Local Government Taxation

I. Applicable Laws
A. 1987 Constitution
B. Book II - Local Taxation and Fiscal Mattes! "ections 1#8 $ #9% o&
'epublic Act (o. 71)* o t+e Local ,o-en.ent Code
C. I.ple.entin/ 'ules and 'e/ulations o& t+e Local ,o-en.ent
Code o& 1991 $ Ad.inistati-e 0de (o. #7* s. 199#
II. Local ,o-en.ent Taxation
A. 'e1uie.ents &o I.position o& Local Taxes b2 Local ,o-en.ent
3nits 4L,3s5
1. "ec. 16#! L,C
"7CTI0( 16#. Local Taxin/ Aut+oit2. 8 T+e powe to i.pose a tax!
&ee! o c+a/e o to /eneate e-enue unde t+is Code s+all be execised b2 t+e
san//unian o& t+e local /o-en.ent unit concened t+ou/+ an appopiate odinance.
#. "ecs. 18) $ 19#! L,C
"7CTI0( 18). 9owe To Le-2 0t+e Taxes! Fees o C+a/es. 8 Local
/o-en.ent units .a2 execise t+e powe to le-2 taxes! &ees o c+a/es on an2 base o
sub:ect not ot+ewise speci&icall2 enu.eated +eein o taxed unde t+e po-isions o& t+e
(ational Intenal 'e-enue Code! as a.ended! o ot+e applicable laws; 9o-ided! T+at
t+e taxes! &ees! o c+a/es s+all not be un:ust! excessi-e! oppessi-e! con&iscato2 o
conta2 to declaed national polic2; 9o-ided! &ut+e! That the ordinance levying such
taxes, fees or charges shall not be enacted without any prior public hearing conducted
for the purpose.
"7CTI0( 187. 9ocedue &o Appo-al and 7&&ecti-it2 o& Tax!
0dinances and 'e-enue Measues< Mandato2 9ublic =eain/s. 8 T+e pocedue &o
appo-al o& local tax odinances and e-enue .easues s+all be in accodance wit+ t+e
po-isions o& t+is Code; 9o-ided! T+at public +eain/s s+all be conducted &o t+e
pupose pio to t+e enact.ent t+eeo&; 9o-ided! &ut+e! T+at an2 1uestion on t+e
constitutionalit2 o le/alit2 o& tax odinances o e-enue .easues .a2 be aised on
appeal wit+in t+it2 46*5 da2s &o. t+e e&&ecti-it2 t+eeo& to t+e "eceta2 o& >ustice w+o
s+all ende a decision wit+in sixt2 4)*5 da2s &o. t+e date o& eceipt o& t+e appeal;
9o-ided! +owe-e! T+at suc+ appeal s+all not +a-e t+e e&&ect o& suspendin/ t+e
e&&ecti-it2 o& t+e odinance and t+e accual and pa2.ent o& t+e tax! &ee! o c+a/e le-ied
t+eein; 9o-ided! &inall2! T+at wit+in t+it2 46*5 da2s a&te eceipt o& t+e decision o t+e
lapse o& t+e sixt2-da2 peiod wit+out t+e "eceta2 o& >ustice actin/ upon t+e appeal! t+e
a//ie-ed pat2 .a2 &ile appopiate poceedin/s wit+ a cout o& co.petent :uisdiction.
"7CTI0( 188. 9ublication o& Tax 0dinances and 'e-enue Measues. 8
?it+in ten 41*5 da2s a&te t+ei appo-al! ceti&ied tue copies o& all po-incial! cit2! and
.unicipal tax odinances o e-enue .easues s+all be publis+ed in &ull &o t+ee 465
consecuti-e da2s in a newspape o& local ciculation; 9o-ided! +owe-e! T+at in
po-inces! cities and .unicipalities w+ee t+ee ae no newspapes o& local ciculation!
t+e sa.e .a2 be posted in at least two 4#5 conspicuous and publicl2 accessible places.
"7CTI0( 189. Funis+in/ o& Copies o& Tax 0dinances and 'e-enue
Measues. 8 Copies o& all po-incial! cit2! and .unicipal and baan/a2 tax odinances
and e-enue .easues s+all be &unis+ed t+e especti-e local teasues &o public
disse.ination.
6. Cases;
6.1 Drilon v. Lim, et al., G.R. No. 112497, August 4, 1994
Facts 9usuant to "ection 187 o& t+e L,C! t+e "eceta2 o& >ustice +ad! on appeal to
+i. o& % oil co.panies and a taxpa2e! to declaed 0dinance (o. 779%! ot+ewise known
as t+e Manila 'e-enue Code! null and -oid &o non-co.pliance wit+ t+e pescibed
pocedue in t+e enact.ent o& tax odinances and &o containin/ cetain po-isions
conta2 to law and public polic2.
T+e Cit2 o& Manila &iled a petition &o cetioai wit+ t+e 'TC w+ic+ e-oked t+e @0>As
esolution and sustained t+e odinance! +oldin/ inte alia t+at t+e pocedual e1uie.ents
+ad been obse-ed. Moe i.potantl2! it declaed "ection 187 o& t+e Local ,o-en.ent
Code as unconstitutional because o& its -estue in t+e "eceta2 o& >ustice o& t+e powe o&
contol o-e local /o-en.ents in -iolation o& t+e polic2 o& local autono.2 .andated in
t+e Constitution and o& t+e speci&ic po-ision t+eein con&ein/ on t+e 9esident o& t+e
9+ilippines onl2 t+e powe o& supe-ision o-e local /o-en.ents.
!ssue T+e constitutionalit2 o& "ection 187 o& t+e Local ,o-en.ent Code po-idin/ &o
t+e pocedue &o appo-al and e&&ecti-it2 o& tax odinances and e-enue .easues.
"el# "ection 187 is constitutional.

In t+e case be&oe us! >ud/e 'odol&o C. 9alattao declaed "ection 187 o& t+e Local
,o-en.ent Code unconstitutional inso&a as it e.poweed t+e "eceta2 o& >ustice to
e-iew tax odinances and! in&eentiall2! to annul t+e.. =e cited t+e &a.ilia distinction
between contol and supe-ision! t+e &ist bein/ Bt+e powe o& an o&&ice to alte o
.odi&2 o set aside w+at a subodinate o&&ice +ad done in t+e pe&o.ance o& +is duties
and to substitute t+e :ud/.ent o& t+e &o.e &o t+e latte!B w+ile t+e second is Bt+e powe
o& a supeio o&&ice to see to it t+at lowe o&&ices pe&o. t+ei &unctions is accodance
wit+ law.B ) =is conclusion was t+at t+e c+allen/ed section /a-e to t+e "eceta2 t+e
powe o& contol and not o& supe-ision onl2 as -ested b2 t+e Constitution in t+e
9esident o& t+e 9+ilippines. T+is was! in +is -iew! a -iolation not onl2 o& Aticle C!
speci&icall2 "ection % t+eeo&! 7 and o& "ection D on t+e taxin/ powes o& local
/o-en.ents! 8 and t+e polic2 o& local autono.2 in /eneal.
?e do not s+ae t+at -iew. T+e lowe cout was at+e +ast2 in in-alidatin/ t+e po-ision.
"ection 187 aut+oiEes t+e "eceta2 o& >ustice to e-iew onl2 t+e constitutionalit2 o
le/alit2 o& t+e tax odinance and! i& waanted! to e-oke it on eit+e o bot+ o& t+ese
/ounds. ?+en +e altes o .odi&ies o sets aside a tax odinance! +e is not also pe.itted
to substitute +is own :ud/.ent &o t+e :ud/.ent o& t+e local /o-en.ent t+at enacted t+e
.easue. "eceta2 @ilon did set aside t+e Manila 'e-enue Code! but +e did not eplace
it wit+ +is own -esion o& w+at t+e Code s+ould be. =e did not ponounce t+e odinance
unwise o uneasonable as a basis &o its annul.ent. =e did not sa2 t+at in +is :ud/.ent it
was a bad law. ?+at +e &ound onl2 was t+at it was ille/al. All +e did in e-iewin/ t+e
said .easue was dete.ine i& t+e petitiones wee pe&o.in/ t+ei &unctions is
accodance wit+ law! t+at is! wit+ t+e pescibed pocedue &o t+e enact.ent o& tax
odinances and t+e /ant o& powes to t+e cit2 /o-en.ent unde t+e Local ,o-en.ent
Code. As we see it! t+at was an act not o& contol but o& .ee supe-ision. llcd
An o&&ice in contol la2s down t+e ules in t+e doin/ o& an act. It t+e2 ae not &ollowed!
+e .a2! in +is discetion! ode t+e act undone o e-done b2 +is subodinate o +e .a2
e-en decide to do it +i.sel&. "upe-ision does not co-e suc+ aut+oit2. T+e supe-iso o
supeintendent .eel2 sees to it t+at t+e ules ae &ollowed! but +e +i.sel& does not la2
down suc+ ules! no does +e +a-e t+e discetion to .odi&2 o eplace t+e.. I& t+e ules
ae not obse-ed! +e .a2 ode t+e wok done o e-done but onl2 to con&o. to t+e
pescibed ules. =e .a2 not pescibe +is own .anne &o t+e doin/ o& t+e act. =e +as no
:ud/.ent on t+is .atte except to see to it t+at t+e ules ae &ollowed. In t+e opinion o&
t+e Cout! "eceta2 @ilon did pecisel2 t+is! and no .oe no less t+an t+is! and so
pe&o.ed an act not o& contol but o& .ee supe-ision.
T+e case o& Taule -. "antos 9 cited in t+e decision +as no application +ee because t+e
:uisdiction clai.ed b2 t+e "eceta2 o& Local ,o-en.ents o-e election contests in t+e
Fatipunan n/ M/a Baan/a2 was +eld to belon/ to t+e Co..ission on 7lections b2
constitutional po-ision. T+e con&lict was o-e :uisdiction! not supe-ision o contol.
cdep
"i/ni&icantl2! a ule si.ila to "ection 187 appeaed in t+e Local Autono.2 Act! w+ic+
po-ided in its "ection # as &ollows;
A tax odinance s+all /o into e&&ect on t+e &i&teent+ da2 a&te its passa/e! unless t+e
odinance s+all po-ide ot+ewise; 9o-ided! +owe-e! T+at t+e "eceta2 o& Finance
s+all +a-e aut+oit2 to suspend t+e e&&ecti-it2 o& an2 odinance wit+in one +unded and
twent2 da2s a&te eceipt b2 +i. o& a cop2 t+eeo&! i&! in +is opinion! t+e tax o &ee t+eein
le-ied o i.posed is un:ust! excessi-e! oppessi-e! o con&iscato2! o w+en it is conta2
to declaed national econo.2 polic2! and w+en t+e said "eceta2 execises t+is aut+oit2
t+e e&&ecti-it2 o& suc+ odinance s+all suspended! eit+e in pat o as a w+ole! &o a peiod
o& t+it2 da2s wit+in w+ic+ peiod t+e local le/islati-e bod2 .a2 eit+e .odi&2 t+e tax
odinance to .eet t+e ob:ections t+eeto! o &ile an appeal wit+ a cout o& co.petent
:uisdiction< ot+ewise! t+e tax odinance o t+e pat o pats t+eeo& declaed suspended!
s+all be consideed as e-oked. T+eea&te! t+e local le/islati-e bod2 .a2 not ei.posed
t+e sa.e tax o &ee until suc+ ti.e as t+e /ounds &o t+e suspension t+eeo& s+all +a-e
ceased to exist.
T+at section allowed t+e "eceta2 o& Finance to suspend t+e e&&ecti-it2 o& a tax
odinance i&! in +is opinion! t+e tax o &ee le-ied was un:ust! excessi-e! oppessi-e o
con&iscato2. @ete.ination o& t+ese &laws would in-ol-e t+e execise o& :ud/.ent o
discetion and not .eel2 an exa.ination o& w+et+e o not t+e e1uie.ents o
li.itations o& t+e law +ad been obse-ed< +ence! it would s.ack o& contol at+e t+an
.ee supe-ision. T+at powe was ne-e 1uestioned be&oe t+is Cout but! at an2 ate! t+e
"eceta2 o& >ustice is not /i-en t+e sa.e latitude unde "ection 187. All +e is pe.itted
to do is ascetain t+e constitutionalit2 o le/alit2 o& t+e tax .easue! wit+out t+e i/+t to
declae t+at! in +is opinion! it is un:ust! excessi-e! oppessi-e o con&iscato2. =e +as no
discetion on t+is .atte. In &act! "eceta2 @ilon set aside t+e Manila 'e-enue Code
onl2 on two /ounds! to wit! t+e inclusion t+eein o& cetain ulta -ies po-isions and
non-co.pliance wit+ t+e pescibed pocedue in its enact.ent. T+ese /ounds a&&ected
t+e le/alit2! not t+e wisdo. o easonableness o& t+e tax .easue. LLp
T+e issue o& non-co.pliance wit+ t+e pescibed pocedue in t+e enact.ent o& t+e
Manila 'e-enue Code is anot+e .atte.
In +is esolution! "eceta2 @ilon declaed t+at t+ee wee no witten notices o& public
+eain/s on t+e poposed Manila 'e-enue Code t+at wee sent to inteested paties as
e1uied b2 At. #7)4b5 o& t+e I.ple.entin/ 'ules o& t+e Local ,o-en.ent Code no
wee copies o& t+e poposed odinance publis+ed in t+ee successi-e issues o& a
newspape o& /eneal ciculation pusuant to At. #7)4a5. (o .inutes wee sub.itted to
s+ow t+at t+e obli/ato2 public +eain/s +ad been +eld. (eit+e wee copies o& t+e
.easue as appo-ed posted in po.inent places in t+e cit2 in accodance wit+ "ec.
D114a5 o& t+e Local ,o-en.ent Code. Finall2! t+e Manila 'e-enue Code was not
tanslated into 9ilipino o Ta/alo/ and disse.inated a.on/ t+e people &o t+ei
in&o.ation and /uidance! con&o.abl2 to "ec. D94b5 o& t+e Code. pLL
>ud/e 9alattao &ound ot+ewise. =e declaed t+at all t+e pocedual e1uie.ents +ad
been obse-ed in t+e enact.ent o& t+e Manila 'e-enue Code and t+at t+e Cit2 o& Manila
+ad not been able to po-e suc+ co.pliance be&oe t+e "eceta2 onl2 because +e +ad
/i-en it onl2 &i-e da2s wit+in w+ic+ to /at+e and pesent to +i. all t+e e-idence
4consistin/ o& #D ex+ibits5 late sub.itted to t+e tial cout.
To /et to t+e botto. o& +is 1uestion! t+e Cout acceded to t+e .otion o& t+e espondents
and called &o t+e ele-ation to it o& t+e said ex+ibits. ?e +a-e cae&ull2 exa.ined e-e2
one o& t+ese ex+ibits and a/ee wit+ t+e tial cout t+at t+e pocedual e1uie.ents +a-e
indeed been obse-ed. (otices o& t+e public +eain/s wee sent to inteested paties as
e-idenced b2 7x+ibits ,-1 to 17. T+e .inutes o& t+e +eain/s ae &ound in 7x+ibits M!
M-1! M-#! and M-6. 7x+ibits B and C s+ow t+at t+e poposed odinances wee publis+ed
in t+e Balita and t+e Manila "tandad on Apil #1 and #D! 1996! especti-el2! and t+e
appo-ed odinance was publis+ed in t+e >ul2 6! %! D 1996 issues o& t+e Manila "tandad
and in t+e >ul2 )! 1996 issue o& Balita! as s+own b2 7x+ibits G! G-1! G-#! and G-6. pLL
T+e onl2 exceptions ae t+e postin/ o& t+e odinance as appo-ed but t+is o.ission does
not a&&ect its -alidit2! considein/ t+at its publication in t+ee successi-e issues o& a
newspape o& /eneal ciculation will satis&2 due pocess. It +as also not been s+own t+at
t+e text o& t+e odinance +as been tanslated and disse.inated! but t+is e1uie.ent
applies to t+e appo-al o& local de-elop.ent plans and public in-est.ent po/a.s o& t+e
local /o-en.ent unit and not to tax odinances.
?e .ake no ulin/ on t+e substanti-e po-isions o& t+e Manila 'e-enue Code as t+ei
-alidit2 +as not been aised in issue in t+e pesent petition.
$%iter ?e stess at t+e outset t+at t+e lowe cout +ad :uisdiction to conside
t+e constitutionalit2 o& "ection 187! t+is aut+oit2 bein/ e.baced in t+e /eneal
de&inition o& t+e :udicial powe to dete.ine w+at ae t+e -alid and bindin/ laws b2 t+e
citeion o& t+ei con&o.it2 to t+e &unda.ental law. "peci&icall2! B9 1#9 -ests in t+e
e/ional tial couts :uisdiction o-e all ci-il cases in w+ic+ t+e sub:ect o& t+e liti/ation is
incapable o& pecunia2 esti.ation! % e-en as t+e accused in a ci.inal action +as t+e i/+t
to 1uestion in +is de&ense t+e co institutionalit2 o& a law +e is c+a/ed wit+ -iolatin/ and
o& t+e poceedin/s taken a/ainst +i.! paticulal2 as t+e2 conta-ene t+e Bill o& 'i/+ts.
Moeo-e! Aticle C! "ection D4#5! o& t+e Constitution -ests in t+e "upe.e Cout
appellate :uisdiction o-e &inal :ud/.ents and odes o& lowe couts in all cases in
w+ic+ t+e constitutionalit2 o -alidit2 o& an2 teat2! intenational o executi-e a/ee.ent!
law! pesidential decee! pocla.ation! ode! instuction! odinance! o e/ulation is in
1uestion.
In t+e execise o& t+is :uisdiction! lowe couts ae ad-ised to act wit+ t+e ut.ost
cicu.spection! beain/ in .ind t+e conse1uences o& a declaation o& unconstitutionalit2
upon t+e stabilit2 o& laws! no less t+an on t+e doctine o& sepaation o& powes. As t+e
1uestioned act is usuall2 t+e +andiwok o& t+e le/islati-e o t+e executi-e depat.ents! o
bot+! it will be pudent &o suc+ couts! i& onl2 out o& a beco.in/ .odest2! to de&e to t+e
+i/+e :ud/.ent o& t+is Cout in t+e consideation o& its -alidit2! w+ic+ is bette
dete.ined a&te a t+oou/+ delibeation b2 a colle/iate bod2 and wit+ t+e concuence o&
t+e .a:oit2 o& t+ose w+o paticipated in its discussion. D
It is also e.p+asiEed t+at e-e2 cout! includin/ t+is Cout! is c+a/ed wit+ t+e dut2 o& a
pupose&ul +esitation be&oe declain/ a law unconstitutional! on t+e t+eo2 t+at t+e
.easue was &ist cae&ull2 studied b2 t+e executi-e and t+e le/islati-e depat.ents and
dete.ined b2 t+e. to be in accodance wit+ t+e &unda.ental law be&oe it was &inall2
appo-ed. To doubt is to sustain. T+e pesu.ption o& constitutionalit2 can be o-eco.e
onl2 b2 t+e cleaest s+owin/ t+at t+ee was indeed an in&action o& t+e Constitution! and
onl2 w+en suc+ a conclusion is eac+ed b2 t+e e1uipped .a:oit2 .a2 t+e Cout
ponounce! in t+e disc+a/e o& t+e dut2 it cannot escape! t+at t+e c+allen/ed act .ust be
stuck down. pcd
6.# &oca'&ola (ottlers )*ili++ines, !nc. v. &it, o- .anila, et al., G.R. No.
1/02/2, 1une 27, 2220
Facts 0n #D Febua2 #***! t+e Cit2 Ma2o o& Manila appo-ed Tax 0dinance (o.
7988! ot+ewise known as B'e-ised 'e-enue Code o& t+e Cit2 o& ManilaB epealin/ Tax
0dinance (o. 779% entitled! B'e-enue Code o& t+e Cit2 o& Manila.B T+e 'e-ised
'e-enue Code a.ended t+e 0ld 'e-enue Code b2 inceasin/ t+e tax ates applicable to
cetain establis+.ents opeatin/ wit+in t+e teitoial :uisdiction o& t+e Cit2 o& Manila!
includin/ +eein Coca-Cola.
A//ie-ed b2 said tax odinance! Coco Cola &iled a 9etition be&oe t+e @0> a/ainst t+e
Cit2 o& Manila and its "an//unian/ 9anlun/sod! in-okin/ "ection 187 o& t+e L,C.
T+e @0> issued a 'esolution declain/ Tax 0dinance (o. 7988 null and -oid and
wit+out le/al e&&ect! &indin/ t+at t+e said odinance &ailed to co.pl2 wit+ t+e e1uie.ent
o& publication unde t+e L,C.
T+e Cit2 o& Manila &ailed to &ile a Motion &o 'econsideation no lod/e an appeal o& said
'esolution! t+us! said 'esolution o& t+e @0> "eceta2 declain/ Tax 0dinance (o.
7988 null and -oid +as lapsed into &inalit2.
@espite t+e 'esolution o& t+e @0> declain/ Tax 0dinance (o. 7988 null and -oid and
t+e diecti-e o& t+e BL,F t+at espondents cease and desist &o. en&ocin/ said tax
odinance! t+e Cit2 o& Manila continued to assess Coca Cola business tax &o t+e 2ea
#**1 based on t+e tax ates pescibed unde Tax 0dinance (o. 7988. T+us! petitione
&iled a Co.plaint wit+ t+e 'TC o& Manila! Banc+ #1! on 17 >anua2 #**1! pa2in/ t+at
espondents be en:oined &o. i.ple.entin/ t+e a&oe.entioned tax odinance.
@uin/ t+e pendenc2 o& t+e case! t+e Cit2 o& Manila enacted anot+e odinance a.endin/
Tax 0dinance (o. 7988. "aid tax odinance was a/ain c+allen/ed b2 petitione be&oe
t+e @0> t+ou/+ a 9etition 1uestionin/ t+e le/alit2 o& t+e a&oe.entioned tax odinance
on t+e /ounds t+at 415 said tax odinance a.ends a tax odinance pe-iousl2 declaed
null and -oid and wit+out le/al e&&ect b2 t+e @0>< and 4#5 said tax odinance was
likewise not publis+ed upon its appo-al in accodance wit+ "ection 188 o& t+e Local
,o-en.ent Code o& 1991.
!ssue ?+et+e o not Tax 0dinance (o. 7988 and its a.end.ents ae null and -oid.
"el# Hes! said Tax 0dinances ae null and -oid.
It is undisputed &o. t+e &acts o& t+e case t+at Tax 0dinance (o. 7988 +as alead2 been
declaed b2 t+e @0> "eceta2! in its 0de! dated 17 Au/ust #***! as null and -oid and
wit+out le/al e&&ect due to espondentsI &ailue to satis&2 t+e e1uie.ent t+at said
odinance be publis+ed &o t+ee consecuti-e da2s as e1uied b2 law. (eit+e is t+ee
1uibblin/ on t+e &act t+at t+e said 0de o& t+e @0> was ne-e appealed b2 t+e Cit2 o&
Manila! t+us! it +ad attained &inalit2 a&te t+e lapse o& t+e peiod to appeal.
Fut+e.oe! t+e 'TC o& Manila! Banc+ #1! in its @ecision dated #8 (o-e.be #**1!
eiteated t+e &indin/s o& t+e @0> "eceta2 t+at espondents &ailed to &ollow t+e
pocedue in t+e enact.ent o& tax .easues as .andated b2 "ection 188 o& t+e Local
,o-en.ent Code o& 1991! in t+at t+e2 &ailed to publis+ Tax 0dinance (o. 7988 &o
t+ee consecuti-e da2s in a newspape o& local ciculation. Fo. t+e &oe/oin/! it is
evi#ent t*at Tax $r#inance No. 7933 is null an# voi# as sai# or#inance 4as
+u%lis*e# onl, -or one #a, in t*e 22 .a, 2222 issue o- t*e )*ili++ine )ost in
contravention o- t*e unmista5a%le #irective o- t*e Local Government &o#e o- 1991.
@espite t+e nullit2 o& Tax 0dinance (o. 7988! t+e cout a 1uo! in t+e assailed 0de!
dated 8 Ma2 #**#! went on to dis.iss petitioneIs case on t+e &oce o& t+e enact.ent o&
Tax 0dinance (o. 8*11! a.endin/ Tax 0dinance (o. 7988. "i/ni&icantl2! said
a.endin/ odinance was likewise declaed null and -oid b2 t+e @0> "eceta2 in a
'esolution! dated D >ul2 #**1! elucidatin/ t+at BJIKnstead o& a.endin/ 0dinance (o.
7988! J+eeinK espondent s+ould +a-e enacted anot+e tax .easue w+ic+ stictl2
co.plies wit+ t+e e1uie.ents o& law! bot+ pocedual and substanti-e. T*e +assage o-
t*e assaile# or#inance #i# not *ave t*e e--ect o- curing t*e #e-ects o- $r#inance No.
7933 4*ic*, an, 4a,, #oes not legall, exist.6 "aid 'esolution o& t+e @0> "eceta2
+ad! as well! attained &inalit2 b2 -itue o& t+e dis.issal wit+ &inalit2 b2 t+is Cout o&
espondentsI 9etition &o 'e-iew on Cetioai in ,.'. (o. 1D7%9* assailin/ t+e dis.issal
b2 t+e 'TC o& Manila! Banc+ 17! o& its appeal due to lack o& :uisdiction in its 0de!
dated 11 Au/ust #**6.
Based on t+e &oe/oin/! t+is Cout .ust e-ese t+e 0de o& t+e 'TC o& Manila! Banc+
#1! dis.issin/ petitioneIs case as t+ee is no basis in law &o suc+ dis.issal. T*e
amen#ing la4, *aving %een #eclare# as null an# voi#, in legal contem+lation,
t*ere-ore, #oes not exist. Furt*ermore, even i- Tax $r#inance No. 3211 4as not
#eclare# null an# voi#, t*e trial court s*oul# not *ave #ismisse# t*e case on t*e
reason t*at sai# tax or#inance *a# alrea#, amen#e# Tax $r#inance No. 7933. As
*el# %, t*is &ourt in t*e case o- )eo+le v. Lim, i- an or#inance or la4 soug*t to %e
amen#e# is invali#, t*en it #oes not legall, exist, t*ere s*oul# %e no occasion or nee#
to amen# it.
B. Aut+oit2 to Ad:ust 'ates and ,ant 7xe.ptions
1. "ecs. 191 and 19#! L,C
"7CTI0( 191. Aut+oit2 o& Local ,o-en.ent 3nits to Ad:ust 'ates o& Tax
0dinances. 8 Local /o-en.ent units s+all +a-e t+e aut+oit2 to ad:ust t+e tax ates as
pescibed +eein not o&tene t+an once e-e2 &i-e 4D5 2eas! but in no case s+all suc+
ad:ust.ent exceed ten pecent 41*L5 o& t+e ates &ixed unde t+is Code.
"7CTI0( 19#. Aut+oit2 to ,ant Tax 7xe.ption 9i-ile/es. 8 Local
/o-en.ent units .a2! t+ou/+ odinances dul2 appo-ed! /ant tax exe.ptions!
incenti-es o elie&s unde suc+ te.s and conditions as t+e2 .a2 dee. necessa2.
C. Co..on Li.itations on Taxin/ 9owes o& t+e L,3
1. "ec. 166! L,C
"7CTI0( 166. Co..on Li.itations on t+e Taxin/ 9owes o& Local
,o-en.ent 3nits. 8 3nless ot+ewise po-ided +eein! t+e execise o& t+e taxin/
powes o& po-inces! cities! .unicipalities! and baan/a2s s+all not extend to t+e le-2 o&
t+e &ollowin/;
4a5 Inco.e tax! except w+en le-ied on banks and ot+e &inancial institutions<
4b5 @ocu.enta2 sta.p tax<
4c5 Taxes on estates! in+eitance! /i&ts! le/acies and ot+e ac1uisitions .otis
causa! except as ot+ewise po-ided +eein<
4d5 Custo.s duties! e/istation &ees o& -essel and w+a&a/e on w+a-es!
tonna/e dues! and all ot+e kinds o& custo.s &ees! c+a/es and dues except
w+a&a/e on w+a-es constucted and .aintained b2 t+e local /o-en.ent
unit concened<
4e5 Taxes! &ees! and c+a/es and ot+e i.positions upon /oods caied into o
out o&! o passin/ t+ou/+! t+e teitoial :uisdictions o& local /o-en.ent
units in t+e /uise o& c+a/es &o w+a&a/e! tolls &o bid/es o ot+ewise! o
ot+e taxes! &ees! o c+a/es in an2 &o. w+atsoe-e upon suc+ /oods o
.ec+andise<
4&5 Taxes! &ees o c+a/es on a/icultual and a1uatic poducts w+en sold b2
.a/inal &a.es o &is+e.en<
4/5 Taxes on business entepises ceti&ied to b2 t+e Boad o& In-est.ents as
pionee o non-pionee &o a peiod o& six 4)5 and &ou 4%5 2eas!
especti-el2 &o. t+e date o& e/istation<
4+5 7xcise taxes on aticles enu.eated unde t+e national Intenal 'e-enue
Code! as a.ended! and taxes! &ees o c+a/es on petoleu. poducts<
4i5 9ecenta/e o -alue-added tax 4MAT5 on sales! bates o exc+an/es o
si.ila tansactions on /oods o se-ices except as ot+ewise po-ided
+eein<
4:5 Taxes on t+e /oss eceipts o& tanspotation contactos and pesons
en/a/ed in t+e tanspotation o& passen/es o &ei/+t b2 +ie and co..on
caies b2 ai! land o wate! except as po-ided in t+is Code<
4k5 Taxes on pe.iu.s paid b2 wa2 o einsuance o etocession<
4l5 Taxes! &ees o c+a/es &o t+e e/istation o& .oto -e+icles and &o t+e
issuance o& all kinds o& licenses o pe.its &o t+e di-in/ t+eeo&! except
tic2cles<
4.5 Taxes! &ees! o ot+e c+a/es on 9+ilippine poducts actuall2 expoted!
except as ot+ewise po-ided +eein<
4n5 Taxes! &ees! o c+a/es! on Count2side and Baan/a2 Business
7ntepises and coopeati-es dul2 e/isteed unde '.A. (o. )81* and
'epublic Act (u.beed "ixt2-nine +unded t+it2-ei/+t 4'.A. (o. )9685
ot+ewise known as t+e BCoopeati-e Code o& t+e 9+ilippinesB
especti-el2< and
4o5 Taxes! &ees o c+a/es o& an2 kind on t+e (ational ,o-en.ent! its
a/encies and instu.entalities! and local /o-en.ent units.
#. Cases;
#.1 7xcise Tax; )rovince o- (ulacan v. &ourt o- A++eals, G.R. No. 120272,
Novem%er 27, 1993.
#.# 7xcise Tax; )etron &or+oration v. Tiangco, et al. G.R. No. 1/3331, A+ril 10,
2223
#.6 MAT; &it, o- .anila, et al. v. &oca'cola (ottlers )*ili++ines, !nc. G.R. No.
13134/, August 4, 2229
#.% Tanspotation Contactos; First )*ili++ine !n#ustrial &or+oration v. &ourt
o- A++eals, GR No. 12/943, Decem%er 29, 1993
#.D 'e/istation o& Moto Me+icles; LT$ v. &it, o- (utuan, GR No. 171/12,
1anuar, 22, 2222
#.) (ational ,o-en.ent! a/encies and instu.entalities and L,3s; .actan &e%u
!nternational Air+ort Aut*orit, v. .arcos, et.al, No. 122232, 8e+tem%er 11,
1990
#.7 (ational ,o-en.ent! a/encies and instu.entalities and L,3s N)& v. &it, o-
&a%anatuan, GR No. 149112, A+ril 9, 2227
#.8 (ational ,o-en.ent! a/encies and instu.entalities and L,3s; .!AA v. &ourt
o- A++eals, G.R. 1//0/2, 1ul, 22, 2220
#.9 (ational ,o-en.ent! a/encies and instu.entalities and L,3s; )*ili++ine
)orts Aut*orit, v. &(AA, &TA 9( &ase No. 137, 1ul, 72, 2227
@. "cope o& Taxin/ 9owes o& 9o-inces! Municipalities! Cities and
Baan/a2
1. Co..on 'e-enue-'aisin/ 9owes
a. "ecs. 1D6 $ 1DD! L,C
"7CTI0( 1D6. "e-ice Fees and C+a/es. 8 Local /o-en.ent units .a2
i.pose and collect suc+ easonable &ees and c+a/es &o se-ices endeed. cdt
"7CTI0( 1D%. 9ublic 3tilit2 C+a/es. 8 Local /o-en.ent units .a2 &ix t+e
ates &o t+e opeation o& public utilities owned! opeated and .aintained b2 t+e. wit+in
t+ei :uisdiction.
"7CTI0( 1DD. Toll Fees o C+a/es. 8 T+e san//unian concened .a2
pescibe t+e te.s and conditions and &ix t+e ates &o t+e i.position o& toll &ees o
c+a/es &o t+e use o& an2 public oad! pie! o w+a&! watewa2! bid/e! &e2 o
teleco..unication s2ste. &unded and constucted b2 t+e local /o-en.ent unit
concened; 9o-ided! T+at no suc+ toll &ees o c+a/es s+all be collected &o. o&&ices
and enlisted .en o& t+e A.ed Foces o& t+e 9+ilippines and .e.bes o& t+e 9+ilippine
(ational 9olice on .ission! post o&&ice pesonnel deli-ein/ .ail! p+2sicall2-
+andicapped! and disabled citiEens w+o ae sixt2-&i-e 4)D5 2eas o olde.
?+en public sa&et2 and wel&ae so e1uies! t+e san//unian concened .a2 discontinue
t+e collection o& t+e tolls! and t+eea&te t+e said &acilit2 s+all be &ee and open &o public
use.
#. Cities
a. "ec. 1D1! L,C
"7CTI0( 1D1. "cope o& Taxin/ 9owes. 8 7xcept as ot+ewise po-ided in
t+is Code! t+e cit2! .a2 le-2 t+e taxes! &ees! and c+a/es w+ic+ t+e po-ince o
.unicipalit2 .a2 i.pose; 9o-ided! +owe-e! T+at t+e taxes! &ees and c+a/es le-ied and
collected b2 +i/+l2 ubaniEed and independent co.ponent cities s+all accue to t+e. and
distibuted in accodance wit+ t+e po-isions o& t+is Code.
T+e ates o& taxes t+at t+e cit2 .a2 le-2 .a2 exceed t+e .axi.u. ates allowed
&o t+e po-ince o .unicipalit2 b2 not .oe t+an &i&t2 pecent 4D*L5 except t+e ates o&
po&essional and a.use.ent taxes.
6. 9o-inces
a. "ecs. 16% $ 1%1! L,C
b. Tans&e o& 'eal 9opet2
c. 9intin/ and 9ublication
d. Fanc+ise Tax
c.1 )LDT v. &it, o- Davao, G.R. No. 147307. August 22,
2221
c.# )LDT v. &it, o- Davao, G.R. No. 147307, .arc* 2/,
2227
c.6 8mart &ommunications !nc. v. &it, o- Davao, G.R. No.
1//491, 8e+tem%er 10, 2223
c.% :ue;on &it,, et al., v. A(8'&(N (roa#casting &or+.,
G.R. No. 100423, $cto%er 0, 2223
c.D Na+ocor v. )rovince o- !sa%ela, G.R. No. 10/327, 1une
10, 2220
e. "and! ,a-el and 0t+e Gua2 'esouces
&. 9o&essional Tax
/. A.use.ent Tax
+. Annual Fixed Tax Fo 7-e2 @eli-e2 Tuck o Man o&
Manu&actues o 9oduces! ?+olesales o&! @eales! o 'etailes
in Cetain 9oducts
%. Municipalities
a. "ecs. 1%#! 1%6! 1%7 $ 1%9
b. Business Tax
i. 9ricsson Telecommunications !nc. v. &it, o- )asig,
GR No. 17007, Novem%er 22, 2227
ii. <amane v. (A Le+anto &on#ominium &or+oration
GR No. 1/4997, $cto%er 2/, 222/
D. Baan/a2;
a. "ec. 1D#! L,C
"7CTI0( 1D#. "cope o& Taxin/ 9owes. 8 T+e baan/a2s .a2 le-2 taxes! &ees!
and c+a/es! as po-ided in t+is Aticle! w+ic+ s+all exclusi-el2 accue to t+e.;
4a5 Taxes 8 0n stoes o etailes wit+ &ixed business establis+.ents wit+
/oss sales o& eceipts o& t+e pecedin/ calenda 2ea o& Fi&t2 t+ousand
pesos 49D*!***.**5 o less! in t+e case o& cities and T+it2 t+ousand pesos
496*!***.**5 o less! in t+e case o& .unicipalities! at a ate not exceedin/
one pecent 41L5 on suc+ /oss sales o eceipts. cda
4b5 "e-ice Fees o C+a/es. 8 Baan/a2s .a2 collect easonable &ees o
c+a/es &o se-ices endeed in connection wit+ t+e e/ulations o t+e use
o& baan/a2-owned popeties o se-ice &acilities suc+ as pala2! copa! o
tobacco d2es.
4c5 Baan/a2 Cleaance. 8 (o cit2 o .unicipalit2 .a2 issue an2 license o
pe.it &o an2 business o acti-it2 unless a cleaance is &ist obtained &o.
t+e baan/a2 w+ee suc+ business o acti-it2 is located o conducted. Fo
suc+ cleaance! t+e san//unian/ baan/a2 .a2 i.pose a easonable &ee.
T+e application &o cleaance s+all be acted upon wit+in se-en 475 wokin/
da2s &o. t+e &ilin/ t+eeo&. In t+e e-ent t+at t+e cleaance is not issued
wit+in t+e said peiod! t+e cit2 o .unicipalit2 .a2 issue t+e said license
o pe.it. aisa dc
4d5 0t+e &ees and C+a/es. 8 T+e baan/a2 .a2 le-2 easonable &ees and
c+a/es;
415 0n co..ecial beedin/ o& &i/+tin/ cocks! cock&i/+ts and
cockpits<
4#5 0n places o& eceation w+ic+ c+a/e ad.ission &ees< and
465 0n billboads! si/nboads! neon si/ns! and outdoo ad-etise.ents.
). 'ates o& Tax in Meto Manila! "ec. 1%%! L,C
"7CTI0( 1%%. 'ates o& Tax wit+in t+e Metopolitan Manila Aea. 8 T+e
.unicipalities wit+in t+e Metopolitan Manila Aea .a2 le-2 taxes at ates w+ic+ s+all
not exceed b2 &i&t2 pecent 4D*L5 t+e .axi.u. ates pescibed in t+e pecedin/ section.
7. 9a2.ent o& Business Taxes $ "ec. 1%)! L,C
"7CTI0( 1%). 9a2.ent o& Business Taxes. 8 4a5 T+e taxes i.posed unde
"ection 1%6 s+all be pa2able &o e-e2 sepaate o distinct establis+.ent o place w+ee
business sub:ect to t+e tax is conducted and one line o& business does not beco.e exe.pt
b2 bein/ conducted wit+ so.e ot+e businesses &o w+ic+ suc+ tax +as been paid. T+e tax
on a business .ust be paid b2 t+e peson conductin/ t+e sa.e.
4b5 In cases w+ee a peson conducts o opeates two 4#5 o .oe o& t+e
businesses .entioned in "ection 1%6 o& t+is Code w+ic+ ae sub:ect to t+e sa.e ate o&
tax! t+e tax s+all be co.puted on t+e co.bined total /oss sales o eceipts o& t+e said
two 4#5 o .oe elated businesses.
4c5 In cases w+ee a peson conducts o opeates two 4#5 o .oe businesses
.entioned in "ection 1%6 o& t+is Code w+ic+ ae sub:ect to di&&eent ates o& tax! t+e
/oss sales o eceipts o& eac+ business s+all be sepaatel2 epoted &o t+e pupose o&
co.putin/ t+e tax due &o. eac+ business.
8. 'etie.ent o& Business
a. "ec. 1%D! L,C
"7CTI0( 1%D. 'etie.ent o& Business. 8 A business sub:ect to tax pusuant to
t+e pecedin/ sections s+all! upon te.ination t+eeo&! sub.it a swon state.ent o& its
/oss sales o eceipts &o t+e cuent 2ea. I& t+e tax paid duin/ t+e 2ea be less t+an t+e
tax due on said /oss sales o eceipts o& t+e cuent 2ea! t+e di&&eence s+all be paid
be&oe t+e business is consideed o&&iciall2 etied.
b. Case; .o%il )*ili++ines, !nc. v. &it, Treasurer o- .a5ati,
et al, G.R. No. 1/4292, 1ul, 14, 222/
9. "itus o& Tax
a. "ec. 1D*! L,C
"7CTI0( 1D*. "itus o& t+e Tax. 8 4a5 Fo puposes o& collection o& t+e taxes
unde "ection 1%6 o& t+is Code! .anu&actues! asse.bles! epackes! bewes! distilles!
ecti&ies and co.poundes o& li1uo! distilled spiits and wines! .illes! poduces!
expotes! w+olesales! distibutos! deales! contactos! banks and ot+e &inancial
institutions! and ot+e businesses! .aintainin/ o opeatin/ banc+ o sales outlet
elsew+ee s+all ecod t+e sale in t+e banc+ o sales outlet .akin/ t+e sale o tansaction!
and t+e tax t+eeon s+all accue and s+all be paid to t+e .unicipalit2 w+ee suc+ banc+
o sales outlet is located. In cases w+ee t+ee is no suc+ banc+ o sales outlet in t+e cit2
o .unicipalit2 w+ee t+e sale o tansaction is .ade! t+e sale s+all be dul2 ecoded in
t+e pincipal o&&ice and t+e taxes due s+all accue and s+all be paid to suc+ cit2 o
.unicipalit2.
4b5 T+e &ollowin/ sales allocation s+all appl2 to .anu&actues! asse.bles!
contactos! poduces! and expotes wit+ &actoies! po:ect o&&ices! plants! and
plantations in t+e pusuit o& t+ei business;
415 T+it2 pecent 46*L5 o& all sales ecoded in t+e pincipal o&&ice
s+all be taxable b2 t+e cit2 o .unicipalit2 w+ee t+e pincipal
o&&ice is located< and
4#5 "e-ent2 pecent 47*L5 o& all sales ecoded in t+e pincipal o&&ice
s+all be taxable b2 t+e cit2 o .unicipalit2 w+ee t+e &acto2!
po:ect o&&ice! plant! o plantation is located.
4c5 In case o& a plantation located at a place ot+e t+an t+e place w+ee t+e
&acto2 is located! said se-ent2 pecent 47*L5 .entioned in subpaa/ap+ 4b5 o&
subsection 4#5 abo-e s+all be di-ided as &ollows;
415 "ixt2 pecent 4)*L5 to t+e cit2 o .unicipalit2 w+ee t+e &acto2 is
located< and
4#5 Fot2 pecent 4%*L5 to t+e cit2 o .unicipalit2 w+ee t+e
plantation is located.
4d5 In cases w+ee a .anu&actue! asse.ble! poduce! expote o contacto
+as two 4#5 o .oe &actoies! po:ect o&&ices! plants! o plantations located in di&&eent
localities! t+e se-ent2 pecent 47*L5 sales allocation .entioned in subpaa/ap+ 4b5 o&
subsection 4#5 abo-e s+all be poated a.on/ t+e localities w+ee t+e &actoies! po:ect
o&&ices! plants! and plantations ae located in popotion to t+ei especti-e -olu.es o&
poduction duin/ t+e peiod &o w+ic+ t+e tax is due.
4e5 T+e &oe/oin/ sales allocation s+all be applied iespecti-e o& w+et+e o
not sales ae .ade in t+e localit2 w+ee t+e &acto2! po:ect o&&ice! plant! o plantation is
located.
b. Case; Lin%erg )*ili++ines, !nc. v. &it, o- .a5ati , &TA.
A& No. 19, 1une 23, 2227, &ivil &ase No. 27'7/4, RT& .a5ati
(ranc* /3
1*. Collection o& Taxes
a. "ecs. 1)D - 171
"7CTI0( 1)D. Tax 9eiod and Manne o& 9a2.ent. 8 3nless ot+ewise
po-ided in t+is Code! t+e tax peiod o& all local taxes! &ees and c+a/es s+all be t+e
calenda 2ea. "uc+ taxes! &ees and c+a/es .a2 be paid in 1uatel2 install.ents.
"7CTI0( 1)). Accual o& Tax. 8 3nless ot+ewise po-ided in t+is Code!
all local taxes! &ees! and c+a/es s+all accue on t+e &ist 41st5 da2 o& >anua2 o& eac+
2ea. =owe-e! new taxes! &ees o c+a/es! o c+an/es in t+e ates t+eeo&! s+all accue on
t+e &ist 41st5 da2 o& t+e 1uate next &ollowin/ t+e e&&ecti-it2 o& t+e odinance i.posin/
suc+ new le-ies o ates.
"7CTI0( 1)7. Ti.e o& 9a2.ent. 8 3nless ot+ewise po-ided in t+is
Code! all local taxes! &ees! and c+a/es s+all be paid wit+in t+e &ist twent2 4#*5 da2s o&
>anua2 o o& eac+ subse1uent 1uate! as t+e case .a2 be. T+e san//unian concened
.a2! &o a :usti&iable eason o cause! extend t+e ti.e &o pa2.ent o& suc+ taxes! &ees! o
c+a/es wit+out suc+a/es o penalties! but onl2 &o a peiod not exceedin/ six 4)5
.ont+s.
"7CTI0( 1)8. "uc+a/es and 9enalties on 3npaid Taxes! Fees! o
C+a/es. 8 T+e san//unian .a2 i.pose a suc+a/e not exceedin/ twent2-&i-e 4#DL5 o&
t+e a.ount o& taxes! &ees o c+a/es not paid on ti.e and an inteest at t+e ate not
exceedin/ two pecent 4#L5 pe .ont+ o& t+e unpaid taxes! &ees o c+a/es includin/
suc+a/es! until suc+ a.ount is &ull2 paid but in no case s+all t+e total inteest on t+e
unpaid a.ount o potion t+eeo& exceed t+it2-six 46)5 .ont+s. cd
"7CTI0( 1)9. Inteests on 0t+e 3npaid 'e-enues. 8 ?+ee t+e a.ount
o& an2 ot+e e-enue due a local /o-en.ent unit! except -olunta2 contibutions o
donations! is not paid on t+e date &ixed in t+e odinance! o in t+e contact! expessed o
i.plied! o upon t+e occuence o& t+e e-ent w+ic+ +as /i-en ise to its collection! t+ee
s+all be collected as pat o& t+at a.ount an inteest t+eeon at t+e ate not exceedin/ two
pecent 4#L5 pe .ont+ &o. t+e date it is due until it is paid! but in no case s+all t+e total
inteest on t+e unpaid a.ount o a potion t+eeo& exceed t+it2-six 46)5 .ont+s.
"7CTI0( 17*. Collection o& Local 'e-enue b2 Teasue. 8 All local
taxes! &ees! and c+a/es s+all be collected b2 t+e po-incial! cit2! .unicipal! o baan/a2
teasue! o t+ei dul2 aut+oiEed deputies.
T+e po-incial! cit2 o .unicipal teasue .a2 desi/nate t+e baan/a2 teasue
as +is deput2 to collect local taxes! &ees! o c+a/es. In case a bond is e1uied &o t+e
pupose! t+e po-incial! cit2 o .unicipal /o-en.ent s+all pa2 t+e pe.iu.s t+eeon in
addition to t+e pe.iu.s o& bond t+at .a2 be e1uied unde t+is Code.
"7CTI0( 171. 7xa.ination o& Books o& Accounts and 9etinent 'ecods
o& Business.en b2 Local Teasue. 8 T+e po-incial! cit2! .unicipal o baan/a2
teasue .a2! b2 +i.sel& o t+ou/+ an2 o& +is deputies dul2 aut+oiEed in witin/!
exa.ine t+e books! accounts! and ot+e petinent ecods o& an2 peson! patnes+ip!
copoation! o association sub:ect to local taxes! &ees and c+a/es in ode to ascetain!
assess! and collect t+e coect a.ount o& t+e tax! &ee! o c+a/e. "uc+ exa.ination s+all
be .ade duin/ e/ula business +ous! onl2 once &o e-e2 tax peiod! and s+all be
ceti&ied to b2 t+e exa.inin/ o&&icial. "uc+ ceti&icate s+all be .ade o& ecod in t+e
books o& accounts o& t+e taxpa2e exa.ined. casia
In case t+e exa.ination +eein aut+oiEed is .ade b2 a dul2 aut+oiEed deput2 o&
t+e local teasue! t+e witten aut+oit2 o& t+e deput2 concened s+all speci&icall2 state
t+e na.e! addess! and business o& t+e taxpa2e w+ose books! accounts! and petinent
ecods ae to be exa.ined! t+e date and place o& suc+ exa.ination and t+e pocedue to
be &ollowed in conductin/ t+e sa.e.
Fo t+is pupose! t+e ecods o& t+e e-enue distict o&&ice o& t+e Bueau o&
Intenal 'e-enue s+all be .ade a-ailable to t+e local teasue! +is deput2 o dul2
aut+oiEed epesentati-e.
11. 'e.edies
a. ,o-en.entAs 'e.edies! 8ecs. 172 = 13/, LG&
"7CTI0( 17#. Application o& C+apte. 8 T+e po-isions o& t+is C+apte and
t+e e.edies po-ided +eein .a2 be a-ailed o& &o t+e collection o& an2 delin1uent local
tax! &ee! c+a/e! o ot+e e-enue.
"7CTI0( 176. Local ,o-en.entIs Lien. 8 Local taxes! &ees! c+a/es and ot+e
e-enues constitute a lien! supeio to all liens! c+a/es o encu.bances in &a-o o& an2
peson! en&oceable b2 appopiate ad.inistati-e o :udicial action! not onl2 upon an2
popet2 o i/+ts t+eein w+ic+ .a2 be sub:ect to t+e lien but also upon popet2 used in
business! occupation! pactice o& po&ession o callin/! o execise o& pi-ile/e wit+
espect to w+ic+ t+e lien is i.posed. T+e lien .a2 onl2 be extin/uis+ed upon &ull
pa2.ent o& t+e delin1uent local taxes! &ees and c+a/es includin/ elated suc+a/es and
inteest.
"7CTI0( 17%. Ci-il 'e.edies. 8 T+e ci-il e.edies &o t+e collection o&
local taxes! &ees! o c+a/es! and elated suc+a/es and inteest esultin/ &o.
delin1uenc2 s+all be;
4a5 B2 ad.inistati-e action t+ou/+ distaint o& /oods! c+attels! o e&&ects! and
ot+e pesonal popet2 o& w+ate-e c+aacte! includin/ stocks and ot+e
secuities! debts! cedits! bank accounts! and inteest in and i/+ts to pesonal
popet2! and b2 le-2 upon eal popet2 and inteest in o i/+ts to eal
popet2< and
4b5 B2 :udicial action.
7it+e o& t+ese e.edies o all .a2 be pusued concuentl2 o si.ultaneousl2 at
t+e discetion o& t+e local /o-en.ent unit concened.
"7CTI0( 17D. @istaint o& 9esonal 9opet2. 8 T+e e.ed2 b2 distaint s+all
poceed as &ollows;
4a5 "eiEue 8 3pon &ailue o& t+e peson owin/ an2 local tax! &ee! o c+a/e
to pa2 t+e sa.e at t+e ti.e e1uied! t+e local teasue o +is deput2 .a2!
upon witten notice! seiEe o con&iscate an2 pesonal popet2 belon/in/ to
t+at peson o an2 pesonal popet2 sub:ect to t+e lien in su&&icient
1uantit2 to satis&2 t+e tax! &ee! o c+a/e in 1uestion! to/et+e wit+ an2
ince.ent t+eeto incident to delin1uenc2 and t+e expenses o& seiEue. In
suc+ case! t+e local teasue o +is deput2 s+all issue a dul2 aut+enticated
ceti&icate based upon t+e ecods o& +is o&&ice s+owin/ t+e &act o&
delin1uenc2 and t+e a.ounts o& t+e tax! &ee! o c+a/e and penalt2 due.
"uc+ ceti&icate s+all se-e as su&&icient waant &o t+e distaint o&
pesonal popet2 a&oe.entioned! sub:ect to t+e taxpa2eIs i/+t to clai.
exe.ption unde t+e po-isions o& existin/ laws. @istained pesonal
popet2 s+all be sold at public auction in t+e .anne +eein po-ided &o.

4b5 Accountin/ o& distained /oods. 8 T+e o&&ice executin/ t+e distaint
s+all .ake o cause to be .ade an account o& t+e /oods! c+attels o e&&ects
distained! a cop2 o& w+ic+ si/ned b2 +i.sel& s+all be le&t eit+e wit+ t+e
owne o peson &o. w+ose possession t+e /oods! c+attels o e&&ects ae
taken! o at t+e dwellin/ o place o& business o& t+at peson and wit+
so.eone o& suitable a/e and discetion! to w+ic+ list s+all be added a
state.ent o& t+e su. de.anded and a note o& t+e ti.e and place o& sale.
4c5 9ublication 8 T+e o&&ice s+all &ot+wit+ cause a noti&ication to be
ex+ibited in not less t+an t+ee 465 public and conspicuous places in t+e
teito2 o& t+e local /o-en.ent unit w+ee t+e distaint is .ade!
speci&2in/ t+e ti.e and place o& sale! and t+e aticles distained. T+e ti.e
o& sale s+all not be less t+an twent2 4#*5 da2s a&te notice to t+e owne o
possesso o& t+e popet2 as abo-e speci&ied and t+e publication o postin/
o& t+e notice. 0ne place &o t+e postin/ o& t+e notice s+all be at t+e o&&ice
o& t+e c+ie& executi-e o& t+e local /o-en.ent unit in w+ic+ t+e popet2 is
distained.
4d5 'elease o& distained popet2 upon pa2.ent pio to sale 8 I& at an2 ti.e
pio to t+e consu..ation o& t+e sale! all t+e pope c+a/es ae paid to
t+e o&&ice conductin/ t+e sale! t+e /oods o e&&ects distained s+all be
estoed to t+e owne.
4e5 9ocedue o& sale 8 At t+e ti.e and place &ixed in t+e notice! t+e o&&ice
conductin/ t+e sale s+all sell t+e /oods o e&&ects so distained at public
auction to t+e +i/+est bidde &o cas+. ?it+in &i-e 4D5 da2s a&te t+e sale!
t+e local teasue s+all .ake a epot o& t+e poceedin/s in witin/ to t+e
local c+ie& executi-e concened.
"+ould t+e popet2 distained be not disposed o& wit+in one +unded and twent2
41#*5 da2s &o. t+e date o& distaint! t+e sa.e s+all be consideed as sold to t+e local
/o-en.ent unit concened &o t+e a.ount o& t+e assess.ent .ade t+eeon b2 t+e
Co..ittee on Appaisal and to t+e extent o& t+e sa.e a.ount! t+e tax delin1uencies s+all
be cancelled.
"aid Co..ittee on Appaisal s+all be co.posed o& t+e cit2 o .unicipal teasue
as c+ai.an! wit+ a epesentati-e o& t+e Co..ission on Audit and t+e cit2 o .unicipal
assesso as .e.bes.
4&5 @isposition o& poceeds 8 T+e poceeds o& t+e sale s+all be applied to
satis&2 t+e tax! includin/ t+e suc+a/es! inteest! and ot+e penalties
incident to delin1uenc2! and t+e expenses o& t+e distaint and sale. T+e
balance o-e and abo-e w+at is e1uied to pa2 t+e entie clai. s+all be
etuned to t+e owne o& t+e popet2 sold. T+e expenses c+a/eable upon
t+e seiEue and sale s+all e.bace onl2 t+e actual expenses o& seiEue and
pese-ation o& t+e popet2 pendin/ t+e sale! and no c+a/e s+all be
i.posed &o t+e se-ices o& t+e local o&&ice o +is deput2. ?+ee t+e
poceeds o& t+e sale ae insu&&icient to satis&2 t+e clai.! ot+e popet2
.a2! in like .anne! be distained until t+e &ull a.ount due! includin/ all
expenses! is collected.
"7CTI0( 17). Le-2 on 'eal 9opet2. 8 A&te t+e expiation o& t+e ti.e
e1uied to pa2 t+e delin1uent tax! &ee! o c+a/e! eal popet2 .a2 be le-ied on be&oe!
si.ultaneousl2! o a&te t+e distaint o& pesonal popet2 belon/in/ to t+e delin1uent
taxpa2e. To t+is end! t+e po-incial! cit2 o .unicipal teasue! as t+e case .a2 be! s+all
pepae a dul2 aut+enticated ceti&icate s+owin/ t+e na.e o& t+e taxpa2e and t+e a.ount
o& t+e tax! &ee! o c+a/e! and penalt2 due &o. +i.. "aid ceti&icate s+all opeate wit+ t+e
&oce o& a le/al execution t+ou/+out t+e 9+ilippines. Le-2 s+all be e&&ected b2 witin/
upon said ceti&icate t+e desciption o& t+e popet2 upon w+ic+ le-2 is .ade. At t+e sa.e
ti.e! witten notice o& t+e le-2 s+all be .ailed to o se-ed upon t+e assesso and t+e
'e/iste o& @eeds o& t+e po-ince o cit2 w+ee t+e popet2 is located w+o s+all annotate
t+e le-2 on t+e tax declaation and ceti&icate o& title o& t+e popet2! especti-el2! and t+e
delin1uent taxpa2e o! i& +e be absent &o. t+e 9+ilippines! to +is a/ent o t+e .ana/e
o& t+e business in espect to w+ic+ t+e liabilit2 aose! o i& t+ee be none! to t+e occupant
o& t+e popet2 in 1uestion.
In case t+e le-2 on eal popet2 is not issued be&oe o si.ultaneousl2 wit+ t+e
waant o& distaint on pesonal popet2! and t+e pesonal popet2 o& t+e taxpa2e is not
su&&icient to satis&2 +is delin1uenc2! t+e po-incial! cit2 o .unicipal teasue! as t+e
case .a2 be! s+all wit+in t+it2 46*5 da2s a&te execution o& t+e distaint! poceed wit+ t+e
le-2 on t+e taxpa2eIs eal popet2.
A epot on an2 le-2 s+all! wit+in ten 41*5 da2s a&te eceipt o& t+e waant! be
sub.itted b2 t+e le-2in/ o&&ice to t+e san//unian concened.
"7CTI0( 177. 9enalt2 &o Failue to Issue and 7xecute ?aant. 8 ?it+out
pe:udice to ci.inal posecution unde t+e 'e-ised 9enal Code and ot+e applicable
laws! an2 local teasue w+o &ails to issue o execute t+e waant o& distaint o le-2 a&te
t+e expiation o& t+e ti.e pescibed! o w+o is &ound /uilt2 o& abusin/ t+e execise
t+eeo& b2 co.petent aut+oit2 s+all be auto.aticall2 dis.issed &o. t+e se-ice a&te
due notice and +eain/.
"7CTI0( 178. Ad-etise.ent and "ale. 8 ?it+in t+it2 46*5 da2s a&te
t+e le-2! t+e local teasue s+all poceed to publicl2 ad-etise &o sale o auction t+e
popet2 o a usable potion t+eeo& as .a2 be necessa2 to satis&2 t+e clai. and cost o&
sale< and suc+ ad-etise.ent s+all co-e a peiod o& at least t+it2 46*5 da2s. It s+all be
e&&ected b2 postin/ a notice at t+e .ain entance o& t+e .unicipal buildin/ o cit2 +all!
and in a public and conspicuous place in t+e baan/a2 w+ee t+e eal popet2 is located!
and b2 publication once a week &o t+ee 465 weeks in a newspape o& /eneal ciculation
in t+e po-ince! cit2 o .unicipalit2 w+ee t+e popet2 is located. T+e ad-etise.ent
s+all contain t+e a.ount o& taxes! &ees o c+a/es! and penalties due t+eeon! and t+e ti.e
and place o& sale! t+e na.e o& t+e taxpa2e a/ainst w+o. t+e taxes! &ees! o c+a/es ae
le-ied! and a s+ot desciption o& t+e popet2 to be sold. At an2 ti.e be&oe t+e date
&ixed &o t+e sale! t+e taxpa2e .a2 sta2 t+e poceedin/s b2 pa2in/ t+e taxes! &ees!
c+a/es! penalties and inteests. I& +e &ails to do so! t+e sale s+all poceed and s+all be
+eld eit+e at t+e .ain entance o& t+e po-incial! cit2 o .unicipal buildin/! o on t+e
popet2 to be sold! o at an2 ot+e place as dete.ined b2 t+e local teasue conductin/
t+e sale and speci&ied in t+e notice o& sale.
?it+in t+it2 46*5 da2s a&te t+e sale! t+e local teasue o +is deput2 s+all .ake a
epot o& t+e sale to t+e san//unian concened! and w+ic+ s+all &o. pat o& +is ecods.
A&te consultation wit+ t+e san//unian! t+e local teasue s+all .ake and deli-e to t+e
puc+ase a ceti&icate o& sale! s+owin/ t+e poceedin/s o& t+e sale! descibin/ t+e
popet2 sold! statin/ t+e na.e o& t+e puc+ase and settin/ out t+e exact a.ount o& all
taxes! &ees! c+a/es! and elated suc+a/es! inteests! o penalties; 9o-ided! +owe-e!
T+at an2 excess in t+e poceeds o& t+e sale o-e t+e clai. and cost o& sales s+all be tuned
o-e to t+e owne o& t+e popet2.
T+e local teasue .a2! b2 odinance dul2 appo-ed! ad-ance an a.ount
su&&icient to de&a2 t+e costs o& collection b2 .eans o& t+e e.edies po-ided &o in t+is
Title! includin/ t+e pese-ation o tanspotation in case o& pesonal popet2! and t+e
ad-etise.ent and subse1uent sale! in cases o& pesonal and eal popet2 includin/
i.po-e.ents t+eeon.
"7CTI0( 179. 'ede.ption o& 9opet2 "old. 8 ?it+in one 415 2ea &o.
t+e date o& sale! t+e delin1uent taxpa2e o +is epesentati-e s+all +a-e t+e i/+t to
edee. t+e popet2 upon pa2.ent to t+e local teasue o& t+e total a.ount o& taxes!
&ees! o c+a/es! and elated suc+a/es! inteests o penalties &o. t+e date o&
delin1uenc2 to t+e date o& sale! plus inteest o& not .oe t+an two pecent 4#L5 pe .ont+
on t+e puc+ase pice &o. t+e date o& puc+ase to t+e date o& ede.ption. "uc+ pa2.ent
s+all in-alidate t+e ceti&icate o& sale issued to t+e puc+ase and t+e owne s+all be
entitled to a ceti&icate o& ede.ption &o. t+e po-incial! cit2 o .unicipal teasue o
+is deput2.
T+e po-incial! cit2 o .unicipal teasue o +is deput2! upon suende b2 t+e
puc+ase o& t+e ceti&icate o& sale pe-iousl2 issued to +i.! s+all &ot+wit+ etun to t+e
latte t+e entie puc+ase pice paid b2 +i. plus t+e inteest o& not .oe t+an two pecent
4#L5 pe .ont+ +eein po-ided &o! t+e potion o& t+e cost o& sale and ot+e le/iti.ate
expenses incued b2 +i.! and said popet2 t+eea&te s+all be &ee &o. t+e lien o& suc+
taxes! &ees! o c+a/es! elated suc+a/es! inteests! and penalties.
T+e owne s+all not! +owe-e! be depi-ed o& t+e possession o& said popet2 and
s+all be entitled to t+e entals and ot+e inco.e t+eeo& until t+e expiation o& t+e ti.e
allowed &o its ede.ption.
"7CTI0( 18*. Final @eed to 9uc+ase. 8 In case t+e taxpa2e &ails to
edee. t+e popet2 as po-ided +eein! t+e local teasue s+all execute a deed
con-e2in/ to t+e puc+ase so .uc+ o& t+e popet2 as +as been sold! &ee &o. liens o&
an2 taxes! &ees! c+a/es! elated suc+a/es! inteests! and penalties. T+e deed s+all
succinctl2 ecite all t+e poceedin/s upon w+ic+ t+e -alidit2 o& t+e sale depends.
"7CTI0( 181. 9uc+ase o& 9opet2 B2 t+e Local ,o-en.ent 3nits &o
?ant o& Bidde. 8 In case t+ee is no bidde &o t+e eal popet2 ad-etised &o sale as
po-ided +eein! o i& t+e +i/+est bid is &o an a.ount insu&&icient to pa2 t+e taxes! &ees!
o c+a/es! elated suc+a/es! inteests! penalties and costs! t+e local teasue
conductin/ t+e sale s+all puc+ase t+e popet2 in be+al& o& t+e local /o-en.ent unit
concened to satis&2 t+e clai. and wit+in two 4#5 da2s t+eea&te s+all .ake a epot o&
+is poceedin/s w+ic+ s+all be e&lected upon t+e ecods o& +is o&&ice. It s+all be t+e dut2
o& t+e 'e/ista o& @eeds concened upon e/istation wit+ +is o&&ice o& an2 suc+
declaation o& &o&eitue to tans&e t+e title o& t+e &o&eited popet2 to t+e local
/o-en.ent unit concened wit+out t+e necessit2 o& an ode &o. a co.petent cout.
?it+in one 415 2ea &o. t+e date o& suc+ &o&eitue! t+e taxpa2e o an2 o& +is
epesentati-e! .a2 edee. t+e popet2 b2 pa2in/ to t+e local teasue t+e &ull a.ount
o& t+e taxes! &ees! c+a/es! and elated suc+a/es! inteests! o penalties! and t+e costs o&
sale. I& t+e popet2 is not edee.ed as po-ided +eein! t+e ownes+ip t+eeo& s+all be
&ull2 -ested on t+e local /o-en.ent unit concened.
"7CTI0( 18#. 'esale o& 'eal 7state Taken &o Taxes! Fees! o C+a/es.
8 T+e san//unian concened .a2! b2 odinance dul2 appo-ed! and upon notice o& not
less t+an twent2 4#*5 da2s! sell and dispose o& t+e eal popet2 ac1uied unde t+e
pecedin/ section at public auction. T+e poceeds o& t+e sale s+all accue to t+e /eneal
&und o& t+e local /o-en.ent unit concened.
"7CTI0( 186. Collection o& @elin1uent Taxes! Fees! C+a/es o ot+e
'e-enues t+ou/+ >udicial Action. 8 T+e local /o-en.ent unit concened .a2 en&oce
t+e collection o& delin1uent taxes! &ees! c+a/es o ot+e e-enues b2 ci-il action in an2
cout o& co.petent :uisdiction. T+e ci-il action s+all be &iled b2 t+e local teasue
wit+in t+e peiod pescibed in "ection 19% o& t+is Code.
"7CTI0( 18%. Fut+e @istaint o Le-2. 8 T+e e.edies b2 distaint and
le-2 .a2 be epeated i& necessa2 until t+e &ull a.ount due! includin/ all expenses! is
collected.
"7CTI0( 18D. 9esonal 9opet2 7xe.pt &o. @istaint o Le-2. 8 T+e
&ollowin/ popet2 s+all be exe.pt &o. distaint and le-2! attac+.ent o execution
t+eeo& &o delin1uenc2 in t+e pa2.ent o& an2 local tax! &ee o c+a/e! includin/ t+e
elated suc+a/e and inteest;
4a5 Tools and i.ple.ents necessail2 used b2 t+e delin1uent taxpa2e in +is tade o
e.plo2.ent<
4b5 0ne 415 +ose! cow! caabao! o ot+e beast o& buden! suc+ as t+e delin1uent
taxpa2e .a2 select! and necessail2 used b2 +i. in +is odina2 occupation<
4c5 =is necessa2 clot+in/! and t+at o& all +is &a.il2<
4d5 =ouse+old &unitue and utensils necessa2 &o +ousekeepin/ and used &o t+at
pupose b2 t+e delin1uent taxpa2e! suc+ as +e .a2 select! o& a -alue not
exceedin/ Ten t+ousand pesos 491*!***.**5<
4e5 9o-isions! includin/ cops! actuall2 po-ided &o indi-idual o &a.il2 use
su&&icient &o &ou 4%5 .ont+s<
4&5 T+e po&essional libaies o& doctos! en/inees! law2es and :ud/es<
4/5 0ne &is+in/ boat and net! not exceedin/ t+e total -alue o& Ten t+ousand pesos
491*!***.**5! b2 t+e law&ul use o& w+ic+ a &is+e.an eans +is li-eli+ood< and
4+5 An2 .ateial o aticle &o.in/ pat o& a +ouse o i.po-e.ent o& an2 eal
popet2.
b. Taxpa2eAs 'e.edies ! 8ecs. 194 = 190, LG&
"7CTI0( 19%. 9eiods o& Assess.ent and Collection. 8 4a5 Local taxes!
&ees! o c+a/es s+all be assessed wit+in &i-e 4D5 2eas &o. t+e date t+e2 beca.e due. (o
action &o t+e collection o& suc+ taxes! &ees! o c+a/es! w+et+e ad.inistati-e o
:udicial! s+all be instituted a&te t+e expiation o& suc+ peiod; 9o-ided! T+at taxes! &ees
o c+a/es w+ic+ +a-e accued be&oe t+e e&&ecti-it2 o& t+is Code .a2 be assessed wit+in
a peiod o& t+ee 465 2eas &o. t+e date t+e2 beca.e due. acd
4b5 In case o& &aud o intent to e-ade t+e pa2.ent o& taxes! &ees! o c+a/es!
t+e sa.e .a2 be assessed wit+in ten 41*5 2eas &o. disco-e2 o& t+e &aud o intent to
e-ade pa2.ent.
4c5 Local taxes! &ees! o c+a/es .a2 be collected wit+in &i-e 4D5 2eas &o.
t+e date o& assess.ent b2 ad.inistati-e o :udicial action. (o suc+ action s+all be
instituted a&te t+e expiation o& said peiod; 9o-ided! +owe-e! T+at taxes! &ees o
c+a/es assessed be&oe t+e e&&ecti-it2 o& t+is Code .a2 be collected wit+in a peiod o&
t+ee 465 2eas &o. t+e date o& assess.ent.
4d5 T+e unnin/ o& t+e peiods o& pesciption po-ided in t+e pecedin/
paa/ap+s s+all be suspended &o t+e ti.e duin/ w+ic+;
415 T+e teasue is le/all2 pe-ented &o. .akin/ t+e assess.ent o&
collection< casia
4#5 T+e taxpa2e e1uests &o a ein-esti/ation and executes a wai-e in
witin/ be&oe expiation o& t+e peiod wit+in w+ic+ to assess o collect< and
465 T+e taxpa2e is out o& t+e count2 o ot+ewise cannot be located.
"7CTI0( 19D. 9otest o& Assess.ent. 8 ?+en t+e local teasue o +is
dul2 aut+oiEed epesentati-e &inds t+at coect taxes! &ees! o c+a/es +a-e not been
paid! +e s+all issue a notice o& assess.ent statin/ t+e natue o& t+e tax! &ee! o c+a/e! t+e
a.ount o& de&icienc2! t+e suc+a/es! inteests and penalties. ?it+in sixt2 4)*5 da2s &o.
t+e eceipt o& t+e notice o& assess.ent! t+e taxpa2e .a2 &ile a witten potest wit+ t+e
local teasue contestin/ t+e assess.ent< ot+ewise! t+e assess.ent s+all beco.e &inal
and executo2. T+e local teasue s+all decide t+e potest wit+in sixt2 4)*5 da2s &o. t+e
ti.e o& its &ilin/. I& t+e local teasue &inds t+e potest to be w+oll2 o patl2 .eitoious!
+e s+all issue a notice cancellin/ w+oll2 o patiall2 t+e assess.ent. =owe-e! i& t+e local
teasue &inds t+e assess.ent to be w+oll2 o patl2 coect! +e s+all den2 t+e potest
w+oll2 o patl2 wit+ notice to t+e taxpa2e. T+e taxpa2e s+all +a-e t+it2 46*5 da2s &o.
t+e eceipt o& t+e denial o& t+e potest o &o. t+e lapse o& t+e sixt2 4)*5-da2 peiod
pescibed +eein wit+in w+ic+ to appeal wit+ t+e cout o& co.petent :uisdiction
ot+ewise t+e assess.ent beco.es conclusi-e and unappealable.
"7CTI0( 19). Clai. &o 'e&und o& Tax Cedit. 8 (o case o poceedin/
s+all be .aintained in an2 cout &o t+e eco-e2 o& an2 tax! &ee! o c+a/e eoneousl2 o
ille/all2 collected until a witten clai. &o e&und o cedit +as been &iled wit+ t+e local
teasue. (o case o poceedin/ s+all be entetained in an2 cout a&te t+e expiation o&
two 4#5 2eas &o. t+e date o& t+e pa2.ent o& suc+ tax! &ee! o c+a/e! o &o. t+e date
t+e taxpa2e is entitled to a e&und o cedit.
c. Case; 1ar#ine Davies !nsurance (ro5ers, !nc. v. Alis+osa,
GR No. 113922, Fe%ruar, 27, 2227
Facts 0n >ul2 D! 1996! t+e @epat.ent o& >ustice 4@0>5! on petition o& t+e 9+ilippine
'acin/ Club! Inc.! declaed null and -oid Municipal 0dinance (o. 9##-*7#! ot+ewise
known as t+e Makati 'e-enue Code! w+ic+ po-ides! inte alia! &o t+e sc+edule o& eal
estate! business and &anc+ise taxes in t+e Municipalit2 o& Makati at ates +i/+e t+an
t+ose in t+e Meto Manila 'e-enue Code. 9endin/ esolution o& its .otion &o
econsideation o& t+e 'esolution o& t+e @0>! t+e espondent Makati &iled a petition ad
cautela. wit+ t+e 'e/ional Tial Cout o& Makati alle/in/ -alidit2 o& t+e 0dinance. In
t+e .eanti.e! espondent Makati continued to i.ple.ent t+e odinance. 9etitione was
assessed and billed b2 t+e espondents &o taxes! &ees and c+a/es unde t+e odinance &o
t+e second! t+id! and &out+ 1uates o& 1996. 9etitione paid its 1uatel2 business taxes
wit+out potest. 0n >anua2 6*! 199%! petitione e1uested t+e espondent Makati to
co.pute its business tax liabilities in accodance wit+ t+e Meto Manila 'e-enue Code
and not unde t+e odinance considein/ t+at it was alead2 declaed b2 t+e @0> null and
-oid. 9etitione asked t+at it be cedited &o t+e a.ount it o-epaid o to e&und its
o-epa2.ent. ?+en t+e espondent Makati denied t+e e1uest! petitione &iled a
co.plaint wit+ t+e 'e/ional Tial Cout o& Makati. T+e 'TC dis.issed t+e co.plaint on
/ound o& pesciption! +oldin/ t+at petitione &ailed to &ile an opposition o potest wit+in
)* da2s &o. t+e notice o& assess.ent. 9etitione .o-ed &o econsideation alle/in/ t+at
it was not e1uied to &ist &ile a potest wit+ t+e espondent Makati be&oe institutin/ its
action &o a e&und o& its o-epa2.ent o &o it to be cedited &o said o-epa2.ents. T+e
.otion &o econsideation was! +owe-e! denied b2 t+e tial cout. =ence! petitione
bou/+t t+e .atte be&oe t+e "upe.e Cout. 7aICA@
"el# T+e Cout a/eed wit+ t+e petitione t+at as a /eneal pecept! a tax+a,er ma,
-ile a com+laint assailing t*e vali#it, o- t*e or#inance an# +ra,ing -or a re-un# o- its
+erceive# over+a,ments 4it*out -irst -iling a +rotest to t*e +a,ment o- taxes #ue
un#er t*e or#inance. =owe-e! it +eld t+at t+e petitione was poscibed &o. &ilin/ its
co.plaint wit+ t+e tial cout &o t+e eason t+at petitione &ailed to appeal to t+e
"eceta2 o& >ustice wit+in 6* da2s &o. t+e e&&ecti-it2 date o& t+e odinance as .andated
b2 "ection 187 o& t+e Local ,o-en.ent Code. In 'e2es -. Cout o& Appeals! t+e Cout
uled t+at &ailue o& a taxpa2e to intepose t+e e1uisite appeal to t+e "eceta2 o& >ustice
is &atal to its co.plaint &o a e&und. T+e Cout! t+ee&oe! denied t+e petition.
d. Case; 8an 1uan v. &astro, GR No. 174017, Decem%er 27,
2227
III. 'eal 9opet2 Taxation
A. Fun#amental )rinci+les = 8ec. 193, LG&
"7CTI0( 198. Funda.ental 9inciples. 8 T+e appaisal! assess.ent! le-2
and collection o& eal popet2 tax s+all be /uided b2 t+e &ollowin/ &unda.ental
pinciples;
4a5 'eal popet2 s+all be appaised at its cuent and &ai .aket -alue<
4b5 'eal popet2 s+all be classi&ied &o assess.ent puposes on t+e basis o& its actual
use<
4c5 'eal popet2 s+all be assessed on t+e basis o& a uni&o. classi&ication wit+in
eac+ local /o-en.ent unit<
4d5 T+e appaisal! assess.ent! le-2 and collection o& eal popet2 tax s+all not be let
to an2 pi-ate peson< and
4e5 T+e appaisal and assess.ent o& eal popet2 s+all be e1uitable.
B. Assess.ent Appeals
1. Local Boad o& Assess.ent Appeals $ 8ec. 220, LG&
"7CTI0( ##). Local Boad o& Assess.ent Appeals. 8 An2 owne o peson
+a-in/ le/al inteest in t+e popet2 w+o is not satis&ied wit+ t+e action o& t+e po-incial!
cit2 o .unicipal assesso in t+e assess.ent o& +is popet2 .a2! wit+in sixt2 4)*5 da2s
&o. t+e date o& eceipt o& t+e witten notice o& assess.ent! appeal to t+e Boad o&
Assess.ent Appeals o& t+e po-ince o cit2 b2 &ilin/ a petition unde oat+ in t+e &o.
pescibed &o t+e pupose! to/et+e wit+ copies o& t+e tax declaations and suc+ a&&ida-its
o docu.ents sub.itted in suppot o& t+e appeal.
#. Action o& t+e LBAA $ 8ec. 229, LG&
"7CTI0( ##9. Action b2 t+e Local Boad o& Assess.ent Appeals. 8 4a5 T+e
Boad s+all decide t+e appeal wit+in one +unded twent2 41#*5 da2s &o. t+e date o&
eceipt o& suc+ appeal. T+e Boad! a&te +eain/! s+all ende its decision based on
substantial e-idence o suc+ ele-ant e-idence on ecod as a easonable .ind .i/+t
accept as ade1uate to suppot t+e conclusion.
4b5 In t+e execise o& its appellate :uisdiction! t+e Boad s+all +a-e t+e powe
to su..on witnesses! ad.iniste oat+s! conduct ocula inspection! take depositions! and
issue subpoena and subpoena duces tecu.. T+e poceedin/s o& t+e Boad s+all be
conducted solel2 &o t+e pupose o& ascetainin/ t+e &acts wit+out necessail2 ad+ein/ to
tec+nical ules applicable in :udicial poceedin/s.
4c5 T+e seceta2 o& t+e Boad s+all &unis+ t+e owne o& t+e popet2 o t+e
peson +a-in/ le/al inteest t+eein and t+e po-incial o cit2 assesso wit+ a cop2 o& t+e
decision o& t+e Boad. In case t+e po-incial o cit2 assesso concus in t+e e-ision o t+e
assess.ent! it s+all be +is dut2 to noti&2 t+e owne o& t+e popet2 o t+e peson +a-in/
le/al inteest t+eein o& suc+ &act usin/ t+e &o. pescibed &o t+e pupose. T+e owne o&
t+e popet2 o t+e peson +a-in/ le/al inteest t+eein o t+e assesso w+o is not satis&ied
wit+ t+e decision o& t+e Boad! .a2! wit+in t+it2 46*5 da2s a&te eceipt o& t+e decision
o& said Boad! appeal to t+e Cental Boad o& Assess.ent Appeals! as +eein po-ided.
T+e decision o& t+e Cental Boad s+all be &inal and executo2.
6. 9a2.ent unde 9otest $ 8ec. 2/2, LG&
"7CTI0( #D#. 9a2.ent 3nde 9otest. 8 4a5 (o potest s+all be
entetained unless t+e taxpa2e &ist pa2s t+e tax. T+ee s+all be annotated on t+e tax
eceipts t+e wods Bpaid unde potestB. T+e potest in witin/ .ust be &iled wit+in t+it2
46*5 da2s &o. pa2.ent o& t+e tax to t+e po-incial! cit2 teasue o .unicipal teasue!
in t+e case o& a .unicipalit2 wit+in Metopolitan Manila Aea! w+o s+all decide t+e
potest wit+in sixt2 4)*5 da2s &o. eceipt.
4b5 T+e tax o a potion t+eeo& paid unde potest s+all be +eld in tust b2 t+e
teasue concened.
4c5 In t+e e-ent t+at t+e potest is &inall2 decided in &a-o o& t+e taxpa2e! t+e
a.ount o potion o& t+e tax potested s+all be e&unded to t+e potestant! o applied as
tax cedit a/ainst +is existin/ o &utue tax liabilit2.
4d5 In t+e e-ent t+at t+e potest is denied o upon t+e lapse o& t+e sixt2-da2
peiod pescibed in subpaa/ap+ 4a5! t+e taxpa2e .a2 a-ail o& t+e e.edies as po-ided
&o in C+apte 6! Title II! Book II o& t+is Code.