Bureau of Local Government Finance Opinion

July 8, 1996 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully referred to the Municipal Treasurer, Taguig, Metro Manila. This refers to the letter dated June 14, 1996 of Mr. Dioscoro Brebante, Chairman, Pinagpala, Multi-Purpose Cooperative (PMPC),requesting refund of the business permit fee and Community Tax paid to that municipality. Section 133 (n) of the Local Government Code of 1991 (LGC) provides as follows: "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 "(n) Taxes, fees or charges, on Countryside and Barangay Business Enterprises and cooperatives duly registered under R.A. 6810 and Republic Act Numbered Sixty-nine hundred thirty-eight (R.A. 6938) otherwise known as the "Cooperatives Code of the Philippines." It is clear from the aforequoted provisions that, if registered under R.A. No. 6810 or 6938, PMPC shall not be liable to the payment of a business permit fee or any business tax, and therefore, entitled to a refund pursuant to Section 196 of the LGC. With regard to the community tax, PMPC shall likewise be exempt except that upon request, said entity may be issued a community tax certificate upon payment of One Peso (P1.00) pursuant to Article 247 of the Implementing Rules and Regulations (IRR), implementing Section 162 of the LGC. Moreover, said entity shall also be liable to pay charges or fees for services rendered by the local government unit, such as garbage collection and disposal, electrical inspection, sanitary inspection and similar others, as well as rentals or tolls for use of public utilities owned and operated by the local government. In view of the foregoing, that Office is hereby instructed to cease collecting the business permit fee and the community tax from PMPC, except as aforestated and to communicate with the Chairman of PMPC for the purpose of settling their claim for refund of amounts paid to that Office. (SGD.) LORINDA M. CARLOS Executive Director