Image by World Bank PhilippinesAn April 12, 2011 press release by the Department of the Interior and Local Government
Secretary Jesse M. Robredo of the Department of the Interior and Local Government (DILG) on Tuesday called on all city and municipal mayors to review all existing ordinances on fees and charges created and imposed by the barangays.
“This is to ensure that the fees and charges are not unjust or excessive, and that the ordinances have undergone public hearing prior to enactment,” said Robredo.
Robredo issued the directive amid complaints received by the DILG on the alleged excessive fees and charges and burdensome or extraneous documentary requirements imposed by some barangays especially on the issuance of a barangay clearance.
“While local government units have the power to create their own sources of revenue under the Local Government Code of 1991, such power is not absolute as the Code itself provides for certain limitations.”
He said mayors should ensure that barangay taxes, fees, charges and other obligations should be based on the respective taxpayer’s ability to pay.
“Such fees should also be levied and collected only for public purposes, and not be contrary to law, public policy, or in the restraint of trade,” he stressed, citing Section 130 of the Code.
Under the Code, barangays may impose taxes on stores or retailers with fixed business establishments with gross sales/receipts of P50,000 or less (cities), or P30,000 or less (towns), at a rate not exceeding one percent on such sales.
Barangays are also allowed to levy fees or charges for services rendered in connection with the regulation or use of barangay-owned properties or service facilities; for the issuance of barangay clearance; on commercial breeding of fighting cocks, cockfights and cockpits; on places of recreation with admission fees; and on billboards, signboards, neon signs and outdoor advertisements.
Robredo, however, pointed out that LGUs have been given a certain degree of leeway to determine other possible sources of income aside from those enumerated in the Code.
“Any barangay may conceptualize other forms of income-generating sources, for as long as the restrictions and limitations are observed and the procedures surrounding the enactment of revenue-raising barangay ordinances are complied.” he said.
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