Pass-through tax unlawful, LGUs told

Published by rudy Date posted on October 20, 2011

The Department of Interior and Local Government on Wednesday warned local government units not to collect pass-through tax, which is illegal.

Secretary Jesse Robredo issued the warning to provincial governors, mayors and barangay chiefs following reports that pass-through fees were still being imposed despite his directive disallowing the practice.

The transport sector earlier met with President Benigno Aquino III to complain about LGUs collecting such tax, particularly on delivery trucks passing through their areas.

Robredo invoked Section 133 of the Local Government Code that sets limitations on the taxing powers of provinces, cities, municipalities and barangays.

According to Robredo, Section 133of the Code stipulates that the taxing powers of the LGUs shall not extend to the levy of the following: “taxes, fees and charges and other impositions upon goods carried into or out of, or passing through, the territorial jurisdictions of LGUs in the guise of charges for wharfage, toll for bridges or otherwise, or other taxes, fees or charges in any form whatsoever upon goods or merchandise.”

He issued a directive, enjoining all governors, mayors and barangay heads to refrain from enforcing any ordinance authorizing the levy of fees and taxes on inter-province transport of goods, regulatory fees from passengers in local ports, and other additional taxes, fees or charges in any form upon transporting goods and passengers.

He also urged local officials to immediately repeal any ordinance imposing pass-through tax and similar fees.

He said he ordered his department’s regional directors to launch an information drive to reiterate his call and file charges against erring officials. –Rio N. Araja, Manila Standard Today

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