Bureau of Local Government Finance Opinion

October 30, 2014 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 2nd Indorsement Respectfully returned to the ICO-Regional Director for Local Government Finance, Regional Office No. VIII, 141 Sto. Nio St., Tacloban City, the within 1st Indorsement dated September 29, 2014 relative to the letter dated September 25, 2014 of Hon. JERRY S. UY, Chairman, Committee on Ways and Means, Office of the Sangguniang Panlungsod (SP), that City, seeking legal opinion on the proposed Ordinance entitled " An Ordinance Waiving the Imposition of Surcharges, Interests, and Penalties for the Renewal of Business Permits for Establishments which are in the Process of Re-Building or Have Resumed Business Operations After June 30, 2014 ". At the outset, we would like to clarify that it is our understanding that the intent of the proposed Ordinance is to waive the surcharges, interests and penalties for business establishments that renewed or will be renewing their business permits after June 30, 2014 thus, constitute " late payments " or not paid on time. TAacHE That Office cited Section 167 of Republic Act No. 7160, otherwise known as the Local Government Code (LGC) of 1991, which provides: " SEC. 167. Time of Payment. Unless otherwise provided in this Code, all local taxes, fees , and charges shall be paid within the first twenty (20) days of January or of each subsequent quarter, as the case may be. The sanggunian concerned may, for a justifiable reason or cause, extend the time for payment of such taxes, fees, or charges without surcharges or penalties, but only for a period not exceeding six (6) months . ( Boldfacing and underscoring for emphasis ) The abovequoted provision of law is clear and explicit that local sanggunian may, for a justifiable reason, extend the time for the payment of taxes, fees, or charges. However, the law is also clear that what it provides for the sanggunian concerned is a discretionary authority to extend the time of payment of such business permit fee. Even Article 282 of the Implementing Rules & Regulations (IRR), implementing Section 192 of the LGC only authorizes local sanggunians for the grant of tax exemption privileges, incentives or tax relief, but explicitly provides that " such grants shall not apply to regulatory fees which are levied under the police power of the LGUs ". Considering therefore that the law aforecited made no mention of an authority for the SP to waive surcharge, interests and penalties for said fee, it is recommended that the said Ordinance be enacted pursuant to Article 282 of the Implementing Rules & Regulations (IRR) implementing Section 192 of the LGC. HDICSa Be guided accordingly. (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director