Whether Municipal or City Tax is Included in the Assessment of the 10% Fire Inspection Fee Imposed on All Establishments

April 22, 2010 DILG LEGAL OPINION NO. 057-10 Ms. Trinidad G. Villavicencio Tax Manager Goldilocks 439 Shaw Boulevard, Mandaluyong City Dear Ms. Villavicencio : This pertains to your letter dated 22 March 2010 wherein you sought clarification on whether or not the municipal or city tax is included in the assessment of the 10% Fire Inspection Fee being imposed on all establishments securing business licenses and permits. This Department shall answer your query by way of distinguishing the taxes mentioned in your letter considering that the phrase " municipal or city tax " is quite general in scope. Each local government unit (LGU) has the power to create its own sources of revenue and to levy taxes, fees, and charges. 1 This power to impose tax, fee or charges shall be exercised by the sanggunian of the LGU concerned through an appropriate ordinance. 2 To address your query, it is safe to assume given the context of your statements, that the municipal or city tax you refer to is a local tax on business wherein an LGU, imposes tax on the amount of gross sales or receipts of the business establishment for the preceding year using the rates of taxes provided under Section 143 of the LGC for each type of business. Fees paid by a local taxpayer doing business include, but not limited to, the following mayor's permit fee, sanitary inspection fee, garbage fee, building inspection fee, electrical inspection fee, mechanical inspection fee, plumbing inspection fee, fire inspection fee, personnel fee, business plate registration fee and other charges imposed by the concerned LGU. These are revenues that pertain to and are attributable to the taxing LGU. However, the 10% Fire Safety Inspection Fee you mentioned is different from the 'fire inspection fee' that is computed by an LGU as part of the imposable business tax. This Fire Safety Inspection Fee is one of the Fire Code Fees that are imposable to partially provide funding for fire service, pursuant to Section 12 of Republic Act No. 9514, otherwise known as the 'Revised Fire Code of the Philippines 2008', the enforcement of which shall be administered by the Bureau of Fire Protection (BFP). A final note to elucidate further the distinction between the subject fees in question Sections 13-A and 13-B of R.A. 9514 are quoted in toto: HDATCc "Sec. 13-A. Assessment of Fire Code Taxes, Fees and Fines. The assessment of fire code taxes, fees and fines is vested upon the BFP. The BFP shall, subject to the approval of the DILG, prescribe the procedural rules for such purpose. Sec. 13-B. Collection and Assessment of Local Taxes, Fees and Fines. The collection and assessment of taxes, fees and fines as prescribed in the Local Government Code, except those contained in this Code, shall be function of the concerned local government units ". (emphasis supplied) Very truly yours, By Authority of the Secretary: (SGD.) ATTY. JESUS B. DOQUE IV Director III, Legal Service Department of Interior and Local Government Footnotes 1. Section 129, Local Government Code (LGC). 2. Section 132, LGC.