Bureau of Local Government Finance Opinion

January 10, 2011 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Philip Francisco U. Dy Head Executive Assistant Department of the Interior and Local Government (DILG) Francisco Gold Condominium II EDSA corner Mapagmahal Street Diliman, Quezon City Sir : This refers to your letter dated January 5, 2010 addressed to Hon. CESAR V. PURISIMA, Secretary of the Department of Finance (DOF), forwarded to this Bureau for appropriate action, requesting opinion or suggestion as to what procedure/s to be adopted by that Department in order for the Cities of Makati and Paraaque to be legally allowed to collect the fees provided under R.A. No. 9514, otherwise known as the "Revised Fire Code of the Philippines of 2008". Representations are made that that Office had received written requests from the Cities of Makati and Paraaque asking Secretary JESSE M. ROBREDO to allow their respective Treasury Offices to collect the Fi re Co de Fees (FCF) together with the other fees and charges being collected by the local government units (LGUs). The above request intends to fast-track the assessment, collection and issuance of official receipts for the payment of local taxes, fees and charges provided under the said Code thus ensure the convenience and satisfaction on the part of the taxpaying public. It is submitted that Secretary Robredo is amenable to the request as long as there is a clear agreement between the LGUs and the Bureau of Fire Protection (BFP) in their respective areas, including the period covered and the procedure of remittance of collections of said FCF to the BFP, subject to the legal requirements involving collection and remittance. Section 13 of R.A. No. 9514, provides: " Section 13. Collection of Taxes, Fees and Fines. All taxes, fees and fines provided in this Code, shall be collected by the BFP . Provided, That twenty percent (20%) of such collection shall be set aside and retained for use by the city or municipal government concerned, which shall appropriate the same exclusive for the use of the operation and maintenance of its local fire station, including the construction and repair of fire station : Provided, further, That the remaining eighty (80%) shall be remitted to the National Treasury under a trust fund assigned for the modernization of the BFP." (Boldfacing and underscoring ours) HICSaD Further, Section 12 of the same Code provides as follows: "Section 12. Appropriation and Sources of Income. xxx xxx xxx (1) Fees to be charged for the issuance of certificates, permits and licenses as provided for in Section 7 (a) hereof; (2) One-tenth of one per centum (0.1%) of the verified estimated value of buildings or structures to be erected, from the owner thereof, but not to exceed fifty thousand (P50,000.00) pesos, one half to be paid prior to the issuance of the building permit, and the balance, after final inspection and prior to the issuance of the use and occupancy permit; (3) One-hundredth of one per centum (0.01%) of the assessed value of buildings or structures annually payable upon payment of the real estate tax, except on structures used as single family dwellings; . . . ." Clear is the law abovequoted, that the collection of FCF shall be the function of the BFP. The LGUs on the other hand, justified that their request to collect the FCF is consistent with R.A. 9485, the Anti-Red Tape Act of 2007 and the DILG-DTI JMC No. 01, Series of 2010 or the "Streamlining of Business Processes and Licensing System". In this connection, it is informed that on January 7, 2010, a meeting was held at the BLGF Conference Room which included among others, the deputization of local treasurer in the collection of FCF, at least for the first quarter of CY 2011. The meeting was presided by the undersigned with representatives from DILG, BFP, Treasurers of Metro Manila Area and other LGU officials concerned. As a result of the meeting, the body agreed in principle on the following proposals: 1) Local Treasurers shall be deputized for the collection of FCF up to the end of the first quarter of CY 2011, with the understanding that the collections shall be remitted 100% to the Bureau of the Treasury (BTr). 2) The DILG shall draft a Memorandum of Agreement (MOA) between the BFP and the BLGF. Upon approval of the MOA, BLGF shall issue a Memorandum Circular for the guidance of all local treasurers nationwide regarding its proper implementation. 3) On the other hand, BFP shall issue a memorandum instructing their field collectors/personnel to refrain from collecting the FCF once the MOA is approved for implementation. It is hoped that with the information abovestated, the matter has been clarified accordingly in as much as the forthcoming issuance of the MOA shall be applicable to all LGUs nationwide. We hope for your understanding and consideration. IDSEAH Very truly yours, (SGD.) MA. PRESENTACION R. MONTESA, CESO III Executive Director