Clarification on Provision of Bacolod Investment Code of 2002 Involving Grant of 5 Years Business Tax Holiday

DOJ OPINION NO. 009, s. 2015 February 13, 2015 Atty. Rolando V. Villamor City Administrator Office of the City Mayor City of Bacolod Dear Atty. Villamor : This refers to your 22 January 2015 letter-request for clarification, on an issue regarding Bacolod City Ordinance (Ordinance) No. 323, otherwise known as the "Bacolod Investment Code of 2002" dated December 27, 2002. The request, it appears, concerns the query of the Bacolod Business Development and Investment Production Center (BBDIPC) on whether it may validly give one (1) to a maximum of five (5) years business tax holiday, as tax incentive to qualified investors, based on the Ordinance. This is being raised because of the apparent difference in the views of the City Treasurer and a member of the Sangguniang Panglunsod on the matter. With regret, we have to decline the grant of your request. At the outset, the resolution of your query would necessarily require this Department to pass upon the subject Ordinance of Bacolod City. Unfortunately, however, the Secretary of Justice does not pass upon the validity or constitutionality of a duly enacted ordinance since said matter properly belongs to the courts ( Victoria Milling Co., Inc. vs. Municipality of Victorias, Negros Occidental , 25 SCRA 192). He is authorized to act only on appeals questioning the constitutionality or legality of a tax ordinance or revenue measure filed within thirty (30) days from the effectivity thereof (Sec. 187, Local Government Code [R.A. 7160]). 1 Meanwhile, it is the City Legal Officer, or in his absence, the City or Provincial Prosecutor, who is mandated by law to "render his opinion in writing on any question of law when requested to do so by the City Mayor or the Sanggunian. 2 Thus, we suggest that the matter be referred to the City Legal Officer or the Provincial Prosecutor for proper disposition. Nonetheless, without passing upon the validity of the Ordinance, it is within the power of each local government unit to create its own sources of revenues and to levy taxes, fees and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. 3 Please be guided accordingly. Very truly yours, (SGD.) LEILA M. DE LIMA Secretary Footnotes 1. Secretary of Justice Opinion No. 18, s. 2012; No. 20, s. 2007. 2. Section 481, Article XI, Title Five, Book III, R.A. No. 7160. 3. Section 5, Article X, 1987 Constitution.