Ieple Ptopons DEPARTMENT OF THE INTERIOR AND LOCAL GO\ ULM Gare: EEA Cece ts ae Cen Cy Sache mooee ATTY. KHARIS M. MANAHAN CILG OPINION NO, 40_ s. 201 Montilla Law Office ‘2F Casa Maritima, 651 General Luna St., Intramuros, Manila 07 AUG 2019 Dear Atty. Manahan: ‘This has reference to your letter dated 21 February 2019 requesting this Department to order the Municipality of Calaca, Batangas to cease and desist from implementing, enforcing, and collecting fees and charges under Municipal Ordinance No. 17-323 (MO 17- 323). At the outset, we find that the above-mentioned requesst is grounded on the question of whether or not said Municipal Ordinance is violative of Section 133(e) of Republic Act No. 7160 (RA 7160), otherwise known as the Local Government Code of 1991, and pertinent issuances of this Department. MO 17-323 imposes an environmental user fee on the use of the municipal waters of the Municipality of Calaca, Batangas. Itis primarily for the judicious and wise utilization, protection, conservation, and management, on a sustainable basis, of its coastal and fisheries resources, through maintaining a sound ecological balance, and protecting and enhancing the quality of the environment! in conformity to relevant laws. Section 133(e) of RA 7160, however, prescribes a limitation to the taxing powers of the local governments. It states: Section 133. Common Limitations on the Taxing Powers of Local Government Units. - 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: ax e) Taxes, fees, and charges and other impositions upon goods carried into or out of, or passing through, the territorial jurisdictions of local | Section 2(a) of Municipal Ordinance No. 17-323; Municipality of Calaca, Batangasgovernment units in the guise of charges for wharkage, tolls for bridges or otherwise, or other taxes, fees, or charges in any form whatsoever upon such goods or merchandise; 20x” (Emphasis supplied). Ithas been our view that the aforecited section refers to the imposition of fees and charges upon goods or merchandise passing through the territory of the concerned local government. Considering that what is being taxed by the subject MO is the use of the municipal waters, we are of the view that the same does not appear to come within the Purview of the limitation in Section 133(e). Thus, it may not be classified as a pass through fee and the local government is not prohibited from imposing the same. Further, we note that municipal waters are under the jurisdiction of the local government unit pursuant to Republic Act No, 8550, otherwise known as the Philippine Fisheries Code of 1998. In light of the said jurisdiction, it is our view that the imposition of fees and charges under the subject MO is an exercise of the Municipality of Calaca, Batangas of its regulatory powers for the protection and conservation of the municipal waters. We opine that it is more of an exercise of police power than the power of taxation, We find the pronouncement of the Supreme Court in the case of Angeles University Foundation vs, City of Angeles, et.al? citing the case of Chevron Philippines, Inc. vs. Bases Conversion Development Authority? relevant, to wit: ‘In distinguishing tax and regulation as a form of police power, the determining factor is the purpost of the implemented measure. If the Purpose is primarily to raise revenue, then it will be deemed a tax even though the measure results in some form of regulation. On the other hand, if the purpose ts primarily to regulate, then it is deemed a regulation and an exercise of the police power of the state, even though incidentally, revenue 4s generated. Thus, in Gerochi v. Department of Energy, the Court stated: ‘The conservative and pivotal distinction between these two (2) powers rests in the purpose for which the charge is made. If generation of revenue is the primary purpose and regulation is merely incidental, the imposition is a tax; but if regulation is the primary purpose, the fact that revenue is incidentally raised does not make the imposition a tax. (Emphasis supplied)” *GR. No, 189999, 27 June 2012 °G.R. No. 173863, 15 September 2010‘This opinion is without prejudice to the contrary opinion that the Bureau of Local Government Finance, Department of Finance may take considering that it is the government agency with the mandate and authority on the subject matter. We hope to have assisted you accordingly. Very truly yours, By the authority of the Secretary MARIVEL C. SAGENDONCILLO, CESO III Undersecretary Copy furnished: Mr. Nifio Raymond B. Alvina Executive Director Bureau of Local Government Finance 8th Floor, EDPC Building, BSP Complex, Roxas Boulevard, Malate, Manila nee a s