Bureau of Local Government Finance Opinion

March 6, 1997 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully returned to the City Treasurer, Cotabato City. This refers to her letter dated October 30, 1996 regarding the proposal made by the Sangguniang Panlungsod relative to the collection of garbage fees. It is being proposed that a Memorandum of Agreement be entered into by the City Government of Cotabato and the Cotabato Light and Power Company (CLPC) for the inclusion of garbage fees in the billing and collection of light bills of CLPC. The amount collected shall be remitted to the City Government less a certain percentage to be retained by the CLPC. Hence, this query on whether such an approach is allowable. In this connection, enclosed is a copy of the 2nd Indorsement dated January 9, 1997 to the Regional Director for Local Government Finance, Region XII, Cotabato City, bearing on a similar query, the pertinent portions of which are quoted hereunder: "Sec. 130. Fundamental Principles . The following fundamental principles shall govern the exercise of the taxing and other revenue-raising powers of local government units: "xxx xxx xxx; "(c) The collection of local taxes, fees, charges and other, impositions shall in no case be let to any private person; "xxx xxx xxx. "Sec. 170. Collection of Local Revenues by Treasurer . All local taxes, fees, and charges shall be collected by the provincial, city, municipal, or barangay treasurers, or their duly authorized deputies." "The provincial, city or municipal treasurer may designate the barangay treasurer as his deputy to collect local taxes, fees, or charges. In case a bond is required for the purpose, the provincial, city or municipal government shall pay the premiums thereon in addition to the premiums of bond that may be required under this Code." "From the aforequoted provisions of the law, it is the view of this Bureau that the collection of a tax, fee or charge is an inherent function of local treasurers, and, therefore, cannot be let to a private person or entity. To allow a private party to collect public money is fraught with dangerous consequence (fraud, delay, ineptness, etc.) without being bound by official oaths of public officers. (The Local Government Code of 1991 Annotated, Jose N. Nolledo). "Moreover, the said provision of law is express and explicit hence, the enactment of City Ordinance No. 2885 authorizing the acceptance of payment of local taxes through the different banking institutions partakes the nature of an amendment to the LGC and, thus, beyond the authority of the Sangguniang Panlungsod of Iligan City which enacted the subject Ordinance." On the basis of the foregoing, this Bureau holds the view that the proposed MOA may not be allowable for lack of legal basis. HacADE Appropriate representations, therefore, should be made with the Sangguniang Panlungsod and the City Mayor. (SGD.) LORINDA M. CARLOS Executive Director