DILG instructs LGUs to stop transport tax levy

WHILE local government units have their share of taxing powers, imposing taxes, fees and charges on transporting goods carried into, out of or passing through their respective localities are however deemed contrary to policies. The Department of the Interior and Local Government then enjoined provincial governors, city and municipal mayors and punong barangays to refrain from enforcing said ordinances which mandate the above-mentioned tax schemes. In a memorandum circular issued to local chief executives, DILG Secretary Ronaldo Puno said such imposition is beyond the scope of the taxing powers of local government units under the Local Government Code (LGC) of 1991.

The DILG Secretary cited LGC Section 133(e) which states that the taxing powers of LGUs shall not extend to the the following: (e) taxes, fees, charges and other impositions upon goods carried into or out of, passing through their territorial jurisdictions. These fees may come in the guise of charges for wharfage, tolls for bridges or otherwise or other taxes, fees or charges upon such goods or merchandize.

Puno said reports reaching the department's Bureau of Local Government Supervision (BLGS) show that LGUs which levy such taxes, fees and charges are those with ports, wharfs or areas serving as transshipment and traversing points in delivery of goods and merchandise.

BLGS Director Rolando Acosta said taxing affects the free flow of commerce and causes the cost increases of goods and merchandise as well as transportation fees. Acosta explained that taxes, fees and charges collected under such ordinances are illegal because they are prohibited by law, in particular, the local government code. In his directive, Puno urged local officials with existing ordinances levying fees, taxes and charges, which are in the nature of impositions under Sec. 133(e) of the LGC, to refrain from enforcing or implementing the same. Furthermore, he instructed them to cause the immediate repeal of said violative ordinances. Puno recognizes the power and the need of local units to enact tax ordinances as income generating measures. However, he emphasized that such exercise must be in conformity with existing laws.

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