MANILA, Philippines—Interior Secretary Jesse Robredo on Wednesday warned barangay council (or village and neighborhood council) officials against imposing excessive fees on businesses applying for barangay clearances and permits.
Robredo also ordered all mayors to scrutinize ordinances enacted by barangay councils involving fees collected from business enterprises.
“Mayors should ensure that barangay taxes, fees, charges and other obligations should be based on the respective taxpayer’s ability to pay,” he said in a statement.
“This is to ensure that the fees and charges are not unjust or excessive and that the ordinances have undergone public hearing prior to enactment,” he added.
According to the interior secretary, a number of businessmen have complained about exorbitant fees imposed by barangay councils and sought the help of the Department of the Interior and Local Government.
Citing the Local Government Code of 1991, Robredo said village councils can only collect charges from businesses with gross sales of P50,000 in highly urbanized cities and P30,000 in municipalities “at a rate not exceeding one percent on such sales.”
Although the law authorizes local government units to generate their own revenues, he said, “such power is not absolute as the code itself provides for certain limitations.”
“Such fees should also be levied and collected only for public purposes, and not be contrary to law, public policy or in the restraint of trade,” he said.