Issuance of Barangay Clearance

March 2, 1995 DILG LEGAL OPINION NO. 027-95 LEGAL SERVICE Atty. Fernando P. Perito Suite 320 Madrigal Building Escolta, Manila S i r : This refers to your letter dated February 17, 1995, requesting for legal opinion on whether the punong barangay can refuse to issue a barangay clearance in favor of a business establishment on the ground that the mother of the applicants has a pending case in the barangay. In reply thereto, we are inviting your attention to Section 152 (c) of Local Government Code of 1991 (RA 7160) which provides that: "SEC. 152. (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." Corollary thereto, Article 240 of the Rules and Regulations Implementing the Local Government Code of 1991 pertinently provides that: ART. 240. Scope of Taxing and Other Revenue Raising Powers of Barangays. The barangays may levy the following taxes, fees, and charges, which shall exclusively accrue to them. xxx xxx xxx (c) Fee for the issuance of a barangay clearance for any business or activity located or conducted within the territorial jurisdiction of the barangay before the city or municipality may issue a license or permit to said business or activity. The application for barangay clearance shall acted upon within seven (7) working days from the filing thereof. In the event that a clearance is not issued or the application is denied within the said period, the city or municipality may issue the license or permit to the applicant. (Emphasis supplied). Another rich source of income for barangays is the clearance fee or charges that they may impose on all sorts of business or activities regardless of the amount of their gross sales or receipts. For as long as the business or activities are within the confines of barangays, they need barangay clearances before they can secure license or permit from the municipalities, cities or provinces concerned. (The Local Government Code of 1991, The Key to National Development, Aquilino Q. Pimentel, Jr., page 278). dctai It is clear from the above-mentioned provision of the Code that an application for a barangay clearance may be denied by the barangay. However, the Code did not mention the instances wherein an application for barangay clearance may be refused by the punong barangay. It may be well to note that Section 132, of the Code provides that: "SEC. 132. Local Taxing Authority. The power to impose a tax, fee , or charge or to generate revenue under this Code shall be exercised by the sanggunian of the local government unit concerned through an appropriate ordinance . (Emphasis supplied) Premised on the above-mentioned provision of the Code, it is our considered opinion that barangays are given the power to specify, through the enactment of an ordinance, the amount of barangay clearance fee and the instances when an application for barangay clearance may be denied by them, like for instance when the business to be put up is detrimental to the interest of the barangay and its constituents. In view of the foregoing considerations, we believe that, unless the ground given by the punong barangay (that the mother of the applicants has a pending case in the barangay) in refusing to issue a barangay clearance in favor of a business establishment is specifically provided in an appropriate barangay ordinance, the refusal has no legal basis to stand on. cdt Hoping that you will be guided accordingly. Very truly yours, DIR. ALMARIO M. DELOS SANTOS Officer-In-Charge Department of Interior and Local Government