AMID reports that some local government units are imposing taxes, fees and charges on transporting goods carried into or out of, or passing through their respective localities, the
Department of the Interior and Local Government enjoined all provincial governors, city and municipal mayors and punong barangays to stop enforcing such ordinances.

In a memorandum circular issued to local chief executives, DILG Secretary Ronaldo V. Puno said such imposition is beyond the scope of the taxing powers of local government units under the Local Government Code of 1991.

The DILG Secretary cited Section 133(e) of the Code that states: “Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities and barangays shall not extend to the levy of the following; (e) taxes, fees and charges and other imposition upon goods carried into or out of, passing through, the territorial jurisdiction of local government units in the guise of charges of wharfage, tools for bridges or otherwise, or other taxes, fees or charges in any form whatsoever upon such goods or merchandize.”

Puno said several reports including those from the department’s Bureau of Local Government Supervision (BLGS) show that LGUs which levy such taxes, fees and charges are those with ports, wharfs localities serving as transshipment and traversing points in the delivery of goods and merchandise.

BLGS Director Rolando M. Acosta explained that the primary reason for the prohibition of tax imposition is that it affects the free flow of commerce, and causes the increase of the cost of goods and merchandise as well as transportation fees.

Acosta explained that taxes, fees and charges so collected are illegal because they are prohibited by law, in particular, the local government code.