October 2016 LOCAL GOVERNMENT TAXES (Atty. C. Liamado) Power To Levy Other Taxes, Fees or Changes LGUs may exercise the power to levy taxes, fees oF charges on any base or subject not otherwise specifically enumerated herein o: taxed under the provisions of the National Internal Revenue ‘Code, as amended, or other applicable laws. Provided, thatthe taxes, fees, or charges? shall not be unjust, exceasive, oppressive, conflseaory or contary to destared national policy. Provided, futher, that the ordinance levying such tees, fees or charges shall not be enacted ‘without any prior public bearing conducted for the purpose (See. 186, LGC). Notes: (8) The aforementioned power includes the power t levy fees that are regulatory in nature? () Such power also includes the power 1 levy charges which are pecuniary liabilities such as renis or fees against persons or property. An exemple would be the imposition of “goodwill fees” upon stall holders a the municipal public market * (© The requirements made mandatory by law for the levy of such taxes, fees, or charges snust be observed. Otherwise, such levy shall be void. In Ongsuco, et al. x: Hon Matones. G.R. No. 182065 (October 27, 2009), since no public hearing had been duly condusted prior to the ensctatent ofan ordinance imposing “goodwill fees” upon stall holders ata public market, said ortinaace was declared void, Fundamental Principles in Local Taxation ‘The following fundamental principles shall govern the exercise ofthe tang and other revenue- raising powers of LGUs: () Taxation shal be uniform in each LGU; () Taxes, fees, charges, and other impesitions shal: (1) Be equitable and based, as fr as practicable, om the taxpayer's ability o pays {@) Be levied and collected only for public purposes; {G) Not be unjust, excessive, oppressive, oF confiseatory; G) Not be contrary to law, public policy, national economic policy, or in the restraint of wuade; "fee" means a charge fixed by law or ondinrce forthe reptlation inspection of « busines or activity (See. 1310), LG). 2scharges refers to pecuniary ibility, as rents or fees aginst persons or pucporty (Ses. 131(@). LGC). » Dp, Joseph Emmanuel L. Angeles, Reststement of the Law on Local Goverument, citing Smart Comamsmication, Ine. ». Munkipalty of Malvar. G.R. No, 204429, Febeay 18,2014. * Ongruco, et al». Hom Malones, G.R. No. 182065 (Ostober 27, 2009)Ober 2019 | (©) The collection of local taxes, fees, charges, and other impositions shall ih no ease be let to any private person (6) The fe “enue collected pursuant to the provisions of the Local Government Code of 1991 (LGW) shall inure solely to the benefit of, and he subject to the disposition by, the LOU levying theta, fee, charge, or other imposition unless otherwise specifically provided in the () Each LGU shall, as far as practicable, evolve a progressive system of taxation; and (O Temitorility ~ an LGU cannot ordinarily tax prnerty or persons unless the situs thereof is ‘within its teritory. Taxing Authority ‘The power to impose a tax, fee, or charge, or to generate revenue under the LGC shall be Peggieet by the cangzunian of be LOU concerned though an appropiate orsance (Se, 132, L<¢) PROVINCES ‘The following are the local taxes that may be imposed by provinces: 1. Taxon Transfer of Real Property Ownership ‘Tax imposed on: | The sale, donation, barter, of on any other mode of transferring ‘ownership or title of real pro Tax base ‘The total consideration involved in the acquisition of the property ‘or ofthe fair market value’ thereof, whichever is higher. Tax rate ‘Not more than fity pereent (509%) of one percent (1%) “Time of Payment [it shall be the duty of the seller, donor, transferor, executor oF ‘administrator to pay the tax herein imposed srithi avs from the date of the execution of the deed or from the date of the decedent's death (Seo. 135(6), LGC). Exemption ‘The sale, transfer or other disposition of real property parsuant RA. No. 6637 (the “Comprehensive Agrarian Reform Law of 1985"). 2, Taxon Business of Printing and Publication : Tarimposed ox! | The bashes of peont engigei la the pining wolor publication of books, cards, phsters, leaflets, handblls, certificates, receipts, pamphlets, and others of similar nature. Tas se ad Gx |) I he cme of « newt asd bins tei al a rate: ‘exceed one-twentieth (1/20) of one percent (1%) of the ‘capital investment’, (©) In the succeeding calendar year, rogardless of when the ‘business started to operate, the tax shall not exceed fifty percent _(50%) of one percent (1%) of the gross annual 2 The i market valve shall be tat refected inthe proving schedule of fir market values enacted by the sangguian concerned (Art. 224s), Roles and Regulations implementing the LGC of 1991), “Capital Investment” isthe capital which a porson employs in any undertaking, or which he contributes to Well FT pnt se ay ple i a ces pa SaasOctober 2019 receipe Tor the preceding calendar year or any faction thereof. ‘Exemption ‘The eessipts om We pining andlor publishing of books or other reading materials prescribed by the Deparment of Education, Culture and Sports as school texs or references. 3 Franchise Tax ‘Tax imposed oni | Businesses enjoying franchise. Tax base and tax|(@) In the case of a newly started Business, the tax shall not rate: ‘exceed one-twentieth (1/20) of one percent (1%) of the capital investment. (©) In the sugseeding calendar year, regardless of when the ‘business started to operate, the tax shall not exceed fifty percent (50%) of one percent (19) of the gross. annual receipts for the preceding calendar year or any fraction thereof. 4, Tax on Sand, Gravel, and Other Quarry Resources “Tax imposed 01 Ordinary stones, sand, gravel, earth, and other quamry resources, as defined under Tax Code extracted from: (@) public lands or (©) the beds of seas, lakes, rivers, streams, creeks, and other public waters ‘within the territorial jurisdiction of the province. Tax base Fair market value in the locality Tax rate "Not more than ten percent (10%) 5. Professional Tax “Tax imposed on: Each person engaged in the exercise or practice of his profession is 3 examination, req ‘Such amount and reasonable classification es the sanggunlang Tax panlalawigan may determine but indred Pesos (P300.00) Place of Payment | Province where taxpayer practices his profession or where be ‘maintains bis principal office in case he practices his profession in several places “Time of Payment — | Annualy, on of before the thirty-first lst) day of January. ‘After January 31, if taxpayer first begins to practice his profession after the moath of January. Exemption Professionals exclusively employed in the goverument Notes: . (8) Such person who hhas pid the corresponding professional tax shall be entitled to practice his profession in any part of the Philippines without being subjected to any ‘other national or local tax, license, or fee for the practice of such profession (Sec. 139(b), LGC).October 2019 (A line of profession does not become exempt even if conducted with some other profession for which the tax has been paid (Sec. 139(8), LGC). (© Any individual or corporation employing a person subject to professional tax shall require payment by that person of the tax on his profession before employment and annually thereafter (See. 13%(c), LGC). @ Any person subject to the professional tax shall write in deeds, receipts, prescriptions, reports, books of account, plans and designs, surveys and maps, as the case may be, the numberof the official receipt issued to him (See. 139(¢), LGC). (© The professionals subject to this professional tax are only those who have passed the ‘bar examinations, or any board or other examination conducted by the Professional Regulation Commission ("PRC"). For example, a lawyer who is also a Certified Public Accountant (“CPA”) must pay the professional tax on lawyers and that fixed for CPAS, ifhe is to practice both professions (Art. 228(0), LGC IRR), (® Before accepting payment of the professional tax for the current yeas, the provincial treasurer or his duly authorized representative shall require from such professionals their current annual registration cards issued by competent authority (Art. 228(0, LGC IRR), © The PRC shall likewise require proof of payment of the professional tax before registration of professionals or renewal of their licenses (Art. 228(9, LOC IRR). 6. Amusement Tax Tax imposed on: | Proprietors, lessees, or operators of (a) theaters, (B) cinemas, (@) concert halis, (4) circuses, (e) boxing stadia, and (f) other places of amusement Tax Base ‘Gross receipts from admission Tees Tax Rate ‘Not more than ten percent (10%) ‘Exemption ‘Operas, concerts, dramas, recitals, painting and ait exhibitions, flower’ shows, ‘musical programs, literary and oratorical presentations shall be exempt. Exception: Pop, rock, or similar concerts shall not be exempt ‘fom the amusement tax Note: A. percentage tax of 15% is imposed on the gross receipts from professional basketball games under Section 125 ofthe Tax Code. This precludes the province fom imposing local tax thereon pursuant to Section 1336) ofthe LOC. Sale of movie tickets is imposed a local amusement tax, and not VAT. 7. Annual Fixed Tax for Every Delivery Truck or Van of Manufacturers or Producers, Wholesalers of, Dealers, or Retailers in, Certain Products | “Tax imposed on: [Every tuck, van, or any vehicle used by manufacturers, producers, wholesalers, dealers or retailers in the delivery or distribution of distilled spirits, fermented liquors, soft drinks, cigars and cigarettes, and other products to sales outlets, or consumers, whether directly or indirectly, within the province, Te, ‘An amount not exceeding Five Hundred Pesos (P500.00). Note: The manufacturers, producers, wholesalers, dealers and retailers referred to above shall be exempt from the tax on peddlers prescribed in Section 143(g) of the LGC.