Imposition of Fees on Passing Vehicles by Sangguniang Barangay of Minuyan, Norzagaray, Bulacan

November 24, 2011 DILG LEGAL OPINION NO. 083-11 Dir. Florida M. Dijan, DPA, CESO IV Regional Director DILG Region III Diosdado Macapagal Regional Government Center Maimpis, City of San Fernando, Pampanga Dear Dir. Dijan : This has reference to your 28 October 2011 letter requesting the Central Office's guidance regarding the 26 October 2011 letter of Punong Barangay Jerry M. Cenal, which requests the Department's opinion on the following issues in relation to DILG MC No. 2011-151, to wit: a. Anu-ano po ba and maituturing na illegal fees o collection? b. Anu-ano po bang uri ng lansangan ang hindi dapat patawan ng singil? Bagama't alam namin na ang National Road ay di-dapat magkaroon ng pataw na singilin. c. Sana po ay may malinaw na batayan o naka "define" ang nasabing Memorandum Circular No. 2011-151. In PB Cenal's letter, he relates that the Sangguniang Barangay of Minuyan, Norzagaray, Bulacan passed an ordinance in 2003 which impose fees on vehicles passing through or using Daang Barangay . PB Cenal cites Sections 152 and 155 of the Local Government Code of 1991 (the "Code") as basis of the ordinance which charges a PhP20.00 fee on trucks carrying raw materials and cement finished products. PB Cenal asseverates that there appears to be a conflict between Section 155 and Section 133 (e) of the Code. To begin with, this level opines that there is no conflict between Sections 133 (e) and 155 of the Code, viz.: ACDIcS "SEC. 133. Common Limitations on the Taxing Powers of Local Government Units. Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: xxx xxx xxx (e) Taxes, fees and charges and other impositions upon goods carried into or out of, or passing through, the territorial jurisdictions of local government units in the guise of charges for wharfage, tolls for bridges or otherwise, or other taxes, fees or charges in any form whatsoever upon such goods or merchandise; xxx xxx xxx SEC. 155. Toll Fees or Charges. The sanggunian concerned may prescribe the terms and conditions and fix the rates for the imposition of toll fees or charges for the use of any public road, pier or wharf, waterway, bridge, ferry or telecommunication system funded and constructed by the local government unit concerned: Provided, That no such toll fees or charges shall be collected from officers and enlisted men of the Armed Forces of the Philippines and members of the Philippine National Police on mission, post office personnel delivering mail, physically-handicapped, and disabled citizens who are sixty-five (65) years or older. When public safety and welfare so requires, the sanggunian concerned may discontinue the collection of the tolls, and thereafter the said facility shall be free and open for public use." Section 133 (e) of the Code enumerates the common limitations on the taxing powers of the Local Government Units. It qualifies the taxes which may be imposed by the LGUs. On the other hand, Section 155 of the Code is among the common revenue-raising powers of the LGUs. Toll fees or charges for the USE of the enumerated infrastructures under Section 155 of the Code may be imposed by LGUs under conditions provided therein. This does not conflict with Section 133 (e) which prohibits the imposition of TAXES, FEES, CHARGES AND OTHER IMPOSITIONS UPON GOODS CARRIED INTO OR OUT OF, OR PASSING THROUGH the territorial jurisdiction of the LGUs in the guise of a toll, charges for wharfage or others taxes, fees, or charges in any form upon goods or merchandise. Clearly, the ordinance being implemented by Barangay Minuyan, Norzagaray, Bulacan which imposes a PhP20.00 fee on trucks carrying raw materials and cement finished products is in the nature of a pass through fee which is prescribed by the Code. As regards the three (3) queries raised, we shall answer them in seriatim. Firstly, illegal fees or illegal collections are those imposed by the LGUs which are not covered by its specific taxing powers and common taxing powers. This also covers the imposition of the taxes, fees and charges enumerated under Section 133 of the Code. In addition to the foregoing, a tax, fee, or charge may be considered an illegal collection if it is being imposed by the LGU absent any ordinance directing the imposition of the same. DILG MC No. 2009-42 dated 27 March 2009 entitled: "Imposition and collection of Local Taxes, Fees and Charges" is instructive on this issue. Secondly, the query posed is in relation to Section 155 of the Code, hence the roads covered by the toll fees or charges that may be validly imposed by Barangay Minuyan, Norzagaray, Bulacan refers to those roads and other infrastructures funded and constructed by said Barangay. As regard the imposition of pass through fees, the same is absolutely prohibited on any type of road. Lastly, DILG MC No. 2011-151 is a reiteration of previous issuances of the Department, namely: DILG MC No. 2006-70 dated 26 June 2006 entitled: "Suspension of LGU Imposition and Collection of Illegal Fees and Taxes"; DILG MC No. 2009-76 dated 17 June 2009 entitled: "Reiterating Strict Compliance to Pertinent Laws, Rules and DILG Circulars Prohibiting LGUs from Charging Fees on Passing Through Vehicles Especially Those Carrying Agricultural Goods and Products and Exempting such Vehicles from Truck Ban Implementation"; and DILG MC No. 2011-122 dated 26 August 2011 entitled: "Reiteration of DILG Memorandum Circulars on the Suspension of LGU Imposition and Collection of Pass Through Fees." In addition to these issuances we have also issued DILG MC No. 2009-42 dated 27 March 2009 entitled: "Imposition and collection of Local Taxes, Fees and Charges" to guide LGUs on the scope and limitations of their taxing powers. These issuances laid down the basis for the prohibition on the imposition of pass through fees as well as the scope of the taxing powers of the LGUs (please refer to aforecited issuances). The same merely enforces codal provisions of the Local Government Code of 1991. We hope to have enlightened you on the foregoing. cDSaEH Very truly yours, (SGD.) JESUS B. DOQUE IV Director III, Legal Service