Bureau of Local Government Finance Opinion

May 14, 1993 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Fidelino G. Benzon Councilor Chairman, Ways & Means Committee Paraaque, Metro Manila S i r : This refers to your letter dated March 12, 1993 inquiring whether or not the Department of Finance: 1. has the power to review any tax or fiscal ordinance passed by a city or municipality. If it does, what effect does such power have on local government units? If not, who does? 2. has the right to determine the legality or propriety of any tax or fiscal ordinance passed by a city or municipality. cd On Query No. 1 It is hereby informed that beginning January 1, 1992, the effectivity date of the Local Government Code of 1991, local tax ordinances are no longer subject to review by this Department. The Department may, however, still extend technical assistance to local government units in the preparation of tax ordinances and in the clarification of issues and controversies arising from the imposition and/or collection of taxes and fees under the provisions of the Local Tax Code (PD 231), as amended, or of the Local Government code of 1991. This is in accordance with Article 3876 of the Implementing Rules and Regulations (IRR) of the Code, quoted hereunder: "Art. 287. Administrative Authority of the Secretary of Finance. The Secretary of Finance shall, in consultation with the various leagues, formulate and prescribe, from time to time procedures and guidelines as may be necessary for the proper, efficient and effective implementation of the provisions of Title I, Book II of the Code." In this connection local tax ordinances enacted by the Sangguniang Panlungsod of a component city and the Sangguniang Bayan of municipalities comprising a province are to be submitted to the Sangguniang Panlalawigan for review pursuant to Section 56 of the Code, as implemented under Art. 110 of the IRR. As to local tax ordinances enacted by the sangguniang barangays, the same should be submitted to the Sangguniang Panlungsod or Sangguniang Bayan for review pursuant to Section 57 of the Code as implemented under Art. 111 of the same Code. Regarding local tax ordinances enacted by the Sangguniang Panlungsod and Sangguniang Bayan of the four (4) cities and the thirteen (13) municipalities of Metropolitan Manila, the Code is silent on the matter. However, at the discretion of the Sanggunian and/or the local chief executives, consultations may be made with this Department pursuant to Art. 287 of the IRR aforementioned. On Query No. 2 The Secretary of Justice shall determine the legality and constitutionality of a tax ordinance or revenue measure pursuant to the provisions of Sec. 187 of the Code as implemented under Art. 275 of the IRR, quoted hereunder: "Art. 275. Procedure for Approval and Effectivity of Tax Ordinances and Revenue Measures. . . . . That any question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice who shall render decision within sixty (60) days from the date of receipt of the appeal: Provided , however , That such appeal shall not have the effect of suspending the effectivity of the ordinance and the accrual and payment of the tax, fee, or charge levied therein: Provided , finally , That within thirty (30) days after receipt of the decision or the lapse of the sixty-day period without the Secretary of Justice acting upon the appeal, the aggrieved party may file appropriate proceedings with a court of competent jurisdiction. (Underlining supplied) We trust that this clarifies matters. Very truly yours, By Authority of the Secretary: LORINDA M. CARLOS Executive Director Bureau of Local Government Finance