1st ChanRobles Internet Bar Review : ChanRobles Professional Review, Inc.

5/13/2011

Compare local taxing power under

the current constitution with that
under the 1935 Const.?

On-Line Bar Reviewer

on Taxation

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Reynaldo G. Geronimo
Partner

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Under the 1935 Constitution, local governments

had taxing power only on account of legislative
delegation. Hence, it was ruled that Congress
could revoke all the taxing powers of local
governments.
Under the current Constitution, taxing power is
directly vested on local governments. Thus,
Congress can only put limits, but not take away
local taxing power entirely.
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Taxes, fees, charges

es and other
impositions shall:
l:
Be equitable
e and ba
based as far as practicable
xpayers ability to pay.
on the taxpayers

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Be levied and collected only for

or public
purposes;
oppressiv or
Not unjust, excessive, oppressive,
confiscatory;
Not be contrary to law, pub
public policy, national
r
economic policyy or in restraint
of trade;

What constitutional provision grants

taxing power of local governments?

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Taxation shall be uniform in each local

government unit.

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Loc Taxation
Local
Part I Taxation off
business

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What are the fundamental

p
n
principles
of local taxation?

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Art. X, Sec. 5: Each local government unit

shall have the power to create its own
sources of revenues and to levy taxes,
fees and charges subject to such
guidelines and limitations as the Congress
may provide, consistent with the basic
policy of local autonomy. Such taxes,
fees, and charges shall accrue exclusively
to the local governments.

The collection
ection of taxes, fees, charges and
other impositions
positio shall not be let to any
private person;

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5/13/2011

.in the guise of charges for wharfage,

tolls for bridges or otherwise, or other
taxes, fees or charges in any form
whatsoever upon goods or merchandise;

The revenue collected pursuant to the

provisions of the LGC shall insure to the
benefit of, and be subject to the disposition
by, the local government unit levying the
tax, fee, charge or other imposition unless
otherwise specifically provided herein; and

f. Taxes, fees or charges on agricultural

and aquatic products when sold by
marginal farmers or fishermen;

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Each local government shall, as far as

practicable, evolve a progressive system
of taxation

g. Taxes on business enterprises certified

by the BOI as pioneer or non-pioneer for a
period of six (6) and four (4) years
10
respectively from date of registration

I. Percentage or VAT on sales, barters or

ctions on
o goods or
exchanges or similar transactions
services;

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1. Income tax, except on banks and other

her
financial institutions;
2. Documentary stamp tax;
3. Taxes on estate, inheritance, gifts, and
a
legacies and other acquisitionss mortis
morti
causa;

h. E
Excise taxes on articles enumerated under
the NIRC, as amended, and taxes, fees, or
charges on petroleum products;

Local taxing
axing power,
pow as a generally rule,
cannot
ot extend
exten to:

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What are the

e common
comm limitations
ocal ta
on local
taxing power?

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k. Taxes on premiums paid

d by way
wa of
reinsurance or retrocession;
on

4. Customs duties, registration fees of

vessel and wharfage on wharves, tonnage
dues and all other kinds of customs fees,
charges, and dues except wharfage on
wharves constructed and maintained by
the local government;

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rec pts of
o transportation
j. Taxes on gross receipts
person engaged in the
contractors and persons
n of passengers
pass
transportation
or freight by hire
on carriers
carrie by law, land, or water;
and common

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l. Taxes, fees or charges for the

registration of motor vvehicles and for the
issuance of all kinds
kind of licenses or permits
for the driving
thereof, except tricycles;
riving the

5. Taxes, fees and charges and other

impositions upon goods carried into or out
of or passing through the territorial
jurisdictions of local government units

m. Taxes, fees or other charges on

Philippine products actually exported;
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What is the scope of taxing

power of cities?

n. Taxes fees or charges on Countryside

and Barangay Business Enterprises and
cooperatives duly registered under R.A,
No. 6810 and R.A. No. 6938, otherwise
known as the Cooperatives Code of the
Philippines;

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o. Taxes, fees, or charges of any kind on

the National Government, its agencies and
instrumentalities, and local government
units.

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The city may levy the taxes, fees and

charges which the province or municipality
may impose.
In highly urbanized and independent
component cities shall accrue to them and
distributed according to the LGC.
The rates of city taxes may exceed the
maximum rates allowed for provinces or
municipalities by not more than 50%,
except the rates of professional and
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amusement taxes.

Wha taxes, fees and charges

What
may be imposed by barangays?
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What taxes may a province impose?

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What are the common revenue

reven
ocal govts?
go
raising powers of local

What taxes, fees and charges

may municipalities impose?

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(b) Tax on business of printing and publication;

n;
(c) Franchise Tax;
(d) Tax on sand, gravel and other quarryy
resources;
(e) Professional Tax;
(f) Amusement Tax;
very tru
(g) Annual Fixed Tax for delivery
trucks or van 14

Barangays may impose:

ilers w
Taxes on stores and retailers
with fixed
business establishments
ents with low gross sales
Service fees or charges
arges
Barangay clearance
rance fees
Other fees and char
charges

A province may im
impose ONLY:
ax on tr
(a) Tax
transfer of real property
ownership;
rship;

(a)Tax on business
(b)Tax for sealing and licensing of weights
(c)Fishery rentals, fees and charges

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All local governments

nts may
ma impose:
c
1. Service fees and charges
for services
rendered;;
2. Publicc utility charges;
c
3. Toll fees
ees or
o charges.

Municipalities may levy taxes, fees, and

charges not otherwise levied by
provinces, such as:

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What are the rules relating to the

collection of local taxes?

Thank You
Good Luck

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1. The tax period, unless otherwise fixed,

is the calendar.
2. The obligation accrues on the first (1st)
day of January of each year;
3. But the tax may be paid in quarterly
installments, within the first 20 days of
January or subsequent quarters

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Period of collection: within 5 years from

the date the taxes become due
In case of fraud or intent to avoid payment,
taxes may be collected within 10 years
from DISCOVERY;
Period of prescription suspended:

What periods govern the

collection of local taxes?

The treasurer is legal prevented

Taxpayer requests in writing for a
reinvestigation
Taxpayer abroad or cannot be located.

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Surcharge of not more than 25%

Interest of not more than 2% per
month (but not more than 36 mos.)

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What are the pe

penalties that may
osed fo
be imposed
for non-payment of
local taxes?
taxes

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