The Department of Finance (DoF) said Sunday that service contractors that provide temporary or outsourced employees, including those who work from home (WFH), are not responsible for paying mayor fees or work permits.
The Ministry of Finance made the announcement after Finance Minister Benjamin Diokno issued Local Finance Circular (LFC) 001.2022 on September 1, 2022, which provides guidance on the imposition of Local Business Tax (LBT) and fees for service contractors. LFC 001.2022 is effective September 24, 2022.
“We have issued a circular to address concerns [the DoF] It has been received from taxpayers since 2015, specifically in connection with the charging of work permit or mayor fees to service contractors who deploy temporary and outsourced local government employees outside its head office,” said Finance Minister Benjamin Dyukno.
Before the Treasury issued this Local Funding Act, local government units (LGUs) would have collected work permit fees or mayors from businesses, including food delivery service companies that did not have an office there.
However, LGUs may charge an occupation fee to external employees who have been temporarily deployed and engaged in the exercise of a profession that does not require government examination, including those in a WFH arrangement.
This is to recover the cost of services which may be rendered by the concerned Local Government Authority as a function of regulating and/or providing the service, and as may be provided by a duly enacted Local Ordinance.
All sales or transactions made by the service undertaker in a LGU having a branch or sales office in the said branch or sales office shall be recorded and the amount of LBT due thereon shall be paid to the LGU where such branch or sales office is. Located.
“I advise all city and municipal treasurers to comply with the provisions of Law No. 001.2022. The Department of Finance, through the Local Government Finance Office (BLGF), monitors LGU compliance, through the relevant local treasurers, and provides necessary technical assistance to governments,” Diokno said. local”.