HomeIAMURE International Journal of Business and Managementvol. 3 no. 1 (2012)

Tax Treatment of Security and Janitorial Service Agencies: An In-Depth Study

Christopher C. Malaya



Security and janitorial service agencies are treated differently in terms of tax treatments. The study was to examine and analyze the similarities and differences of the treatments. It used both descriptive and analytical methods to uncover the factors that contributed to the preferential tax treatment of security agencies. The following significant findings were gathered from court decisions, journals, books, newspaper articles, and online publications and documents: (1) The security agency is given preferential tax measures different from other service providers as shown from Revenue Memorandum Circular (RMC) No. 39-2007; (2) Congress of the Philippines is inclined to promote and provide a fair, efficient, and simple and transparent tax system; (3) Vested political and economic groups were lobbying hard in protecting their interests that allowed exemptions and uneven tax treatment; (4) Other business agencies are based on the same principles and business models of security agencies; and (5) No disparity of tax measures exists among service agencies in Singapore and United States. It concluded that the tax measures among service agencies were not applied fairly and equitably without any rational justification even they belong to the same business model. It also recommended that Revenue Memorandum Circular (RMC) No. 39-2007 should also be applicable to janitorial service agencies.