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· HANDOUT NO. 004-B

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Reminders in Local Taxation

•
,oncepts

1. The power of local government unit (LGU) to (A) create its O\Vl"I sources of revenue; and
(B) to levy taxes, fees, and charges (See Sec. 5, Art. X, 1987 Constitution and Sec. 129, LGC).
Congress ,c annot enact laws depriving LGU from e erdsing such power to tax but it may set
guidelines and limitations for th exercise. Such taxes, fees and charges shall accrue exclusively
to the LGUs.

2. Local government ta es are taxes that are imposed and collected by the local
government units in order to raise revenues to enable them to perfomt the functions for which
they have been organized.

3. The power of local government units to impose taxes within its territorial jurisdiction
erives from the Constitution itself, wl1ich recognizes the power of these units ''to create its
' :twn sources of revenue 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."
(Yamane vs. BA Lepanto Condominium Corporation, 474 SCRA 258).

. 4. The State is mandated to en sure local autonomy of local governments, and local
~ governments are empowered to levy taxes, fees, and charges that accrue exclusively to them,
subject to congressional guidelines and limitations (City of Davao vs. ETC, Branch XII, Davao CihJ,
· 467 SCRA 280).
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Sources or basis of a local government uhit's power to tax
•

The power is derived from (a) The provisions of Sec. 5 Art. X of the 1987 Constitution;
and (b) Sec. 129 of the Republic Act 7160, otherwise known as the Local Government Code of
1991 (LGC). ·

Nature of the taxing power of local governments

•

Local taxing power is (a) not inherent; (b) exercised only if delegated to them by law or
to
Constitution; (c) not absolute; and (d) subject limitations provided by law.

Aspects of local taxing power

1. They are (a) local taxation ; and (b) real property taxation. ~
2. The most well-known mode of local government taxation is perhaps the real property
tax, which is governed by Title II, Book II of the Code: and which bears no application in this •

case (FELS Energy, Inc. vs. Province of Batangas, 516 SCRA 186).
j

Scope of a local government unit's power to levy other taxes, fees or charges

(a) On any base or subject; and (b) not specifically en~erated under the code or taxed
der the NIRC or other applicable law.
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_,.,..... .. . •
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Limitations
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\..oc.a\ \~ sb.a.\\. n.o\. 'oe: ,a) -un\ust-, \\)) e~c:.ess\ve·, \c.) Ot>'?I essive~ (.d) : (~~ I
contrary to dec\ared national 'Policy; and li) must 'oe mad e W\\n -pnot l)U'ou.c. b.ea-rm'b ... . \ ~
LGC).
•

Doctrine of preemption or exclusion

•
.
Where the national government elects to tax a particular area, it imp1iedly withhol,
from the Local government the delegated pow er to tax the same field . This d octrine principa1
rests upon the intention of ,Congress.

Excluded impositions (pursuant to tl1e doctrine of preemption)

(a) Taxes which are lev ied under the NIRC, unless otherwise p rovided by LGC of 19
(b) Troces, fees, etc. which are imposed under the Tariffs and Customs Cod e; (c) Taxes f es, e
the imposition of which contravenes existing governmental p olicies or which v es
fundamental principles of taxation; and (d) Taxes, fees and other charges imp osed Wlder spe
law.

Fundamental principles governing local taxation

•

Local taxation shall be governed by the following principles : (a) shall be unilorn1 in E
local sub-unit; (b) shall be equitable and based as much as possible on the taxpayer's a~ilil
pay; (c) levied for public purposes; (d) shall not be unjust, excessive, oppressive
confiscatory; (e) shall not be contrary to law, public policy, national economic policy, o
restraint of trade; (f) collection of local taxes and other impositions shall not be let to any per
(g) the revenues collected under the Code shall inure solely to the benefit of, and subjec
disposition by, the LGU levying the tax or other imposition unless otherwise specifi,
provided therein; and (h) each LGU shall, as far as practicable, evolve a progressive systei
taxation.
•

Local taxing authority

•
The taxing power shall be exercised by the Sanggunian of the LGU concerned throuf
appropriate ordinance (Sec. 132, LGC).

Kinds of local tax ordinances

The kinds of local tax ordinances are (a) those imposing a fee or tax espe
authorized by the LGC for the local govenllll.ent units to impose; and (b) those imposing a J
tax not specifically enumerated under the LGC or taxed under the provisions of the Na1
Internal Revenue Code (NffiC) or other applicable laws.

Requisites for the imposition of a fee or tax authorized by the Local Government Code

· The rate should be (a) within the range of rate provided by the Code; :) un
throughout the political subdivision; and (c) fair and reasonable to the taxpayers .

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Requisites for imposition of a fee or tax not specifically enumerated by the Local
Government Code

The requisites are: (a) It is not against any fundamental principles of the local taxation;
(b) It is not one of the prohibited impositions under the common limitations on the taxing
powers of local government units; (c) It is not one of the taxes, fees or charges denied the local
government units by the Code; and (d) The taxes shall not be (i) unjust; {ii) excessive; (iii)
oppressive; (iv) confiscatory; and (v) contrary to declared national policy (Sec. 186, LGC).

Common revenue raising powers of local govemment units

The common revenue raising powers of local government units such as provinces, cities,
municipalities and barangm1s: .
•

(a) Fees, service or user charg·es: May impose and collect fees and service or user
charges for any services rendered by LGUs in an amount reasonably commensurate
to such service be reasonable (Sec. 153, LGC; Art. 244 (a), Rules and Regulations
Implementing the LGC of 1991).
(b) Public utility charges: Collect charges for services rendered by LGUs in connection
with the operating of the public utilities owned, operated and maintained within
their jurisdiction (Sec. 154, LGC).
(c) Toll, fees or charge~: LGUs may prescribe the terms and conditions, through an
appropriate orclmance enacted by their sanggunians, for the use of any public road,
pier or wharf, waterway bridge, ferry or telecommunication system funded and
constructed by the local government code (Sec. 155, LGC; Art. 244 (c), Rules and
regulations Implementing the Local Government Code of 1991).

Fundamental principles of locaI taxation

., The following fundamental principles shall govern the exercise of taxing and other
• revenue - raising po·w ers of the local government units:

(a) Uniformity principles. Taxation shall be uniform in each local government unit.
UnifoI"mity is required only within the territorial jurisdiction of a province, city,
municipality, or a barangay;
(b) Taxes, fees, charges and other impositions shall:
(i) be equitable and based as far as practicable on the taxpayer's ability to
pay;
(ii) be levied and collected only for public purpose;
(iii) not be unjust, excessive, oppressive, or confiscatory; and
(iv) not be contrary to law, public policy, national economic policy or in
restraint of trade;
(c) Not let to any private person. The collection of local taxes, fees, charges and other
impositions shall in no case be let to any private person;
1
(d) Inures solely to the local government levying it. The revenue collected W1der the
LGC shall inure solely to the benefit of, and be subject to the disposition by, the LGU
levying the tax, fee, charge and other imposition unless otherwise specifically
•
provided by the LGC.

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(e) Progressivity principle. Each LGU shall, as far as practicable, evolve a progressive
system of taxation (Sec. 130 LGC; Art. 219, Rule XXX, Rules and regulations
Implementing tlie Locnl Government Code of 1991).

Common limitations on the taxing powers of LGU or taxes that cannot be imposed by the
LGUs

1. Unless otl1erwise provided in the LGC, the exercise of taxing powers of provinces, cities,
municipalities, and barangays sh~ extend to the levy of the following:

(a) Income tax, except when levied O·n banks and financial institutions;
(b) Documentary stamp tax;
(c) Taxes on estate, inheritance, gilts, legacies and other mortis causa, except tax on
transfer of real property ownership;
(d) Customs duties, registration fees of vessels 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 unit;
(e) Taxes, fees and charges and other imposition upon goods carried into ot out of, or
passing through the territorial jurisdiction of the LGUs in the guise of charges of
wharfage, tolls for bridges or otl1.erwise, or other taxes or charges in any fora,
whatsoever upon such goods or merchandise;
(f) Taxes, .fees, or charges on agricultural and acquatic products when sold by the
•
marginal farmers or fishem,en;
(g) Taxes on business enterprises certified to by the Board of Investments as pioneer or
non -pioneer for a period of 6 and 4 years from the date of registration respectively;
(h) Excise taxes on articles under the NIRC;
(i) Taxes, fees, or charges on petrole11m products;
(j) Percentage or value-added tax on sales, barters or exchanges or similar transactions
on goods or services;
(k) Taxes on gross receipts of transportation contractors and persons engaged in the
transportation of passe11gers or freight by hire and common carriers by air, land or
water except as provided in the NIRC; •

(1) Taxes on premiums paid by way of reinsurance or retrocession;

(m)Taxes, fees or charges for the registration of motor vehicles and for the issuance of all
kinds of license or permits for the operation thereof, except tricycles;
(n) Taxes, fees, or other charges on Philippine products actually exported therefrom
except as provided by the NIRC; and
(o) Taxes, fees, or charges on Countryside and Barangay Business Enterprises and
Cooperatives (Sec. 153, LGC; Part 3, Rule XXX Art. 233 Rules nnd regulations
In1plementing the Local Government Code of 1991).

2. Congress has the constitutional authority to impose limitations on the power to tax of
local government units and Section 133 of the Local Govemme11t Code is one such limitation
(Petron Corporation vs. Tiangco, 551 SCRA 484).

3. While business taxes imposed in the exercise of police power for regulatory purposes
are paid for the privilege of carrying on a business in the year the tax was paid, income tax is a
tax on all yearly profits arising from property, professions, trades or offices, or as a tax on a
person's income, emoluments, profits and the like - it is a tax on incomel whether net or gross

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realized in one taxable year (Mobil Philippines, Inc. vs. The City Treas,,rer of Makati, 463 SCRA
379). .

4. The imposition of local business tax based on gross revenue inevitably results in double
taxation -taxing of the same person twice by the s~e jurisdiction over the same thing ( Ericsson
Telecomn1unications, Inc. vs. City of Pnsig, 538 SC.RA 99). The respondent city treasurer
erroneously treated the asse sment and collection of business tax as if it were income tax (Id.).

5. The prohibition with respect to petroleum products extends not only to excise taxes
thereon, but all ''taxes, fees and cl,arges." Even absent Article 232, local government units
cannot impose business taxes on petroleum products (Petron Corporation vs. Tiangco, supra).

Scope of taxing powers of a city •

The taxing power of a city is the same as that of the province or municipality. (a) Rate
may not exceed by not more than 50%. Except: professional and amusement taxes; and (b)
Taxes, fees or other charges levied and collected by highly urbanized and independent
component cities accrue solely to them (Sec. 151, LGC).

Scope of taxin,g powers of a province which may also be exercised by a city

The taxes, fees, and charges which a province or a city may levy are:

(a) Tax on transfer of real property ownership (Sec. 135, LGC);

(b) Tax on business of printing and publication (Sec. 136, LGC);
(c) Franchise tax (Sec. 137, LGC);
(d) Tax on sand, gravel and other quarry resources (Sec. 138, LGC);
(e) Amusement tax (Se·c. 140, LGC); and
(f) Annual fixed for every delivery truck or van manufacturer or producers, wholesalers
1 • of, dealers, or retailers in, certain products (Sec. 141, LGC).

Section 138 of the Local Government Code (LGC) which authorizes provinces to levy
and collect tax on ordinary stones, sand, gravel, earth and other quarry resources extracted from
public lands or from beds of seas, lakes, rivers, streams, creeks and other public waters within
its territorial jurisdiction should be deemed to cover extractions for both personal and
commercial uses (Lepanto Consolidated Mining Company vs. Hon. Ma,,ricio B. Ambanloc in his
cnpacity as the Provincial Treasurer of Benguet, G.R. No, 180639, June 29, 2010).

The Revised Benguet Revenue Code provides that the sand and gravel tax must be paid
prior to the issuance of the permit to extract sand and gravel. It enumerates four kinds of
permits: commercial, industrial, special and gratuitous. Special permits cover only personal use
of the extracted materials and did not allow perrnitees to sell materials coming from his
concession. However, only gratuitous permits were exempt from the sand and gravel tax. It
follows that persons who applied for special permits needed to pay the tax, event though they
did not extract materials for commercial purposes (Lepanto Consolidated Mining Company vs. Hon. •
1 Mauricio B. Ambanloc in }1is capacitlJ as the Provincial Treasurer of Benguet, G.R. No. 180639, June 29,
2010).
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Trucing powers of a municipality

Except as otherwise provided in the LGC, municipalities may levy taxes, fees, and
.. charges not otherwise levied by provinces (Sec, 142, LGC).

1. Tax on business
a. On n1anufacturers, assemblers, repackers, p rocessors, brewers, distillers,
rectifiers, and compounder s of liquors, distilled spirits, and wines;
b. On manufacturers of any article of commerce of w hatever kind or nature;
NOTE: If the basis of the tax is prodi,ction and not the quantity of commodity sold,
tlie tax is business tax. If the basis of the tax is the quantity of commodity sold, the tax
applicable is the Valtte-Added Tax.
c. On wholesalers, distributors, or d ealers in any article of commerce of whatever
kind or nature;
d. On exporters, and on manufacturers, millers, producers, wholesalers,
' distributors, dealers or retailers of essential commodities;
e. On retailers;
NOTE: Barangays s11all have the exclusive power to lemJ taxes on gross sales or
receipts of the preceding calendar year of PS0,000 or less, in the case of cities, and
P30,000 or less, in the case of municipalities.
f. On contractors and other independent contra·ctors;
g. On banks and other financial institutions;
h . On peddlers engaged in the sale of any m erchandise or article of commerce; and
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i. On any business which the sanggunian concerned may deem proper to tax .
NOTE: Business tax shall be payable for every separate or distinct establishment or place
where business subject to the tax is conducted and one line of business does not become exempt by
being conducted with some other business for which such tax has been paid. The tax on a business
must be paid by the person conducting the same.

2. Fees and charges on business and occupation except professional tax reserved for the
province m1.der Sec. 139, LGC (Sec. 147, LGC).
3. Fees for sealing and licensing of weights and measures (Sec. 148, LGC).
4. Fishery rentals, fees and charges (Sec. 149, LGC) .

Taxing powers of a barangay

Scope of the taxing and revenue raising powers of a barangay:

1. Taxes -
{a) In cities and municipalities
(i) Transaction taxed: Store or retailers with fixed business
• establishments
(ii) Cities: PSO, 000.00; Municipalities: P30,000.00
(iii)Tax base: gross sales or receipts
2. Service fees or charges
(a) Transaction taxed: Service rendered in connection with the regulation or use
of barangay-owned properties or service facilities such as palay, copra, or
tobacco dryers.
(b) Tax rate: Reasonable fees or charges.
3. Barangay clearance
(a) Pre-requisite for the issuance of license or permit for any activity

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(b) Tax rate: Reasonable fee

4. Other fees and charges
(a) Transaction or subjects taxe d: ·
(i) Commercial breeding of figh ting cock, cock figh ts and cockpits;
1

(ii) Plaoes of recreation which charge admission fees; and

(iii) Billboards, signboards, neon signs, and outdoo r adver tisements.
(b) Tax rate: Reasonable fees and charges (Sec. 152, LGC).

Unlike in the case of the NIRC, there is no express provision in the Local Government
Code (LGC) prohibiting courts from issuing an injunction to restrain local governments from
collecting taxes. However, injunctions enjoining the collection of local taxes are s till frowned
upon and court should thetelat:e e.x ~t c\SC?. e.')(.t!e.m.e cauti.on m \Ssum~ such m \uncnons. And \he
tequu:emen\s tot tbe issuance oi a writ ol p1e\iminary m.Junction \ aid down u.ndeT section 3, rule
58 of the Rules of Court are applicable, namely: (1) the existence of a clear and unmistakable
right that must be protected and (2) an urgent and paramount n ecessity for the writ to prevent
serious damage (Angeles City vs. Angeles City Electric Corporation and Regional Trial CCJurt Branch
57, Angeles City, G.R. No. 166134, June 29, 2010).

Taxes, being the lifeblood of the government, should be collected promptly, without
unnecessary hindrance or delay. In line with this principle, the National Internal Revenue Code
of 1997 (NIRC) expressly provides that no court shall have the authority to grant an injunction
to restrain the collection of any national internal revenue tax, fee or charge imposed by the
NIRC. An exception to th.is rule is when, in the opinion of the Court of Tax Appeals (CTA) the 1

• collection thereof may jeopardize the interest of the government and/ or the taxpayer (Angeles
CihJ vs. Angeles City Electric Corporation and Regional,Trial Court Branch 57, Angeles City, G.R No.
166134, June 29, 2010).
•

Provinces

1. Tax on transfer of real 1. Tax on business 1. Taxes

property ownership
a. On manufacturers, On stores or retailers with fixed
assemblers, repackers, business establishments
processors, brewers,
distillers, rectifiers, ► Gross sales or receipts of
and compounders of the preceding calendar
liquors, distilled year of P50,000 or less,
spirits, and wines • in the case of cities
P30,000 or less, in the
b. On manufacturers of '--,:;:.___...:.::;.:..:;..~~.:..--
• case of munici -- alities
----;
any article of
2. Tax on business of commerce of whatever 2. Service fees or charges
printing and publication kind or nature
Reasonable fees or charges for
c. On wholesalers, services rendered in connection
distributors, or dealers with the regulations or the use
in any article of of barangay-owned properties or •

commerce of whatever service facilities such as pnlay,

kind or nature ers.

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3. Franchise tax d. On exporters, and on L.. 3.:..___:
.=.: B:.:a::.r=an:..:..a;a-::,,i_c.;;.l;:.;,e~
a r:.an
:._c_e_ _ _-t
manufacturers,
4. Tax on sand, gravel and millers, producers, 4. Other fees and charg s
other quarry resources wholesalers, The barangny may levy
(from ublic lands distributors, dealers or reasonable fees and charges:
retailers of essential
.. commodities ► On commercial breeding
5. Professional ta of fighting cocks,
e. On retailers cockfights and cockpits;
► Annual professional
tax on each person f. On contractors and ► On places of recreation
engaged in the other independent which charge admission
exercise •Of · contractors fees; and
professio11 requiring
government g. On banks and other ► On billboards,
•
e amination financial institutions signboards, neon signs,
and outdoor
h. On peddlers en gaged advertisements.
in the sale of any
merchandise or article
of commerce

• i. On any business
which the sanggunian
concerned may deem •

6. Amusementtax 2. Fees and charges

To be collected from the ► Reasonable fees and

proprietors, lessees, or charges on business
operators of theaters, and occupation, and
cinemas, concert halls, on the practice of any
circuses, boxing stadia, and profession or calling
other places of amusement NOT REOUlKlNG
at a rate of not more than g_ovemment
30% of the gro$ receipts examination
from ADMISSION FEES.

7. Annual fixed tax for · 3. Fees for sealing and •

every delivery truck or van licensing of weights and

of manufacturers or measures
1-----...,;._------------f
producers, wholesalers of,
dealers, or retailers in, 4. Fishery rentals, fees and
certain products charges

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 Siti1s of municipal taxation (Sec. 150, LGC)

1. Place of sale (with branch or sales outlet ther in): Municipality or city where the branch
or outlet is located.

2. Place of sale (no branch or sal · outlet): Municipality or city of principal office (not in the
place of sale).

3. If manufacturer, a embler, contractor, producer or exporter with factory, project office,

plant or plantation:
a. 30% of recorded sales in the principal office: city or municipality where the principal
office is located;
b . 70% of recorded sales in the prin•cipal office: city or municipality where the FPPP is
located (pro rata if FPPP are located in differen t municipalities or cities).
c. If plantatior1 is located in some other place than tha t where the factory is located, the •

•
foregoing 70% shall be subdivided as follow s:
- 60% to the city or m unicip ality where the factory is located,
- 40% to the city or municipality where the plantation is located.

Public hearing

Public h earing apparently is not necessary w hen the tax or fee is imposed on a tax base
or subject specifically enumerated in the Local Tax Code. (Berdin vs. M ascarinas, 526 SCRA 592)

Community tax

Cities or municipalities may levy a community tax

Individuals liable to community tax

1. Every inhabitant of the Philippines 18 years of age or over who has been regularly
employed on a wage or salary basis for at leas t thirty 30 consecutive working days during any
I calendar year;
2. Every inhabitant wh o is engaged in business or occupation;
Every inhabitant wh o owns real property with an aggregate assessed value of Pl,000 or m ore;
or
3. Every inhabitant wh o is required by law to file an incon,e tax return. ,

Rate of community tax for individuals

1. Annual additional tax of PS and an annual additional tax of P l for every Pl,000 of
income regardless of whether from bu siness, exercise of profession or from property which in
no case shall exceed PS,000.
1
2. In the case of husband and wife, the additional tax herein imposed shall be based upon
the total prop erty owned by them and the total gross receipts or earnings derived by them.

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Juridical persons liable to community tax

Every corporation no matter how created or o rganized, \ h ether domestic or r ident ,

foreign, engaged in or doing business in th Philippine shall pay an annual community l x of
P500 and an annu al additional tru , which, in no case, shaU e c ed Pl0,000.

Exemptions

The following are e ..~pt £ron1 tl1e community tax: (1) diplom c tic and consular
representatives; and (2) transient visitors when their stay in the Ph ilippines does not exceed
three (3) m on ths.

Place of payment

(1) In the place of reside.nee of the individual; or (2) In the p lace wh ere the principal
office of the juridical entity is located.

Tin1e for payment

1. The community tax shall accrue on the first day of January of each year which shall be
paid n ot later than the last ,d ay of February of each year.

• 2. If a person reaches the age of eighteen (18) years or otherwise loses the benefit of
•
exemption on ·or before the last day of Tune, h e shall be liable for the community tax on the day
he reaches such age or upon the day the exemption ends.

3. Persons who come to reside in the Philippines or reach the age of eighteen (18) years on
or aftet the 1s t day of July of any year, or who cease to belong to an exempt class or after the
same date, sh all n ot be subject to the community tax for that year.

4. If a p erson reaches the age of eighteen (18) years or loses the benefit of exemption on or
before. the last d ay of March, he sh all h ave twenty (20) days to pay the community tax without
becoming d elinqu ent.

5. Corporation s establish ed and organized on or before the last day of June sh all be liable
for the coinmunity tax for that year.

6. But corporations established and organized on or before the last day of March shall ha ve
twen ty (20) days within w ltich to pay the community t ax without becoming delinquent.

7. Corporations established and o rganized on or. after the firs t day of July shall not be
·ect to the community tax for that year.

8. If the tax is n ot p aid wi thin the time p rescribed above, there shall be added to the
aid amonnt an interest of 24% p er annum .from the due date until it is paid.

tation of community tax certificate on certain occasions -

• When an individu al subject to tl1e community tax
(a) acknowled ges an y document before a notary public;

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• • •

(b) takes an oath of office upon election or appointment to any position in the
government service;
(c) receives any license, certificate, or pernut from any public authority;
(d) p ays any tax or free;
(e) receives any money from any public fund; •

(f) transacts other official business; or

(g) receives any salary or wage from any person or corporation;

it sh all be the duty of any perso11 or corporation with w h om such transaction is made to
require such individual to exhibit the community tax certi ficate.

2. The community tax certificate required to be p resen ted shall be the on e issued for tl1e
current year., except for the p er iod fTom January until the 15th of April each year, in which case,
the certificate issued for the preceding year shall suffice.

Power to prescribe penalties for tax violations and limitations thereon

1. The Sanggunia,1 is authorized to prescribe fines or other penalties for violation s of tax
ordinances, provided:

a. m no case shall fines b e \ ess than "Pl,C)C)() not more than l'5,()()Q
b . not shall \he imprisonment b e less than one (1) month nor more than six (6)
months.

2. Such fine or other penalty shall be imposed at the discretion of the court.
3. The Sangguniang Barangay may p rescribe a fine of n ot less than PlOO nor more than
Pl,000.00 (Sec. 51 6, LGC).

Power to adjust local tax rate •

Adjustment of the tax rates as prescribed herein sl1ould not be often er than once every
five (5) years, and in no case shall such adjustment exceed ten (10) percent of the rates fixed
under the LGC (Sec. 191, LGC).
j

Power to grant local tax exemptions

LGUs may, through ordinances duly approved, grant tax exemptions, incentives or
reliefs under such ter111s and conditions, as they may d eem necessary (Sec. 192, LGC).

Tax exemptions existing before the effectivity of the LGC.withdrawn

1. Unless otherwise provided in this Code, tax exemptions granted to, or presently enjoyed
by all persons, whether natural or juridical, including government-owned or controlled
corporations are hereby withdrawn upon the effectivity of the LGC except the following:
..
a. local water districts;
b . cooperatives duly registered under RA 6938, non-stock and non-profit hospitals; and
c. educational institutions
•

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 2. The power to grant tax e emptions, ~ incentive o.nd t, rl.'licfs shnll not pply to
regulatory fees which are levied Wlder the police po\vcr of the LGU.

3. Tax exemptions shall b coru rt"d through the issuanc of a non-LransferJble :-)
exemption certificate.

4. BUT the ,vithdrawal of tn e n1ptions J1cr .. should 11ot b _, construed as prohibiting

fu ture grants of ta •emption . The grant of taxing powers to LGUs under tl,e LGC does not
affect the po\.ver of Congress to grant _,, ... mptions to certain persons, pursuant to a declared
national policy {PLDT vs. City ofDavao, Az,gust 22, 2001).

Guidelines f or the grant of tax exemptions, tax incentives and tax reliefs

1. On tl1e grant of ta e emptions or tax reliefs:

a. the same may be granted in cases of natural calamities, civil disturbance, general
failure of crops, or adverse economic conditions such as substantial decrease}
prices of agricultural or agri-based products;
b. the grant shall be through an ordinance;
c. any exemption or relief granted to a type or kind of business shall apply to all
business similarly situated;
d. the same shall take effect only dwing the next calendar year for a period not
• exceeding twelve (12) months as may be provided in the ordinance;
e. in the case of shared revenues, the exemption or relief shall only extend to the
LGU granting such exemption or relief. :

2. On the grant of tax incentives:

a. the same shall be granted only to new investments in the locality and the
ordinance shall prescribe the terms and conditions therefor;
b . the grant shall be for a definite period of not exceeding one (1) calend ar year;
c. the grant shall be by ordinance passed prior to the first day of January of any
year;
d. any grant to a type or kind of business sh all apply to all businesses similib
~
J
situated

Local taxation remedies

•

Tax remedies of the local government units

The following are the civil remedies of the local government units to effect collection of
taxes:

1. Tax lien (Sec. 173, LGC)

2. Civil remedies
a. Admu1istra tive
i. Distraint (Sec. 175, LGC) )
ii. Levy (Sec. 176, LGC)

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iii. Purchase of property by LGUs for want of bidder (Sec. 181, LGC);
Property distrained not disposed within 120 days from date of distraint -
• considered sold to the LGU (Sec. 175, LGC). ·
•
b. Judicial
•
i. Civil action (Sec. 183, LGC) •
•
• •

Jurisdiction of courts over local taxation cases

•

The Court of Tax Appeals now has ap,pellate jurisdiction over local taxation cases
1.
decided by the RTC in the exercise of its appellate or origina]jUTisdiction (R.A . 11251 as amended
by RA 9282).
•

2. Regular judicial courts are not prohibited from enjoining the collection of local taxes,
subject to Rule 58 (preliminary injunction) of the Rules of Court.
•
Prescriptive periods of assessment •
•

{a) Local taxes, fees, or charges - FIVE (5) YEARS from the date they became due (Sec.
194, LGC); and (b) When there is fraud or intent to evade the payment of taxes, fees or charges -
TEN (10) YEARS from discovery of the fraud or intent to evade the payment (Sec. 194, LGC).

Prescriptive period of collection

•

Local taxes, fees, or charg,e s may be collected WITHIN FNE (5) YEARS from the date of
assessment by administrative or judicial action. No such action shall be instituted after the
expiration of such period (Sec. 194, LGC). . . 1

Grounds for the suspension of the running of the prescriptive periods •

1. The treasurer is leg.ally prevented from the assessment or collection of the tax;
2. The taxpayer requests for a reinvestigation and executes a waiver in writing before the
expiration of the period within which to assess or collect; and
3. The taxpayer is out of the country or otherwise cannot be located (Sec. 194, LGC).

Tax remedies of the taxpayer

1. The following are the remedies of the taxpayer BEFORE assessment: ,

a. Administrative Appeal to the Secretary of Justice (Sec. 187, LGC)
b. Action for declaratory relief when applicable ..

2. The following are the remedies of the taxpayer AFTER assessment:

~ -
~ -

I Administrative __ Jt1liicit1l __
Protest- within sixty (60) days from receipt Appeal - any question on
of assessment (Sec. 195 LGC). Payment constitutionality or legality of tax •
under protest not necessary ordinance within thirty (30) days from
effectivity thereof to Secretary 0£ Justice
(Sec. 187 LGC).
Payment and si,bsequent refund or tax credit - Court action - within thirty (30) days
within two 2) ears from a ment of tax after recei t of decision or la se of six

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.---:-------- ------ ---,..------- ---------,
to local treasurer (Sec. 196 LGC) It is to be {60) days of Secret, ry of Justice's
noted that, Wllike in internal revenue inaction (Ste. 187 LGC)
taxes, the supervening caus applies in within thirty (30) day from rec ~ipt
local taxation becau s til, e period for the when protest of assessment is denied
filing of claims for refund or credit of local (Sec. 195 LCC)
taxes is counted not n ce arily from the If no action is tak )n by the treasurer in
date of payme11t but from th d ate th r fund cos s and the two year period is
taxpayer is entitled to a r fu1,d or credit. about to lnpsc (Sec. 195 LCC) if remedies
.. avnilabl,e does not provide p lain,
s eed and ade uale remcd .
Rigltt of rede11tptio11 - On (1) year from tl1t? Injunction - if irreparable damage would
date of sale or from the dat of forfei ture b e caused to th e taxpayer and no
(Sec. 181 LGC). ad e uate remcd :is available.

3. Under Section 226 of R.A. No. 7160, the last action of the local assessor on a particular
assessment shall be the n otice of assessm ent.

4.
1
Under Section 195 of the Local Govemm·e nt Code, a taxpayer who ,d isagrees with a tax
assessment made by a local treaSUier may file a written protest thereof., and from a denial of the
same, either appeal the assessm ent before the court of com petent jurisdiction or pay the tax and
then seek a refund (San Juan vs. Castro, 541 SCRA 526).
•
5. Mandamus does not lie to compel the City Treasurer to accept as full compliance of tax
payment which in his reasoning and assessmen t is deficient and incorrect (Id.).
•
•
•

6. The rem edy of app eal to the Local Board of Assessment Ap peals (LBAA) is available
from an adverse ruling or action of the p rovincial, city or municipal assessor in the assessment
of the prop erty. The taxp ayer's failure to question the assessment in the Local Board of
Assessm ent Appeals (LBAA) renders the assessm ent of the local assessor final, executory and
d em andable (FELS Energ,11 Inc. vs, Province of Batangas, 516 SCRA 186).
I

Real Property Taxation

·)
Definition • •

1. Real property taxes are direct taxes imposed on the privilege to use real prop erty such as
land, building, m achinery, and other improvement (Province of Nuev.a Ecija v. Imperial Mining
Co., Inc., GR No. 59463, November 19, 1982). ·

2. Real proper ty refers to land, building, m acl1inery and o ther improvement not
h ereinafter specifically exempted (Sec. 232, LGC).

a. Real p roperty includes all things enumerated under Ar ticle 415 of the Civil Code.
A m ovable proper ty m ay be deemed a real prop er ty for the purpose of real
property tax if it is used actually, directly and exclusively for the trade 0" )
business of the taxp ayer. 1
-

b. Machinery and equipment installed by the lessee of leased land are considered
real property for real property tax purposes as ,.,other improvements to affixed or
a ttach ed real property." (Caltex Phil. Vs. CBAA, 114 SCRA 296) .
•

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c. Radio Communication of the Philippin ' , Inc.' (RCPI' ) radio r lay station
to\v r, radio talion building, and mal.hincry 11 1d arc r al prop rti s and ar
thus subj ct to the r al prop rty ta (Radio Co11i1,1unications of tlic Philippirrcs, Inc.
(RCP I), vs. Provi,,c,nl A.,se.s "'Or of Sout/1 Cotnbnto, 456 SCRA 2).

3. Improvement i the valt1oble addition made to a property or an amelioration in its

~ot\d\\i.o'C\. ailt\OUt\ut\'& \o mot \bm a met te.'{)\ate.m t\\ o\ t)arts.
~~u. ~n\~ ~ 'm~ \a\t U\.u.'l~~\ ~a\\\,~ C)\ ~ t a\ ~t~ Tt\'\l\'i\v\\eo. 'G'j 'm~
assessment \evel. It is synonymous to taxable value.
5. Pair Market Value is the price at which a property may be sold by a seller who is not
compe11ed to sell and bought by a buyer who is not compelled to buy .
•

Characteristics -

(a) Direct tax on ownership of rea] property whose burden could not be shifted by one
who pays to the other persons; (b) Ad vaJorem tax based on the assessed vaJue of the property;
(c) Proportionate; (d) Indivisible single obligation; and (e) Local tax and not a national tax.

Taxing authorities . .,,

(a) Province, at the rate of not> 1o/o of assessed value; (b) Ci'ty at the rate of not> 2%; and
(c) Municipality within Metro Manila at the rate of not > 2%.

Under P.O. 464, or the ''Real Property Tax Cod,e ,'' the authority to collect real property
taxes is vested in the locality where the property is situated. This requisite was t-eiterated in
Republic Act No. 7160, or the Local Government Cod@. Thus, while a local government unit is
authorized under severaJ laws to collect real estate tax on properties falling under its territorial
jurisdiction, it is imperative to first show that these properties are unquestionably within its
geographical boundaries. The Court cited the case of Mariano, Jr. v Commission on Elections
which stated that ''the importance of drawing with precise strokes the territorial boundaries of a
local unit of government cannot be ,o veremphasized. The boundaries must be clear for they
define the limits of the territorial jurisdiction of a local government unit. It can legitimate]y
exercise powers of government only within the limits of its territorial jurisdiction. Beyond these
limits, its acts are ultra vires.'' Clearly therefore, the Jocal government unit entitled to collect real
property taxes from Sta. Lucia must undoubtedly show tl,at the subject properties are situated
within its territorial jurisruction; otherwise, it would be acting beyond the powers vested to it by
law (Stn. Lucia RealhJ & Developt-nent, Inc. vs. City of Pasig, G.R. No. 166838, June 15, 2011).

Extent o,f th,e power to levy ..

(a) 'Basic real property tax; (b) 1% additional real estate tax to finance the Special
Education Fund; (c) So/o additional tax on idle lands; .a nd (d) Speciall levy or special assessments
(may be imposed even by municipalines outside Metro Manila).

Fundamen lal principles governing real property taxation

1

•
(a) Real property shall be appraised at its current and fair market value; (b) Real
property shall be classified for osscssment purpos s on the basi of actual u e; (c) Real property •
shall be assessed on the basis of unifortn classification within each LGU; (d) The apprai al,

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 •
assessment, levy and c-0U cti n of f'i--1 property lc1 hal1 not b I t to nny privat ~ person; and (e)
The appraisal and ment of real prop rly holl b ~ :quit..ibl (Sec. 198, LGC).

• Properties exempt from real p,operty to

· (a) Real property owned by the government except wl1en the b neficial use thereof has
been granted lo a ta abl pl~r on; (b) Charitable institutions, cl1urchcs, personages or convents
appurtenant therel'O, mosques, non-prolil or ,eligious cemeteries and aU lands, buildings and
improvements actually, di reclly ~d c elusively used for religious, charitable or educational
purposes (Art. VL Sec. 28, Constitution); (c) 'Machineries and equipment that are actually,
directly and exclusively u ed by local water utilities and GOCC' s engaged in the supply and
distribution of water and/or electric power; (d) Real property owned by duly registered
cooperatives as provided for in RA 6938; and (e) Machinery and equipment used for pollution
control and environm ntal protection (Sec. 193, 1991 LGC).

Duty of real property owners beginning 1991 ·

Real p roperty owner must file with Assessor's Office a sworn statement of real property
value whether exempt or non•exempt. Every buyer of real property must make a new
declaration thereof. (Failure to do so shall make the assessm ent in the name of the previous
owner binding).
'
Special Levies on_Real Proper~ t •

1. Basic real property tax (Sec. 233, LGC)

a. Province: not exceeding 1% of the assessed value of real property
b . City or Municipality within Metro Manila: not exceeding 2% of the assessed value.
•

2. Additional levy on real pr1>perty for the special education fund (Sec. 235r LGC) ·
► LGU may levy and collect an annual tax of 1o/o on the assessed value of real property
which shall be in addition to the basic real property tax.
► The proceeds sl1all exclusively accrue to the Special Education Fund (SEF) .
• •

3. Additional ad vaJorem tax ,o n idle lands (Sec. 236, LGC)

► Annual tax on idle lands at the rate not exceeding 5°/o of the assessed value of the
property which shall be in addition to the basic real property tax.
► Idle lands shall include tl,e following:
a. Agricultural lands, more tl,an one (1) hectare in area, suitable for cultivation, and
other a,gricumtural u ses, one-haU (1/2) of which remain uncultivated or unimpr,oved.
EXCEPTIONS
i. Agricultural lands planted to permanent or perennial crops with at least fifty (50)
trees to a hectare. , : . •
ii. Lands actually u sed for grazing purposes
b. Lands, other than agricultural, located in a city or municipality, more than 1,000
square meters in area one-half (1/2) of which remain unutilized or unimproved.
c. Reside11tial lots (regardless of land area) in subdivisions duly approved by proper
authorities, the ownerslup of which 1,as been transferred to individual owners, who
shall be liable for the additional tax~ 1

~ l<i\e \'M\O.S e,)(.e.m\)\ b:om ta':ll (._Se.c.. ~~, \..CC.)

'Nben \be own :r o\ tbe. \)l'.O\)e.1'.t'j \\.as ~e.1:\ \eia\\'i \)tevented ho,m \U\'\?tovmi.
u\\\u..m't,, <:>'t t.\l\'a'l~'\\t\~ ~e. ~'M.'C\e. o..u: \o ~ \o\\~'N\-t\.~ c:.:.. M.~e.'a"•

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1. force majeure
2. civil disturbance
3. natural calamity, or
4. analogous cause or circumstance

4. Special levy by loco.I government units (Sec. 240, LGC)

► A LGU may impose a1 speclal levy on the lands comprised within its territoria.J
jurisdiction specially benefited by public works projects or improvements funded by the
LGU concerned.
► The special levy shall not exceed 60% of the actual cost of such projects and
improvements, including the cos ts of acquiring land and such other real property in
connection therewith.
► The special levy shall not apply to lands exempt from basic .real property tax and the
remainder of the land portions of wruch have been donated to the LGU concerned for
the ,c onstruction of such projects or improvements.

Note: The subject matter for the real property taxes herein enumerated is ''real property" as
defined above. However, with respect to the third and fou ·r th kind, the subject matter is limited
to a parcel of land.
. '

Exemptions fr-0m real property taxation

•
1. Th.e Supreme Court has upheld the power of Congress to grant exemptions over the
power of local gov,e mment units to impose taxes.

2. Section 234, paragraph (a) of the Local Government Code (LGC) exempts from real
property taxation properties of the government, provide,d the beneficial use of the property was
not transferred to a taxable person.

3. The exemptions from real property taxes are enumerated in Section 234, which
specifically states that only r,e al properties owned ''by the Republic of the Philippines or any of
its political subdivisions'' is exempted from payment of the tax. Clearly, instrumentalities or
GOCCs do not fall within Lhe exceptions under Section 234 (City of Davao vs. ETC, Branc/1 XII,
Davao City, 467 SCRA 280).
•

4. While there is no dispute that a gov,ernment-owned or contr,o lJed corporation is not

exempt from real estate tax, MlAA is not a government-owned or controlled corporation; A
government-owned or controlled corporation must be "organized as a stock or non~stock
corporation," of which MIAA is neither; MlAA is not a stock corporation because it has no
capital stock divided into shares (Ma,iila International Airport Aut/rority vs. Court of Appeals, 495
SCRA. 591). A government instrumentality like MIAA falls under Section 133(0) of the Local
Government Code, which provision recognizes the basic principle that local governments
caru,ot tax the national government (Id.). By express mandate of the Local Government Cod,e,
local governments ,c annot impose any kind of tax on national government instrumentalities like
the MIAA. (Id.) MIAA's Airport Lands and Buildings are exempt from real estate tax imposed
•
by local governments. The detem1inative test whether MlAA is exempt from local taxation is
not whether MIAA is a juridical person,, but whether it is a national government instrumentality
under Section 133(0) of the Local Government Code (Id.Ji.

'
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•
5. The saving clause in Section 133 of the Loe l Government Code re( rs to the ex,c eption to
the exemption in S ctio,, 234(il) of the Codt•, \.vhich make. ti, nal1on.1l gov mmcrtt subject to
real estate tax \vhcn it iv s th ben fic1JI us• of 1t.s r al prop ..rli lo a Laxablc ~ntity; The
I
e:~.ce~uon \o \n\! XI · m'?\io\, \I\ ' t\on 1.l-\(._a) \ \h, on\)' \r\S\at\lw" "\hi.! \'\a\iona\ iov mmen\,
\.ts a.i~e1~s a.I\~ \M\t\l.n\l 'C\tt\u\\t ut u'ti~ £\ \o "a.'C\'J \c..ma. o\ \ ~ 'o'J \~a\ Y:,fJV mm~ (Monua
l,Jtcmatio,1nl Airport A,,tJ'rority vs. Court of Appeals, supra). Portions of the Airport l-inds and
Buildings that MIAA le.1ses to priviit entities Dre not ,.. empt from real estate tax (Id.).

6. As a rule, Philippin Fish rie~ Dr,velopm nt Authority (PPDA), being an instrumentality

of the national gov mn'\enl, is exempt from r al prop rty Lax but the exemption does not extend
to the portions of th Fislung Port Cornplcx that it ma.nages and operates that were leased to
taxable or private persons and entities for their beneficial use (Plizlippine Fisheries Devtlopmtnl
Autl,ority vs. Court of Appeals, 534 SCRA 490).

7. Philippine National Oil Company~Energy Development Corporation (PNOC-EDC) is a

government owned or controlled corporation conferred by Jaw with corporate powers. Under
its charter, no tax ~ emptions were granted (Republic vs. CihJ of Kidapawnn, 477 SCRA 324).

8. The exemption in favor of property u sed ,e xclusively for charitable or educational

purposes is ''not limited to property actually indispensable'' therefore but extends to facilities
\Vruch are ''incidental to and reasonably necessary for" the accomplishment of said purposes,
such as, in the case of hospitals, ''a school for training nurses, a nurses' home, property use to
• provide housing facilities for interns, resident doctors, superintendents, and other members of
the hospital staff, and recreational facilities for student nurses, interns and r,e sidents" such~
11
athletic fields," .including ''a farm used for the inmates of the institution." (City Assessor of Cebu
City vs. Association of Benevolo de Cebu, Inc., 524 SCRA 128).

9. Under section 234 (a} of the Local Government Code., pr-0perties of public dominion
intended for public use are exempt &om real property tax. Properties of public dominion are
owned by the state or the national government as defined under section 420 of the Civil Code.
The Lucena Fishing Port Complex, which is one of the major infrastructure projects undertaken
by the national government under the Nationwide Fishing Ports Package is devoted for public-
use and falls with the term ''ports." It ''serves as (the Philippine Fisheries Development
Authority's (PFDA's)] commibnent to continuously provide post-harvest infrastructur~ support
to the fishing industry, especially in areas where productivity amon g the various players in the
fishing industry need to be enhanced." As property of public dominion, the Lucena Fishing
Port Complex is owned by the Republic of the Philippines and exempt ftom real property ta>.
except for the portions that the PFDA has leased to private parties (Philippine Fisherits
Develop1:nent Authority vs Central Board of Assessment Appeals, Local Board of Assess1r1ent Apptals ~
Lucen11 City, City of L1.1cena1 Lucena City Assessor and. Lucena City Treasurer, G.R. No. 178030,
1

December 15, 2010~.

Real Property Tax Remedies

Tax raemedi,e s of the local government to effect collection of taxes

(a) Real property tax lien (Secs. 246 and 251, LGC); {b) Distraint (Sec. 254, LGC); (c) Levy
(Sec. 254, LGC)i (d) Civil action - fonnal ,demand not required (Ste. 266, LGC); (e) Purchase of
p roperty by local treasurer for want of bidder (Sec. 263, LGC).

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 Protest - payment under protest is requir d Court action - appeal of CBAA's decision
within thirty (30) days to provirlcial, city, or to Supreme Court by certiorari
municipal treasurer EXCEPT when paym nt was
· made through error or mistake, in the honest
belief that the taxpayer was liable and, ther fore,
could not have been made under prot st, but
with complete voluntariness (Rn,1,ie Textiles vs.
Mathm , 89 SCRA 586).
Refund or tax credit - within two (2) years from Suit assailing validity of tax; recovery of
the date the tax payer is entitled thereto (Sec. 253 refund of taxes paid (Sec. 64, PD 464).
LGC).

Redemption of real property (Sec. 261). LGC). Suit to declare invalidity of tax due to
irregularity in assessment and collection
• (Sec. 64 PD 464).

• Suit assailing the validity of tax sale (Sec .

83, PD 464).

The protest contemplated under Section 252 is required where there is a question as to
•
the reasonableness or correctness of the amount assessed. Hence, if a taxpayer disputes the
I
reasonableness of an increase in a real property· tax assessment, he is required to 'first pay the
1

tax'' under protest. Otherwise, the city or municipal treasurer will not act on his protest.

A claim for tax exemption, whether full or partial, does not question the authority of
local assessor to assess r,eal property tax (National Power Corporation vs. Province ,o f Quezon
and Municipalilty of Pagbilao, G.R. No. 171586, January 25, 2010).

Legal interest is defined as interest in property or a claim cognizable at law, equ.ivaient

to that of a legal owner who has legal title to the property. Given this definition, Napocor is
clearly not vested with the requisite interest to protest the tax assessment, as it is not an entity
having the legal title over the machineries. It has absolutely no solid claim of ownership or even
of use and possession of the machineries.

If Napocor truly believed that it was the owner of the S\tbject machineries, it should have
complied with S ctions 202 and 206 of the LGC which obligates owners of real property to:

a. file a sworn statem nt declaring the true value of the real propertyl whether taxable or
exempt; and
b. file sufficient documentary evidence supporting its claim for tax exemption.

While a real property owner's failure to comply with Sections 202 and 206 does not
necessarily negate it-s tax obligation nor mvalidat its legitimate claim for tax ..
exemption, Napocor's omission to do so in this case can be construed as contradictory to its
claim of ownership of the subject machineries. That it assumed liability for the taxes that may be
imposed on the subject machineries similarly does not clothe it ,vith legal title over the same. •

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 •

We do not believe that the pluase ''person h aving legal interest in tl,e prope rty'' in Section 226
of the LGC can include an entity that assumes another person's tax liability by con tract.

A review of the provisions of the tGC on real property tax11 tion shows that the phrase
has been repeatedly adopted and used to define an entity:

a. in whose name the real property shall be listed, valued, and assessed;
b. who may be sumn1oned by the local assessor to gather information on which to
base the market value of the real property;
c. \vho may protest the lax assessmen t before the LBAA and may appeal
the latter's decision to the CBAA;
d. who may be liable for the idle land tax, as well as who may be ,exempt from the
same·I
e. who shall be notified of ai,y proposed ordinance imposing a sp ecial levy, as well as
who may object the proposed ordinance;
f. who may pay the real property tax;
g. who is entitled to be notified of the warrant of [evy and against whom it may be
enfor-ced;
h. who may stay the public auction upon payment of the delinquent tax, penalties and
surcharge; and
i. who may redeem the property after it was sold at the public auction for delinquent
taxes .
•

• For the Court to consider an entity assuming another person's tax liability by contract as
a person having legal interest in the real property would extend to it the privileges and
responsibilities e.n11merated above. The framers of the LGC certainly did not contemplate that
the listing, valuation, and assessment o,f real property can be made in the name of such entity;
not ,d id fu.e.'! mtmd. to make. the. wmant of \e"', enfo1:c.eab\e atainst it. \nsolar as the "Qtovisions
~\~~"\...~'-.. ~~ ~~~~~~~. ~ ~"{\_~ ~ ~~~ \.~'t.~\.~\.~~~~~~"to.~~~~\."\~~~'\.~~~,~\11..'N~
and could not be clothed with any legal interest over fue property apart ttom its asSUD\ed
liability for tax. The rights and obligations arising from the BOT Agreement
betw,e en Napocor and Mirant were of no legal interest to the tax collector - the Province of ·
Quezon - which is charged with the performance of independent duties under the LGC.

Some authorities consider a person whose pecuniary inter,e sts is or may be adversely
affected by the tax assessment as one who has legal interest in the property (hence, possessed of
the requi<;ite standing to protest it), citing Cooley's law on Taxation. The reference to this
foreign material, l1owever, is misplaced. The tax laws of the United States deem it sufficient that
a person's pecuniary interests are affected by the tax assessment to consider him as a person
aggrieved and who may thus avail ,o f the judicial o,r administrative remedies against it. As
opposed to our LGC, mere pecuniary interest is not sufficient; our law has required legal
interest in the property taxed before any administrative or judicial remedy can be availed. The
ri0ht to appeal a tax assessment is a purely statutory right; whether a person chaJJenging an
assessment bears such a ·relation to the real property being assessed as to entitle him the right to
appeal is determined by the applicable statute - in this case, our own LGC, not US federal or
state tax laws (National Power Corporation vs. Province of Quezon and Municipalilty of Pagbilao, G.R.
No. 171586, Januan; 25, 2010).

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 Remedy against the assessment

1. Within si ty (60) days from notice of a sesstnt!nt of provincial, city or municipal

assessor, appeal to LBAA (Sec. 226, LGC).
2. Within thirty (30) days from re e1pt or decision or LBAA, appeal to CBAA (Sec. 229,
LGC).
3. Within thirty (30) days from r c ipt of decision of CBAA,. appeal to C"TA En Banc (RA
9282).
4. Within fifte n (15) days from receipt of decision of CTA En Banc, appeal to the SC (R.A .
9282).

Condonation of real property tnxes

1. Real property ta es may be condoned wholly or partiaJly in a given local government

unit wl,en
•
a. There is general failure of crops;
b. There is substantial decrease in the price of agricultural or agribased products; or
c. There is a calamity.

2. By the President of the Philippines wl1en public interest so requires.

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