2nd Endorsement

October 2, 2013
PLO No. 2013-139

Respectfully returned to Mrs._____________, Secretary to the Sanggunian, Office

of the Sangguniang Panlalawigan, the attached unnumbered Ordinance of the Municipality
of ______________ entitled, The ______________ Tourism Code of 2013, with the
following comments/opinion to wit:

Under Section 17 of RA 7160, otherwise known as the Local Government Code of

1991, local government units shall exercise such other powers and discharge such other
functions and responsibilities as are necessary, appropriate, or incidental to efficient and
effective provision of the basic facilities enumerated therein, which include for a
municipality, tourism facilities and other tourist attractions, including the acquisition of
equipment, regulation and supervision of business concessions, and security services for
such facilities.

Likewise, Section 447 of the Code provides that the Sangguniang Bayan, as the
legislative body of the municipality, shall enact ordinances, approve resolutions and
appropriate funds for the general welfare of the municipality and its inhabitants pursuant to
Section 16 of this Code and in the proper exercise of the corporate powers of the
municipality as provided under Section 22 of the same Code.

Pursuant to the above provisions, this Office opines that it is within the power of the
Sangguniang Bayan of ________________ to enact its own Tourism Code.

However, this Office finds the following provisions of the Tourism Code as not in
harmony with existing laws, to wit:

1. SECTION 10. THE MUNICIPAL TOURISM COUNCIL (MTC).

- While it is within the power of the Municipal Mayor to call upon any national
official stationed in or assigned to the municipality to advise him on matters
affecting the municipality and to make recommendations thereon, he has no
direct authority over the said officials to compel them to be part of a Council
under the Municipal Government because the nature of their appointment
and function is independent of the powers of the Municipal Government.
Hence, the Sangguniang Bayan or the Municipal Mayor, may only invite or
coordinate with, but cannot mandate the PCSD Personnel and the DENR
Personnel to be part of the MTC without prior approval or agreement with the
heads of the said Personnel.

2. SECTION 33. LEGAL REQUIREMENTS/SUPPORTING DOCUMENTS

AND PROCEDURES FOR REGISTRATION OF TOURISM-ORIENTED
ESTABLISHMENTS.
- The _________ Clearance System under Administrative Order
No. 6, in conformity with the Memorandum of Agreement between PCSD
and DENR dated December 29, 1994 and DOJ Opinion No.90, series of 1994,
recognizes the SEP Act as the primary law in the province of Palawan.
Section 12 of the said Administrative Order provides that upon receipt of
the authorization issued by the ___________, the DENR shall

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 either proceed with the processing of the ECC, issue a certification
of non-coverage, permit, license, lease agreements or other
similar instruments and that the DENR shall not issue an ECC
without the _________ Clearance/Authorization issued by the
__________.

- Hence, Section 33 Par (f) and (e) of the Tourism Code needs review and
appropriate revision. It is the DENR which issues the ECC or the Certification
of Non-Coverage, upon issuance of _________________.

3. SECTIONS 37. LEGAL REQUIREMENTS AND SUPPORTING

DOCUMENTS FOR REGISTRATION OF TRAVEL & TOUR SERVICES;
AND
SECTION 38. ESTABLISHMENT OF BRANCH.

- As reviewed and noted by this Office, the same Pre-Construction and Post-
Construction Requirements are being imposed uniformly for Agencies, Tour
Guides, Vehicles and Organizers, which are found to be inapplicable to some
of the applicants.

- Sections 37 and 38 have to be renumbered or rearranged to avoid confusion.

4. SECTION 53. REGISTRATIONS FEES; AND

SECTION 58. LICENSE AND PERMIT FEES

- Section 129 of the Local Government Code, provides that each local
government unit shall exercise its power to create its own sources of revenue
and to levy taxes, fees and charges subject to the provisions herein, consistent
with the basic policy of local autonomy. However, such power of the LGU is
subject to certain limitations enumerated under Section 133 thereof which
provides that taxing powers of LGUs shall not extend to the following:

(d) Customs duties, registration fees of vessel and wharfage on

wharves, tonnage dues, and all other kinds of customs fees, charges
and dues except wharfage on wharves constructed and maintained
by the local government unit concerned;

(e) Taxes on business enterprises certified to by the Board of

Investments as pioneer or non-pioneer for a period of six (6) and
four (4) years, respectively from the date of registration; xxx

(l) Taxes, fees or charges for the registration of motor vehicles and for
the issuance of all kinds of licenses or permits for the driving
thereof, except tricycles;

(n) Taxes, fees, or charges, on Countryside and Barangay Business

Enterprises and cooperatives duly registered under R.A. No. 6810
and Republic Act Numbered Sixty-nine hundred thirty-eight (R.A.
No. 6938) otherwise known as the "Cooperative Code of the
Philippines" respectively; and

(o) Taxes, fees or charges of any kind on the National Government, its
agencies and instrumentalities, and local government units.

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 - The Tourism Code of ________________ imposes the following tax/fees
to Hotels, Resorts, Inns, Apartels, Pensions, Motels, Restaurants,
Departments Stores and Souvenir Shops, Sports and Recreational Clubs,
Trainings Centers, Museums, Homestays, Travel & Tour Operators/Agencies,
Tour Guides, Tourist Land Vehicles, Tourist Water Vessels, Tourist Air
Transport and Professional Congress Organizer:

1. One-time Registration Fee;

2. Annual Licence Tax;
3. Mayors Permit/Regulatory Fees

- It is the opinion of this Office, based on the existing laws, that the
Municipality of ______________ cannot impose Registration Fees,
License Tax and Regulatory Fee/Mayors Permit on (1) Land Transportation
Vehicles, except Tricycles, because it is within the jurisdiction of the Land
Transportation, Franchising and Regulatory Board (LTFRB), (2) Sea/Water
Transportation Vessel because it is within the jurisdiction of Maritime
Industry Authority (MARINA) and (3) Air Transportation because it is within
the jurisdiction of the Civil Aviation Authority of the Philippines (CAAP).

- Moreover, there is a need to clarify the basis for imposing the Registration
Fee on the above business/establishments, it being similar to Permit
Fee/Mayors Permit which is an imposition in connection with regulatory
measure or police power, and therefore imposing both would constitute
Double Taxation.

- Section 59 of the proposed Tourism Code also explains that the License tax
imposed therein is in the nature of a Business Tax, an exercise of the taxing
power of the LGU. Being a Business Tax, the same must conform to Section
143 Par (h) of the Local Government Code, which refers to business,
not otherwise specified in the preceding paragraphs, which the Sanggunian
may deem proper to tax: Provided that on any business subject to the excise,
value-added or percentage tax under the National Internal Revenue Code, as
amended, the rate of tax shall not exceed two percent (2%) of gross sales or
receipts of the preceding calendar year. The Sanggunian concerned may
prescribe a schedule of graduated tax rates but in no case to exceed the rates
prescribed therein.

5. SECTION 83. PENALTY FOR FAILURE TO REMEDY THE DEFECT,

AND
SECTION 153. PENALTY PROVISIONS

- Section 447 of the Local Government Code provides that Sangguniang Bayan
has the power to approve ordinances imposing a fine not exceeding Two
Thousand Five Hundred (P2,500.00) or an imprisonment for a period not
exceeding six (6) months, or both at the discretion of the court, for violation
of a municipal ordinance. Hence, the fine of P150.00 for every day of delay for
Resorts, in complying with directions during inspections, but not to exceed
P5, 000.00, under Section 83, as well as that in Section 153 imposing a
penalty of P1,000.00 to P5, 000.00 for violation of the Ordinance, are not

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 valid. However, if the violation is pursuant to a provision of a Tax Ordinance,
Section 516 of the same Code empowers the Sangguniang Bayan to impose a
penalty of not less than One thousand pesos (P1, 000.00) nor more than Five
thousand pesos (P5, 000.00), and imprisonment of not less than one (1)
month nor more than six (6) months. Such fine or other penalty, or both, shall
be imposed at the discretion of the court.

6. SECTION 144. INCENTIVES FOR TOURISM-ORIENTED AND

TOURISM-RELATED ESTABLISHMENTS.

- The Tourism Code has to specify whether the exemption from the Liquor
Ban indicated in the said Section is in connection with the Liquor Ban
imposed by the COMELEC during Election Period or in relation to a
Municipal Ordinance. Such exemption may be allowed if the basis of the
Liquor Ban is merely a local Ordinance. However, if it is in relation to the
Liquor Ban imposed by the COMELEC, the power to give exemption is within
the jurisdiction of the said Office and not of the Sangguniang Bayan of
Busuanga.

7. SECTION 152. _________ TO DETERMINE SCHEDULE OF PERMIT

FEES/TOURIST FEES, AND
SECTION 153. SHARING OF PROCCEEDS AND ACCOUNTING.

- Sec. 51 of the Philippine Mining Act of 1995 provides that:

Guano Permit. Any qualified person may be granted a guano

permit by the provincial governor to extract and utilize loose
unconsolidated guano and other organic fertilizer materials in
any portion of a municipality where he has established
domicile. The permit shall be for specific caves and/or for
confined sites with locations verified by the Department's field
officer in accordance with existing rules and regulations.

- Hence, a Guano Permit must first be obtained from the Office of the
Governor, through the Provincial Regulatory Mining Board. It is the
PMRB which sets the requirements for the application of such permit,
not the PCSD.

Other than the above-cited provisions, this Office finds no legal impediment that
would render the Tourism Code of Busuanga not valid.

Respectfully submitted.

_________________
Provincial Legal Officer

_________________
Attorney V

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