Can a Barangay Impose Taxes or Fees on Quarrying Activities? (Philippines)

Short answer

No, a barangay cannot impose a “quarry tax.” Under the Local Government Code of 1991 (LGC, R.A. 7160), the power to levy a tax on sand, gravel, earth, ordinary stones, and other quarry resources is granted to provinces (and cities have the same taxing powers as both provinces and municipalities). Barangays, however, may (1) collect barangay clearance fees and other reasonable regulatory/service fees related to businesses operating within their jurisdiction, and (2) receive a substantial statutory share of quarry tax collections made by the province/city where the extraction occurs. Barangays may also regulate certain local impacts (e.g., traffic routing for dump trucks, noise, dust control) through ordinances, so long as they do not duplicate or contradict provincial, city, or national mining laws and regulations.

The legal framework at a glance

1) Local Government Code (R.A. 7160)

Common limitations on LGU taxing powers (LGC, Sec. 133). LGUs may not impose taxes/fees prohibited by the Code or other laws, nor encroach on national taxes or powers reserved to other LGUs.
Provincial power to tax quarry resources (LGC, Sec. 138). Provinces may levy and collect a tax on sand, gravel, and other quarry resources extracted from public lands or waters within their jurisdiction, generally computed per cubic meter with a rate cap set by the Code.
Cities’ taxing powers (LGC, Sec. 151). Cities may levy the taxes and charges that provinces and municipalities may impose; thus, a city may also levy the quarry tax within its jurisdiction.
Municipal taxing powers. Municipalities do not have the quarry tax power; they may levy other business and regulatory fees within the scope of the LGC but not the quarry tax.
Barangay taxing and fee-setting powers (LGC, Sec. 152). Barangays are limited to:
- A small barangay tax on certain retailers below specified gross sales thresholds;
- Service fees and charges for services rendered by the barangay (e.g., barangay certificates, facility use);
- Barangay clearance fees required before the municipality/city issues a business permit;
- Other fees/charges authorized by the LGC—but not including a quarry tax.

2) Philippine Mining Act of 1995 (R.A. 7942) & its IRR

Defines “quarry resources” and sets the policy and permitting architecture.
For ordinary stones, sand, gravel, earth, and other quarry resources, quarry permits are issued at the provincial/city level (through the Provincial/City Mining Regulatory Board with DENR participation), not by barangays.
National environmental laws (e.g., EIA system, clean air/water, hazardous waste) and DENR regulations may apply depending on scale and impacts.

3) Prior consultation & local participation (LGC, Secs. 26–27)

Projects with significant environmental impacts require prior consultations with affected LGUs and communities, and often endorsements by the appropriate sanggunian. Barangays frequently participate through public consultations and may issue resolutions expressing support, conditions, or objections—subject to higher law.

What a barangay cannot do

Impose a “quarry tax.” The LGC explicitly assigns the quarry tax to provinces (and to cities via Sec. 151). A barangay ordinance purporting to levy a tax on extraction per cubic meter, per truckload, or per ton would be ultra vires (beyond its powers) and void.
Impose a disguised tax labeled as a “fee.” A barangay may not impose recurring revenue-raising charges on quarry extraction (e.g., “environmental fee per cubic meter,” “road user fee per load,” “extraction fee per truck”) when these function as taxes rather than cost-based regulatory charges. Courts and the DILG/DOF generally look at substance over form: if the charge is not tied to the reasonable costs of a specific, legitimate regulatory service the barangay actually renders, it is a tax in disguise and invalid.
Regulate or permit quarrying itself. Quarry permits and principal regulatory authority over extraction belong to the province/city (with DENR involvement). A barangay cannot approve, deny, suspend, or revoke quarry permits.

What a barangay may lawfully do

Barangay business clearance (LGC, Sec. 152). Quarry operators, haulers, and contractors maintaining offices/yards in the barangay typically need a barangay business clearance as part of the city/municipal business permitting process. The barangay may charge a reasonable clearance fee (usually a fixed amount, not volume-based).
Service and regulatory fees tied to actual services. The barangay may charge reasonable, cost-based fees for specific services it actually provides, e.g.:
- Verification/inspection fee for conducting on-site checks related to barangay ordinances (safety, traffic, noise).
- Use fees for barangay-owned facilities (e.g., staging areas or access roads that are owned/maintained by the barangay). These must be (a) authorized by ordinance; (b) reasonable and commensurate to documented costs; (c) not duplicative of municipal/provincial charges; and (d) non-confiscatory.
Local impact regulation by ordinance (police power). Barangays may enact reasonable, non-conflicting ordinances to mitigate local impacts, for example:
- Truck routes and hours, speed limits near schools/health centers, no-idling near residential clusters;
- Dust and noise control standards ancillary to national/municipal rules;
- Barangay road protection measures (e.g., axle-weight compliance, spotters at blind corners). These should not regulate extraction itself but rather address neighborhood safety and nuisance issues.
Participation and monitoring.
- Consultation and endorsement: Participate in public hearings; issue barangay resolutions with specific conditions (e.g., water spraying along certain streets, safety marshals at peak hours).
- Community monitoring: Coordinate with the Municipal/City/Provincial Environment Office and DENR/MGB to report violations and request enforcement action.
Receive a statutory share of quarry tax collections. Under Sec. 138 mechanics and the LGC’s inter-LGU revenue-sharing, the barangay where extraction occurs receives a significant percentage of the provincial/city quarry tax collections from that area (commonly remembered as 40% to the barangay, 30% to the province, 30% to the component city/municipality—check your local revenue code for the exact codified split and remittance workflow). This is the principal way barangays benefit financially from quarrying without levying their own tax.

Practical do’s and don’ts for barangay officials

Do:

Codify a clear barangay business clearance schedule (fixed amounts; no per-cubic-meter charges).
Enact impact-mitigation ordinances narrowly tailored to local safety and nuisance concerns, consistent with municipal/provincial ordinances and national law.
Document costs if charging any regulatory/service fee; keep fees commensurate with those costs.
Coordinate with the municipality/city and province for (a) traffic management, (b) road maintenance programs, and (c) enforcement.
Track and claim the barangay’s statutory share of quarry tax revenues from the province/city treasurer.

Don’t:

Don’t pass an ordinance that charges per cubic meter/ton/truckload—that is a quarry tax in substance.
Don’t require a separate “barangay quarry permit” or add a second layer of approval to extraction activities already permitted by the province/city.
Don’t adopt duplicate or conflicting environmental or mining rules; instead, complement higher-level regulations through local implementation (signage, checkpoints with the PNP, barangay tanod deployment).
Don’t set exorbitant “road fees” unless they are (i) tied to barangay-owned roads/facilities, (ii) supported by cost studies, and (iii) not already covered by municipal/provincial fees.

Compliance roadmap for operators engaging a host barangay

Secure the proper quarry permit from the province/city via the PMRB/DENR process (as applicable), including environmental clearances.
Obtain municipal/city business permits, with the barangay business clearance as a prerequisite.
Engage the barangay early: present haul routes, dust/noise controls, and community grievance channels.
Pay the provincial/city quarry tax at the prescribed rate/measurement method; ensure all transfer/waybills reflect volumes and origins for audit.
Honor barangay ordinances on traffic and safety, and pay only those barangay fees that are lawful, fixed, and cost-based.

Typical pitfalls (and how to fix them)

Volume-based “environmental fees” at the barangay level. Fix: Convert to a fixed clearance/inspection fee aligned with documented administrative costs, or repeal if duplicative of higher-level fees.
Conflicting hours/route rules between barangay and municipality. Fix: Harmonize via joint meetings; barangay ordinance should yield to municipal/city ordinances in case of conflict.
Delayed remittance of the barangay’s share of quarry tax. Fix: The barangay treasurer should coordinate with the provincial/city treasurer and request a periodic statement of collections attributable to the barangay, citing the LGC sharing rule and the local revenue code.

Key takeaways

Only provinces (and cities) can levy the quarry tax.
Barangays cannot tax extraction but can:
- Collect barangay clearance and cost-based service/regulatory fees;
- Regulate local impacts (safety, traffic, nuisance) via reasonable, consistent ordinances;
- Receive a statutory share of quarry tax proceeds.
Charges must be reasonable, non-duplicative, and tied to actual services—otherwise they risk being void as ultra vires or as disguised taxes.

Model clause ideas (for barangay ordinances)

Barangay business clearance (fixed fee). “A barangay business clearance is required for any office, yard, garage, or support facility for quarry operations located within the barangay. A fixed fee of ₱____ shall cover administrative processing and verification.”
Traffic management. “Quarry haul trucks shall use Route X between 9:00 p.m. and 5:00 a.m., avoid School Zone Y during class hours, observe a maximum speed of 20 kph along Barangay Road Z, and deploy a flagman at blind corners.”
Dust/noise mitigation. “Operators shall water unpaved sections of designated haul routes as needed to control dust and shall maintain mufflers to meet municipal noise standards.”

(Note: Replace blanks with locally appropriate amounts and routes; ensure consistency with municipal/provincial codes and national regulations.)

Final note

Because revenue-raising powers are strictly construed, any barangay measure that targets extraction volume or mimics the provincial/city quarry tax will likely be struck down. The legally sound path is to focus on clear, cost-based services the barangay actually provides, coordinate with higher LGUs and DENR/MGB on permitting and enforcement, and use the LGC revenue-sharing to fund community priorities.