Power of a Local Government Unit to Put a Cap on Tax Increases

DOJ OPINION NO. 061 , s. 2009 November 6, 2009 Hon. Lina D. Isorena Executive Director National Tax Research Center Department of Finance Port Area, Manila Madam : Subject herein is your request for opinion on whether or not a Local Government Unit (LGU),through its Sanggunian, has the power to put a cap on tax increases. It appears that the foregoing legal predicament was an offshoot of what you call as a "practice of most LGUs in order to cushion their taxpayers from the impact of abrupt tax increases, such as the real property tax, as a result of a general revision of the Schedule of Market Values". EITcaH You further mentioned that a resolution on the above-query would enlighten your office on the issue and guide LGUs in the enactment of local tax ordinance. With regret, this Department cannot formulate an opinion on the instant request. Pursuant to settled rules and precedents, the Secretary of Justice does not render opinion or express any comment on questions which fall within another office's jurisdiction, the resolution of the issues raised would undeniably require us to encroach into the authority of the Department of the Interior and Local Government (DILG),which has the authority of supervision over local government units and which has primary jurisdiction over the above-mentioned issues you raised. 1 This rule arises not only from practical considerations, but also out of due respect and deference for the competence and expertise of DILG. Further, the resolution of the issue raised would inevitably involve an interpretation of the Local Government Code of 1991, specifically Section 129 thereof. It is suggested, that your queries be addressed to the Department of the Interior and Local Government (DILG),having primary jurisdiction to resolve your query for its familiarity with the policy repercussions of the questions as well as from logical recognition of the lawful exercise of an authority conferred by law. 2 Please be guided accordingly. DACTSH Very truly yours, (SGD.) AGNES VST DEVANADERA Acting Secretary Footnotes 1. Secretary of Justice Opinion No. 3 and 14, s. 2006; Op. No. 83, s. 2004. 2. Op. No. 1. s. 1983; No. 7, s. 1996; No. 24, s. 1999, No. 7, s. 2006.