1.

The Barangay did not exercise its taxing power to generate additional income as
provided for in Section 152 of Republic Act 7160, thus, resulting in its failure to
implement more beneficial projects that could have been funded out of the
collections generated.

The barangay council did not exercise its power to tax as authorized under Section 152 of
Republic Act 7160 which provides “the barangay may levy taxes, fees and charges that shall
exclusively accrue to them:

1. 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 percent (1%) on such gross sales or receipts.

2. 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.

3. 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 the said
license or permit.

4. Other Fees and Charges – the barangay may levy reasonable fees and charges:

a. On commercial breeding of fighting cocks, cockfights and cockpits;

b. On places of recreation with charge admission fees; and

c. On billboards, signboards, neon signs, and outdoor advertisements.”

For audit period CY 2015-2017, we noted that the source of the barangay income came
from its share in the Internal Revenue Allotment (IRA), share on Real Property Taxes (RPT)
and financial assistance from the provincial government. There was no income derived from
the exercise of barangay taxing power that could have been imposed by the barangay
through an ordinance which could then be utilized to finance more developmental projects in
the community.

Recommendation

We recommend that the barangay exercise its taxing powers pursuant to Section 152 of RA
7160. It is further recommended that the barangay council identify other sources of taxation,
pass corresponding revenue ordinances, and strictly monitor the implementation of such
ordinances.