Invalidity of Portions of the Revised Revenue Code of San Simon, Pampanga as Declared by RTC Branch 54, Macabebe, Pampanga

February 28, 2012 DILG LEGAL OPINION NO. 021-12 Dir. Florida M. Dijan Regional Director DILG-Region III Diosdado Macapagal Regional Government Center Maimpis, San Fernando City Pampanga Dear Director Dijan : We write regarding your 30 January 2012 letter requesting the Central Office's action on the following: a. Comments/recommendation as regards the invalidity of some portions of the Revised Revenue Code of San Simon, Pampanga as declared by RTC Branch 54 Macabebe, Pampanga; and b. Opinion on whether or not truckers or haulers, whose main office/s are not within the jurisdiction of San Simon, but are hauling and unloading goods within said LGU, may be imposed fees or charges. Based on your letter and the attached documents thereto, on 10 January 2012 San Simon, Pampanga Mayor Leonora C. Wong, made a request in writing seeking for a clarification on the decision of the RTC in nullifying some portions of its revenue code particularly on the imposition of a P300.00 permit fee, per unit per day, on haulers or truckers operating within their Municipality. Mayor Wong posits the fee is imposed only on haulers or truckers which are actually doing business in the jurisdiction of the Municipality and not merely passing through their roads/streets. As such, Mayor Wong questions the decision of the court invalidating portions of the revenue code which were based on DILG circulars suspending LGU collection and imposition of pass through fees and Section 133 of the Local Government Code of 1991 (LGC). TEIHDa In addition to said request, the said LGU seeks the Department's guidance on whether or not they may impose fees or charges to those truckers or haulers, whose main office is outside the municipality's jurisdiction, but are hauling and unloading goods within their municipality. Hereunder are our comments and opinion on the issues: A. Invalidity of Some Portions of the Revised Revenue Code of San Simon, Pampanga In soliciting the Department's opinion, Mayor Wong is indirectly asking for a review of the Court's decision. Out of deference to the Court, the Department should refrain from commenting, much less, reviewing decisions arrived at by the Court in the exercise of its judicial powers which are presumed valid and sound and could only be questioned by the parties involved therein in the proper forum through remedies such as the filing of a motion for reconsideration and/or appeal within the reglementary period, as pointed out in your 30 January 2012 opinion. B. Scope of Municipalities' Taxing Power; Situs of Tax To answer the question on whether or not haulers or truckers, whose main office is not within the jurisdiction of San Simon, but are hauling and unloading goods within said LGU, may be imposed fees or charges, it is important to note the scope of municipalities' taxing power as enumerated under Sections 142-149 and Articles 231-236 of the Local Government Code of 1991 (LGC) and its IRR, respectively. Under Section 143 of the LGC, municipalities may levy tax on businesses based on the schedule provided therein. However, the collection for the tax on business is subject to Section 150 and Article 243 of the LGC and its IRR, respectively, which provides the situs or the locality or place where the taxation occurs. Section 243 (d) of the IRR, which provides the situs of taxation for sales made by route trucks, vans or vehicles, finds its application on the case at hand, viz.: "ART. 243. Situs of the tax. xxx xxx xxx (d) Sales made by route trucks, vans, or vehicles (5) For route sales made in a locality where a manufacturer, producer, wholesaler, retailer or dealer has a branch or sales office or warehouse, the sales are recorded in the branch, sales office or warehouse, the sales are recorded in the branch, sales office or warehouse and the tax due thereon is paid to the LGU where such branch, sales office or warehouse is located. cAHIST (6) For route sales made in locality where a manufacturer, producer, wholesaler, retailer or dealer has no branch, sales office or warehouse, the sales are recorded in the branch, sales office or warehouse from where the route trucks withdraw their products for sale, and the tax due on such sales is paid to the LGU where such branch, sales office or warehouse is located. (7) Based on subparagraphs (1) and (2) above, LGUs where route trucks deliver merchandise cannot impose any tax on said trucks except the annual fixed tax authorized to be imposed by the province in Article 230 of this Rule on every delivery truck or van or any motor vehicle used by manufacturers, producers, wholesalers, dealers, or retailers in the delivery or distribution of distilled spirits, fermented liquors, soft drinks, cigars and cigarettes, and others products as may be determined by the sangguniang panlalawigan , and by the city, pursuant to Article 233 of this Rule. (8) In addition to this annual fixed tax, cities may also collect from same manufacturers, producers, wholesalers, retailers, and dealers using route trucks a mayor's permit fee which shall be imposed in a local tax ordinance pursuant to Article 233 in relation to Article 222 of this Rule." [Emphasis, ours] Clearly, the tax on sales made by haulers or truckers unloading goods within the Municipality of San Simon, but whose branch or sales office is located outside Simon, does not accrue in said Municipality. In addition, LGUs cannot impose tax on said delivery trucks, with the exception of provinces under Section 141 of the LGC, and cities (who have a wide taxing power as provided under Section 151 of the LGC), who are authorized to impose an annual fixed tax not exceeding P500.00. We hope to have enlightened you on the foregoing. THEDCA Very truly yours, (SGD.) JESUS B. DOQUE IV Director III, Legal Service