BACOLOD CITY — Mayor Greg Gasataya has issued a stern directive to all 61 barangays in the city to immediately stop the collection of unauthorized business taxes and clearance fees. The move, formalized through Executive Order No. 08, Series of 2026, follows mounting complaints from the business sector regarding overreach by local village officials.
The Mayor emphasized that these practices not only burden entrepreneurs but also expose barangay officials to significant legal liabilities for violating the Local Government Code (LGC) of the Philippines.
The Executive Order clarifies the specific, narrow taxing powers granted to barangays under the law:
- The ₱50,000 Rule: Per Section 152(a) of the LGC, barangays can only tax stores or retailers with gross annual sales not exceeding ₱50,000.
- Fixed Tax Rate: For these small businesses, the tax rate cannot exceed one percent (1%).
- Prohibited Practices: Barangays are strictly forbidden from using sales brackets, percentages of gross sales, or capital investment amounts to calculate “clearance fees.”
Mayor Gasataya pointed out a critical distinction in local governance:
- Regulatory Fees: Barangay clearance fees are meant to be purely regulatory. They should only cover the actual administrative cost of processing the document.
- Illegal Revenue Generation: Using clearance fees as a primary revenue-generating measure—by scaling the price based on a company’s success or size—is contrary to law.
To restore order and protect the business community, the City Government has laid out a strict roadmap for all barangays:
- Mandatory Review: Every barangay must submit a certified true copy of their current tax ordinances and fee schedules to the DILG-Bacolod City Office.
- Repeal and Amend: Barangays found with illegal provisions in their revenue measures are required to formally amend or repeal those sections to align with the Local Government Code.
- DILG Monitoring: The Department of the Interior and Local Government will actively monitor these submissions and report back to the Mayor’s Office to ensure a uniform, streamlined permitting process across the city.
This crackdown is part of a broader effort to make Bacolod more business-friendly and ensure that local governance remains transparent and legally sound. “We must correct these practices to protect our economy and our public servants,” Gasataya stated.