Scope of Taxing Power of Barangays under R.A. No. 7160

February 23, 1995 DILG LEGAL OPINION NO. 021-95 LEGAL SERVICE MR. REYNALDO R. GOBATON Barangay Chairman Barangay 183, Zone 19 Pasay City Dear Sir : This has reference to Resolution No. 02-94 passed by your Barangay Council, requesting the Secretary, this Department, for legal opinion whether the base authorities of Villamor Air Base is still authorized to levy and collect taxes, fees and charges within the territorial jurisdiction of Barangay 183 in Pasay City, in view of the passage of Rep. Act No. 7160, otherwise known as the Local Government Code of 1991. A perusal of the aforementioned Resolution would reveal that your barangay is contemplating on levying and collecting taxes, fees, and charges from the operations of tricycles, passenger jeepneys, and all business establishments thereat which, as represented by you, are already being levied upon by the Villamor Air Base authorities. In this regard, your apprehension of an impending overlapping of taxing powers between your barangay and that of the Base is, emphatically, only more apparent than real. While it is true that a barangay, pursuant to Rep. Act No. 7160, has revenue raising powers, this is not, however, without limitations. In fact, paragraph (a) (2), Section 391 of the Code, provides that sangguniang barangays shall enact tax and revenue ordinances, subject to the limitations imposed in this Code. Accordingly, local government units can levy and collect taxes, fees and charges only on subjects which the Code allows them to levy upon. Corollarily, Section 152 of the Code provides for the scope of the taxing powers of a barangay, to wit: "SEC. 152. Scope of Taxing Powers. The barangay may levy taxes, fees and charges, as provided in this Article, which shall exclusively accrue to them: (a) Taxes On stores or retailers with fixed business establishments with gross sales or receipts of the proceeding calendar year of Fifty Thousand Pesos (P50,000.00) or less, in the case of cities and Thirty Thousand Pesos (P30,000.00) or less, the case of municipalities, at a rate not exceeding one percent (1%) on such gross sales or receipts. (b) Service Fees or Charges Barangays may collect reasonable fees or charges for services rendered in connection with the regulation or the use of barangay-owned properties or service facilities such as palay, copra or tobacco dryers. (c) Barangay Clearance No city or municipality may issue any license or permit for any business or activity unless a clearance is first obtained from the barangay where such business or activity is located or conducted. For such clearance, the sangguniang barangay may impose a reasonable fee. The application for clearance shall be acted upon within seven (7) working days from the filing thereof. In the event that the clearance is not issued within the said period, the city or municipality may issue the said license or permit. (d) Other fees and charges The barangay may levy reasonable fees and charges: 1) On commercial breeding of fighting cocks, cockfighting and cockpits; 2) On places of recreations which charge admission fees; and 3) On billboards, signboards, neon signs, and outdoor advertisements." Based on the foregoing premises, it is our considered view that on the assumption that the Base authorities may legally levy taxes, fees and charges, this fact, however, will not deprive the barangay of its taxing power provided that the same be exercised in accordance with law and the provisions of the Local Government Code, particularly the scope and limitations thereof. cdt Hope that you have been enlightened on the matter. Very truly yours, ALMARIO M. DE LOS SANTOS Director II Officer-in-Charge Department of Interior and Local Government copy furnished: Director Rodolfo S. Feraren DILG, NCR City Hall, Quezon City CLGOO David T. San Diego DILG Field Office City Hall, Pasay City Vice-Mayor Wenceslao B. Trinidad Pasay City