Bureau of Local Government Finance Opinion

October 21, 1996 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully returned, thru the City Treasurer of San Carlos City, Negros Occidental, to the Sangguniang Panlungsod, same City. cdlex This refers to Resolution No. 114, s. 1996 enacted by that Body, entitled "A RESOLUTION REQUESTING FOR THE OPINION FROM THE HON. SECRETARIES OF THE DEPARTMENT OF JUSTICE, DEPARTMENT OF FINANCE AND THE DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT ON THE LEGALITY OF ORDINANCE NO. 96-2 RELATIVE TO THE IMPOSITION OF TERMINAL FEE AND PERMIT FEE TO ALL OUTBOUND PASSENGERS FROM PPA-MANAGED PORT, BY THE CITY OF TOLEDO, CEBU." Upon perusal of said Ordinance, this Bureau finds that it imposes a terminal fee on all outbound passengers of any vessel, ferry or craft docked at the Toledo City port to any point of destination and a permit fee to transport heavy and light equipment including motor vehicles on any outgoing or incoming vessel, ferry or craft at the said port. Section 155 of the Local Government Code of 1991 (LGC) provides as follows: "SEC. 155. Toll Fees and Charges . The sanggunian concerned may prescribe the terms and conditions and fix the rates for the use of any public road, pier or wharf, waterway, bridge, ferry or telecommunication system funded and constructed by the local government unit concerned : . . . ." (Emphasis supplied.) It is clear from the aforequoted provision that a local government unit may only impose a toll fee or charge for the use of a pier or wharf constructed and maintained by it. It is worthwhile to mention that in a letter dated October 3, 1995 of the General Manager of the Philippine Ports Authority (PPA) to Mr. Dickson N. Yu of Yusinlai Trading, San Carlos City, Negros Occidental, it was stated that the Port of Toledo City is a national port which was funded and constructed by the National Government through the PPA. Hence, it is only PPA which can levy dues or charges for the use thereof conformably with Section 6, paragraph b, subparagraph ix of P.D. 857. prLL On the other hand, the imposition of a permit fee on cargoes of an outgoing or incoming vessel, ferry or craft at said port will also not be proper or valid in view of the provisions of Section 133 (e) of the Code which state: "SEC. 133. Common Limitations on the Taxing Powers of Local Government Units . Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: "xxx xxx xxx "(e) Taxes, fees and charges and other impositions upon goods carried into or out of, or passing through, the territorial jurisdictions of local government units in the guise of charges for wharfage, tolls for bridges or otherwise, or other taxes, fees or charges in any form whatsoever upon such goods or merchandise; "xxx xxx xxx" It bears emphasis, however, that the foregoing views are expressed in line with the provisions of Article 287 of the Implementing Rules and Regulations (IRR) implementing the LGC and not a declaration of the legality or constitutionality of the ordinance as the matter falls exclusively within the jurisdiction of the Department of Justice. LLpr We trust that this will help clarify matters. By authority of the Secretary: (SGD.) LORINDA M. CARLOS Executive Director