THE Senate committee on local government is recommending passage of a bill requiring the national government to provide clear guidelines for local government units (LGU) seeking to impose fees and charges on businesses.
Senate Bill No. 2123, under Committee Report No. 533, seeks to amend some provisions in Republic Act No. 7160 or the Local Government Code Act of 1990 covering municipal fees and charges, fishery licenses and rental charges, barangay charges, clearance and other fees, as well as common revenue-raising measures such as other LGU fees and charges, public utility charges, and toll charges.
Under the bill, such fees imposed by LGUs will be subject to the guidelines to be provided by the Department of Finance’s (DoF) Bureau of Local Government Finance (BLGF) in consultation with LGU associations.
Guidelines to be formulated in setting the local charges will also take into consideration the recovery of capital, maintenance, and other service delivery costs.
In the case of fishery license fees and rental charges, the bill allows municipalities to levy rents for erecting fish corrals, operating beds for shellfish like oysters, mussels or other species and to levy fees in issuing licenses to operate fishing vessels.
The fishery rental charges will be subject to the guidelines of BLGF, the Department of Environment and Natural Resources (DENR), and the Department of Agriculture’s (DA) Bureau of Fisheries and Aquatic Resource (BFAR), in consultation with the league of municipalities. Agencies will take into consideration the costs for environmental maintenance and sustainability of the municipal waters covered.
The authority of the barangay to collect charges for the use of barangay-owned properties or service facilities, to impose fees for barangay clearance or a license for any business activity will be subject to the guidelines of the DoF, in consultation with the Liga ng mga Barangay.
The DoF will have to consult with the league of municipalities on fees and charges for services rendered or conveniences provided to businesses and professions.
The bill also provides a new definition to the “charge” imposed by LGUs as the “liability for services rendered or conveniences provided by the local government unit, the amount of which should be commensurate to such services and capital recovery which ensures continued delivery.”
“Fee” is also redefined as the “liability imposed for the regulation or inspection of a business or activity, the amount of which should be commensurate to the administrative cost of regulation and surveillance.”
Senator Juan Edgardo M. Angara, who chairs the committee on local government, said in the bill’s explanatory note that many LGUs lack guidance “on how to fairly and efficiently determine” what fee or charge should be imposed to business activities within their jurisdiction.
He noted that while the Local Government Code gives LGUs greater means to create their revenue sources, many businesses have raised concerns that the imposition of LGU fees has increased their cost of doing businesses.
“With this in mind, this bill mandates several national agencies… to outline clear guidelines in the setting of local fees and charges, which LGUs should then incorporate in their impositions. Such reform will raise LGU competitiveness and strike a healthy balance between revenue generation and private business promotion,” Mr. Angara said. — Camille A. Aguinaldo