RepLrblic oI the philipolresDEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENTA. Francisco cold ConcloutiDjrL[r II, EDSA cofltcl. Nlapqgmahal St., Di]i[raD, eLJIZON CITYTetephone Nulrber 925.11./t8 . C:2S.8S-8S . SZS.6S.SZ

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OFFICE OF THE UNDERSECRETARY FOR TOCAL GOVERNMENT

MR. WILSON S. l_A.O'l'acloban ILverlast Tr-ucking13rgy. 64, I)iversion Road, Bluss Sagcahan,Tacloban City

Dear Mr. Lao:

DILG Legal Opinion No. 11 S. 2013

1 1 APR 2013

This re'fers to yolrl 19 I'ebmary 2013 letter which requests the .l]epartment's legal opi'io' asto the eflectivity and status of DILG lVlemoranclum Circular No. 2011-i51 (MC 2011-151), acopy of which is attached to your letter together wirh the 11 February 2013 generic letterIiom the Provincial Treasurer of Laguna providing information on the imposrtion ol rheannual fixed ux of P500.00 for all types of vehicles being used to directly or indirectly carryor distribute goods or merchandise rvithin the jurisdicrion of rhe Province of Laguna pursuanrto Sectiot-t 2.29 of Provincial Tax O:rdinance No. 01-92, Provincial Tax Ordinance No. 01-94,SP Re.rolution No. 582. s. 1994.

Please be infbrmed that IVIC 2011-15l is a reiterarion of DILG Mernorandum Circular No.2006 70 (lvlc 2006 70), which was amended by DILG Memorandum Circu-lar No. 2013-04.NIC 2006-70 was enforced by the Department on 26 January 2006 and is still effective to date.'Ihe subjecr of said NIC is rhe suspension of the local government unit (LGU) imposition andcollection of illegal fees and ttxes, particular:ly pass through fees which is defined ulderSection 133 (e) of Republic Acr No. 7160 (RA 7160) as taxes, fees, charges and. orherimpositions upon goods carried into or out of, or passing through the territorial jur-isdiction ofthe LGUs in the guise of a toll, charges for wharfage or orhers taxes, fees, or charges in anyform upon goods or merchandise.

Locai orclinances imposing/collecting taxes, fees oi charges on the rypes of subjectsenurnerated under Section 133 are r:onsidered illegal based on the definition of an illegalimposition under DILG Memorandum Circular No. 2OOg 42 dated 27 March 2009, to wit:

"lllegnt itrrposition pe rtnins to tl, Ie,,y of tnxes, fees arrl tl nrges dttLyitttposed by n locnl gouernnent unit on t:t certnht subject tltrough nn ppropnttteordirtonce btLt is, ltouetrcr, outside the scopc of its tnxing nncl reoenLte- rnisittgytottters ttis-i-ztis tle stattltory scope of ttxing pozoe.rs of proninces, cities,t t LtLnicipnlities ntd bLtrtuLguys as nre conf'erred to tlrcm by tlrc Locol GouenutcrttCode. It uay ittcLtLde situntiotts, such ns, but ttot linited to:

(c) VYhen tle taxes, Jbes or clnrges nre unjust, excessiae, oppressioe,corLfiscLttory or cofitrnry to dtchtred nstionnl policy; (Sectiorl 1g6, LGC)

0 Wrcn tlu intposition of tnxes, J'ees or c)nrgei.s rloLlld a xoutlt to Lt restrnlnto.f trntle; (Section 130, LGC)

@ Wlrcn n locnl gozte nnLent ndjL.Lst tlt rntes of ttx itt aittlntiott of tl.teptoz,isiott oJ Lnzo; (Section 191, LCC)

fno{e fun in lne rii ;r1+.ii - * .-. L\ aJtll, .{ ,sttlt t. .:t :frl-r

C

Whett a loctl goz'cnrttrcnt itttposes Jbcs nnd 'charges beyond its tnxittg

pottters. (section 133, LGC)"

AUSTERE A. PANADEROUndersecretary

d

(h)

Parenthetically, taxes fees and charges imposed on goods carried into or out ot' or

passing through, the territorlal iurisiictions of local government units are considered

illegal imPositions.

AnentthellFebruary2013genericletterfromtheProvincialTreasurerofLaguna'whichproviiles information on the iiiposition of the annual fixed tax of P500.00 pursuant to Section

2.29 of Provincial Ta-r Ordinance No 01-92' Provincial Tax Ordinance No 0i-94' SP

Resolution No. 582, s. 1994, the sarne apPears to be a valid imposition of the Province of

Laguna as provinces and cities2 are auth;;ized by RA 7160 to levy an annuai fixed tax on

",riry trrr&, van or any vehicle, subject to the parameters provided under Section 141 (a)

thereof. vlz.:

'SECTION 741. Awrual Fixetl Tax for Eaery Deliiery -l'ttrck..or Vntt

of Mnrrufacturers or Producers, Wrclesalers of' Dcders' or l<etallers uL'

Certnin Ptochtcts' - (a) Tlte proztince may leay an annunl t'ixed tax. fo,r eaery

trtLck, ttan or nny uelicle usect by tnaiufnclurer't' prorhtccrs' ztholesnle.r,s'

tlenLerc or retsilirs in tlrc delivery and distribution oJ d,tsttlled.spl.rtts'

ferrnented liqttors, soft drinks, cigais and ciSarettes' nnd otlrct products Lrs

',,,,ny b, tleterntinetl Ly tl,e s,;rttglunia1g pnnln.lart,iSlut' to td:: :i'l:.!:.?-',

,o,irr,,,,rrr, tplplher tlircctly or inrlirectly, toithin the protttnce rn 0tt fltttoltnt

not exceeding fiae hundred pesos (P500'00) '"

We hope the foregoing discussion has enlightened you on the subiect'

Very truly yours,

2 Sectron 151 In coniLnclron wiLh Secrion l41ot tlre RA 7160