Bureau of Local Government Finance Opinion

March 2, 1995 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Jeremias H. Luis Barangay Kagawad Barangay Poblacion Sta. Josefa, Agusan del Sur S i r : This refers to your letter dated November 28, 1994, requesting comment relative to Barangay Ordinance No. 108, series of 1994, entitled "AN ORDINANCE IMPOSING FEE OF ONE HUNDRED PESOS (P100.00) FOR EVERY BUSINESS PERMIT/LICENSE AND OTHER PERMITS ISSUED BY THE BARANGAY AS NEED ARISES." A reading of the subject Ordinance shows that under Section 2 thereof, all business establishments within the barangay are required to secure a barangay permit/license for a fee of One Hundred Pesos (P100.00). In this connection, it is informed that barangays are not authorized to issue any business permit or license pursuant to Section 152(c) of the Local Government Code (LGC) of 1991 (RA 7160), quoted hereunder: "Section 152. Scope of Taxing Powers . The barangays may levy taxes ,fees, and charges ,as provided in this Article, which shall exclusively accrue to them: xxx xxx xxx" "(c) Barangay Clearance No city or municipality may issue any license or permit for any business or activity unless a clearance is first obtained from the barangay where such business or activity is located or conducted. For such clearance, the sangguniang barangay may impose a reasonable fee .The application for clearance shall be acted upon within seven (7) working days from the filing thereof. In the event that the clearance is not issued within the said period, the city or municipality may issue the said license or permit. "xxx xxx xxx" On the basis of the foregoing provisions, barangays are only empowered to issue clearances on business conducted therein and impose a reasonable fee through a duly enacted barangay ordinance. They are not empowered to issue business permits or licenses as this is vested upon cities and municipalities. Moreover, the issuance of a barangay clearance is applicable only on new businesses. The same shall not be required in the case of existing businesses or activities applying only for renewal of their respective permits/licenses with the city or municipality concerned. It may also be worth mentioning that the application for clearance should be acted upon by the barangay within seven (7) working days from the date of filing thereof. Otherwise, the business license or permit may be issued by the municipality or city even without the barangay clearance. In view of the foregoing, it is suggested that amendments be introduced to Ordinance No. 108. in order to conform with Section 152 of the Code abovequoted, and thereafter submit to the Sangguniang Bayan of that municipality for review pursuant to, Section 57, which states: "Section 57. Review of Barangay Ordinances by the Sangguniang Panlungsod or Sangguniang Bayan . (a) Within ten (10) days after its enactment, the sangguniang barangay shall furnish copies of all barangay ordinances to the sangguniang panlungsod or sangguniang bayan concerned for review as to whether the ordinance is consistent with law and city or municipal ordinances." We trust that this will clarify matters. Very truly yours, By authority of the Secretary: (SGD.) LORINDA M. CARLOS Executive Director Bureau of Local Government Finance