New law toughens control for business tax payments

By
|
Posted on Mar 25 1999
Share

Gov. Pedro P. Tenorio has signed a bill into law that would simplify the business permitting process and ensure that companies seeking license renewals pay their taxes.

The measure is envisioned to resolve problems arising from lack of central control between government agencies involved in business licensing and tax compliance, as well as strengthen efforts in enforcing tax laws.

Under the Business Licensing Processing Act, the function of business permitting will be transferred to the Department of Finance from the Department of Commerce to deter non-payment of taxes by establishments seeking to renew their licenses.

Such tracking mechanism, the law says, will also help the financially-troubled government boost revenue collections without having to raise taxes at this time when businessmen are confronted with declining profits due to economic slump.

“The centralization of the issuance of business licensing within the Revenue and Taxation Division will enhance compliance and enforcement of the laws regarding these issues,” the governor said after approving the legislation.

However, Tenorio underscored the need to clarify to the public a provision empowering the secretary of finance to enter company premises to inquire into the establishment’s compliance with business licensing is subject to constitutional requirements regarding search of the premises.

Although the Public Law 11-73 grants DOF with powers to issue and renew business licenses, it prohibits the department from approving licenses for the purpose of garment manufacturing unless the applicant has been engaged in apparel making prior to January 1, 1995.

The measure also adjusted the rates for the annual business license fees to as follows:

* Banks, $500
* Offshore banking corporations, $1,000
* Securities dealers, $300
* Insurance companies, $300
* Insurance brokers, $100
* Insurance agents, $75
* Public utilities, $300
* Manufacturers, $50
* Wholesalers, $50
* Roadside vendors selling local agricultural and fish products, $5
* Scuba instruction and diving tour operators, $100, and
* General business, $50 per separate line of business.

Businessmen found selling merchandise or providing services for compensation without a valid business permit will be fined $500 and additional $100 per day for continual violation.

Disclaimer: Comments are moderated. They will not appear immediately or even on the same day. Comments should be related to the topic. Off-topic comments would be deleted. Profanities are not allowed. Comments that are potentially libelous, inflammatory, or slanderous would be deleted.