Whether Sections 287 and 325 of the Local Government Code are merely Directory or Mandatory

February 14, 1996 DILG LEGAL OPINION NO. 017-96 LEGAL SERVICE Mr. Themistocles R. Montalban Neptune St., Bahay Toro Quezon City S i r : This refers to your earlier letter requesting for legal opinion on the following queries: 1. Are sections 287 and 325 merely directory or mandatory provisions of the Local Government Code? 2. Whether or not it is legal for the constituents of your municipality to disobey the Provincial Order which increased the real property tax rates to 500% it being issued without a public hearing? 3. What is to be done with the balance of 45% if the total appropriations for personal services of 4th class or lower class municipalities for one fiscal year shall not exceed 55%? Anent your first query, may we invite your attention to Section 287 and 325, respectively, of the Local Government Code of 1991, which provide, that: "SEC. 287. Each local government unit shall appropriate in its annual budget no less than twenty percent (20%) of its annual internal revenue allotment for development projects. Copies of the development plans of local government units shall be furnished the Department of Interior and Local Government." "SEC. 325. The use of the provincial, city, and municipal funds shall be subject to the following limitations: (a) The total appropriations, whether, annual or supplemental, for personal services, of a local government unit for one (1) fiscal year shall not exceed forty-five percent (45%) in the case of first to third class provinces, cities, and municipalities, and fifty-five percent (55%) in the case of fourth class or lower, of the total annual income from regular sources realized in the next preceding fiscal year. . . ." The word "shall" was used in the aforequoted provisions of the Code which, in accordance with the rule on statutory construction is a word of command that has to be given a compulsory meaning as denoting an obligation. It has the invariable significance of excluding the idea of discretion and has the significance of operating to impose a duty which may be enforced particularly if public policy is in favor of its meaning, or when addressed to public officials, or where the public or persons have the right which ought to be exercised or enforced (People's vs. O' Rouke, 124, App. 752 13 p. 2nd 989; Black's Law Dictionary, 5th Ed., p. 1233). In another case, the Supreme Court ruled that the word "shall" is imperative, operating to impose a duty which may be enforced (Dizon vs. Encarnacion, L-18615, 9 SCRA 714, 716-717). The implication is that Sections 287 and 325 are mandatory provisions of the Local Government Code. Anent your second query, may we invite your attention to section 187 and 188 of the Local Government Code of 1991 which provide, that: "SECTION 187. Procedure for Approval and Effectivity of Tax Ordinances and Revenue Measures; Mandatory Public Hearings. The procedure for approval of local tax ordinances and revenues measures shall be in accordance with the provisions of this Code: Provided, That public hearings shall be conducted for the purpose prior to the enactment thereof: Provided, further, That any question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice who shall render a decision within sixty (60) days from the date of receipt of the appeal: Provided, however, that such appeal shall not have the effect of suspending the effectivity of the ordinance and the accrual and payment of the tax, fee, or charge levied therein: Provided, finally, That within thirty (30) days after receipt of the decision or the lapse of the sixty-day period without the Secretary of Justice acting upon the appeal, the aggrieved party may file appropriate proceedings with a court of competent jurisdiction." "SECTION 188. Within ten (10) days after their approval, certified true copies of all . . . municipal tax ordinances or revenue measures shall be published in full for three (3) consecutive days in a newspaper of local circulation: Provided, however, That in . . . municipalities where there are no newspapers of local circulation, the same may be posted in at least two (2) conspicuous and publicly accessible places." Public hearings are required tax ordinances or review measures are enacted. Similarly, publication or posting of tax ordinances and revenue measurers is a mandatory requirement. Without publication or posting, these measures are not enforceable. (Pimentel, Jr. Aquilino Q., The Local Government Code of 1991 The Key to National Development, pp. 300-301, 1993). As to the issue you want to be clarified on whether it is legally feasible for the constituents of that municipality to merely disobey the payment of the increased tax rates, the answer is in the negative because Section 187 of the Code specifically provides for the remedial measures against objectionable tax or revenue measure. Moreover, an appeal does not have the effect of suspending the effectivity of the tax ordinance and the accrual and payment of the tax, fee or charge levied therein. Anent your third query, the balance of 45% may be spend for purposes in accord with the General Welfare Provisions of R.A. 7160. Section 16 of the Code, invests LGUs with the power to provide for the general welfare of their people. . . . This section list some activities which LGUs may undertake such as the preservation and enrichment of culture, promotion of health and safety, enhancement of ecological balance, development of appropriate self-reliant scientific and technological capabilities, improvement of public morals, enhancement of economic prosperity and social justice, promotion of full employment of their residents, maintenance of peace, more appropriately, law and order, and preservation of the comfort and convenience of their inhabitants. Even without the enumeration, the activities listed may be justifiably undertaken by LGUs under its power to promote the general welfare of its inhabitants. (Ibid, p. 21). Hoping to have enlightened you on the matter. Very truly yours, DIR. ALMARIO M. DELOS SANTOS Officer-In-Charge Department of Interior and Local Government