Imposition and Collection of Toll Fees under Section 155 of RA 7160 vis-à-vis Pass Through Fees Under Section 133 (e) of RA 7160

February 14, 2012 DILG LEGAL OPINION NO. 016-12 Hon. Shirlita Y. Chong Municipal Mayor Municipality of Liloan Province of Southern Leyte Dear Mayor Chong : 09 December 2011 letter of Liloan, Southern Leyte Mayor Shirlita Y. Chong requesting this Department's comments/opinion on the imposition and collection of toll fees under Section 155 of RA 7160 vis--vis pass through fees under Section 133 (e) of RA 7160. As narrated in your letter, sometime in 1993, the Sangguniang Bayan of Liloan, Southern Leyte enacted Municipal Ordinance No. 29-93, as amended by Municipal Ordinance No. 35-93. Said ordinance imposes fees to all vehicles for the use of the municipal road which connects the National Highway down to the toll gate of the ferry terminal of Liloan. With the issuance of DILG MC No. 2011-151, several complaints labeled the above-mentioned ordinance arbitrary since they have no choice but to pay to the fees imposed under the ordinance to get to the Liloan Ferry Terminal. In the municipal government's opinion, the above-mentioned ordinance does not impose/collect pass through fees. What it imposes is the collection of an entry fee pursuant to Section 155 of the Local Government Code of 1991 (the "Code"), for the maintenance of the municipal road which was constructed and maintained by the Municipality of Liloan. TaDAIS Hereunder our comments/opinion thereon. Pass through fees are 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 others taxes, fees, or charges in any form upon goods or merchandise. Local ordinances imposing/collecting taxes, fees or charges are considered illegal and runs counter to Section 133 (e) of the Code. Notably, Section 133 of the Code enumerates the common limitations on the taxing powers of the Local Government Units. Parenthetically, illegal fees or illegal collections are those imposed by the LGUs which are not covered by its specific taxing powers and common taxing powers. This also covers the imposition of the taxes, fees and charges enumerated under Section 133 of the Code. In addition to the foregoing, a tax, fee, or charge may be considered an illegal collection if it is imposed by the LGU absent any ordinance directing the imposition of the same. Nevertheless, LGUs may regulate the USE of its roads or other public facilities as provided under Section 155 of the Code through the imposition of toll fees or charges thereon PROVIDED THAT IT IS FUNDED AND CONSTRUCTED BY THE LOCAL GOVERNMENT UNIT concerned, 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." Please note that DILG Memorandum Circular No. 2011-122 was issued by the Department to deter LGUs from imposing and collecting fees, taxes, charges and other impositions which are beyond its taxing powers pursuant to Section 133 (e) of the Code. This does not cover other LGU impositions which are authorized by the Code such as the imposition of toll fees under Section 155. AHaETS We hope to have enlightened you on the foregoing. Very truly yours, (SGD.) JESUS B. DOQUE IV Director III, Legal Service