Clarification on Securing of a Business Permit by Paywell Marketing & Industrial Corporation (PMIC)

October 3, 2017 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Eustaquio N. Lopez General Manager Paywell Marketing & Industrial Corporation 81 Interior J. Gregorio St., Canumay West Valenzuela City SUBJECT : Clarification on Securing of a Business Permit by Paywell Marketing & Industrial Corporation (PMIC) Dear Mr. Lopez : This refers to your letter dated 21 September 2017 seeking the Bureau's opinion on whether or not Paywell Marketing & Industrial Corporation (PMIC) is required to secure a business permit in Tanauan, Batangas where PMIC renders its project-based services. Representations are made that PMIC is a company engage in job contracting and providing outsourced services to various clients from different industries. Furthermore, PMIC has its principal office in Valenzuela City, where it secures its business permit. Pursuant to its business, the company renders its services lasting for approximately 1-2 days in the factory of Nestle Philippines, Inc., a client located in Tanauan, Batangas wherein PMIC does not maintain an office. In view of this, PMIC requests a clarification on whether or not it is still required to secure a business permit in the said locality. In this connection, attached for your guidance and reference is our letter dated 27 January 2015 to STERIX, Inc., treating on a similar case, wherein this Bureau opined, to wit: "With regard to the required business permit, this Bureau, based on the information submitted, believes that there is no need for STERIX to secure business permit from local government units as the presence of its personnel to said localities is merely to fulfill its contractual obligation to its clientele and their presence to carry out this obligation contracted by the business from their clients is only temporary. This opinion is expressed in view of the tenets embodied in Section 147 which provides that the imposition and collection of such regulatory fee (business permit fee) shall be commensurate with the cost of regulation, inspection and licensing before any person may engage in such business. To elucidate and affirm our stand on the issue and as viewed from a different perspective, the absence of any branch office, sales outlet or warehouse of STERIX repudiate the requirement of securing business permit as, in the first place, there is no fixed business establishment to regulate, inspect and issue license to justify the imposition . For after all how can a regulating authority impose its authority to regulate when the very subject of the regulation is non-existent." Therefore, this Bureau reiterates the above Opinion, and considers that PMIC is no longer required to secure a business permit on the ground that it does not maintain any branch office in Tanauan, Batangas wherein said company renders its project-based services pursuant to a contractual obligation to its client, Nestle Philippines, Inc. PMIC, however, shall pay an occupational fee for any of its workers employed in other jurisdictions pursuant to Section 147 1 of the Local Government Code of 1991, in relation to Section 151 2 thereof, as may be authorized under a duly enacted ordinance of the said City. This Opinion is issued based on the information provided. If upon subsequent verification or submission of information proves the contrary, this Opinion will be deemed null and void. We hope we have provided clarity on the matter. Very truly yours, (SGD.) NIO RAYMOND B. ALVINA OIC Executive Director ATTACHMENT Paywell Marketing & Industrial Corporation 81 Interior J. Gregorio St., Canuway West, Valenzuela City Tel. No.: (02) 292-9046 Telefax No.: (02) 293-0262 E-mail: [emailprotected] September 21, 2017 Mr. Nio Raymond B. Alvina Executive Director Bureau of Local Government Finance 8th Floor, EDPC Building, BSP Complex, Roxas Boulevard, Malate, Manila Dear Sir, We are writing this letter to ask for your insight with regards to the business permit of Paywell Marketing & Industrial Corporation. Currently, we have a business permit in Valenzuela City, where our office is located. Our company has project-based services that are assigned at Nestle Philippines, Inc.-Tanauan Factory. We don't maintain our office in Tanauan, Batangas. We only go there if we have project that last for approximately 1 to 2 days. May we ask for your advice if we should still apply another business permit for another location like Nestle-Tanauan? Hoping for your positive response regarding this matter at your earliest convenience time. Sincerely yours, (SGD.) MR. ESTAQUIO N. LOPEZ General Manager Footnotes 1. 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. 2. Section 151. Scope of Taxing Powers. Except as otherwise provided in this Code, the city, may levy the taxes, fees, and charges which the province or municipality may impose: Provided, however, That the taxes, fees and charges levied and collected by highly urbanized and independent component cities shall accrue to them and distributed in accordance with the provisions of this Code.