RepLrblic oI the philipolres

DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT

A. Francisco cold ConcloutiDjrL[r II, EDSA cofltcl. Nlapqgmahal St., Di]i[raD,
eLJIZON CITY
Tetephone 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-ucking

I)iversion Road, Bluss Sagcahan,

Tacloban City

DILG Legal Opinion No. 11 S. 2013

13rgy. 64,

1 1 APR 2013

Dear Mr. Lao:

This re'fers to yolrl 19 I'ebmary 2013 letter which requests the .l]epartment's
legal opi'io' as
to the eflectivity and status of DILG lVlemoranclum Circular No. 2011-i51 (MC
2011-151), a
copy of which is attached to your letter together wirh the 11 February 2013
generic letter
Iiom the Provincial Treasurer of Laguna providing information on the imposrtion ol
rhe
annual fixed ux of P500.00 for all types of vehicles being used to directly or indirectly
carry
or distribute goods or merchandise rvithin the jurisdicrion of rhe Province of Laguna
pursuanr
to 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.

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 and
collection of illegal fees and ttxes, particular:ly pass through fees which is defined ulder
Section 133 (e) of Republic Acr No. 7160 (RA 7160) as taxes, fees, charges and. orher
impositions upon goods carried into or out of, or passing through the territorial jur-isdiction
of
the LGUs in the guise of a toll, charges for wharfage or orhers taxes, fees, or charges in any
form upon goods or merchandise.
Please be

Locai orclinances imposing/collecting taxes, fees oi charges on the rypes of subjects

enurnerated under Section 133 are r:onsidered illegal based on the definition of an illegal
imposition 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 dttLy
itttposed by n locnl gouernnent unit on t:t certnht subject tltrough nn ppropnttte
ordirtonce btLt is, ltouetrcr, outside the scopc of its tnxing nncl reoenLte- rnisittg
ytottters ttis-i-ztis tle stattltory scope of ttxing pozoe.rs of proninces, cities,
t LtLnicipnlities ntd bLtrtuLguys as nre conf'erred to tlrcm
by tlrc Locol Gouenutcrtt
Code. It uay ittcLtLde situntiotts, such ns, but ttot linited to:
t

(c)

tle

taxes, Jbes or clnrges nre unjust, excessiae, oppressioe,

cofitrnry to dtchtred nstionnl policy; (Sectiorl 1g6, LGC)
Wrcn tlu intposition of tnxes, J'ees or c)nrgei.s rloLlld a xoutlt to Lt restrnlnt
o.f trntle; (Section 130, LGC)
Wlrcn n locnl gozte nnLent ndjL.Lst tlt rntes of ttx itt aittlntiott of tl.te
ptoz,isiott oJ Lnzo; (Section 191, LCC)

VYhen

corLfiscLttory or

0
@

fno{e fun in lne rii ;r1

- * .-. L\ aJt
.{ ,sttlt t. .:t :

+.ii
ll,

frl-r

C
(h)

Whett a loctl goz'cnrttrcnt itttposes

pottters. (section 133, LGC)"

Jbcs nnd

its tnxittg
'charges beyond

on goods carried into or out ot' or

Parenthetically, taxes fees and charges imposed
local government units are considered
passing through, the territorlal iurisiictions of
illegal imPositions.
AnentthellFebruary2013genericletterfromtheProvincialTreasurerofLaguna'which
fixed tax of P500.00 pursuant to Section
proviiles information on the iiiposition of the annual
Tax Ordinance No 0i-94' SP
2.29 of Provincial Ta-r Ordinance No 01-92' Provincial
to be a valid imposition of the Province of
Resolution No. 582, s. 1994, the sarne apPears
RA 7160 to levy an annuai fixed tax on
as provinces and cities2 are auth;;ized by
Laguna

under Section
trrr&, van or any vehicle, subject to the parameters provided

",riry
thereof.

vlz.:
-l'ttrck..or

Vntt
for Eaery Deliiery
uL'
of Mnrrufacturers or Producers, Wrclesalers of' Dcders' or l<etallers

'SECTION 741. Awrual Fixetl

Tax

tax. fo,r eaery

Certnin Ptochtcts' - (a) Tlte proztince may leay an annunl t'ixed
prorhtccrs' ztholesnle.r,s'
trtLck, ttan or nny uelicle usect by tnaiufnclurer't'
oJ d,tsttlled.spl.rtts'
tlenLerc or retsilirs in tlrc delivery and distribution
cigais and ciSarettes' nnd otlrct products Lrs
ferrnented liqttors, soft drinks,
',,,,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,

AUSTERE A. PANADERO
Undersecretary

Sectron 151 In coniLnclron wiLh Secrion

l41ot tlre RA 7160

141 (a)