Bureau of Local Government Finance Opinion

September 16, 2015 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 2nd Indorsement Respectfully returned to Mr. PETER PAUL D. BALUYAN, Regional Director, Bureau of Local Government Finance, Region I, San Fernando City, La Union, the herein 1st Indorsement dated July 14, 2015 relative to the letter dated July 10, 2015 of Mr. Francis R. E. Estigoy , Provincial Treasurer, Province of La Union, regarding the proposed amendments to Provincial Tax Ordinance No. 001-2008, same Province. HTcADC It is represented that the Province of La Union included in the proposed amendments the provision "Sale of Agricultural Products" , patterned after the Provincial Tax Ordinance of the Province of Pangasinan. However, the Sangguniang Panlalawigan (SP) of La Union deleted the said proposal in the final draft for reason that the said provision does not fall under the category of taxes, fees and charges. In view thereof, Mr. Estigoy wanted to be clarified on the legal basis for the inclusion of the term "fee" for the sale of Seedlings, Orchard, Farm and Aqua Farm Products in the Tax Ordinance of the Province of Pangasinan. A reading of the similar provisions of Tax Ordinance No. 1, s. 2006 of the Province of Pangasinan and Section 152 of the proposed amendment to Provincial Tax Ordinance No. 001-2008 of the Province of La Union, it appears that the same speak of "fee" for the sale of seedlings bought from the Office of the Provincial Agriculturist, in the case of La Union, and therefore to be collected from the buyers. For the immediate resolution of the herein issue, it is our view that such imposition may be considered as falling under the operation of an "economic enterprise" rather than a regulatory "fee" for the sale of Seedlings, Orchard, Farm and Aqua Farm Products. As can be viewed from the wordings of Section 152, the proposed provisions used the terms "Prescribed Price List" and "Imposition of Fees" . Now, to avoid any confusion, it is advised to use the term "Price" instead of "Fees" considering that the term "fee" could be mistakenly understood as imposing a regulatory fee for the sale of Seedlings, Orchard, Farm and Aqua Farm Products when in fact, the levy is based on price per seedling, amount per piece based on size, other measures and quantifiable bases. With regard to the Provincial Tax Ordinance of the Province of Pangasinan, we are invoking the principle of "presumption of validity'' on the assumption that the same has gone through the processes and requisites required by law in the enactment of a valid ordinance or tax measure (Sections 187-188, Local Government Code of 1991). We therefore regret that we cannot give any comment regarding Tax Ordinance No. 1, s. 2006 of the Province of Pangasinan considering that we are not privy as to the basis of the Sangguniang Panlalawigan thereat in crafting such provisions imposing fee for Seedlings, Orchard, Farm and Aqua Farm Products sold by its OPA. We hope that this will help clarify matters. Very truly yours, (SGD.) SALVADOR M. DEL CASTILLO OIC-Executive Director