Reiteration of DILG Memorandum Circulars on the Suspension of LGU Imposition and Collection of Pass Through Fees

August 26, 2011 DILG MEMORANDUM CIRCULAR NO. 122-11 TO : All Provincial Governors, City Mayors, Municipal Mayors, Punong Barangays, Presiding Officers and Members of the Sanggunians at All Levels, DILG Regional Directors and Others Concerned RE : Reiteration of DILG Memorandum Circulars on the Suspension of LGU Imposition and Collection of Pass Through Fees It has been observed that despite several issuances of the Department enjoining the imposition and/or collection of pass through fees, some local government units (LGUs) are continuously charging fees, taxes and other charges on the transportation of goods and passengers carried into or out of, or passing through the respective territorial jurisdictions of these LGUs in the guise of sticker fee, discharging fee, delivery fee, market fee, toll fee and mayor's permit fee, among others. Please be advised that these fees, taxes, charges and other impositions are beyond the taxing powers of LGUs pursuant to Section 133 (e) of the Local Government Code, viz. : "SECTION 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: (e) Taxes, fees and charges and other impositions upon goods carried into or out of, or passing though, the territorial jurisdictions of local government units in the guise of charges for wharfage, toll for bridges or otherwise, or other taxes, fees or charges in any form whatsoever upon goods or merchandise;" In view thereof, Memorandum Circular No. 2006-70 dated 26 June 2006 entitled: "Suspension of LGU Imposition and Collection of Illegal Fees and Taxes"; Memorandum Circular No. 2009-42 dated 27 March 2009 entitled, "Imposition and Collection of Local Taxes, Fees and Charges"; and Memorandum Circular No. 2009-76 dated 17 June 2009, entitled: "Reiteration 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" are hereby REITERATED. CTEDSI All Local Chief Executives, Presiding Offices and Members of the Sanggunians at all levels who fail to strictly observe the limitations on the taxing power of LGUs, particularly the aforequoted limitation, or who ignore the same by failing to rectify defective tax ordinances, shall be dealt with accordingly. All Regional Directors are likewise hereby enjoined to cause the immediate and widest dissemination of this Memorandum Circular within their respective regional assignments. For strict compliance. (SGD.) JESSE M. ROBREDO Secretary