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BARANGAY

TAXATION

SCOPE OF TAXING POWERS


(Section 152, Local Government Code)
SEC. 152. Scope of Taxing Powers.- The

barangays may levy taxes, fees, and charges,


as provided in this Article, which shall
exclusively accrue to them:
(a) Taxes On stores or retailers with fixed

business establishments with gross sales or


receipts of the preceding calendar year of Fifty
Thousand Pesos (P50,000.00) or less in the case
of cities and Thirty Thousand Pesos
(P30,000.00) or less, in the case of
municipalities, at a rate not exceeding one

(b) Service Fees or Charges- Barangays may

collect reasonable fees or charges for services


rendered in connection with the regulation or
the use of barangay-owned properties or
service facilities such as palay, copra or
tobacco dryers.
(c) Barangay Clearance- No city or municipality
may issue any license or permit for any
business or activity unless a clearance is first
obtained from the barangay where such
business or activity is located or conducted. For
such clearance, the sangguniang barangay may
impose a reasonable fee. The application for
clearance shall be acted upon within seven (7)
working days from the filing thereof. In the
event that the clearance is not issued within the
said period, the city or municipality may issue

(d) Other Fees and Charges

The barangay may levy


reasonable fees and charges:
(1) On commercial breeding of
fighting cocks, cockfights and
cockpits;
(2) On places of recreation
which charge admission fees;
and
(3) On billboards, signboards,

Meaning of "commercial breeding"


of fighting cocks.
For
purposes
of
imposing
barangay fees and charges on the
commercial breeding of fighting
cocks, commercial breeding shall
mean an annual sale of more than
five (5) fighting cocks of a duly
registered breeder. (Art. 240-d,
IRR)

Meaning of "places of recreation"


For purposes of Sec. 152 of the Code,

the term places of recreation shall


include places of amusement where
one seeks admission to entertain
himself by seeing or viewing the
show or performance or those where
one amuses himself by direct
participation. (Art. 240 IRR)

Approval and review of barangay


tax ordinances.
(procedure should be in accordance with the

Local Government Code and a public hearing


conducted for the purpose prior to the
enactment thereof)
A tax ordinance enacted by the sangguniang

barangay shall, upon approval by the majority


of all its members, be signed by the punong
barangay.
Within 10 days after its enactment, the
sangguniang barangay shall furnish copies of all
barangay ordinances to the sangguniang
panglungsod or sangguniang bayan concerned

If

the sangguniang panglungsod or sangguniang


bayan, as the case may be, fails to take action on
barangay ordinances within thirty (30) days from
receipt thereof, the same shall be deemed approved.

Should the sangguniang panglungsod or sangguniang

bayan, as the case may be, finds the barangay


ordinances inconsistent with law or city or municipal
ordinances, the sanggunian concerned shall, within
thirty (30) days from receipt thereof, return the same
with its comments and recommendations to the
sangguniang barangay concerned for adjustment,
amendment, or modification; in which case, the
effectivity of the barangay ordinance is suspended
until such time as the revision called for is effected.

Publication of barangay tax ordinances;


the language of its text; and the furnishing
of copies thereof.
Within 5 days after the approval of a barangay tax

ordinance, the secretary of the sangguniang


barangay shall cause the posting thereof in the
bulletin board at the entrance of the barangay hall,
and in at least two other conspicuous places in the
barangay.
The text of the ordinance shall be disseminated and
posted in Filipino or English and in the language or
dialect understood by the majority of the people in
the barangay.
Copies of all barangay tax ordinances shall be
furnished the barangay treasurer for dissemination.

Barangay clearance as a prerequisite for


engaging in any business or activity;
action on application therefor.
No city or municipality may issue any license

or permit for any business or activity unless a


clearance is first obtained from the barangay
where such business or activity is located or
conducted.
The application for barangay clearance shall

be acted upon within seven (7) working days


from the filing thereof, and if not issued within
said period, the city or municipality may
proceed to issue the license and permit
therefor.

A barangay is entitled to a share


from the following revenues:
Real property tax (RPT) collections of the

province and city;


Community tax collections when collected by
the barangay:
Internal revenue collections;
The development and utilization of national
wealth;
The proceeds of tax on sand, gravel, and
other quarry sources;

How much is the share of a barangay out


of the proceeds from real property tax?
In case of provinces, twenty-five percent (25%)

of the proceeds from RPT collections of the


province shall accrue to the barangay where
the property is located.
In the case of cities and municipalities within
the Metropolitan Manila Area, thirty percent
(30%) of the proceeds shall be distributed
among the component barangays, within the
city/municipality where the property is located,
as follows:
50% to the barangay where the property is located;
and
50% to be distributed equally among all component

Allocation of shares of natural resources


Section 292. Allocation of Shares. The share (natural resources)

in the preceding Section shall be distributed in the following


manner:
(a) Where the natural resources are located in the province:
(1) Province Twenty percent (20%);
(2) Component City/Municipality Forty-five percent (45%); and
(3) Barangay Thirty-five percent (35%)
Provided, however, That where the natural resources are located in
two (2) or more provinces, or in two (2) or more component cities
or municipalities or in two (2) or more barangays, their respective
shares shall be computed on the basis of:
(1) Population Seventy percent (70%); and
(2) Land area Thirty percent (30%)
(b) Where the natural resources are located in a highly urbanized
or independent component city:
(1) City Sixty-five percent (65%); and
(2) Barangay Thirty-five percent (35%)
Provided, however, That where the natural resources are located in
such two (2) or more cities, the allocation of shares shall be based
on the formula on population and land area as specified in

What is IRA?
The Internal Revenue Allotment (IRA) is the

annual share of local governments out of the


proceeds from national internal revenue taxes.
It is estimated at forty percent (40%) of the
actual collections of national internal revenue
taxes during the third fiscal year preceding
the current year, as certified by the Bureau of
Internal Revenue (BIR).