LGUs ordered to lower charges for mayor’s permits, clearances

To allow businesses to thrive, the Department of Finance (DOF) and Department of the Interior and Local Government (DILG) have ordered local government units (LGUs) to make regulatory fees and service charges more reasonable.

In a statement on Monday, the DOF said Finance Secretary Carlos G. Dominguez III and DILG Secretary Eduardo Año recently issued Joint Memorandum Circular (JMC) No. 2019-01, which would “ensure that LGU fees do not unduly burden the public but are imposed only to help local governments recover the costs of services they render while making them more business friendly.”

“In order to help LGUs build strong enabling environment for good local governance and serve our constituents fairly, particularly the business sector, we enjoin all LGUs to review, adjust and/or revise their local revenue ordinances in accordance with the rationalized procedure for setting fees and charges,” JMC 2019-01 read.

JMC 2019-01, which will take effect immediately, applies to all fees imposed by LGUs when they render public services, such as barangay clearances, billboard fees, business permits, mayor’s permits and toll fees.

The circular tasked the DOF-attached Bureau of Local Government Finance to come up with a Local Fees and Charges (LFC) Toolkit, “which comprises the direct fixed cost (such as depreciation of equipment and utilities, or electricity and water used) and variable costs (such as salaries of personnel, cost of supplies and materials) of rendering services.”

The DILG, meanwhile, would enjoin LGUs to use the LFC Toolkit so they not only update revenue codes and ordinances but also institutionalize a monitoring system to ensure compliance, the DOF said.

“LGUs have the option to adjust the fees they impose but these should conform to the variables in the LFC Toolkit used in computing the rates and should, as much as possible, [be] uniform for similar or comparable services and functions offered by other LGUs,” the DOF added.

According to JMC 2019-01, “the revised rates shall be imposed through the issuance of an appropriate ordinance and compliance to all legal requirements including the conduct of a public hearing and publications.”

JMC 2019-01 was issued in compliance with Republic Act No. 11032, or the Ease of Doing Business and Efficient Government Service Delivery Act, and the Local Government Code.