Question & AnswerQ&A (Republic Act No. 1612)
A privilege tax must be paid before any specified business or occupation can be lawfully begun or pursued.
The tax on business is payable for every separate or distinct establishment or place where the business subject to the tax is conducted. One line of business does not become exempt by being conducted alongside another business for which such tax has been paid.
The business tax must be paid by the person, firm, or company conducting the business; the occupation tax must be paid by each individual engaged in a calling subject thereto.
All fixed taxes shall be due and payable on or before January 20 of each year, but any person first beginning a business or occupation must pay the tax before engaging therein.
(1) Persons subject to percentage tax pay a fixed annual tax of twenty pesos per calendar year or fraction thereof. (2) Persons not subject to percentage tax pay graduated fixed taxes based on their gross annual sales, ranging from ten pesos to five hundred pesos depending on sales thresholds.
Lawyers, medical practitioners, architects, interior decorators, certified public accountants, civil, electrical, chemical, mechanical or mining engineers, insurance agents and subagents, 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 must pay seventy-five pesos.
A fine ranging from two thousand to ten thousand pesos and imprisonment from six months to six years; in case of reincidence, fines and imprisonment are increased. All articles produced illegally and the property used in such business shall be forfeited.
A tax equivalent to fifty percent of the gross selling price for automobiles up to seven thousand pesos, increasing to seventy-five percent for prices between seven and ten thousand pesos, and one hundred percent for over ten thousand pesos.
Every person engaged in any business or occupation subject to a privilege tax must register the name or style, business address, and other details with the provincial revenue agent or provincial treasurer within ten days after securing the privilege tax receipt.
Exemptions include persons whose gross annual sales do not exceed two thousand pesos, persons engaged in retail sale of domestic food products in public markets, peddlers with stock under one hundred pesos, producers working at home with productions under five pesos per day, owners of animal drawn two-wheeled vehicles, owners of bancas, and persons employed exclusively by the government or charitable institutions as to their professional services.