Bureau of Local Government Finance Opinion

July 20, 1993 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 2ND INDORSEMENT Respectfully returned, thru the Regional Director, Bureau of Local Government Finance, Region VII, 3rd Floor, Cebu Kang-ha Foundation Building Juan Luna Street corner Lapulapu Street, Cebu City, to the City Treasurer, City of Tagbilaran. cdt This refers to the basic letter of the City Treasurer of Tagbilaran City requesting opinion as to whether the Province of Bohol may levy and collect the amusement tax within the city limits of Tagbilaran City considering that city is already imposing the said tax. In this connection, reference may be made to the pertinent provisions of Section 140 and 151 of the Local Government Code, quoted hereunder: "Sec. 140. Amusement Tax . (a) The province may levy an amusement tax to be collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement at a rate of not more than thirty percent (30%) of the gross receipts from admission fees." xxx xxx xxx "Sec. 15. Scope of Taxing Powers . Except as otherwise provided in this Code, the city may levy the tax, fees, and charges which the province or municipality may impose: Provided, however , That the taxes, fees, and charges levied and collected by highly urbanized and independent component cities shall accrue to them and distributed in accordance with the provisions of this Code. "The rates of taxes that the city may levy may exceed the maximum rates allowed for the province or municipality by not more than fifty percent (50%) except the rates of the professional and amusement taxes." From the abovequoted provisions of the Code, it appears that the law does not distinguish as to the class or kind of city which may exercise the taxing powers of the province. Hence, since we may not distinguish where the law does not distinguish, all cities, whether component, independent component or highly urbanized, are empowered under the Code to levy the taxes, fees and charges that provinces and municipalities are authorized to imposed. While there is no mention in Section 151 of the Code regarding the accrual of tax collection to component cities, this omission may be supplemented by the fundamental principle of local taxation that "the revenue collected pursuant to the provisions of this Code shall inure solely to the benefit of, and be subject to the disposition by, the local government unit levying the tax, fee, charge or other imposition unless otherwise specifically provided herein" (Sec. 130). It may be added that Section 5, Article X of the Constitution provides that "(e)ach local government unit shall have the power to create its own sources of revenues and to levy taxes, fees, and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local governments." casia Under the old Local Tax Code, there was an unequivocal provision that the exercise of the tax powers of the city extends to all the taxes, fees and other impositions that the province or municipality may levy and collect, to the exclusion of the national and provincial governments (Sec. 23, PD 231 as amended by PD 426). Stated differently, "the exercise by the city of the taxing powers given to provinces deprives the latter of its authority to impose a similar tax and grants exclusive power to the city to levy and collect such taxes, fees and charges. Accordingly, following settled interpretation of local tax laws and the spirit of present legislation, this Department holds that the Province of Bohol may not impose local amusement taxes on amusement places specified by law within the city limits of Tagbilaran City. By Authority of the Secretary: (SGD.) JUANITO D. AMATONG Undersecretary