7. Other Selected Local Taxes

Local Taxing Power and Revenue Generation under the Local Government Code

Under the Local Government Code of 1991, the vesting of duty, responsibility, and accountability in local government units (LGUs) must be accompanied with provision for reasonably adequate resources to discharge their powers and effectively carry out their functions¹. Guided by these operative principles of local autonomy, LGUs possess the power to create and broaden their own sources of revenue, alongside the right to a just share in national taxes and an equitable share in the proceeds from the utilization and development of national wealth within their respective areas.

To achieve self-reliance and implement their development objectives, LGUs are endowed with the power and authority to levy taxes, fees, and charges. Revenue generated from these local impositions accrues exclusively for the use and disposition of the levying LGU and is retained by it². Local governments may apply these resources and assets for productive, developmental, or welfare purposes, in the exercise or furtherance of their governmental or proprietary powers and functions².

These fiscal powers support the obligation of LGUs to provide basic services and facilities devolved to them pursuant to the Code. For a barangay, such services and facilities include agricultural support services, health and social welfare services, solid waste collection and general hygiene, maintenance of local roads and water supply systems, katarungang pambarangay, and infrastructure facilities such as multi-purpose halls and satellite public markets³.