Enforcement of the Payment of Occupation Tax

February 23, 1970 REVENUE MEMORANDUM ORDER NO. 09-70 SUBJECT : Enforcement of the Payment of Occupation Tax In order to effectively implement the provisions of Section 182(B) of the National Internal Revenue Code, as amended by Republic Act No. 6110, which section provides for the payment of occupation tax, the following procedure is hereby promulgated for the compliance of all concerned: 1. The particular provision of the law which is the subject matter of this Revenue Memorandum Order is quoted hereunder for the guidance of all concerned: "Sec. 182(B) On occupation . Annual taxes on occupation shall be collected as follows: (1) Seventy-five pesos: (a) Lawyers, medical practitioners, architects, interior decorators, certified public accountant, civil, electrical, chemical, mechanical, mining or sanitary engineers, insurance agents and sub-agents, customs brokers, marine surveyors, actuaries, registered master plumbers, veterinarians, dental surgeons, opticians, commercial aviators, professional appraisers or connoisseurs of tobacco and other domestic or foreign products, licensed ship masters and marine chief engineers; (b) Mechanical plant engineers, junior mechanical engineers and certified plant mechanics, unless he or she is a professional mechanical engineer and has paid the corresponding fixed tax for mechanical engineers. The term 'mechanical engineers,' as used herein, means professional mechanical engineers as defined in Commonwealth Act Numbered Two hundred and ninety-four. cd (2) Fifty pesos: (a) Land surveyors, chief mates, marine second engineer, pharmacists, registered nurses, chiropodists, tattooers, masseurs, pelotaris, jockeys, professional actors or actresses, stage performers, hostesses, statisticians, dietitians, commercial stewards and stewardesses, flight attendants, insurance adjusters and embalmers; (b) Midwives, unless he or she is a registered nurse and has paid the corresponding fixed tax for nurses; (c) Chemist, unless he or she is registered chemical engineer and has paid the corresponding fixed tax for chemical engineers; (d) Associate electrical engineers, unless he or she is a professional electrical engineer and has paid the corresponding fixed tax for electrical engineers; (e) Marine officer, unless he is a marine engineer or second engineer and has paid the corresponding fixed tax for marine engineers or second engineers. Every professional legally authorized to practice his profession, who has paid the corresponding annual privilege tax on professions as herein imposed, shall be entitled to practice the profession for which he has been duly qualified under the law, in all parts of the Philippines without being subject to any other national tax, license or fee for the practice of the profession, if they have paid to the office concerned the registration fees required by their respective profession. Any professional subject to the foregoing taxes shall write or print in deeds, receipts, prescriptions, reports, books of accounts, plans and designs, surveys and maps, as the case may be, his privilege tax receipt number. Any individual or corporation employing a person subject to tax under Section one hundred eighty-two (B) shall require payment by that person of the privilege tax on occupation before employment and annually thereafter." 2. Regional Directors shall instruct their respective Revenue District Officers to assign the fieldmen under their jurisdiction in the checking of the occupation tax paid by those liable thereto within their particular revenue districts. Such checking should be done without issuing an authority to investigate and the fieldmen should be instructed that they are not to go over the books of accounts nor conduct any investigation for tax purposes but to merely check the payment of the occupation tax of the taxpayer and/or the employees of the taxpayer subject to occupation tax. 3. The checking of the payment of the occupation tax should not be confined to private firms or businesses but should also include government entities and government owned or controlled corporations. 4. For those who are already liable to the occupation tax as of January, 1969, they should be checked to determine whether the full amount of the tax for 1969 had been paid in addition to the payment of the 1970 tax, annually or semestrally. 5. For those who became liable to the occupation tax only with the passage of RA 6110, otherwise known as the Omnibus Revenue Law, which became effective on September 1, 1969, the examiner should see to it that the privilege tax corresponding to the second semester of 1969 had been paid together with that for the year 1970 or the first semester thereof. 6. In checking businesses or professional firms employing persons subject to occupation tax, the employer should be reminded of his liability to require all those in his employ to pay the occupation taxes if they are subject thereto. Employees discovered not to have paid the privilege tax on occupation should be reported to the employer so that the latter can require the former to pay the required occupation tax. 7. In addition to the checking of the payment of the occupation taxes and in the course of the regular investigation for tax purposes the examiners are conducting at present or will conduct in the future, he shall also check deeds, receipts, prescriptions, reports, books of accounts, plans and designs, surveys and maps, and such other papers which are produced, prepared, reviewed or processed by any individual subject to occupation tax to determine whether the privilege tax receipt number of the individual concerned who is subject to occupation tax has been written or printed in the said papers or correspondence. For example, in investigating a drug store, he shall look into the prescriptions received from doctors and determine whether the privilege tax receipt number has been written or printed on the said prescriptions. 8. Units, divisions and branches of the Bureau who receive communications from private businesses or firms or other individual taxpayers shall see to it that if the one who sent the communication or signed the communication is a professional, his privilege tax receipt number together with the taxpayer account number is indicated in the said communication. If there is no written or printed privilege tax receipt number on the paper received by the unit, division or branch, the correspondence should be returned to the sender with the notation that he comply with the provisions of Section 182(B) which is quoted hereunder: "Any professional subject to the foregoing taxes shall write or print in deeds, receipts, prescriptions, reports, books of account, plans and designs, surveys and maps, as the case may be, his privilege tax receipt number." 9. The privilege tax receipt number contained in the letter or correspondence should be collated and listed in the following manner: a. Name of the Taxpayer b. Nature of Occupation c. Privilege tax receipt number The list as collated should be forwarded to the Data Processing Center, National Office, for checking up with the original of the receipts listed in the said office to determine whether the privilege tax receipt cited is correct or not or whether it is genuine or fake. 10. Examiners assigned to check the payment of the occupation tax should submit a weekly report in duplicate to the Revenue District Officer who in turn shall forward the said report to the regional office. The various reports submitted or coming from the Revenue District Officers shall be collated in the regional office and the original should be forwarded to the National Office, Attention: Data Processing Center, for the latter to check with the originals of the receipts to determine correctness of the payment made and that the receipt is genuine or not. 11. The remaining copy of the progress report of the examiner should be forwarded to the Assessment Branch for processing and if there is any deficiency tax that should be assessed, the Assessment Branch shall prepare and issue the said assessment notice to the taxpayer concerned. 12. The weekly report required from the examiners should contain the following information: PART A List of those who paid showing the following information: a. Name b. Address c. Nature of Occupation d. Name of employer, if any e. Official Receipt Number for occupation tax paid f. Amount of occupation tax paid g. Period Covered PART B List of names of those subject to occupation tax but have not paid the occupation tax due either partially or fully: a. Name b. Address c. Nature of occupation d. Name of employer, if any e. Amount of tax due f. Period Covered 13. To guide the examiners in the checking of those subject to occupation tax, the last paragraph of Section 180 is quoted hereunder: "If the privilege tax is not paid within the time specified, the amount of the tax shall be increased by twenty-five per centum , the increment to be part of the tax." Accordingly, all those discovered not to have paid their privilege taxes or if they paid but not on time, are therefore considered delinquent and the corresponding 25% surcharge and compromise for late payment should be collected in addition to the tax, if the required tax has not yet been paid. All those concerned are enjoined to comply with the provisions of this revenue memorandum order which becomes effective upon approval. MISAEL P. VERA Commissioner of Internal Revenue APPROVED: CESAR VIRATA Acting Secretary of Finance February 25, 1970 The Honorable The Secretary of Finance Finance Building Manila Sir: I have the honor to forward Revenue Memorandum Order No. 9-70, the subject matter of which is "Enforcement of the Payment of Occupation Tax, for your approval. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue