c. Professional Tax (RA 7160, Sec. 139)

PROFESSIONAL TAX (RA 7160, SEC. 139)

Concept

Section 139 of the Local Government Code authorizes a province to levy an annual professional tax on a person engaged in the exercise or practice of a profession requiring government examination. For a lawyer practicing the profession, this is a tax connected with professional practice. The province may set reasonable classifications, but the amount must not exceed ₱300. (Sec. 139, Rep. Act No. 7160)¹

Governing provisions

Section 139 governs who pays, where payment is made, when the tax is due, and the effect of payment on practice elsewhere in the Philippines. It also directs employers to require payment by persons subject to the tax and exempts professionals exclusively employed in the government. (Sec. 139, Rep. Act No. 7160)¹

Requisites / Rules

• Coverage. The provincial levy applies to each person engaged in exercising or practicing a profession requiring government examination. The amount and reasonable classification are determined by the sangguniang panlalawigan, subject to the ₱300 ceiling. (Sec. 139, Rep. Act No. 7160)¹
• Place of payment. A person legally authorized to practice pays the province where the person practices. If the person practices in several places, payment is made to the province where the principal office is maintained. (Sec. 139, Rep. Act No. 7160)¹
• Annual deadline. The tax is payable on or before January 31 each year. A person who first begins professional practice after January must pay the full tax before engaging in that practice. (Sec. 139, Rep. Act No. 7160)¹
• Employer’s duty. An individual or corporation employing a person subject to the tax must require that person to pay it before employment and annually thereafter. (Sec. 139, Rep. Act No. 7160)¹

Distinctions

The place for paying the tax and the places where the profession may subsequently be practiced are different questions. A professional who practices in several places pays in the province of the principal office. Once the corresponding tax is paid, the professional may practice anywhere in the Philippines without another national or local tax, license, or fee for practicing that profession. (Sec. 139, Rep. Act No. 7160)¹

Key doctrines

Payment of the corresponding professional tax carries a nationwide effect for the practice of the profession: a second jurisdiction may not impose another national or local tax, license, or fee for that practice. This rule should be read together with Section 139’s direction on the province to which payment is initially made. (Sec. 139, Rep. Act No. 7160)¹

Exceptions

Professionals exclusively employed in the government are exempt from paying the professional tax. By contrast, practicing one line of profession together with another line for which the tax has been paid does not exempt the additional line of profession. (Sec. 139, Rep. Act No. 7160)¹

Bar tip

In a problem involving practice in several provinces, identify the principal office first; then apply the January 31 deadline and the nationwide effect of paying the corresponding tax. Check separately whether the professional is exclusively employed in the government. (Sec. 139, Rep. Act No. 7160)¹