Does NCAP violate Local Government Code on taxation?

MANILA, Philippines — The Supreme Court (SC) is questioning whether the no-contact apprehension policy violates the fundamental principle of local government taxation as oral arguments on the NCAP showed that the private service provider receives more than 50 percent of the traffic fines collected by local government units (LGUs) in Metro Manila.

Associate Justice Japar Dimaampao raised the question as the SC wrapped up oral arguments on the NCAP on Tuesday.

QPax Traffic Systems Inc. provides the surveillance cameras and AI-powered management system for the NCAP.

Dimaampao said that based on the joint venture agreements, QPax gets the lion’s share of traffic fines collected by the LGUs.

He cited that in Manila, QPax gets 65 percent of the traffic fines collected while the city government receives 35 percent.

In Parañaque and Valenzuela, the service provider also receives 65 percent. In Quezon City, QPax is entitled to 60 percent of the traffic fines collected.

“Section 130 (b) of the Local Government Code provides that revenue collected should solely be for the benefit of and subject to the disposition of the LGUs… Is this not a clear violation of the law?” Dimaampao asked the respondents during the hearing.

In response, Solicitor General Menardo Guevarra, who represents the government respondents, argued that the fines collected through the NCAP are part of the police power of the LGUs and are not revenue-raising measures.

“It’s not a tax, it’s a regulatory fee pursuant to the police powers delegated to the LGUs,” Guevarra said.

He said the government allows such arrangement under the private-public partnership scheme.

Some lawmakers have questioned the legality of what they describe as the outsourcing of law enforcement to the private sector.