not Dentists who are operating Dental Clinics in the practice of their profession are liable to pay business tax in municipalities or cities where they are situated. It is alleged that the City Government of Trece Martires City is subjecting dental clinics to the payment of Mayor's Permit fee and Business Tax unlike in other cities in Cavite like Dasmarias and Imus, which are not requiring dental clinics to pay Mayor's Permit and Business Tax. In view of the said request, dental clinics are confronted with two different legal opinions issued by this Bureau and the Department of Finance, the contents of which are summarized as follows: 1. December 6, 1999 (Edgardo B. Espiritu, DOF Secretary) Using as basis Sections 139 (b) and 147 of the Local Government Code, profession, requiring government examination, like dentists, are required to pay professional tax to the province where they are practicing but are exempt from paying Mayor's permit or license fee for the practice of such profession. Dental clinics as a direct consequence of the practice of such profession cannot be imposed a graduated tax on the premise that it is a "business establishment offering to render professional service." 2. March 10, 2003 (Mr. Joselito Laniwan, Licensing Officer, Catarman, Northern Samar) Again using as basis Sections 139 (b) and 147 of the Local Government Code, professionals, like dentist and doctors, who maintain clinics, are subject to the payment of Mayor's Permit, Business Tax as well as regulatory fees and service charges imposed by Cities and Municipalities. Likewise, in August 12, 2013, the Department of the Interior and Local Government Regional Director Atty. Rene K. Bordeos, issued a Memorandum to all DILG Provincial Directors and City Directors, directing them to disseminate the December 6, 1999 opinion of the Secretary of Finance. In this connection and for the immediate resolution of the herein issue, please be informed that the opinion embodied in the letter dated December 6, 1999 addressed to Dr. Flor S. Enriquez, former President of the Philippine Dental Association on the request for opinion on whether cities or municipalities may validly require dentists to secure a Mayor's Permit before they can practice their profession and whether a dental clinic may be taxed as a business establishment, it was held as follows: a. Such professional who has paid the corresponding professional tax to the province where he practices his profession shall be entitled to practice his profession in any part of the Philippines without being subjected to any other national or local tax, license or fee, including the Mayor's Permit or license fee, for the practice of such profession. b. As to dental clinics, they are established as a direct consequence of the practice of the dental profession. They are, necessarily, for the exercise of such a profession. c. Therefore, to impose a graduated tax on a dental clinic on the premise that it is a "business establishment rendering or offering to render professional services'' would be to impose a local tax on the practice of profession. This would be in contravention of the Local Government Code. It is the view of this Bureau that said opinions still hold until such time that the same are modified or rescinded accordingly by the same administrative authority or by the Court of competent jurisdiction. In this connection, all previous rulings and/or opinions issued by this Bureau relative to the herein subject matter which are inconsistent with the views expressed herein are hereby modified and/or repealed accordingly. We hope this will help clarify matters. Very truly yours, (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director