No uniformity in imposition: Review of barangay tax laws sought

CEBU, Philippines — The Cebu City Council has called for a general review of the implementation of the tax ordinances of the city’s 80 barangays, after it was observed that they have different approaches to the imposition of local taxation, which may have gone against the provisions of the Local Government Code.

This came after City Councilor Rey Gealon delivered a privileged speech during their regular session last Wednesday on the effective implementation of the tax ordinances, without which the “government will bleed dry.”

Gealon, chairman of the City Council committee on laws, ordinances, and styling, said he reviewed the barangay tax ordinances and made numerous observations on how the barangays exercise their taxing and revenue generating powers.

“It is a fundamental principle in local taxation that taxation should be uniform. However, our barangays have different approaches in the imposition of the allowable taxes, fees, and charges under Section 152 of the Local Government Code,” he said in his speech.

Gealon said there are barangays that do not impose the 1 percent tax on stores and retailers with fixed business establishments, when it should be imposed on businesses with gross sales or receipts not exceeding P50,000.

Aside from this, he said, there are also different approaches to the collection of barangay clearance fees.

Gealon said there are barangays that use gross sales or receipts as the basis for the barangay clearance fee.

He said these practices are not being sanctioned under the Local Government Code, as the collection of fees and charges is not supposed for “revenue-raising.”

“Fees and charges are levied for the purpose of regulating a practice or a privilege. Hence, the rates of fees and charges should be commensurate with the costs of regulation,” Gealon said.

He then cited “best practices” to impose on the collection of barangay clearance fees to regulate businesses, that are also aligned with the Local Government Code.

Among these, Gealon said, is that there is no single rate for the clearance fee and that the rate should depend on the purpose of the request, such as for business and personal or non-business purposes.

Gealon said that the barangay should provide the guidelines for several categories of businesses with different corresponding fees depending on the costs of regulating the particular business.

“Case in point, businesses which have a considerable environmental impact are assessed with higher fees since the barangay would incur greater expenses in regulating their business,” he said.

For building permits, Gealon also said the fee should depend on the area or the number of rooms or units.

“I suggest that these practices be duplicated by other barangays because there are barangays who only impose P200 regardless of the nature of the business,” he said.

Further, Gealon said, the barangays must also be reminded of Republic Act (RA) 11032 (Ease of Doing Business and Efficient Government Service Delivery Act) of 2018 amended Section 152(c), on the streamlining of the barangay clearance.

RA 11032 requires the integration of the barangay clearance with the building permit and locational clearance. This means that the collection of the barangay clearance fees is to be made by the city treasurer and no longer by the barangay.

The same law further mandates that barangays authorize the city treasurer to collect the barangay clearance fees through the appropriate ordinance.

“The City however must remit the fees it collected to the barangay not later than seven working days of the ensuing month,” Gealon said.

He also noted that as for the fees and charges collected on billboards, signboards, neon signs, and outdoor advertisements, there are some barangays charging either a yearly or monthly fee, while some fees are based on the size or the material used for the signs, or based on the purpose of the signs.

“I am raising but a few observations so that I can lead to the conclusion that there is a need for the City to provide guidance and legal assistance to our component barangays in the crafting of their tax ordinances,” he said.

In line with this, Gealon also asked for the City to sponsor a training or upskilling activity for the barangay councils, to empower them to craft barangay tax ordinances that would increase their respective revenues from taxes and to also maximize their regulatory collections.

During the discussion, Association of Barangay Councils (ABC) President and City Council Mx-officio Member Franklyn Ong agreed, saying it would also help the barangays in coming up with their respective annual budgets.

He also agreed that the collection of barangay fees should be done with the City Treasury to be able to have a unified assessment conducted by the City Assessor’s Office.

He disclosed that there is still confusion about the landmarks of where the businesses are located, creating boundary disputes.

“Kinahanglan i-settle gyud na sa city when it comes to barangay boundaries,” he said.

This is to make sure that barangay fee collections from businesses are being put into the right area.

Ong also brought up the efficiency of the City in refunding the collection fees for each barangay which, according to law, as mentioned by Gealon, should be within seven working days at the end of the month.

“We should remember…(that) even the Real Property Tax share of the barangay that is supposed to be given every quarterly to the barangay, ma-delay man gani sa treasurer nato,” he said.

Ong added that delays in refunds can also affect the disbursements of the budgets in each barangay.

In line with these, the City Council passed a resolution requesting the Office of the Mayor, in coordination with the ABC, to organize the training activity relative to the review of the local taxation ordinances. —/RHM (FREEMAN)