Q: What is the nature and source of local  Not contrary to law, public policy,

taxing power? national economic policy, or in the

restraint of trade
 Mactan Cebu case:
3. Collection shall not be left to private
The power to tax is primarily vested in persons. (It has to be the Treasurer of the
Congress. LGU)
However, in our jurisdiction, it may be 4. Revenue collections shall accrue
exercised by local legislative bodies exclusively to LGUs
pursuant to direct authority conferred by
Sec 5, Art 10 of the Constitution. 5. System of taxation must be progressive
Under the said provision, the exercise of the Q; What are the common limitations of
power may be subject to such guidelines the taxing power of the LGUs?
and limitations as the Congress may
provide which, however, must be consistent DIET8-C2-BV:
with the basic policy of local autonomy.
 DST
Currently, Titles I (Local Taxation) and II  Income Tax except on banks and
(RPT) of Book II, Local Government Code other financial institutions
prescribe the guidelines and limitations of
 Excise Tax & TFC on petroleum
local taxing power.
products
 Transfer Taxes (Estate and Donor’s
Q: May the Congress repeal Titles 1 and 2
Tax)
of the LGC effectively withdrawing the
power to tax of the LGUs?  Taxes on Reinsurance Premiums
 TFC on:
No. The Congress cannot. The remedy of
the LGUs is to file a petition for certiorari 1. Goods “passing through” the
because there is grave abuse of territorial jurisdiction of the LGU
discretion on the part of the Congress. 2. Agricultural & Aquatic Products
when sold by marginal farmers
The Congress cannot deny the LGUs the or fishermen
power to tax. They can only set limitations 3. Registration of Motor Vehicles,
but not deny them that power altogether. except tricycles
4. Export Products
Q: What are the fundamental principles that 5. Countryside and Brgy. Business
govern the exercise of taxing and other Enterprises or Cooperatives duly
revenue-raising powers of LGUs? registered w/ CDA
6. National Govt. or LGUs
1. Uniformity in Taxation
 Custom Fees and other charges
2. Local exactions shall be  Common Carriers Tax
 Business Tax on BOI-, PEZA-,
 Equitable and based on taxpayer’s SBMA-registered entities & those
ability to pay granted by special laws
 For Public Purposes  VAT or any percentage tax
 Not unjust, excessive, oppressive
and confiscatory These common limitations are basically the
taxes that the LGUs cannot impose. They
were thought of by Congress as by the quarterly fixed tax based on the gross value
Constitution to limit LGUs power to tax. of money or actual market value at the time
of removal of the manufactured articles from
JURISPRUDENCE: their factories is essentially a percentage
tax based on sales, therefore, beyond the
 Pepsi Cola Case → An increase in the authority of the LGU to enact.
tax alone would not support the claim that
the tax is oppressive, unjust and A percentage tax is imposed when there
confiscatory. is a set of ratio between the amount of
tax and volume of sales.
Municipal corporations are allowed
much discretion in determining the rates  SCOPE OF TAXING POWERS OF
of imposable taxes. LGUS:

Unless the amount is so excessive as to Q: What are the TFCs that provinces may
be prohibitive, courts will go slow in levy and collect?
writing off an ordinance as
unreasonable. A: Look at your summary..hehe

 Province of Bulacan vs. CA → provinces Continuation on Municipalities:

may not levy excise taxes on articles
already taxed by the NIRC. FEES AND CHARGES ON:

 Phil. Petroleum Corp. v. Municipality of 1. Municipalities authorized also to

Pililla → a tax on business is distinct from a impose and collect such reasonable
tax on the article itself. fees and charges on business and
occupation and on the practice of
Here, the Supreme Court upheld the any profession or calling (other than
imposition of a local tax on the business of professional tax, which only
manufacturing petroleum products, despite provinces or cities may impose)
the fact that the NIRC imposes excise taxes before any person may engage in
on manufactured petroleum products. such business, occupation or
practice of such profession (i.e.
Note, however, that under the IRR of Sec. mayor’s permit). The fees and
133(h), the prohibition extends to the charges, however, should be
imposition of a tax on the business of commensurate with the cost of
manufacturing petroleum products. regulation, inspection and licensing
(i.e. must not be revenue-
See, however, Petron Corp. v. Tiango generating)
(2008), holding that LGU may not impose 2. Service Fees and Charges
business taxes on entities engaged in sale 3. Public Utility Charges
of petroleum products. 4. Toll Fees & Charges

Therefore in Phil. Jurisdiction, LGU may CITIES:

not impose taxes on the business of
manufacturing petroleum products and Q: What are the taxes, fees and charges
on entities engaged on the sale of that cities may levy and collect?
petroleum products.
Taxes, fees, charges which provinces or
 SAN MIGUEL CORP. V. MUNICIPAL municipalities may levy and collect.
COUNCIL OF MANDAUE → a graduated
The rates of taxes that cities may levy may Who are authorized to levy and collect
exceed the maximum rates allowed for community taxes?
provinces or municipalities by not more than Cities or municipalities
50%, except the rates of professional and Who are liable?
amusement taxes. 1. Individuals
Thus, if the rate provided by the LGC is 18 years or over (i) regularly employed on a
50% of 1% for province, the city can collect wage or salary
75% of 1%. basis for at least 30 consecutive working
days during any
Again, municipalities within Metro Manila calendar year; or (ii) engaged in business or
may levy taxes at rates which shall not occupation; or
exceed by 50% the maximum rates in (a) to (iii) own real property with FMV of P1k or
(h) of those that municipalities may impose. more; or (iv)
Now, only Pateros is the municipality within required to file ITR
Metro Manila. Rate and Base: annual tax of P5, plus P1
per P1k income
BARANGAYS:
2. Juridical Persons
WHAT ARE THE TAXES, FEES AND Every corporation engaged in or doing
CHARGES THAT BARANGAYS MAY business in
LEVY AND COLLECT? the Philippines
1. Taxes on stores or retailers with fixed Rate and Base: annual tax of P500 and an
business establishments with gross sales or annual
receipts for the preceding calendar year of additional tax based on FMV of real
P50k or less (for barangay in cities) and property and
P30k or less (for barangays in gross receipts (the additional tax, however,
municipalities) at a rate not exceeding 1% of shall
such not exceed P10k)
gross sales or receipts
2. Service fees or charges for services Who are exempt from community tax?
rendered in connection with the regulation 1. Diplomatic and consular representatives
or 2. Transient visitors
the use of barangay-owned properties or
service facilities such as palay, copra or PLACE AND TIME OF
tobacco dryers PAYMENT OF TAX
3. Barangay clearance for purposes of
mayor’s or business permit application or Where shall the community tax be paid?
renewal Resident of individual
4. Other fees and charges on (a) Place where principal office of juridical entity
Commercial breeding of fighting cocks, is
cockfights located
and cockpits; (b) on places of recreation When shall community tax be paid?
charging admission fees; and (c) on On or before last day of February
billboards, etc. Special rules for individuals and
corporations who
COMMUNITY TAX became liable for community tax during the
CERTIFICATE year

WHO ARE LIABLE? TIME, MANNER AND PLACE

OF PAYMENT OF LOCAL
BUSINESS TAX
 WHERE SHOULD LOCAL
TIME AND MANNER BUSINESS TAXES BE PAID?
Principal Office Rule
Tax period is generally on a calendar year In case where there is no such branch, sale
basis. Manner office or
of payment may be made quarterly. warehouse in the locality where the sale is
Accrual of tax is generally on January 1; in made, the sale
case of new shall be recorded in the principal office
ordinance levying new tax or increasing tax along with the sales
rates, on the made by said principal office and the tax
1st day of quarter next following effectivity shall accrue to the
of ordinance. city or municipality where said principal
Time of payment is generally on the first 20 office is located.
days of Principal Office is the head or main office
January or the quarter, as the case may be. appearing in the
In case of AOI or DTI registration.
retirement from business, if the tax paid
during the year ALLOCATION RULE
be less than the tax due on said gross sales Important: Allocation rule applies only to
or receipts of manufacturers, assemblers, contractors,
the current year, the difference shall be paid producers
before the and exporters with factories, project offices,
business is considered officially retired. plants
and plantations in the pursuit of business.
Time of payment coincides with the time for
renewal of business permits. PROJECT OFFICE, PLANT OR
PLANTATION
PLACE (SITUS RULES) 30% of all sales recorded in the principal
office shall
BUSINESS TAXES BE PAID? be taxable by the city or municipality where
Branch or Sales Office Rule the
LGU where branch or sales office is located. principal office is located, and 70% of all
All sales made in a locality sales
where there is branch or sales office or recorded in the principal office shall be
warehouse shall be recorded in said taxable by the
branch or sales office or warehouse and the city or municipality where the factory,
tax shall be payable to the city or project office,
municipality where the same is located. plant or plantation is located.
Branch or Sales Office is a fixed place in a
locality which conducts operations PRINCIPAL OFFICE &
of the business as an extension of the FACTORY & PLANTATION
principal office; offices used only as In case a plantation located at a place other
display areas of products where no stocks than the
or items are stored for sale, place where the factory is located, said 70%
although orders for the products may be shall be
received thereat, are not branch or divided as follows:
sales office. A warehouse which accepts 60% of the 70% to the city or municipality
orders and/or issues sales invoices where
independent of a branch with sales office the factory is located, and
shall be considered as a sales office.
40% of the 70% to the city or municipality ORDINANCE AND OTHER
where REVENUE MEASURES
the plantation is located.
PUBLIC HEARING AND
PRINCIPAL OFFICE WITH 2 OR PUBLICATION
MORE FACTORIES, PROJECT If the tax ordinance is contrary to the
OFFICES, PLANTS OR PLANTATIONS common limitations or scope of taxing
In case where a manufacturer, assembler, powers stated in the LGC, then it will be
producer, exporter void for substantive reasons.
or contractor has 2 or more factories, However, there are also procedural grounds
project offices, plants to nullify a tax ordinance - failure to comply
or plantations located in different localities, with the public hearing and publication
the 70% sales requirements.
allocation shall be pro-rated among the
localities where the What are the procedural requirement for the
factories, project offices, plants, or enactment of tax ordinances?
plantations are located in Public hearing and publication.
proportion to their respective volumes of Secs. 186 & 187 state that no ordinance
production during levying
the period for which the tax is due. taxes, fees and charges shall be enacted
In the case of project officers of service or without
other independent public hearing.
contractors, production is cost of projects This is a mandatory requirement.
undertaken during
the tax period. If the procedural requirement is violated, the
remedy to cure the nullity is to publish again
SALES MADE BY ROUTE or to conduct a public hearing. If the ground
TRUCKS, VANS OR VEHICLES is substantial, there is no
Sec. 243(d), LGC remedy to cure the nullity but to change the
For route sales made in a locality where a substance of the ordinance.
manufacturer, producer, wholesaler, Example:
retailer or dealer has a branch or sales In Rizal, the taxpayers were shocked that a
office or warehouse, the sale shall be tourism tax is collected from fast food
recorded in the branch or sales office or chains. There were no public hearing, that’s
warehouse and the tax due thereon why they do not know. Taxpayers
shall be paid to the city or municipality filed a case to declare the ordinance null
where such branch or sales office or and void.
warehouse is located. How do you prove they did not do a public
For route sales made in a locality where a hearing, which is a negative fact? By
manufacturer, producer, wholesaler, availing of the modes of discovery —
retailer or dealer has no branch or sales produce the minutes of the hearing, under
office or warehouse, the sale shall be the Rules of Court. If what is requested is
recorded in the branch or sales office or not produced, it will establish that fact. The
warehouse from where the route court invalidated the tax ordinance.
trucks withdraw their products for sale, and
the tax due thereon shall be paid FIGUERRES V. CA
to the city or municipality where such The Supreme Court confirmed that the
branch or sales office or warehouse is holding of a
located. public hearing is a mandatory requirement
for the
ENACTMENT OF TAX enactment of a tax ordinance.
The SC, however, upheld the validity of the because of certain ultra vires provisions and
assailed non-compliance
ordinance for failure of the taxpayer to with the prescribed procedure for enactment
adduce thereof.
evidence that the requisite public hearings RTC declared Sec. 187 unconstitutional
were not because said provision
conducted by the LGU (presumption of violates the constitutional provision on local
validity of autonomy.
ordinances). The Supreme Court held that no
constitutional rule on local
What is the procedure for the publication of autonomy was violated because no control,
tax but only
ordinances? supervision was exercised by the Secretary
Within 10 days from approval, certified true of Justice in
copies of the ordinance shall be published declaring as illegal the assailed ordinance.
for 3
consecutive days in a newspaper of local HAGONOY MARKET VENDORS
circulation. ASSOCIATION V. MUNICIPALITY OF
In LGUs where there are no newspapers of HAGONOY, BULACAN
local Where an appeal to the Secretary of Justice
circulation, the tax ordinance may be posted more
in at than 1 year after the effectivity of the
least 2 conspicuous and publicly accessible ordinance in
places. question was held to be time-barred on the
ground
APPEAL OF TAX ORDINANCE that the periods stated in Sec. 187 are
mandatory.
WHAT IS THE PROCEDURE FOR
THE APPEAL OF TAX COURT OF COMPETENT
ORDINANCES? JURISDICTION
Secretary of Justice Within 30 days from receipt of adverse
Any question on the constitutionality or decision or
legality of tax from the lapse of the 60-day period without
ordinances or revenue measures may be the
raised on appeal Secretary of Justice acting on the appeal,
within 30 days from the effectivity thereof to the
the Secretary of aggrieved party may file appropriate
Justice. proceedings
The Secretary of Justice must render a with a court of competent jurisdiction.
decision on the appeal Direct Attack v. Collateral Attack
within 60 days from receipt of appeal. The remedy for a direct attack is to appeal
Pendency of the appeal the ordinance to the Secretary of Justice
does not suspend the effectivity of within 30 days from the effectivity of the
ordinance or accrual and ordinance. The Secretary of Justice
payment of taxes, fees, and charges levied has 60 days to decide.
thereon. After denial of the appeal, the remedy of
taxpayer is to appeal to the RTC. In case of
DRILON V. LIM inaction, appeal the inaction.
Secretary of Justice declared a Manila tax Failure to so question the ordinance with the
ordinance illegal Secretary of Justice, the taxpayer cannot
challenge the ordinance anymore from Sec. 198, LGC
directly attacking its validity.
Is the taxpayer precluded for questioning WHAT ARE THE FUNDAMENTAL
the ordinance? No. PRINCIPLES
The taxpayer can still collaterally attack the GOVERNING THE APPRAISAL,
ordinance. The remedy would be to protest ASSESSMENT,
the assessment by the local treasurer and LEVY AND COLLECTION OF REAL
appeal such denial to the RTC. PROPERTY
- See discussion in remedies of the TAX?
taxpayer. 1. Real property shall be appraised at its
current and fair market value
REMEDIES OF LOCAL GOVERNMENT 2. Real property shall be classified for
assessment purposes on the
LGUS IN THE COLLECTION OF basis of its actual use
TAXES AND REVENUES? 3. Real property shall be assessed on the
1. Examination of taxpayer’s book of basis of a uniform
accounts classification within each LGU
2. Issuance of deficiency assessment 4. The appraisal, assessment, levy, and
3. Imposition of surcharge and interest collection of RPT shall not let
4. Summary remedies for the collection of to any private person; and
taxes 5. The appraisal and assessment of real
• Distraint of personal property property shall be equitable.
• Levy on real property Memorize this list. This, together with the
• Further distraint and levy fundamental principles in local taxation, and
5. Judicial action for collection of taxes the common limitations of the taxing power
of LGUs always come out in the Bar
REMEDIES OF TAXPAYER Exams.

WHAT ARE THE REMEDIES PROVINCE OF NUEVA ECIJA V.

OF TAXPAYERS? IMPERIAL MINING CO., INC.
1. Protest the assessment It was held that the policy of taxing real
• File protest with local treasurer within 60 property is
days from receipt on the basis of actual use even if the user is
of assessment, otherwise, assessment not the
becomes final and owner.
executory Hence, government property leased to a
• Appeal to court of competent jurisdiction private
(RTC) within 30 person becomes taxable.
days from receipt of denial of protest or from TY V. TRAMPE
lapse of the 60- The Supreme Court declared illegal the
day period without the local treasurer acting 400% to
on the protest 570% increase in real estate taxes imposed
2. Claim for refund or tax credit on
landowners in Pasig.
AUTHORITY OF LGUS TO LOPEZ V. CITY OF
GRANT EXEMPTIONS MANILA
The Supreme Court enumerated the
REAL PROPERTY procedural steps in
TAXATION computing real property tax as follows:
1. Ascertain assessment level
GENERAL PRINCIPLES
2. Multiply the FMV by the applicable 2. The notice of assessment similar to the
assessment level, and one provided in the NIRC, which contains
3. Find the tax rate corresponding to that the demand for the taxpayer to pay its taxes
class (use) of the due on a specified time. This is the
property and multiply the assessed value by function of the local treasurer.
that rate. A. PREPARATION OF
The Supreme Court also enumerated the SCHEDULE OF FMV
steps for the mandatory Sec. 201, LGC
conduct of general revision of real property Assessor shall prepare Schedule of FMV for
assessments. enactment by ordinance of sanggunian.
B. APPRAISAL AND Schedule shall be published in newspaper
ASSESSMENT OF REAL of general
PROPERTY circulation or posed in the capitol/hall and in
Assessment is the act or process of two
determining the other conspicuous places.
value of a property, or a proportion thereof, Assessor may take evidence.
subject If there is no schedule, the LGU has no right
to tax. Includes discovery, listing, to impose RPT. The schedule is the basis of
classification, and the LGU in collecting RPT.
appraisal of properties The schedule of fair market value by the
Appraisal is the act or process of local assessor is almost always lower than
determining the the zonal value prescribed by the BIR.
value of property as of a specified date for a Why? It is a political process.
specific Zonal value, in turn, is usually lower than
purpose. the actual market value or the selling price
General Process for Assessment and in the market. Why? It is difficult to revise
Appraisal the zonal value. There must be a
1. Preparation of schedule of the FMV study conducted both by private and public
2. Declaration of value appraisers.
3. Appraisal, valuation and classification, Amendment to Schedule of FMV may be
which will be based on the actual use of the made to
property; the assessment level which correct errors in valuation; to be confirmed
depends on the classification of the by
property, Sangguniang Bayan in an ordinance
will be applied to the FMV of the property enacted within
4. Listing of property to the assessment roll 90 days from assessor’s recommendation.
5. Notification of the new and revised Assessor shall prepare a revised Schedule
assessment of FMV in
- Assessment is broader than appraisal connection with an ongoing general revision
because the former covers the latter. every
Appraisal is only a component of assessing three years.
the real property value. Amendment is limited only to clerical errors
- Assessment can also refer to two things, in putting the value, because revising the
which entails different remedies: schedule is another thing which has more
1. The act of the local assessor of notifying stringent requirements.
the taxpayer of the new or revised B. DECLARATION OF VALUE
assessment, which simply refers to the tax Secs 202 to 204, LGC
declaration. This is the function of the local There are only three types of properties
assessor, and the prescriptive period will subject to real property tax:
start from the act of notifying (or service of 1. Lands
the notice). 2. Improvements, including buildings
3. Machineries, by destination (the same as Revision is typically upwards.
in the Civil Code) Why would a person ask that the FMV be
Thus, a house and lot will have two tax revalued?
declarations: one pertaining to the house Example:
and one pertaining to the land. Real property involved is a building or
Declaration may be: factory a portion thereof is damaged by fire
Voluntary — by the owner every three years or natural calamity. In this case, the owner
Involuntary — by the assessor can ask the local assessor to lower
C. APPRAISAL, VALUATION the FMV. For lands, it rarely applies. There
AND CLASSIFICATION are also times when there can be significant
Secs. 215 to 218, 224, LGC deflation in the value of the property —
What is the applicable rule regarding the exception to the rule (example would be
appraisal of when Marikina was flooded during Ondoy,
real property (land, buildings, and other the value of real properties in the area
improvements)? decreased).
Real property, whether taxable or exempt, - Bullet 2: In which case, a new tax
shall declaration may be issued. However, it can
be appraised at the current FMV prevailing be decreased more than once every three
at the years.
locality where the property is located CLASSIFICATION
(schedule Real property shall be classified and
of fair market values). assessment level applied on the basis of
Real property shall be classified, valued and actual use.
assessed on the basis of actual use What are the classes of real property for
regardless of assessment purposes?
location and owner or user of property. Residential
What is the applicable rule regarding the Agricultural
appraisal of Commercial
machinery? Industrial
If machinery is brand new — FMV is Mineral
acquisition Timberland
cost. Special
If machinery is imported — FMV is total What are the special classes of real
landed property?
cost. Lands, buildings and other improvements
Appraisal, valuation, and classification of thereon
real property may actually, directly, and exclusively used for
be made in cases hospitals,
1. Where property is declared and listed for cultural or scientific purposes, and those
taxation owned and used
purposes for the first time by local water districts, and GOCCs
2. There is an ongoing general revision, and rendering essential
3. A request is made by the person in public services in the supply and distribution
whose name the of water
property is declared. and/or generation and transmission of
Assessment of real property shall not be electric power.
increased oftener What is an assessment level?
than once every 3 years, except in case of It is the percentage applied to the FMV
new improvements (depending on the
substantially increasing the value of said class of real property) to determine the
property. taxable value of
real property. available in case the taxpayer wants to
What are the steps in determining the challenge the new assessments.
assessed value WHEN DOES THE ASSESSMENT OR
of real property? RE-ASSESSMENT TAKE EFFECT?
1. Determine FMV General Rule: January 1 of the following
2. Determine classification year (prospective application)
3. Apply assessment level to determine Exception: The reassessment of real
assessed property due to its
value or taxable value 1. Partial or total destruction, or
4. Determine RPT due by multiplying the 2. To a major change in its actual use, or
rate 3. To any great and sudden inflation or
against assessed value deflation of real property values, or
Fair Market Value P1,000,000 4. To the gross illegality of the assessment
Assessment Level (Residential) 20% when made or to any other abnormal
Assessed Value 200,000 cause
Basic Real Property Tax (2%) P4,000 Shall be made within 90 days from the date
Special Education Fund 2,000 any such cause or causes occurred, and
Total P6,000 shall take effect at the beginning of the
D. LISTING OF PROPERTY IN quarter next following the reassessment.
ASSESSMENT ROLL WHEN DOES THE ASSESSMENT OR
Sec. 206, LGC RE-ASSESSMENT TAKE EFFECT?
This is merely a list of all the properties Exception: For previously undeclared real
found in a particular LGU with all its FMVs property
and assessed values. This will be (property being declared for the first time),
published. effectivity
If real property is exempt, declarant shall file of assessment retroacts to the period during
with the which it
assessor documentary evidence on would have been liable (maximum of 10
exemption within years).
30 days from declaration. Taxpayer received new assessment, can he
E. NOTICE OF NEW OR file a request for reconsideration?
REVISED ASSESSMENT - No. The remedy of the person is to appeal
Secs. 220, 221 & 223, LGC the tax declaration to LBAA.
Written notice of such new or revised - Rationale: Corruption happens in the
assessment assessor level, where assessor will put high
(through a new Tax Declaration) shall be values on assessment in order to force the
given to the taxpayer to seek reconsideration.
person in whose name the property is The taxpayer will have to pay bribes for the
declared within reconsideration.
30 days. C. REAL PROPERTY TAX AND
This is important for purposes of ADDITIONAL OR SPECIAL
determining when LEVIES
the 60-day period to appeal the new or Secs. 233, 235 to 237, 240 to 243, LGC
revised WHAT ARE THE TAXES THAT LGUS
assessment to the LBAA pursuant to Sec. MAY LEVY ON REAL PROPERTY?
226. 1. Basic RPT
It is important that for the new or revised • 1% for provinces
assessment, notification or new tax • 2% for cities and municipalities within
declaration be served to the taxpayer. The MMA
notification sets into motion the remedies 2. 1% Special Education Fund (SEF)
3. 5% tax on idle lands
• Agricultural lands more than 1 hectare in ARE EXEMPT FROM RPT?
area 1. Property owned by the Government or
• Lands other than agricultural lands more any of its
than 1k sq.m. political subdivisions
• Residential lots in subdivisions regardless 2. Those actually, directly and exclusively
of land area used for
WHAT ARE THE TAXES THAT LGUS religious, charitable or educational
MAY LEVY ON REAL PROPERTY? purposes, and
4. Special Levy due to Improvements non-profit or religious cemeteries
• Lands specially benefited by public works - Bullet 2: As provided for by the
projects or improvements funded by the Constitution.
LGU BLGF OPINION DATED MARCH 9, 1993
concerned ADDRESSED TO THE MUNICIPAL
• Special levy shall not exceed 60% of the ASSESSOR OF TUGUEGARAO,
cost of CAGAYAN
the project or improvement Where only real properties owned by the
Special levy example: Philippine
A highway was constructed which increased Union College are actually, directly and
the value of the lands nearby. The LGU can exclusively
impose special levy. used for education purposes are exempt,
D. EXEMPTIONS FROM RPT including the
Sec. 234, LGC student dormitories, cafeterias, and the food
WHAT IS THE PROCEDURE FOR services
CLAIMING EXEMPTION FROM RPT? building.
File documentary evidence in support of The guardhouses garages, perimeter
claimed fences, water
exemption with the local assessor within 30 tanks and pumps, generator houses,
days stockrooms and
from date of declaration of real property. faculty/personnel residential quarters are
However, if the owner fails to do this, it will not exempt.
not affect the nature of the property as an BLGF OPINION DATED MARCH 19,
exempt property. The provision is merely 1993 ADDRESSED TO MR. ELMER
procedural, and is a directory LEE OF QUEZON CITY
requirement. The taxpayer is not precluded Where the real properties of the Chinese
from questioning the assessment. General
WHAT TYPES OF REAL PROPERTY Hospital were held exempt because the only
ARE EXEMPT FROM RPT? purpose
1. Property owned by the Government or for which it was formed was for charitable,
any of its benevolent, civic and educational purposes.
political subdivisions BLGF OPINION DATED
LRTA V. CBAA APRIL 22, 1999
The Supreme Court held that the LRT The Andres Soriano Training Center, owned
carriageways and
and terminal stations are not exclusively for operated by SMC, was held subject to RPT
public although it
use but rather patrimonial property, and was used for educational purposes because
therefore, (a) it also
are subject to RPT notwithstanding that caters to other private offices who wish to
LRTA is a avail of
GOCC. their training courses, (b) its courses are not
WHAT TYPES OF REAL PROPERTY the
regular subjects offered in schools or GOVERNMENT
universities, Secs. 254 to 257, LGC
and (c) it is not accredited by DECS. WHAT ARE THE REMEDIES OF
WHAT TYPES OF REAL PROPERTY LGUS IN THE COLLECTION OF RPT?
ARE EXEMPT FROM RPT? 1. Posting of notice of delinquency
1. Property owned by the Government or 2. Imposition of interest
any of its political subdivisions 3. Administrative remedies
2. Those actually, directly and exclusively 4. Judicial action for collection
used for religious, charitable or 5. Unpaid tax constitutes a lien
educational purposes, and non-profit or G. REMEDIES OF TAXPAYER
religious cemeteries Secs. 226, 229, 231, 252, 253, LGC; Sec. 7,
3. Machineries and equipment actually, RA 9282
directly, and exclusively used by local water WHAT ARE THE REMEDIES
districts and GOCCs in the supply and OF TAXPAYERS?
distribution of water and electricity. 1. Dispute the assessment
Machineries and equipment used by a 2. Pay under protest (appeal does not
private power plant not exempt. suspend
4. Real properties owned by cooperatives collection)
registered with the Cooperative 3. Claim for refund or credit
Development Authority and in accordance Take note that payment under protest is not
with the provisions of RA 6938 required in local business taxes.
5. Machinery and equipment used for WHAT ARE THE PROCEDURES
pollution control and environmental FOR DISPUTING AN ASSESSMENT?
protection. 1. Appeal to LBAA within 60 days from
E. PAYMENT OF RPT AND receipt of
SPECIAL LEVIES assessment
Secs. 246, 245, 250 to 251, LGC CALLANTA V. OFFICE OF
When does RPT accrue? THE OMBUDSMAN
On January 1. It was ruled that filing with the local
When does a special levy accrue? assessor of a
On the first day of the quarter next following request for a review or readjustment of an
the assessment is not a proper remedy, but
effectivity of the ordinance imposing such instead an
levy. appeal should have been lodged with the
For taxpayers electing to pay RPT and SEF LBAA.
in installments, WHAT ARE THE PROCEDURES
what are the due dates for payment of the FOR DISPUTING AN ASSESSMENT?
installments? 1. Appeal to LBAA within 60 days from
Four equal installments payable on March receipt of
31, June assessment
30, September 30, and December 31. 2. Appeal to CBAA within 30 days, if LBAA
Is there a tax discount for advanced prompt denies
payment appeal
of RPT and SEF? 3. Appeal to CTA within 30 days, if CBAA
Yes. If RPT and SEF are paid in advance of denies
March 31, June 30, September 30 and appeal
December LBT RPT
31, the Sangguniang Bayan may grant a File protest with local treasurer
discount within 60 days from receipt of
not exceeding 20% of the annual tax due. assessment
F. REMEDIES OF LOCAL Appeal to LBAA within 60 days
from receipt of assessment of reassessment that the local assessor erred in determining
Local treasurer has 60 days to act any of the
on the protest items for computing the real property tax,
Appeal to CBAA within 30 days, if i.e. the
LBAA denies appeal value of the real property or the portion
Appeal to RTC within 30 days from thereof
receipt of denial or protest or from subject to tax and the proper assessment
lapse of 60-day period levels.
Appeal to CTA within 30 days if WHAT IS AN ILLEGAL
CBAA denies appeal ASSESSMENT?
Payment under protest not On the other hand, an illegal assessment is
required one made
Payment under protest required without authority under the law, i.e. taxpayer
(or post surety bond) is not
Here it is important to distinguish the subject to RPT in the first place.
remedies available to the taxpayer in What is the remedy of the taxpayer in case
questioning an assessment which may refer of an
to the notice of assessment by the local erroneous assessment?
treasurer, Taxpayer must pay under protest and
or the notification of new and revised exhaust
assessments by the local assessor. administrative remedies under Sec. 252:
I. Taxpayer received a notice of new or 1. Pay under protest
revised assessment. 2. Appeal to LBAA
• Appeal to the LBAA, under Sec. 226; no 3. Appeal to CBAA
need to file an MR with the local assessor; 4. Appeal to CTA
payment under protest but under the rules, What is the remedy of the taxpayer in case
a bond may be allowed in lieu of of an
payment. illegal assessment?
• Appeal the decision of the LBAA to CBAA, In case of an illegal assessment, the
then to the CTA and Supreme Court the taxpayer
same as in the NIRC. may directly resort to judicial action without
This will not suspend payment of the RPT, paying under protest the assessed tax and
but subject to refund later on. The prayer filing
must indicate a prayer to declare the an appeal with the LBAA/CBAA:
assessment invalid and a prayer for refund. 1. File complaint for injunction with RTC
II. Taxpayer was assessed by the local 2. Appeal RTC decision to CTA
treasurer deficiency real property taxes This is not found in the Local Government
• Protest first, under Sec. 252; payment Code, but is provided by jurisprudence
under protest is required applying the general provisions on
• When denied, appeal to the LBAA, under injunction.
Sec. 226
WHAT IS AN ERRONEOUS
ASSESSMENT?
An erroneous assessment presupposes that
the
taxpayer is subject to the tax but is disputing
the
correctness of the amount assessed.
With an erroneous assessment, the
taxpayer claims