Validity of Ordinances Authorizing the Levy of Fees and Taxes on Transport of Garbage

January 30, 2012 DILG LEGAL OPINION NO. 007-12 Mr. Armando G. Garcia President & General Manager Metro Clark Waste Management Corporation Rm. 12, Brooks Business Ctr., 3678 C.M. Recto Highway, Clark Freeport Phils., Clarkfield, Pampanga Dear Mr. Garcia : This has reference to your 15 December 2011 letter requesting the Department's opinion on the validity of ordinances authorizing the levy of fees and taxes on transport of garbage in relation to Memorandum Circular No. 2011-151, more particularly on the attached proposed tax ordinance of the Sangguniang Bayan of Bamban, Tarlac entitled: "An Ordinance Imposing Regulatory Fees for Public and Private Haulers of Garbage Traversing the Roads of this Municipality Leading to the Kalangitan Sanitary Landfill, Pursuant to Section 155 of RA 7160 and for other Related Purposes." HEcIDa As narrated in your letter, the Sangguniang Bayan of Bamban, Tarlac proposes the imposition of regulatory fees for public and private haulers of garbage traversing the roads of said municipality, as in the case of garbage haulers of Metro Clark Waste Management Corporation (MCWMC), which pass by said municipality en route to its sanitary landfill in Sitio Kalangitan, Capas, Tarlac. In your opinion, transportation of wastes and their disposal to a sanitary landfill is of equal importance as the transportation of goods and passengers. Further, imposing additional fees and charges on garbage trucks may result in the delay and failure of collection, transportation and disposal of garbage in a sanitary landfill that can cause environmental, health and sanitation problems. The first issue to be determined here is whether garbage may be considered "goods" within the purview of Section 133 (e) of the Local Government Code of 1991 (the "Code"). Secondly, whether the regulatory fee proposed in said tax ordinance is a pass through fee. SIDTCa In response to the 1st issue, there is a need to define the word "goods" as used under Section 133 (e) of the Code. Moreno's Law Dictionary 2 defines "goods" as follows: "Taxation. The term "goods or properties" shall mean tangible and intangible objects which are capable of pecuniary estimation . . ." Taking into consideration the above definition, we opine that garbage is NOT considered goods within the purview of Section 133 (e) of the Code. Secondly, it is this level's opinion that the proposed tax ordinance of Bamban, Tarlac is NOT a pass through fee. The imposition in said ordinance is based on Section 155 of the Code, viz. : SEC. 155. Toll Fees or Charges. The sanggunian concerned may prescribe the terms and conditions and fix the rates for the imposition of toll fees or charges 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: Provided, That no such toll fees or charges shall be collected from officers and enlisted men of the Armed Forces of the Philippines and members of the Philippine National Police on mission, post office personnel delivering mail, physically-handicapped, and disabled citizens who are sixty-five (65) years or older. When public safety and welfare so requires, the sanggunian concerned may discontinue the collection of the tolls, and thereafter the said facility shall be free and open for public use." SHIcDT Section 155 of the Code is among the common revenue-raising powers of the LGUs. On the other hand, Section 133 of the Code enumerates the common limitations on the taxing powers of the Local Government Units. Section 133 qualifies the taxes which may be imposed by the LGUs. Toll fees or charges for the USE of the enumerated infrastructures under Section 155 of the Code may be imposed by LGUs under conditions provided therein. This does not conflict with Section 133 (e) which prohibits the imposition of TAXES, FEES, CHARGES AND OTHER IMPOSITIONS UPON GOODS CARRIED INTO OR OUT OF, OR PASSING THROUGH the territorial jurisdiction of the LGUs in the guise of a toll, charges for wharfage or other taxes, fees, or charges in any form upon goods or merchandise. However, the toll fees or charges that may be validly imposed on the roads covered by Section 155 of the Code refer to those roads and other infrastructures funded and constructed by the LGUs. We hope to have enlightened you on the foregoing. SCaEcD Very truly yours, (SGD.) JESUS B. DOQUE IV Director III, Legal Service Footnotes 1. Note from the Publisher: Missing footnote text and reference. 2. Moreno's Law Dictionary, 2000 Edition, Rex Bookstore.