In 2014, M City approved an ordinance levying customs duties and fees on goods coming into the territorial jurisdiction of the city. Said city ordinance was duly published on February 15, 2014 with effectivity date on March 1, 2014.
a. Is there a ground for opposing said ordinance? (2%)
b. What is the proper procedural remedy and applicable time periods for challenging the ordinance? (4%)
Suggested answer only. Not an official answer and not legal advice.
(a) Yes, the ordinance is void for being ultra vires. (b) The remedy is an appeal to the Secretary of Justice. Under Sec. 133(e), LGC, LGUs cannot levy customs duties reserved for the national government. Under Sec. 187,
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Quick check
Under Section 133(e) of the Local Government Code, which of the following taxes is a local government unit prohibited from levying?
Section 133(e) of the Local Government Code explicitly prohibits local government units from levying customs duties and fees.
Within what period from its effective date must an appeal challenging the legality of a local tax ordinance be filed with the Secretary of Justice?
Section 187 of the LGC mandates that an appeal on the legality of a tax ordinance be filed within thirty days from its effectivity.
How many days does the Secretary of Justice have to decide an administrative appeal challenging a local tax ordinance under Section 187 of the LGC?
Under Section 187 of the Local Government Code, the Secretary of Justice has sixty days from receipt of the appeal to render a decision.
If the Secretary of Justice fails to decide the appeal within sixty days, within what period may the taxpayer file an appeal with the court?
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What is the effect of filing an appeal with the Secretary of Justice under Section 187 on the collection of the challenged local tax?
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Learn more about these topics
1. Local Taxing Limitations
Under Section 133(e) of the Local Government Code, local government units are explicitly prohibited from levying customs duties, registration fees of vessels, wharfage, tonnage dues, and all other kinds of customs fees, charges, and imposts. The power to impose customs duties is reserved exclusively for the National Government under the Tariff and Customs Code. Consequently, any local tax ordinance enacted by a city council that attempts to levy customs duties or fees on goods entering its territorial jurisdiction is ultra vires, unconstitutional, and completely void ab initio for exceeding statutory authority.
2. Secretary Appeal Procedure
Section 187 of the Local Government Code lays down the mandatory administrative procedure for challenging the constitutionality or legality of a local tax ordinance. Any aggrieved taxpayer must file a formal appeal with the Secretary of Justice within thirty days from the effective date of the questioned tax ordinance. The filing of an appeal with the Secretary of Justice does not suspend the accrual and collection of the local tax. The Secretary of Justice is granted a statutory period of sixty days from receipt of the appeal to render a final administrative decision.
3. Judicial Review Appeal
If the Secretary of Justice fails to decide the administrative appeal within sixty days from receipt, or if the Secretary renders a decision affirming the validity of the questioned tax ordinance, the aggrieved taxpayer may seek judicial relief. The taxpayer has thirty days from receipt of the adverse decision or thirty days from the lapse of the sixty-day administrative decision period to file a petition with a court of competent jurisdiction. Direct resort to the courts without exhausting administrative remedies before the Secretary of Justice renders the judicial petition prematurely filed.