Whether Tax Ordinances can be Valid and Enforceable Without Any Public Hearing Conducted

January 25, 1993 DILG LEGAL OPINION NO. 042-93 LEGAL SERVICE Mr. Jorge U. Saguinsin Rizal Province Chamber of Commerce and Industry, Inc. c/o Singer Industries Philippines, Inc. Ortigas Avenue Extension, Taytay Rizal Dear Mr. Sanguinsin : This has reference to your December 12,1992 letter, inquiring on whether or not tax ordinances can be valid and enforceable without any public hearing conducted, not approved by the sanggunian and higher than the limits imposed by Rep. Act No. 7160 (The Local Government Code of 1991). In this regard, please be informed that Sections 186 and 187 of Rep. Act No. 7160 provide that: "SEC. 186. Power to Levy Other Taxes, Fees of Charges. Local government units may exercise the power to levy taxes, fees or charges, on any base or subject not otherwise specifically enumerated herein or taxes under the provisions of the National Internal Revenue Code, as amended, or other applicable laws. Provided, That the taxes, fees or charges shall not be unjust, excessive, oppressive, confiscatory or contrary to declared national policy: Provided, further, That the ordinance levying such taxes, fees of charges shall not be enacted without any prior public hearing conducted for the purpose." "SEC. 187. Procedure for Approval and Effectivity of Tax Ordinances and Revenue Measures: Mandatory Public Hearings." The procedure for approval of local tax ordinances a revenue measures shall be in accordance with the provision this Code; Provided, That public hearing, 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 effectively 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 effectively 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 lap of sixty-day period without the Secretary of Justice acting upon the appeal, the aggrieved party may file appropriate proceeding with a court of competent jurisdiction." As can be readily seen from the aforequoted provisions of the Code, the power of the sanggunian to levy taxes, fees or charges or raise the amount of imposition thereof, is subject to the proviso that there should be a public hearing before enactment of the ordinance. The failure to observe such proviso/requirement sine qua non shall give rise to a cause of action on the part of the party affected to question the legality of the enactment thereof pursuant to the provisions of Section 187 of the Code. Hoping that we have enlightened you on the matter. Very truly yours, DIR. JACOB F. MONTESA Department Legal Counsel Department of Interior and Local Government