DILG to LGUs: Support suspension of pass-through fees 

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DILG to LGUs: Support suspension of pass-through fees 
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  • Interior and Local Government Secretary Benhur Abalos urged officials of the Union of Local Authorities of the Philippines to pass resolutions of support for the executive order prohibiting local government units from collecting “pass-through” fees on national roads
  • ULAP president and Quirino governor Dakila Carlo Cua said the group will pass a resolution calling on all LGUs to immediately comply with Executive Order 41
  • Cua said he will ask all LGUs to adhere to the order and enact local ordinances suspending or discontinuing the collection of such fees within their respective jurisdictions
  • The Metro Manila Council issued Resolution No. 23-15, supporting EO 41 and ordering LGUs in Metro Manila to suspend the collection of pass-through fees

Interior and Local Government Secretary Benhur Abalos urged officials of the Union of Local Authorities of Philippines (ULAP) to pass resolutions of support to the executive order prohibiting local government units (LGUs) from collecting pass-through fees on national roads.

Abalos made the statement in a meeting with officials of ULAP on October 6 to discuss national and local collaboration towards implementing Executive Order (EO) 41.

President Ferdinand Marcos, Jr signed Executive Order 41 on September 25, prohibiting LGUs from collecting toll fees and other charges for all motor vehicles transporting goods or merchandise while passing through any national roads and other roads not constructed and funded by them.

READ: Marcos bans LGU pass-through fees on national roads

The EO clarifies that under Section 133(e) of Republic Act (RA) No. 7160, also known as the Local Government Code of 1991, local governments are not allowed to impose taxes, fees, charges, or any other levies on goods transported through their areas. This includes charges for things like wharfage, bridge tolls, or any form of taxation on these goods or merchandise.

“The DILG (Department of Interior and Local Government) recognizes that LGUs are essential partners of the national government in achieving national development goals. We, therefore, urge ULAP to mobilize support for EO 41 to facilitate the seamless flow of goods and services throughout the country,” Abalos said.

For his part, ULAP president and Quirino governor Dakila Carlo Cua said the group will pass a resolution calling on all LGUs to immediately comply with the EO.

At the same time, Cua will ask LGUs to adhere to the order and enact local ordinances suspending or discontinuing the collection of such fees within their respective jurisdictions.

He said ULAP will foster close collaboration with the Department of Interior and Local Government and other relevant agencies to ensure the effective enforcement of the moratorium on pass-through fees.

Meanwhile, Abalos lauded the mayors of Metro Manila for their unanimous support of the moratorium on pass-through fee collection.

Metro Manila Development Authority (MMDA) Resolution No. 23-15 issued on October 6 declares the suspension of pass-through fees on national roads and other fees on motor vehicles under Sections 153 or 155 of Republic Act No. 7160.

READ: MMC suspends pass-through fees

The resolutions encourage LGUs to halt the collection of various fees, including but not limited to sticker fees, discharging fees, market fees, toll fees, entry fees, or mayor’s permit fees, for all motor vehicles transporting goods and using local public roads constructed and funded by the LGUs.

Under EO 41, the DILG, within 30 days of the order taking effect, must obtain copies of all LGUs’ existing ordinances related to collecting pass-through fees on motor vehicles, including those linked to Sections 153 and 155 of RA 7160.

DILG, in collaboration with the Department of Trade and Industry (DTI), Department of Transportation (DOTr), Department of Public Works and Highways (DPWH), Anti-Red Tape Authority (ARTA), and Department of Finance (DOF), will review these ordinances to confirm their alignment with RA 7160.

Also within 30 days of EO 41 taking effect, DILG, DTI, DOTr, ARTA, DPWH, and DOF must work together to create guidelines, update existing rules, or issue new ones as needed to ensure EO compliance.

DTI and DILG are also directed to jointly submit reports to the Office of the President, through the Office of the Executive Secretary, on the compliance of LGUs with EO 41.

Failure to comply with the EO will be ground for the imposition of administrative and disciplinary sanctions against erring public officials or employees.

Stakeholders, especially truckers, have been complaining for years about the collection of pass-through fees from cargo trucks by every LGU, especially in Metro Manila, they pass on the way to their delivery destination.

DILG has consistently stated since 2006, through eight memorandum circulars, that collecting pass-through fees is illegal, with the most recent one being Memorandum Circular (MC) No. 2018-033 in 2018.

In April 2021, ARTA, DILG, and DOF signed Joint Memorandum Circular No. 2021-01, which outlines the rules for suspending illegal fees and taxes imposed by LGUs on the transportation of goods and products. This circular reaffirms the principles set out in MC 2018-033.

Alliance of Concerned Truck Owners and Organizations vice president Rina Papa, in an earlier statement, said they “welcome and sincerely appreciate this development.”

Confederation of Truckers Association of the Philippines president Maria Zapata also welcomes the development, as it will help reduce “unnecessary charges” imposed on truckers. Zapata, however, hoped the EO covered all roads and not just national roads because she said LGUs might use that distinction to continue to impose pass-through fees on local roads.

She also hopes LGUs this time will comply with the policy, noting several DILG heads over the years have issued memos saying pass-through fees are illegal to no avail.

The European Chamber of Commerce in the Philippines, meanwhile, said EO 41 “plays an essential role in tempering the inflation rate in the country and in ensuring Filipinos have easy access to essential goods and other necessities.”