1. What are the common revenue measures available to LGUs? (Sec 153, 154, 155, LGC) a. Fees and charges on SERVICES rendered by the LGU including the operation of public utilities b. Market fees for the maintenance and operation of market stalls c. Toll fees for the funding and construction of roads and other infrastructure 2. In what capacity does an LGU impose fees/rentals for the use of market stalls? In its PROPRIETARY CAPACITY and not governmental authority or governmental capacity. As such, the fee is not subject to the test of reasonableness unlike taxes. In imposing fees for the use of market stalls, the LGU is actually leasing out PATRIMONIAL PROPERTY (private property of the LGU). In doing so, the LGU is free to charge such sums as it may deem best, and the prospective lessees are free to enter or not into a lease contract with the LGU. On the other hand, the PRIVILEGE OF OPERATING A MARKET STALL under license is always subject to police power of the government. It may be refused or granted for reasons of public policy and sound public administration. 3. What CONDITIONS must be present before an LGU may impose fees for the use of roads and other infrastructures? a. The toll fee is imposed only for the USE of the road or infrastructure b. The road or infrastructure must be FUNDED AND CONSTRUCTED by the LGU c. The toll fee is NOT in the nature of an IMPORT or EXPORT TAX d. The LGU must recognize the EXEMPTION of the following:
AFP & PNP
Post Office personnel delivering mails Physically handicapped Disabled citizens who are 65 years or older (Sec. 155 LGC)
4. What is the RESIDUAL TAXING AUTHORITY (RTA) of an LGU? (Sec
186, LGC) It refers to the power of an LGU to levy taxes, fees, or charges on any base or subject that is NOT: a. specifically enumerated in the LGC b. taxed under the provisions of the NIRC c. taxed under the provisions of other applicable laws 5. What are the LIMITATIONS on the LGUs RTA? (Sec 186, LGC) a. The limitations under the LGC must be adhered to b. The power to levy additional taxes, fees, and charges must NOT be specifically granted to other LGUs to avoid DOUBLE TAXATION c. The levy must be consistent with the FUNDAMENTAL PRINCIPLES (Section 130 LGC) and not in violation of the COMMON LIMITATIONS (Section 133 LGC) of local taxation. d. PROPER PROCEDURE for the enactment of revenue ordinance must be complied with, including the conduct of prior public hearing and publication of the proposed revenue measure. e. The revenue ordinance must NOT be:
ViolatIve of the constitution or the laws
Unfair or oppressive Partial or discriminatory Prohibitive of trade Inconsistent with public policy
6. May the LGU increase/decrease tax rates?
Yes, but the adjustment should not be made more than once every five (5) years and the adjusted rates should not exceed ten (10) percent of the prescribed rates. If the revision were to decrease the tax rate, the LGU may do it more often than five (5) years. 7. Are the limitations on the increase/decrease of tax rates applicable to fees, service charges, market fees and stall rentals? No. 8. What is the PROCEDURE for the approval and effectivity of a revenue ordinance?
a. Sanggunian ENACTS the ordinance in accordance with its
internal rules. b. Ordinance is PRESENTED to the local chief executive (LCE). c. LCE may APPROVE by signing EACH & EVERY PAGE. He may VETO and return the ordinance to the sanggunian with his objections. d. Sanggunian may RECONSIDER the ordinance with the objections or it may OVERRIDE the veto by 2/3 vote of all its members. e. Within 3 days in the case of component cities and municipalities, or 10 days in the case of barangays, the secretary of the sanggunian which passed the revenue ordinance must FORWARD FOR REVIEW to the sanggunian of the LGU a copy of the approved revenue ordinance. f. Within 30 days from receipt, the reviewing sanggunian shall either EXAMINE the ordinance or TRANSMIT it to the LGU attorney or LGU prosecutor, as the case may be, for prompt examination. g. The LGU attorney or LGU prosecutor is given 10 days from receipt of the ordinance within which to INFORM the reviewing sanggunian of his COMMENTS & RECOMMENDATIONS which may or may not be heeded by the reviewing sanggunian. h. Reviewing sanggunian may void in whole or in part the ordinance if it finds the ordinance ultra vires (beyond the power conferred to the LGU). i. If no action is taken by the reviewing sanggunian within 30 days after submission of the revenue ordinance, it shall be presumed consistent with the law. j. Within ten (10) days from its approval, a certified true copy of the revenue ordinance must be PUBLISHED in FULL for three (3) consecutive DAYS in a newspaper of local circulation, OR, where there are no newspapers of local circulation, the certified true copy of the revenue ordinance may be POSTED in at least two (2) conspicuous and publicly accessible places. (Sec. 188, LGC) k. Copies of the ordinance must be furnished to the local treasurer for public dissemination. 9. Before the enactment of a revenue ordinance, a PUBLIC HEARING must be had. What is the procedure re public hearings? a. Proposed revenue ordinance is FILED in the sanggunian. b. Within ten (10) days from filing, the proposed ordinance must be PUBLISHED for three (3) consecutive days in a
newspaper of local circulation OR POSTED simultaneously in
at least four (4) conspicuous public places within the LGUs jurisdiction. c. Sanggunian sends WRITTEN NOTICES of the proposed revenue ordinance to interested and/or affected parties operating or doing business within the LGUs territorial jurisdiction. The NOTICES shall specify the date or dates and venue of the public hearing or hearings. The initial hearing shall be held not earlier than ten (10) days from the sending out of notice or notices, or the last day of publication, or date of posting, whichever is later. d. There can be as many CONTINUANCES of the public hearing as may be needed to afford all concerned the opportunity to express their views. e. The secretary of the sanggunian shall prepare the MINUTES of such public hearing and shall attach to the minutes the position papers, memoranda and other documents submitted by the participants. 10. What are the ADMINISTRATIVE REMEDIES against a void revenue ordinance (RO)? A person with proper LEGAL STANDING can: a. Assail RO during public hearings. b. If enacted, assail before the local chief executive who may veto in whole or in part. c. If approved, assail before the reviewing sanggunian (if applicable) d. If reviewing sanggunian approves (or if there is no reviewing sanggunian), appeal to the DOJ - Secretary of Justice within 30 days from the effectivity of the assailed RO. DOJ is given 60 days to decide on the appeal. The DOJ may review only the legality or constitutionality (but never the wisdom) of the RO. DOJ can not substitute the RO with a different version. e. If appeal to the DOJ denied, or if no action is taken by the DOJ within 60 days, appeal to a court of competent jurisdiction (REGIONAL TRIAL COURT) within 30 days from denial of appeal or expiration of the period of 60 days. f. If RTC decides against the taxpayer, he may elevate the matter to the SUPREME COURT via petition for review on certiorari (RULE 41, Section 2[c]) 11. Requirements of appeal to the RTC. a. Must be in the nature of an action for DECLARATORY RELIEF to determine the constitutionality or legality of a revenue ordinance if there is no QUESTION OF FACT and BEFORE BREACH OR VIOLATION of the questioned RO.
b. If there is a breach or violation that takes place before the
final determination of the case, the action will be CONVERTED into an ORDINARY ACTION and the parties shall be allowed to file necessary pleadings. If, on the other hand, the person questioning the RO pays the tax during the pendency of the case, the issues DO NOT become moot and academic.