Government sets guidelines on LGU fees, charges

MANILA, Philippines — The Department of Finance (DOF) and the Department of Interior and Local Government (DILG) have issued a joint circular to ensure that local government units (LGUs) charge reasonable fees and charges for services they offer to the public.

Finance Secretary Carlos Dominguez and Interior and Local Government Secretary Eduardo Año recently signed Joint Memorandum Circular (JMC) 2019-01 providing the guidelines in setting the rates for regulatory fees and other service charges imposed by LGUs.

The DOF said this was issued “to ensure that LGU fees do not unduly burden the public, but are imposed only to help local governments recover the costs of services they render, while making them more business friendly.”

It was also released in compliance with Republic Act 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act, as well as the Local Government Code.

“In order to help LGUs build strong enabling environment for good local governance and serve our constituents fairly, particularly the business sector, we enjoin all LGUs to review, adjust, and/or revise their local revenue ordinances in accordance with the rationalized procedure for setting fees and charges,” the JMC said.

The joint circular, which takes effect immediately, applies to all fees and charges imposed by LGUs rendering services to the public. These include business permits, mayor’s permits and barangay clearances, toll fees, and billboard fees, among others.

Under the circular, the DOF, through the Bureau of Local Government Finance (BLGF), is mandated to issue guidelines through a local fees and charges (LFC) toolkit, which will identify the direct fixed cost and variable costs of rendering services.

The DILG is tasked to promote the usage of the LFC toolkit in updating revenue codes and ordinances and to institutionalize a monitoring system to ensure the compliance of LGUs.

The circular also states that LGUs have the option to adjust the fees they impose, as long as these conform to the variables in the LFC toolkit used in computing rates, and, as much as possible, uniform for similar services offered by other LGUs.

Meanwhile, the BLGF and the Philippine Tax Academy (PTA), in coordination with the DILG, will conduct the training and technical assistance programs for LGU personnel to help them review and set regulatory fees and charges using the LFC toolkit.

Every local chief executive is advised to issue an executive order creating an oversight committee, which will review, gather data and compute the appropriate fees and charges based on the LFC toolkit.

The committee will also be tasked to recommend the local revenue ordinance necessary to effect the revised fees along with a program of action to institute reforms.

For its part, the BLGF is tasked to regularly monitor the fees and charges imposed by LGUs through the DOF-BLGF online portal, and ensure that the schedule of rates and their analysis are regularly published online and readily available to anyone.