DILG to sue local executives over ‘pass-through’ fees

MANILA, Philippines – Department of Interior and Local Government (DILG) Secretary Ronaldo Puno warned local chief executives yesterday against charging “pass-through” fees from delivery trucks going through their areas of jurisdiction, saying they face criminal and administrative charges if they do so.

He said collecting or charging pass-through fees are illegal under the Local Government Code.

“Local government executives could face administrative charges for ignorance of the law and other violations of the Code if they continue to impose such illegal fees even if these are covered by ordinances enacted by their respective local legislative bodies,” Puno said.

He issued the warning after President Arroyo ordered him to look into numerous complaints from producers, manufacturers and wholesalers about local government units (LGUs) imposing the illegal fees despite the provisions clearly stated under the Local Government Code that limits and sets the taxes that can be imposed on delivery trucks.

Puno told all local government officials to immediately rescind any existing resolutions authorizing pass-through fees.

He said he will personally remind local government officials during a meeting today.

Besides the illegal pass-through fees, Puno said the DILG will also investigate reports about excessive taxes imposed by provinces and cities on delivery trucks.

Under Sections 141 and 151 of the Local Government Code, Puno said only provinces and cities can impose an annual fixed tax of not more than P500 for every delivery truck or van of manufacturers, producers, wholesalers, dealers, or retailers of certain products. He said towns cannot impose such taxes.

Puno made it clear that the tax to be imposed can only be charged annually and not everytime a truck passes through a province or city. Moreover, the tax can only be imposed by the province or city that is to be determined the sales destination of the product carried by the delivery truck.

Puno has directed all DILG regional officials to find out which LGUs are imposing the pass-through fees and to submit a report to his office about the results of their respective surveys within five days.

After this period, he will submit to Malacañang a list of LGUs that the DILG will investigate for violations.

He said LGUs that will stop charging the fees will be considered as acting in good faith, but will be “required to reimburse the illegal fees they collected.”

Puno said the pass-through fees were reported in certain areas in Lanao del Norte, Bukidnon, Ilocos Norte, Nueva Vizcaya, La Union and Pangasinan.

In her State-of-the-Nation Address (SONA) last year, Mrs. Arroyo asked mayors and governors to stop collecting pass-through fees after the DILG found out 24 LGUs were collecting the illegal fees.

“After the SONA, the number of violators went down to only three, but in the last two weeks we have received an upsurge of complaints again after these illegal charges,” Puno said.–Cecille Suerte Felipe, Philippine Star