Atty. Julius Gregory Delgado
THE YELLOW BUS LINES CONTROVERSY
There is an ongoing stand-off between the famous bus liner, Yellow Bus Lines (YBL), plying the route between Koronadal City (also known as Marbel) in South Cotabato to Davao City via General Santos City. The allegation of the City Local Government Unit (CLGU) of Koronadal is that YBL has no Business/Mayor’s Permit to conduct business in the city. The CLGU refused to issue one because of the allegation that YBL is violating an Ordinance requiring all bus lines/public transport to use the City Transport Terminal. However, YBL insists in using their current Terminal in Marbel, which is along the National Highway, rather than utilize the relatively new Public Terminal because it is remotely located.
A case in point is the consolidated cases of common carriers which successfully assailed Section 21 (B) of Ordinance No. 7794, otherwise known as the Revenue Code of the City of Manila (Manila Revenue Code), as amended by Ordinance No. 7807. In the case of City of Manila, et al. vs. Hon. Angel Valera Colet, G.R. No. 120051 (December 10, 2014), the Supreme Court held:
“Under the Philippine system of government, the power of taxation, while inherent in the State in view of its sovereign prerogatives, is not inherent in municipal corporations or LGUs. LGUs may exercise the power only if and to the extent that it is delegated to them. One of the common limitations on the power to tax of LGUs is Section 133(j) of the LGC, carried over from the Local Tax Code of 1973.
Section 133(j) expressly states that the taxing powers of the LGUs shall not extend to the transportation business. Section 133(j) of the LGC is a special provision, which prevails over Section 143(h) of the same Code, a general provision. This interpretation would give effect to both Sections 133(j) and 143(h) of the LGC, and contrary to the assertion of the City of Manila and its public officials, would not render Section 143(h) useless, meaningless, and nugatory. There are other businesses which the LGUs may tax under Section 143(h). Besides, in case of any doubt, any tax ordinance or revenue measure shall be construed strictly against the LGU enacting it and liberally in favor of the taxpayer, for taxes, being burdens, are not to be presumed beyond what the applicable statute expressly and clearly declares.
x x x x x x x x x
In the case at bar, the sanggunian of the municipality or city cannot enact an ordinance imposing business tax on the gross receipts of transportation contractors, persons engaged in the transportation of passengers or freight by hire, and common carriers by air, land, or water, when said sanggunian was already specifically prohibited from doing so. Any exception to the express prohibition under Section 133(j) of the LGC should be just as specific and unambiguous. Second, the construction adopted by the Court gives effect to both Sections 133(j) and 143(h) of the LGC. In construing a law, care should be taken that every part thereof be given effect and a construction that could render a provision inoperative should be avoided, and inconsistent provisions should be reconciled whenever possible as parts of a harmonious whole. (Emphasis and underscoring supplied)
As stated in the above-cited case, LGU cannot enact an ordinance imposing business tax on the gross receipts of transportation contractors. YBL may not be the first and LGU Koronadal may not be the only LGU who will attempt to raise local taxes as the IRA allocation for 2023 has been drastically cut. I just hope that LGUs should not kill the hen that lays the golden egg.