License/Regulatory Fees

American Mail Line v City of Basilan

G.R. No. L-12647 (May 31, 1961)

American Mail Line and other foreign shipping companies filed a petition for
declaratory relief, asking the Court to determine the validity of anchorage fees
being collected by the City Government of Basilan pursuant to the local Port
Area Ordinance. Said ordinance imposed a fee of centavo (P0.005) per
registered gross ton of the vessel for the first twenty-four (24) hours, or part
thereof, and for succeeding hours, but not to exceed seventy-five pesos (P75.00)
per day, irrespective of the greater tonnage of the vessels. At the time, the harbor
fee being imposed by the National Government was fifty pesos (P50.00). The
City argues that the ordinance in question was enacted in the exercise of its
police power and that the fees imposed therein are for purely regulatory
purposes.

ISSUE: Whether the City of Basilan had authority to enact the questioned
ordinance and to collect the anchorage fees prescribed therein?

RULING: Under its Charter, the City of Basilan had the authority, among others,
(1) to levy and collect taxes for general and special purposes in accordance
with law; and (2) to fix the charges to be paid by all watercraft landing at or using
public wharves, docks, levees, or landing places.

It is clear from the foregoing that the City of Basilan was not granted a blanket
power of taxation. The use of in accordance with law clearly discloses the
legislative intent to limit the taxing power of the City. The power to regulate as
an exercise of police power does not include the power to impose fees for
revenue purposes. Fees for purely regulatory purposes may only be of
sufficient amount to include the expenses of issuing the license and the
cost of the necessary inspection or police surveillance, taking into account
not only the expense of direct regulation but also incidental expenses.

The fees herein, being based upon the tonnage of the vessels, have no proper or
reasonable relation to the cost of issuing the permits and the cost of inspection or
surveillance. In fact, the fee imposed exceeds even that imposed by the National
Government. All these circumstances point to the conclusion that the fees were
intended for revenue purposes, in excess of the authority conferred upon the City
by law.