Bacolod Mayor Greg Gastaya has issued an executive order directing all barangays to immediately cease and desist from collecting unauthorized business taxes and clearance fees that do not comply with the Local Government Code (LGC).
The mayor on Thursday, April 17, said practices that violate the LGC must be corrected to protect the business sector and shield barangay officials from potential legal liabilities.
The directive follows several complaints from the business sector regarding barangays imposing taxes beyond their legal authority and computing clearance fees based on gross sales or capital investment, he said.
Under Section 152(a) of the Local Government Code, a barangay’s taxing power is limited strictly to stores or retailers with gross sales not exceeding ₱50,000, at a rate not higher than one percent, Gasataya said in Executive Order No. 08, Series of 2026.
The executive order clarifies that any “business tax” imposed outside this narrow scope is contrary to law, he said.
Furthermore, the order prohibits barangays from using sales brackets or percentages to determine clearance fees, Gasataya said, noting that such fees must remain purely regulatory and commensurate with the actual cost of regulation rather than being used as a revenue-generating measure, he added.
To ensure strict compliance, Gasataya’s executive order directs all barangays to submit certified true copies of their tax ordinances and fee schedules to the DILG-Bacolod City Office.
Barangays are required to formally amend or repeal any provisions in their revenue measures that are inconsistent with the law.
The DILG will monitor these submissions and report compliance status to the Office of the City Mayor to ensure uniform adherence to the streamlined permitting process.*
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