Enactment of Local Tax Ordinances and Revenue Measures and Issuance of Barangay Clearance

January 16, 1992 DILG MEMORANDUM CIRCULAR NO. 002-92 TO : All Provincial Governors, City and Municipal Mayors, Punong Barangays, Members of the Sangguniang Panlalawigan, Sangguniang Panlungsod, Sangguniang Bayan, Sangguniang Barangay and Others Concerned SUBJECT : Enactment of Local Tax Ordinances and Revenue Measures and Issuance of Barangay Clearance Pursuant to Sections 186 to 189 and Section 152(c), Respectively, of Republic Act No. 7160 Pending approval of the Rules and Regulations Implementing Republic Act No. 7160, otherwise known as the Local Government Code of 1991, and under direction of the Oversight Committee created in the said Code, the attention of all concerned is hereby invited to strictly follow the procedures and guidelines herein prescribed governing the enactment of local tax ordinances and revenue measures and issuance of barangay clearance. Enactment of Local Tax Ordinances and Revenue Measures. Pursuant to Section 186 of the Code, local government units may exercise the power to levy taxes, fees or charges on any base or subject not otherwise specifically enumerated in the Code or taxed 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. In conformity with the provisions of Sections 187 to 189 of the Code, the procedures for approval and effectivity of tax ordinances and revenue measures are as follows: (A) Prior to the enactment of any tax ordinance or revenue measure, public hearings shall be conducted for the purpose. Public hearings shall be conducted in the following manner: (1) Within ten (10) days from filing of any proposed tax ordinance or revenue measure, the same shall first be published for three (3) consecutive days in a newspaper of local circulation or shall be posted simultaneously in at least four (4) conspicuous public places within the territorial jurisdiction of the local government unit concerned. (2) In addition to the foregoing requirement on publication or posting, the sanggunian concerned shall cause the sending of a written notice of the proposed ordinance, enclosing a copy thereof, to interested or affected parties operating or doing business within the territorial jurisdiction of the local government unit concerned. (3) The notice shall specify the date and venue of the public hearing. The initial public hearing shall be held not earlier than ten (10) days from the sending out of the notice, or the last day of publication, or date of posting thereof, whichever is later. (4) During the public hearing, all affected or interested parties shall be accorded an opportunity to appear and present or express their views, comments and recommendations, and such public hearing shall continue until all issues shall have been presented and fully deliberated upon and a consensus shall have been obtained, whether for or against the enactment of the proposed tax ordinance or revenue measure. (5) The secretary of the sanggunian concerned shall prepare the minutes of such public hearing and shall attach to the minutes the position papers, memoranda, and the like, submitted by those who participated. (b) No tax ordinance or revenue measure shall be enacted or approved in the absence of a public hearing duly conducted in the manner herein provided. (c) Exempted from the mandatory public hearing requirement is the city or municipal ordinance levying a community tax to be made effective January 1, 1992 in view of the urgency of issuing such ordinance for official purposes. Cities and municipalities shall have to enact immediately an ordinance levying the community tax and providing for the collection thereof. (d) Any question on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice who shall render a decision within sixty (60) days from the date of receipt of the appeal. However, such appeal shall not have the effect of suspending the effectivity of the ordinance and the accrual and payment of the tax fee, or charge levied therein. Within thirty (30) days after receipt of the decision or the lapse of the sixty (60)-day period without the Secretary of Justice acting upon the appeal, the aggrieved party may file appropriate proceedings with a court of competent jurisdiction. (e) If the tax ordinance or revenue measure contains penal provisions as authorized under Section 516 of the Code, the gist of such tax ordinance or revenue measure shall be published in a newspaper of general circulation within the province where the sanggunian concerned belongs. In the absence of such newspaper, posting of the tax ordinance or revenue measure shall be made in all municipalities and cities of the province where the sanggunian of origin is situated. (f) In case the effectivity of any tax ordinance or revenue measure falls in any date other than the beginning of the quarter, the same shall be considered as falling at the beginning of the next ensuing quarter and the taxes, fees, or charges due shall begin to accrue therefrom. (g) Within ten (10) days after their approval, certified true copies of all provincial, city and municipal tax ordinances or revenue measures shall be published in full for three (3) consecutive days in a newspaper of local circulation. However, in provinces, cities and municipalities where there are no newspapers of local circulation, the same may be posted in at least two (2) conspicuous and publicly accessible places. (h) Copies of all provincial, city, municipal, and barangay tax ordinances and revenue measures shall be furnished the respective local treasurers for public dissemination. (I) All existing tax ordinances or revenue measures of provinces, cities, municipalities and barangays imposing taxes, fees, or charges shall continue to be in force and effect after the effectivity of the Code, except those imposing levies on tax bases or tax subjects which are no longer within the taxing and revenue raising powers of the local government unit concerned, and where the rate levied in the tax ordinance is higher than the tax, fee, or charge stipulated in the Code; in which case, the lower rate shall be collected. (j) In case of failure of the sanggunian to amend or revoke or rescind such tax ordinances or revenue measures inconsistent with, or in violation of the Code, the same shall be deemed rescinded upon the effectivity of the Code on January 1, 1992. Barangay Clearance. Pursuant to Section 152(c) of the Code, 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. In the issuance of barangay clearance, these guidelines shall be observed: (a) For CY 1992, all legally existing businesses within the barangay shall not be required to secure barangay clearance prior to the renewal of their mayor's permit or business license; (b) Beginning CY 1993, however, the barangay clearance may be required provided that the application therefore shall be acted upon by the barangay within seven (7) days from filing thereof; and (c) In the event that the application for barangay clearance is not acted upon or denied by the barangay within the prescribed period of seven (7) days, the city or municipality may proceed to issue the mayor's permit or business license upon filing of application by the business concerned. Please be guided accordingly. CESAR N. SARINO Secretary Department of Interior and Local Government