1Ax 2 8LvlLWL8

LCCAL 1AxA1lCn
8epubllc AcL noŦ 7160ţ Local CovernmenL Code (LCC) of 1991ţ as
amended
lŦ Þ8LLlMlnA8? MA11L8S
aŦ Þower Lo 1ax of Local CovernmenL unlLs
lŦ SecŦ 3 ArLŦ xţ 1987 ConsLlLuLlon
SecLlon 3Ŧ Lach local governmenL unlL shall have Lhe power Lo creaLe lLs
own sources of revenues and Lo levy Laxesţ fees and charges sub[ecL Lo such
guldellnes and llmlLaLlons as Lhe Congress may provldeţ conslsLenL wlLh Lhe
baslc pollcy of local auLonomyŦ Such Laxesţ feesţ and charges shall accrue
excluslvely Lo Lhe local governmenLsŦ
llŦ SecŦ 129ţ LCC
SLCŦ 129Ŧ Þower Lo CreaLe Sources of 8evenueŦ Ŵ Lach local governmenL
unlL shall exerclse lLs power Lo creaLe lLs own sources of revenue and Lo levy
Laxesţ feesţ and charges sub[ecL Lo Lhe provlslons herelnţ conslsLenL wlLh Lhe
baslc pollcy of local auLonomyŦ Such Laxesţ feesţ andcharges shall accrue
excluslvely Lo Lhe local governmenL unlLsŦ
CASLSťÞepsl Cola 8oLLllng vsŦ MunlclpallLy of 1anuan 69 SC8A 460
ÞepslŴCola 8oLLllng Company of Lhe Þhlllpplnesţ lncŦţ commenced a
complalnL wlLh prellmlnary ln[uncLlon before Lhe CourL of llrsL lnsLance of
LeyLe for LhaL courL Lo declare SecLlon 2 of 8epubllc AcL noŦ 2264Ŧ oLherwlse
known as Lhe Local AuLonomy AcLţ unconsLlLuLlonal as an undue delegaLlon
of Laxlng auLhorlLy as well as Lo declare Crdlnances nosŦ 23 and 27ţ serles of
1962ţ of Lhe munlclpallLy of 1anauanţ LeyLeţ null and voldŦ Munlclpal
Crdlnance noŦ 23ţ of 1anauanţ LeyLeţ whlch was approved on SepLember
23ţ 1962ţ levles and collecLs ƍfrom sofL drlnks producers and manufacLurers a
Lal of oneŴslxLeenLh (1/16) of a cenLavo for every boLLle of sofL drlnk corkedŦƍ 2
lor Lhe purpose of compuLlng Lhe Laxes dueţ Lhe personţ flrmţ company or
corporaLlon produclng sofL drlnks shall submlL Lo Lhe Munlclpal 1reasurer a
monLhly reporLţ of Lhe LoLal number of boLLles produced and corked durlng Lhe
monLhŦ Cn Lhe oLher handţ Munlclpal Crdlnance noŦ 27ţ whlch was approved
on CcLober 28ţ 1962ţ levles and collecLs ƍon sofL drlnks produced or
manufacLured wlLhln Lhe LerrlLorlal [urlsdlcLlon of Lhls munlclpallLy a Lax of
CnL CLn1AvC (Þ0Ŧ01) on each gallon (128 fluld ouncesţ uŦSŦ) of volume
capaclLyŦƍ lor Lhe purpose of compuLlng Lhe Laxes dueţ Lhe personţ fun
companyţ parLnershlpţ corporaLlon or planL produclng sofL drlnks shall submlL
Lo Lhe Munlclpal 1reasurer a monLhly reporL of Lhe LoLal number of gallons
produced or manufacLured durlng Lhe monLhŦ 1he Lax lmposed ln boLh
Crdlnances nosŦ 23 and 27 ls denomlnaLed as ƍmunlclpal producLlon LaxŦƌ
1here ls no valldlLy Lo Lhe asserLlon LhaL Lhe delegaLed auLhorlLy can be
declared unconsLlLuLlonal on Lhe Lheory of double LaxaLlonŦ lL musL be
observed LhaL Lhe delegaLlng auLhorlLy speclfles Lhe llmlLaLlons and
enumeraLes Lhe Laxes over whlch local LaxaLlon may noL be exerclsedŦ 13
1he reason ls LhaL Lhe SLaLe has excluslvely reserved Lhe same for lLs own
prerogaLlveŦ Moreoverţ double LaxaLlonţ ln generalţ ls noL forbldden by our
fundamenLal lawţ slnce We have noL adopLed as parL Lhereof Lhe ln[uncLlon
agalnsL double LaxaLlon found ln Lhe ConsLlLuLlon of Lhe unlLed SLaLes and
some sLaLes of Lhe unlonŦ 14 uouble LaxaLlon becomes obnoxlous only
where Lhe Laxpayer ls Laxed Lwlce for Lhe beneflL of Lhe same governmenLal
enLlLy 13 or by Lhe same [urlsdlcLlon for Lhe same purposeţ 16 buL noL ln a
case where one Lax ls lmposed by Lhe SLaLe and Lhe oLher by Lhe clLy or
munlclpallLyŦ 17
Crdlnance noŦ 27 ls Lhus clearť lL was lnLended as a plaln subsLlLuLe for Lhe
prlor Crdlnance noŦ 23ţ and operaLes as a repeal of Lhe laLLerţ even wlLhouL
words Lo LhaL effecLŦ 18 ÞlalnLlffŴappellanL ln lLs brlef admlLLed LhaL
defendanLsŴappellees are only seeklng Lo enforce Crdlnance noŦ 27ţ serles
of 1962Ŧ Lven Lhe sLlpulaLlon of facLs conflrms Lhe facL LhaL Lhe AcLlng
Munlclpal 1reasurer of 1anauanţ LeyLe soughL L6 compel compllance by Lhe
plalnLlffŴappellanL of Lhe provlslons of sald Crdlnance noŦ 27ţ serles of 1962Ŧ
1he aforemenLloned admlsslon shows LhaL only Crdlnance noŦ 27ţ serles of
1962 ls belng enforced by defendanLsŴappelleesŦ Lven Lhe Þrovlnclal llscalţ
counsel for defendanLsŴappellees admlLs ln hls brlef ƍLhaL SecLlon 7 of
Crdlnance noŦ 27ţ serles of 1962 clearly repeals Crdlnance noŦ 23 as Lhe
provlslons of Lhe laLLer are lnconslsLenL wlLh Lhe provlslons of Lhe formerŦƍ
MacLan Cebu lnLernaLlonal AlrporL AuLhorlLy vsŦ Marcos Ŷ C8 noŦ
120082ţ SepLŦ 11ţ 1996
ÞeLlLloner MacLan Cebu lnLernaLlonal AlrporL AuLhorlLy (MClAA) was creaLed
by vlrLue of 8epubllc AcL noŦ 6938ţ mandaLed Lo ƍprlnclpally underLake Lhe
economlcalţ efflclenL and effecLlve conLrolţ managemenL and supervlslon of
Lhe MacLan lnLernaLlonal AlrporL ln Lhe Þrovlnce of Cebu and Lhe Lahug
AlrporL ln Cebu ClLyţ Ŧ Ŧ Ŧ and such oLher AlrporLs as may be esLabllshed ln Lhe
Þrovlnce of Cebu Ŧ ŦŦ Ŧ (SecŦ 3ţ 8A 6938)Ŧ Slnce Lhe Llme of lLs creaLlonţ
8LvlLWL8 1Ax2Ŵ ?uMl 1peLlLloner MClAA en[oyed Lhe prlvllege of exempLlon from paymenL of realLy
Laxes ln accordance wlLh SecLlon 14 of lLs CharLerŦ Cn CcLober 11ţ 1994ţ
howeverţ MrŦ LusLaqulo 8Ŧ Cesaţ CfflcerŴlnŴChargeţ Cfflce of Lhe 1reasurer
of Lhe ClLy of Cebuţ demanded paymenL for realLy Laxes on several parcels of
land belonglng Lo Lhe peLlLlonerŦ ÞeLlLloner ob[ecLed Lo such demand for
paymenL as baseless and un[usLlfledţ clalmlng ln lLs favor Lhe aforeclLed
SecLlon 14 of 8A 6938 whlch exempL lL from paymenL of realLy LaxesŦ lL was
also asserLed LhaL lL ls an lnsLrumenLallLy of Lhe governmenL performlng
governmenLal funcLlonsţ clLlng secLlon 133 of Lhe Local CovernmenL Code of
1991 whlch puLs llmlLaLlons on Lhe Laxlng powers of local governmenL unlLsŦ
8espondenL ClLy refused Lo cancel and seL aslde peLlLlonerƌs realLy Lax
accounLţ lnslsLlng LhaL Lhe MClAA ls a governmenLŴconLrolled corporaLlon
whose Lax exempLlon prlvllege has been wlLhdrawn by vlrLue of SecLlons 193
and 234 of Lhe Local CovernmenLal Code LhaL Look effecL on !anuary 1ţ
1992Ŧ
As a general ruleţ Lhe power Lo Lax ls an lncldenL of soverelgnLy and ls
unllmlLed ln lLs rangeţ acknowledglng ln lLs very naLure no llmlLsţ so LhaL
securlLy agalnsL lLs abuse ls Lo be found only ln Lhe responslblllLy of Lhe
leglslaLure whlch lmposes Lhe Lax on Lhe consLlLuency who are Lo pay lLŦ
neverLhelessţ effecLlve llmlLaLlons Lhereon may be lmposed by Lhe people
Lhrough Lhelr ConsLlLuLlonsŦ 13 Cur ConsLlLuLlonţ for lnsLanceţ provldes LhaL
Lhe rule of LaxaLlon shall be unlform and equlLable and Congress shall evolve
a progresslve sysLem of LaxaLlonŦ 14 So poLenL lndeed ls Lhe power LhaL lL
was once oplned LhaL ƍLhe power Lo Lax lnvolves Lhe power Lo desLroyŦƍ 13
verllyţ LaxaLlon ls a desLrucLlve power whlch lnLerferes wlLh Lhe personal and
properLy for Lhe supporL of Lhe governmenLŦ Accordlnglyţ Lax sLaLuLes musL be
consLrued sLrlcLly agalnsL Lhe governmenL and llberally ln favor of Lhe
LaxpayerŦ 16 8uL slnce Laxes are whaL we pay for clvlllzed socleLyţ 17 or are
Lhe llfeblood of Lhe naLlonţ Lhe law frowns agalnsL exempLlons from LaxaLlon
and sLaLuLes granLlng Lax exempLlons are Lhus consLrued sLrlcLlsslml [urls
agalnsL Lhe Laxpayers and llberally ln favor of Lhe Laxlng auLhorlLyŦ 18 A clalm
of exempLlon from Lax paymenL musL be clearly shown and based on
language ln Lhe law Loo plaln Lo be mlsLakenŦ 19 Llsewlse sLaLedţ LaxaLlon ls
Lhe ruleţ exempLlon Lherefrom ls Lhe excepLlonŦ 20 Poweverţ lf Lhe granLee of
Lhe exempLlon ls a pollLlcal subdlvlslon or lnsLrumenLallLyţ Lhe rlgld rule of
consLrucLlon does noL apply because Lhe pracLlcal effecL of Lhe exempLlon ls
merely Lo reduce Lhe amounL of money LhaL has Lo be handled by Lhe
governmenL ln Lhe course of lLs operaLlonsŦ 21
1he power Lo Lax ls prlmarlly vesLed ln Lhe CongressŤ howeverţ ln our
[urlsdlcLlonţ lL may be exerclsed by local leglslaLlve bodlesţ no longer merely
by vlrLue of a valld delegaLlon as beforeţ buL pursuanL Lo dlrecL auLhorlLy
conferred by SecLlon 3ţ ArLlcle x of Lhe ConsLlLuLlonŦ 22 under Lhe laLLerţ Lhe
exerclse of Lhe power may be sub[ecL Lo such guldellnes and llmlLaLlons as
Lhe Congress may provlde whlchţ howeverţ musL be conslsLenL wlLh Lhe baslc
pollcy of local auLonomyŦ
1here can be no quesLlon LhaL under SecLlon 14 of 8ŦAŦ noŦ 6938 Lhe
peLlLloner ls exempL from Lhe paymenL of realLy Laxes lmposed by Lhe
naLlonal CovernmenL or any of lLs pollLlcal subdlvlslonsţ agenclesţ and
lnsLrumenLallLlesŦ neverLhelessţ slnce LaxaLlon ls Lhe rule and exempLlon
Lherefrom Lhe excepLlonţ Lhe exempLlon may Lhus be wlLhdrawn aL Lhe
pleasure of Lhe Laxlng auLhorlLyŦ 1he only excepLlon Lo Lhls rule ls where Lhe
exempLlon was granLed Lo prlvaLe parLles based on maLerlal conslderaLlon of
a muLual naLureţ whlch Lhen becomes conLracLual and ls Lhus covered by Lhe
nonŴlmpalrmenL clause of Lhe ConsLlLuLlonŦ 23
1he LCCţ enacLed pursuanL Lo SecLlon 3ţ ArLlcle x of Lhe consLlLuLlon
provldes for Lhe exerclse by local governmenL unlLs of Lhelr power Lo Laxţ Lhe
scope Lhereof or lLs llmlLaLlonsţ and Lhe exempLlon from LaxaLlonŦ
Manlla LlecLrlc Company vsŦ Þrovlnce of Laguna Ŷ C8 noŦ 131339ţ May
3ţ 1999
Meralco was granLed a franchlse Lo operaLe an elecLrlc llghL and power
servlce ln Calambaţ Laguna someLlme ln 1983 under ÞŦuŦ noŦ 331Ŧ under
Lhe franchlse Meralco pays 2Ʒ franchlse Lax on of lLs gross recelpLs and ºany
law Lo Lhe conLrary noLwlLhsLandlng be ln lleu of all Laxes and assessmenLs of
whaLever naLure lmposed by any naLlonal or local auLhorlLy or earnlngsţ
recelpLsţ lncome and prlvllege of generaLlonţ dlsLrlbuLlon and sale of elecLrlc
currenLŦ" ÞursuanL Lo Lhe Local CovernmenL Codeţ Lhe provlnce of Laguna
enacLed an ordlnance lmposlng a franchlse of 30Ʒ of 1Ʒ of Lhe gross annual
recelpLs of buslness en[oylng a franchlse reallzed durlng Lhe precedlng
calendar year wlLhln Lhe provlnce lncludlng clLles locaLed LherelnŦ 8ule on Lhe
valldlLy of Lhe Lax ordlnanceŦ
SuCCLS1Lu AnSWL8ť 1he Lax ordlnance ls valldŦ under Lhe now
prevalllng ConsLlLuLlonţ where Lhere ls nelLher a granL nor prohlblLlon by
sLaLuLeţ Lhe Lax power musL be deemed Lo exlsL alLhough Congress may
provlde sLaLuLory llmlLaLlons and guldellnesŦ 1he baslc raLlonale for Lhe
currenL rule ls Lo safeguard Lhe vlablllLy and selfŴsufflclency of local
governmenL unlLs by dlrecLly granLlng Lhem general and broad Lax powersŦ
1he Local CovernmenL Code expllclLly auLhorlzes provlnces and clLlesţ
noLwlLhsLandlng ºany exempLlon granLed by any law or oLher speclal law" Lo
lmpose a Lax on buslnesses en[oylng a franchlseŦ lndlcaLlve of Lhe leglslaLlve
lnLenL Lo carry ouL Lhe consLlLuLlonal mandaLe of vesLlng broad Lax powers Lo
8LvlLWL8 1Ax2Ŵ ?uMl 2local governmenL unlLsţ Lhe Local CovernmenL Code has wlLhdrawn Lax
exempLlons or lncenLlves LhereLofore en[oyed by cerLaln enLlLlesŦ
ln addlLlonţ Lhe Local CovernmenL Code conLalns a general repeallng clauseŦ
1he phrase ln ºlleu of all Laxes" has Lo glve way Lo Lhe perempLory language
of Lhe Local CovernmenL Code whlch speclflcally provldes for Lhe wlLhdrawal
of all exempLlonsŦ 1he CourL has vlewed lLs prevlous rullngs as laylng sLress
on Lhe leglslaLlve lnLenL of Lhe amendaLory law wheLher Lhe Lax exempLlon
prlvllege ls Lo be wlLhdrawn or noL raLher Lhan on wheLher Lhe law can or
cannoL wlLhdraw Lhe Lax exempLlonţ wlLhouL vlolaLlng Lhe consLlLuLlonŦ (Manlla
LlecLrlc Company vŦ Þrovlnce of Lagunaţ eL alŦţ CŦ8Ŧ noŦ 131339ţ May 3ţ
1999)
nÞC vsŦ ClLy of CabanaLuan C8 noŦ 149110ţ Aprll 9ţ 2003
ºÞaradlgm shlfL" from excluslve Congresslonal power Lo dlrecL granL of Laxlng
power Lo local leglslaLlve bodlesŦ 1he power Lo Lax ls no longer vesLed
excluslvely on CongressŤ local leglslaLlve bodles are now glven dlrecL
auLhorlLy Lo levy Laxesţ fees and oLher charges pursuanL Lo ArLlcle xţ secLlon
3 of Lhe 1987 ConsLlLuLlonŦ
nAÞCCC8ţ Lhe peLlLlonerţ ls a governmenLŴowed and conLrolled corporaLlon
creaLed under CommonwealLh AcL 120Ŧ lL ls Lasked Lo underLake Lhe
ºdevelopmenL of hydroelecLrlc generaLlons of power and Lhe producLlon of
elecLrlclLy from nuclearţ geoLhermalţ and oLher sourcesţ as well asţ Lhe
Lransmlsslon of elecLrlc power on a naLlonwlde baslsŦ"
lor many years nowţ nAÞCCC8 sells elecLrlc power Lo Lhe resldenL
CabanaLuan ClLyţ posLlng a gross lncome of Þ107ţ814ţ187Ŧ96 ln 1992Ŧ
ÞursuanL Lo SecŦ 37 of Crdlnance noŦ 163Ŵ92ţ Lhe respondenL assessed Lhe
peLlLloner a franchlse Lax amounLlng Lo Þ808ţ606Ŧ41ţ represenLlng 73Ʒ of 1Ʒ
of Lhe former's gross recelpLs for Lhe precedlng yearŦ
ÞeLlLlonerţ whose caplLal sLock was subscrlbed and wholly pald by Lhe
Þhlllpplne CovernmenLţ refused Lo pay Lhe Lax assessmenLŦ lL argued LhaL Lhe
respondenL has no auLhorlLy Lo lmpose Lax on governmenL enLlLlesŦ ÞeLlLloner
also conLend LhaL as a nonŴproflL organlzaLlonţ lL ls exempLed from Lhe
paymenL of all forms of Laxesţ chargesţ duLles or fees ln accordance wlLh
SecŦ 13 of 8A 6393ţ as amendedŦ
1he respondenL flled a collecLlon sulL ln Lhe 81C of CabanaLuan ClLyţ
demandlng LhaL peLlLloner pay Lhe assessed Laxţ plus surcharge equlvalenL Lo
23Ʒ of Lhe amounL of Lax and 2Ʒ monLhly lnLeresLŦ 8espondenL alleged LhaL
peLlLloner's exempLlon from local Laxes has been repealed by SecŦ 193 of 8A
7160 (Local CovernmenL Code)Ŧ 1he Lrlal courL lssued an order dlsmlsslng
Lhe caseŦ Cn appealţ Lhe CourL of Appeals reversed Lhe declslon of Lhe 81C
and ordered Lhe peLlLloner Lo pay Lhe clLy governmenL Lhe Lax assessmenLŦ
lssuesť (1) ls Lhe nAÞCCC8 excluded from Lhe coverage of Lhe franchlse Lax
slmply because lLs sLocks are wholly owned by Lhe naLlonal CovernmenL and
lLs charLer characLerlzed ls as a 'nonŴproflL organlzaLlon'?
(2) ls Lhe nAÞCCC8's exempLlon from all forms of Laxes repealed by Lhe
provlslons of Lhe Local CovernmenL Code (LCC)?
Peldť (1) nCŦ 1o sLressţ a franchlse Lax ls lmposed based noL on Lhe
ownershlp buL on Lhe exerclse by Lhe corporaLlon of a prlvllege Lo do
buslnessŦ 1he Laxable enLlLy ls Lhe corporaLlon whlch exerclses Lhe franchlseţ
and noL Lhe lndlvldual sLockholdersŦ 8y vlrLue of lLs charLerţ peLlLloner was
creaLed as a separaLe and dlsLlncL enLlLy from Lhe naLlonal CovernmenLŦ lL
can sue and be sued under lLs own nameţ and can exerclse all Lhe powers of
a corporaLlon under Lhe CorporaLlon CodeŦ
1o be sureţ Lhe ownershlp by Lhe naLlonal CovernmenL of lLs enLlre caplLal
sLock does noL necessarlly lmply LhaL peLlLloner ls no engage dln buslnessŦ
(2) ?LSŦ Cne of Lhe mosL slgnlflcanL provlslons of Lhe LCC ls Lhe removal of
Lhe blankeL excluslon of lnsLrumenLallLles and agencles of Lhe naLlonal
CovernmenL from Lhe coverage of local LaxaLlonŦ AlLhough as a general ruleţ
LCus cannoL lmpose Laxesţ feesţ or charges of any klnd on Lhe naLlonal
CovernmenLţ lLs agencles and lnsLrumenLallLlesţ Lhls rule now admlLs an
excepLlonţ lŦeŦ when speclflc provlslons of Lhe LCC auLhorlze Lhe LCus Lo
lmpose Laxesţ feesţ or charges on Lhe aforemenLloned enLlLlesŦ 1he
leglslaLlve purpose Lo wlLhdraw Lax prlvlleges en[oyed under exlsLlng laws or
charLer ls clearly manlfesLed by Lhe language used on SecŦ 137 and 193
caLegorlcally wlLhdrawlng such exempLlon sub[ecL only Lo Lhe excepLlons
enumeraLedŦ Slnce lL would be Ledlous and lmpracLlcal Lo aLLempL Lo
enumeraLe all Lhe exlsLlng sLaLuLes provldlng for speclal Lax exempLlons or
prlvllegesţ Lhe LCC provlded for an expressţ albelL generalţ wlLhdrawal of
such exempLlons or prlvllegesŦ no more unequlvocal language could have
been usedŦ
lllŦ Local 1axlng AuLhorlLy (SecŦ 132)
SLCŦ 132Ŧ Local 1axlng AuLhorlLyŦ Ŵ 1he power Lo lmpose a Laxţ feeţ or
charge or Lo generaLe revenue under Lhls Code shall be exerclsed by Lhe
sanggunlan of Lhe local governmenL unlL concerned Lhrough an approprlaLe
ordlnanceŦ
1Ŧ ConsLrucLlon of 1ax Crdlnances (SecŦ 3b)
8ules of lnLerpreLaLlon
(b) ln case of doubLţ any Lax ordlnance or revenue measure shall be
consLrued sLrlcLly agalnsL Lhe local governmenL unlL enacLlng lLţ and llberally
8LvlLWL8 1Ax2Ŵ ?uMl 3ln favor of Lhe LaxpayerŦ Any Lax exempLlonţ lncenLlve or rellef granLed by any
local governmenL unlL pursuanL Lo Lhe provlslons of Lhls Code shall be
consLrued sLrlcLly agalnsL Lhe person clalmlng lLŦ
CASLťÞeLron CorpŦ vsŦ Mayor 1oblas 1langco Ŷ C8 noŦ 138881ţ Aprll
16ţ 2008
CourL records showed LhaL ÞeLronţ whlch malnLalns a depoL or bulk planL aL
Lhe novaLas llshporL Complex ln navoLasţ recelved a leLLer from respondenL
navoLas Mayor 1oblas 1langcoţ whereln Lhe flrm was assessed Laxes
coverlng lLs sale of dlesel from 1997 Lo 2001Ŧ1he navoLas clLy governmenL
demanded paymenL of Þ10Ŧ2 mllllon represenLlng ÞeLron's ºdeflclency LaxesŦ"
ÞeLron flled wlLh navoLas a leLLerŴproLesL Lo Lhe noLlce of assessmenL
pursuanL Lo SecLlon 193 of Lhe CodeŦ lL argued LhaL lL was exempL from local
buslness Laxes ln vlew of ArLlcle 232 of Lhe lmplemenLln 8ules of Lhe LCC as
well as Lhe rullng of Lhe 8ureau of Local CovernmenL llnance of Lhe
ueparLmenL of llnanceŦ Cwlng Lo Lhe denlal of lLs proLesLţ ÞeLron flled wlLh
Lhe 81C ln Malabon a complalnL for cancellaLlon of assessmenL for deflclency
Laxes wlLh prayer for Lhe lssuance of a Lemprorary resLralnlng order and
prellmlnary ln[uncLlonŦ
Cn May 3ţ 2003ţ Lhe 81C ln Malabon rendered lLs declslon dlsmlsslng
ÞeLron's complalnL and orderlng Lhe paymenL of Lhe assessed amounLŦ
AfLer 11 daysţ ÞeLron recelved a closure order from 1langcoţ dlrecLlng lL Lo
cease and deslsL from operaLlng Lhe bulk planLţ prompLlng lL Lo elevaLe Lhe
case Lo Lhe SCŦ
lssueť wheLher a local governmenL unlL ls empowered under Lhe Local
CovernmenL Code (Lhe LCC) Lo lmpose buslness Laxes on persons or enLlLles
engaged ln Lhe sale of peLroleum producLsŦ
Peldť 1he power of a munlclpallLy Lo lmpose buslness Laxes ls provlded for ln
SecLlon 143 of Lhe LCCŦ under Lhe provlslonţ a munlclpallLy ls auLhorlzed Lo
lmpose buslness Laxes on a whole hosL of buslness acLlvlLlesŦ Sufflce lL Lo
sayţ unless Lhere ls anoLher provlslon of law whlch sLaLes oLherwlseţ SecLlon
143ţ broad ln scope as lL lsţ would undoubLedly cover Lhe buslness of selllng
dlesel fuelsţ or any oLher peLroleum producL for LhaL maLLerŦ
1PL Supreme CourL declared local governmenLs are noL auLhorlzed Lo
lmpose buslness Laxes on oll companles or oLher enLlLles engaged ln Lhe sale
of peLroleum producLsŦ
lvŦ Þrocedure for Approval of and LffecLlvlLy of 1ax Crdlnances (SecŦ
187)
SLCŦ 187Ŧ Þrocedure for Approval and LffecLlvlLy of 1ax ordlnances and
8evenue MeasuresŤ MandaLory Þubllc PearlngsŦ Ŵ 1he procedure for
approval of local Lax ordlnances and revenue measures shall be ln
accordance wlLh Lhe provlslons of Lhls Codeť Þrovldedţ 1haL publlc hearlngs
shall be conducLed for Lhe purpose prlor Lo Lhe enacLmenL Lhereofť Þrovldedţ
furLherţ 1haL any quesLlon on Lhe consLlLuLlonallLy or legallLy of Lax ordlnances
or revenue measures may be ralsed on appeal wlLhln LhlrLy (30) days from
Lhe effecLlvlLy Lhereof Lo Lhe SecreLary of !usLlce who shall render a declslon
wlLhln slxLy (60) days from Lhe daLe of recelpL of Lhe appealť Þrovldedţ
howeverţ 1haL such appeal shall noL have Lhe effecL of suspendlng Lhe
effecLlvlLy of Lhe ordlnance and Lhe accrual and paymenL of Lhe Laxţ feeţ or
charge levled Lherelnť Þrovldedţ flnallyţ 1haL wlLhln LhlrLy (30) days afLer
recelpL of Lhe declslon or Lhe lapse of Lhe slxLyŴday perlod wlLhouL Lhe
SecreLary of !usLlce acLlng upon Lhe appealţ Lhe aggrleved parLy may flle
approprlaLe proceedlngs wlLh a courL of compeLenL [urlsdlcLlonŦ
vŦ ÞubllcaLlon (SecŦ 188)
SLCŦ 188Ŧ ÞubllcaLlon of 1ax ordlnances and 8evenue MeasuresŦ Ŵ WlLhln
Len (10) days afLer Lhelr approvalţ cerLlfled Lrue coples of all provlnclalţ clLyţ
and munlclpal Lax ordlnances or revenue measures shall be publlshed ln full
for Lhree (3) consecuLlve days ln a newspaper of local clrculaLlonť Þrovldedţ
howeverţ 1haL ln provlncesţ clLles and munlclpallLles where Lhere are no
newspapers of local clrculaLlonţ Lhe same may be posLed ln aL leasL Lwo (2)
consplcuous and publlcly accesslble placesŦ
bŦ CLher Þrellmlnary MaLLers
lŦ 8esldual Þowers of LCus ŴÞower Lo Levy CLher 1axesţ lees or
Charges (SecŦ 186)
8LvlLWL8 1Ax2Ŵ ?uMl 4SLCŦ 186Ŧ Þower 1o Levy CLher 1axesţ lees or ChargesŦ Ŵ Local
governmenL unlLs may exerclse Lhe power Lo levy Laxesţ fees or charges on
any base or sub[ecL noL oLherwlse speclflcally enumeraLed hereln or Laxed
under Lhe provlslons of Lhe naLlonal lnLernal 8evenue Codeţ as amendedţ or
oLher appllcable lawsť Þrovldedţ 1haL Lhe Laxesţ feesţ or charges shall noL be
un[usLţ excesslveţ oppresslveţ conflscaLory or conLrary Lo declared naLlonal
pollcyť Þrovldedţ furLherţ 1haL Lhe ordlnance levylng such Laxesţ fees or
charges shall noL be enacLed wlLhouL any prlor publlc hearlng conducLed for
Lhe purposeŦ
llŦ uocLrlne of ÞreempLlon or Lxcluslonary 8ule
CASLť vlcLorlas Mllllng CoŦţ lncŦ vsŦ MunlclpallLy of vlcLorlas Ŷ LŴ21183ţ
SepLember 27ţ 1968
1he dlspuLed ordlnance was approved by Lhe munlclpal Councll of vlcLorlas
on SepLember 22ţ 1936 by way of an amendmenL Lo Lwo munlclpal
ordlnances separaLely lmposlng llcense Laxes on operaLors of sugar cenLrals
and sugar reflnerlesŦ 1he changes wereť wlLh respecL Lo sugar cenLralsţ by
lncreaslng Lhe raLes of llcense LaxesŤ and as Lo sugar reflnerlesţ by lncreaslng
Lhe raLes of llcense Laxes as well as Lhe range of graduaLed schedule of
annual ouLpuL capaclLyŦ ÞlalnLlff flled sulL below Lo ask for [udgmenL declarlng
Crdlnance noŦ 1ţ serles of 1936ţ null and voldŤ orderlng Lhe refund of all
llcense Laxes pald and Lo be pald under proLesLŤ dlrecLlng Lhe offlclals of
vlcLorlas and Lhe Þrovlnce of negros CccldenLal Lo observeţ durlng Lhe
pendency of Lhe acLlonţ Lhe provlslons of secLlon 337 of Lhe 8evlsed Manual
of lnsLrucLlons Lo 1reasurers of Þrovlncesţ ClLles and MunlclpallLlesţ 1934
edlLlonţ regardlng Lhe LreaLmenL of llcense Laxes pald under proLesL by vlrLue
of a dlspuLed ordlnanceŤ and oLher rellefsŦ
1he reasons puL forLh by plalnLlff are LhaLť (a) Lhe ordlnance exceeds Lhe
amounLs flxed ln Þrovlnclal Clrcular 12ŴA lssued by Lhe llnance ueparLmenL
on lebruary 27ţ 1940Ť (b) lL ls dlscrlmlnaLory slnce lL slngles ouL plalnLlff
whlch ls Lhe only operaLor of a sugar cenLral and a sugar reflnery wlLhln Lhe
[urlsdlcLlon of defendanL munlclpallLyŤ (c) lL consLlLuLes double LaxaLlonŤ and
(d) Lhe naLlonal governmenL has preempLed Lhe fleld of LaxaLlon wlLh respecL
Lo sugar cenLrals or reflnerlesŦ
ÞreempLlon ln Lhe maLLer of LaxaLlon slmply refers Lo an lnsLance where Lhe
naLlonal governmenL elecLs Lo Lax a parLlcular areaţ lmplledly wlLhholdlng from
Lhe local governmenL Lhe delegaLed power Lo Lax Lhe same fleldŦ 1hls docLrlne
prlmarlly resLs upon Lhe lnLenLlon of CongressŦ Converselyţ should Congress
allow munlclpal corporaLlons Lo cover flelds of LaxaLlon lL already occuplesţ
Lhen Lhe docLrlne of preempLlon wlll noL applyŦ
ln Lhe case aL barţ SecLlon 4(1) of CommonwealLh AcL 472 clearly and
speclflcally allows munlclpal counclls Lo Lax persons engaged ln ƍLhe same
buslnesses or occupaLlonƍ on whlch ƍflxed lnLernal revenue prlvllege Laxesƍ
are ƍregularly lmposed by Lhe naLlonal CovernmenLŦƍ WlLh cerLaln excepLlons
speclfled ln SecLlon 3 of Lhe same sLaLuLeŦ Cur case does noL fall wlLhln Lhe
excepLlonsŦ lL would Lherefore be fuLlle Lo argue LhaL Congress excluslvely
reserved Lo Lhe naLlonal governmenL Lhe rlghL Lo lmpose Lhe dlspuLed LaxesŦ
We rule LhaL Lhere ls no preempLlonŦ
llŦ CLnL8AL Þ8CvlSlCnS
aŦ Scope of Laxlng powers (SecŦ 128)
ScopeŦŴ 1he provlslons hereln shall govern Lhe exerclse by provlncesţ clLlesţ
munlclpallLlesţ and barangays of Lhelr Laxlng and oLher revenueŴralslng
powersŦ
bŦ lundamenLal Þrlnclples (SecŦ 130)
lundamenLal ÞrlnclplesŦ Ŵ 1he followlng fundamenLal prlnclples shall govern
Lhe exerclse of Lhe Laxlng and oLher revenueŴralslng powers of local
governmenL unlLsť
(a) 1axaLlon shall be unlform ln each local governmenL unlLŤ
(b) 1axesţ feesţ charges and oLher lmposlLlons shallť (1) be equlLable and
based as far as pracLlcable on Lhe Laxpayerƌs ablllLy Lo payŤ(2) be levled and
collecLed only for publlc purposesŤ (3) noL be un[usLţ excesslveţ oppresslveţ
or conflscaLoryŤ (4) noL be conLrary Lo lawţ publlc pollcyţ naLlonal economlc
pollcyţ or ln resLralnL of LradeŤ
(c) 1he collecLlon of local Laxesţ feesţ charges and oLher lmposlLlons shall ln
no case be leL Lo any prlvaLe personŤ
(d) 1he revenue collecLed pursuanL Lo Lhe provlslons of Lhls Code shall lnure
solely Lo Lhe beneflL ofţ and be sub[ecL Lo dlsposlLlon byţ Lhe local governmenL
unlL levylng Lhe Laxţ feeţ charge or oLher lmposlLlon unless oLherwlse
speclflcally provlded herelnŤ andţ
(e) Lach local governmenL unlL shallţ as far as pracLlcableţ evolve a
progresslve sysLem of LaxaLlonŦ
cŦ ueflnlLlons (SecŦ 131)
8LvlLWL8 1Ax2Ŵ ?uMl 3SLCŦ 131Ŧ ueflnlLlon of 1ermsŦ Ŵ When used ln Lhls 1lLleţ Lhe Lermť
(a) ƍAgrlculLural ÞroducLƍ lncludes Lhe yleld of Lhe sollţ such as cornţ rlceţ
wheaLţ ryeţ hayţ coconuLsţ sugarcaneţ Lobaccoţ rooL cropsţ vegeLablesţ frulLsţ
flowersţ and Lhelr byŴproducLsŤ ordlnary salLŤ all klnds of flshŤ poulLryŤ and
llvesLock and anlmal producLsţ wheLher ln Lhelr orlglnal form or noLŦ 1he
phrase ƍwheLher ln Lhelr orlglnal form or noLƍ refers Lo Lhe LransformaLlon of
sald producLs by Lhe farmerţ flshermanţ producer or owner Lhrough Lhe
appllcaLlon of processes Lo preserve or oLherwlse Lo prepare sald producLs
for Lhe markeL such as freezlngţ drylngţ salLlngţ smoklngţ or sLrlpplng for
purposes of preservlng or oLherwlse preparlng sald producLs for Lhe markeLŤ
(b) ƍAmusemenLƍ ls a pleasurable dlverslon and enLerLalnmenLŦ lL ls
synonymous Lo relaxaLlonţ avocaLlonţ pasLlmeţ or funŤ
(c) ƍAmusemenL Þlacesƍ lnclude LheaLersţ clnemasţ concerL hallsţ clrcuses
and oLher places of amusemenL where one seeks admlsslon Lo enLerLaln
oneself by seelng or vlewlng Lhe show or performancesŤ
(d) ƍ8uslnessƍ means Lrade or commerclal acLlvlLy regularly engaged ln as a
means of llvellhood or wlLh a vlew Lo proflLŤ
(e) ƍ8anks and oLher flnanclal lnsLlLuLlonsƍ lnclude nonŴbank flnanclal
lnLermedlarlesţ lendlng lnvesLorsţ flnance and lnvesLmenL companlesţ
pawnshopsţ money shopsţ lnsurance companlesţ sLock markeLsţ sLock
brokers and dealers ln securlLles and forelgn exchangeţ as deflned under
appllcable lawsţ or rules and regulaLlons LhereunderŤ
(f) ƍCaplLal lnvesLmenLƍ ls Lhe caplLal whlch a person employs ln any
underLaklngţ or whlch he conLrlbuLes Lo Lhe caplLal of a parLnershlpţ
corporaLlonţ or any oLher [urldlcal enLlLy or assoclaLlon ln a parLlcular Laxlng
[urlsdlcLlonŤ
(g) ƍChargesƍ refer Lo pecunlary llablllLyţ as renLs or fees agalnsL persons or
properLyŤ (h) ƍConLracLorƍ lncludes personsţ naLural or [urldlcalţ noL sub[ecL Lo
professlonal Lax under SecLlon 139 of Lhls Codeţ whose acLlvlLy conslsLs
essenLlally of Lhe sale of all klnds of servlces for a feeţ regardless of wheLher
or noL Lhe performance of Lhe servlce calls for Lhe exerclse or use of Lhe
physlcal or menLal faculLles of such conLracLor or hls employeesŦ
As used ln Lhls SecLlonţ Lhe Lerm ƍconLracLorƍ shall lnclude general
englneerlngţ general bulldlng and speclalLy conLracLors as deflned under
appllcable lawsŤ fllllngţ demollLlon and salvage works conLracLorsŤ proprleLors
or operaLors of mlne drllllng apparaLusŤ proprleLors or operaLors of dockyardsŤ
persons engaged ln Lhe lnsLallaLlon of waLer sysLemţ and gas or elecLrlc llghLţ
heaLţ or powerŤ proprleLors or operaLors of smelLlng planLsŤ engravlngţ plaLlngţ
and plasLlc lamlnaLlon esLabllshmenLsŤ proprleLors or operaLors of
esLabllshmenLs for repalrlngţ repalnLlngţ upholsLerlngţ washlng or greaslng of
vehlclesţ heavy equlpmenLţ vulcanlzlngţ recapplng and baLLery charglngŤ
proprleLors or operaLors of furnlLure shops and esLabllshmenLs for planlng or
surfaclng and recuLLlng of lumberţ and sawmllls under conLracL Lo saw or cuL
logs belonglng Lo oLhersŤ proprleLors or operaLors of dryŴ cleanlng or dyelng
esLabllshmenLsţ sLeam laundrlesţ and laundrles uslng washlng machlnesŤ
proprleLors or owners of shops for Lhe repalr of any klnd of mechanlcal and
elecLrlcal devlcesţ lnsLrumenLsţ apparaLusţ or furnlLure and shoe repalrlng by
machlne or any mechanlcal conLrlvanceŤ proprleLors or operaLors of
esLabllshmenLs or loLs for parklng purposesŤ proprleLors or operaLors of Lallor
shopsţ dress shopsţ mllllners and haLLersţ beauLy parlorsţ barbershopsţ
massage cllnlcsţ saunaţ 1urklsh and Swedlsh baLhsţ slenderlzlng and
bulldlng saloons and slmllar esLabllshmenLsŤ phoLographlc sLudlosŤ funeral
parlorsŤ proprleLors or operaLors of hoLelsţ moLelsţ and lodglng housesŤ
proprleLors or operaLors of arrasLre and sLevedorlngţ warehouslngţ or
forwardlng esLabllshmenLsŤ masLer plumbersţ smlLhsţ and house or slgn
palnLersŤ prlnLersţ bookblndersţ llLhographersŤ publlshers excepL Lhose
engaged ln Lhe publlcaLlon or prlnLlng of any newspaperţ magazlneţ revlew or
bulleLln whlch appears aL regular lnLervals wlLh flxed prlces for subscrlpLlon
and sale and whlch ls noL devoLed prlnclpally Lo Lhe publlcaLlon of
adverLlsemenLsŤ buslness agenLsţ prlvaLe deLecLlve or waLchman agenclesţ
commerclal and lmmlgraLlon brokersţ and clnemaLographlc fllm ownersţ
lessors and dlsLrlbuLorsŦ
(l) ƍCorporaLlonƍ lncludes parLnershlpsţ no maLLer how creaLed or organlzedţ
[olnLŴsLock companlesţ [olnL accounLs (cuenLas en parLlclpaclon)ţ assoclaLlons
or lnsurance companles buL does noL lnclude general professlonal
parLnershlps and a [olnL venLure or consorLlum formed for Lhe purpose of
underLaklng consLrucLlon pro[ecLs or engaglng ln peLroleumţ coalţ
geoLhermalţ and oLher energy operaLlons pursuanL Lo an operaLlng or
consorLlum agreemenL under a servlce conLracL wlLh Lhe governmenLŦ
Ceneral professlonal parLnershlps are parLnershlps formed by persons for Lhe
sole purpose of exerclslng Lhelr common professlonţ no parL of Lhe lncome of
whlch ls derlved from engaglng ln any Lrade or buslnessŦ 1he Lerm ƍresldenL
forelgnƍ when applled Lo a corporaLlon means a forelgn corporaLlon noL
oLherwlse organlzed under Lhe laws of Lhe Þhlllpplnes buL engaged ln Lrade
or buslness wlLhln Lhe ÞhlllpplnesŤ
([) ƍCounLryslde and 8arangay 8uslness LnLerprlseƍ refers Lo any buslness
enLlLyţ assoclaLlonţ or cooperaLlve reglsLered under Lhe provlslons of 8epubllc
AcL numbered SlxLyŴelghL hundred Len (8ŦAŦ noŦ 6810)ţ oLherwlse known as
8LvlLWL8 1Ax2Ŵ ?uMl 6ƍMagna CarLa lor CounLryslde And 8arangay 8uslness LnLerprlses
(kalakalan 20)ƍŤ
(k) ƍuealerƍ means one whose buslness ls Lo buy and sell merchandlseţ
goodsţ and chaLLels as a merchanLŦŦ Pe sLands lmmedlaLely beLween Lhe
producer or manufacLurer and Lhe consumer and depends for hls proflL noL
upon Lhe labor he besLows upon hls commodlLles buL upon Lhe sklll and
foreslghL wlLh whlch he waLches Lhe markeLŤ
(l) ƍleeƍ means a charge flxed by law or ordlnance for Lhe regulaLlon or
lnspecLlon of a buslness or acLlvlLyŤ
(m) ƍlranchlseƍ ls a rlghL or prlvllegeţ affecLed wlLh publlc lnLeresL whlch ls
conferred upon prlvaLe persons or corporaLlonsţ under such Lerms and
condlLlons as Lhe governmenL and lLs pollLlcal subdlvlslons may lmpose ln Lhe
lnLeresL of publlc welfareţ securlLyţ and safeLyŤ
(n) ƍCross Sales or 8ecelpLsƍ lnclude Lhe LoLal amounL of money or lLs
equlvalenL represenLlng Lhe conLracL prlceţ compensaLlon or servlce feeţ
lncludlng Lhe amounL charged or maLerlals supplled wlLh Lhe servlces and
deposlLs or advance paymenLs acLually or consLrucLlvely recelved durlng Lhe
Laxable quarLer for Lhe servlces performed or Lo be performed for anoLher
person excludlng dlscounLs lf deLermlnable aL Lhe Llme of salesţ sales reLurnţ
exclse Laxţ and valueŴadded Lax (vA1)Ť
(o) ƍManufacLurerƍ lncludes every person whoţ by physlcal or chemlcal
processţ alLers Lhe exLerlor LexLure or form or lnner subsLance of any raw
maLerlal or manufacLured or parLlally manufacLured producL ln such manner
as Lo prepare lL for speclal use or uses Lo whlch lL could noL have been puL ln
lLs orlglnal condlLlonţ or who by any such process alLers Lhe quallLy of any
such raw maLerlal or manufacLured or parLlally manufacLured producLs so as
Lo reduce lL Lo markeLable shape or prepare lL for any of Lhe use of lndusLryţ
or who by any such process comblnes any such raw maLerlal or
manufacLured or parLlally manufacLured producLs wlLh oLher maLerlals or
producLs of Lhe same or of dlfferenL klnds and ln such manner LhaL Lhe
flnlshed producLs of such process or manufacLure can be puL Lo a speclal use
or uses Lo whlch such raw maLerlal or manufacLured or parLlally manufacLured
producLs ln Lhelr orlglnal condlLlon could noL have been puLţ and who ln
addlLlon alLers such raw maLerlal or manufacLured or parLlally manufacLured
producLsţ or comblnes Lhe same Lo produce such flnlshed producLs for Lhe
purpose of Lhelr sale or dlsLrlbuLlon Lo oLhers and noL for hls own use or
consumpLlonŤ
(p) ƍMarglnal larmer or llshermanƍ refers Lo an lndlvldual engaged ln
subslsLence farmlng or flshlng whlch shall be llmlLed Lo Lhe saleţ barLer or
exchange of agrlculLural or marlne producLs produced by hlmself and hls
lmmedlaLe famllyŤ
(q) ƍMoLor vehlcleƍ means any vehlcle propelled by any power oLher Lhan
muscular power uslng Lhe publlc roadsţ buL excludlng road rollersţ Lrolley
carsţ sLreeLŴsweepersţ sprlnklersţ lawn mowersţ bulldozersţ gradersţ forkŴllfLsţ
amphlblan Lrucksţ and cranes lf noL used on publlc roadsţ vehlcles whlch run
only on ralls or Lracksţ and LracLorsţ Lrallersţ and LracLlon englnes of all klnds
used excluslvely for agrlculLural purposesŤ
(r) ƍMunlclpal WaLersƍ lncludes noL only sLreamsţ lakesţ and Lldal waLers
wlLhln Lhe munlclpallLyţ noL belng Lhe sub[ecL of prlvaLe ownershlp and noL
comprlsed wlLhln Lhe naLlonal parksţ publlc foresLţ Llmber landsţ foresL
reserves or flshery reservesţ buL also marlne waLers lncluded beLween Lwo
llnes drawn perpendlcularly Lo Lhe general coasLllne from polnLs where Lhe
boundary llnes of Lhe munlclpallLy or clLy Louch Lhe sea aL low Llde and a Lhlrd
llne parallel wlLh Lhe general coasLllne and flfLeen (13) kllomeLers from lLŦ
Where Lwo (2) munlclpallLles are so slLuaLed on Lhe opposlLe shores LhaL
Lhere ls less Lhan flfLeen (13) kllomeLers of marlne waLers beLween Lhemţ Lhe
Lhlrd llne shall be equally dlsLanL from opposlLe shores of Lhe respecLlve
munlclpallLlesŤ
(s) ƍCperaLorƍ lncludes Lhe ownerţ managerţ admlnlsLraLorţ or any oLher
person who operaLes or ls responslble for Lhe operaLlon of a buslness
esLabllshmenL or underLaklngŤ
(L) ƍÞeddlerƍ means any person whoţ elLher for hlmself or on commlsslonţ
Lravels from place Lo place and sells hls goods or offers Lo sell and dellver Lhe
sameŦ WheLher a peddler ls a wholesale peddler or a reLall peddler of a
parLlcular commodlLy shall be deLermlned from Lhe deflnlLlon of wholesale
dealer or reLall dealer as provlded ln Lhls 1lLleŤ
(u) ƍÞersonsƍ means every naLural or [urldlcal belngţ suscepLlble of rlghLs
and obllgaLlons or of belng Lhe sub[ecL of legal relaLlonsŤ
(v) ƍ8esldenLsƍ refer Lo naLural persons who have Lhelr hablLual resldence ln
Lhe provlnceţ clLyţ or munlclpallLy where Lhey exerclse Lhelr clvll rlghLs and
fulflll Lhelr clvll obllgaLlonsţ and Lo [urldlcal persons for whlch Lhe law or any
oLher provlslon creaLlng or recognlzlng Lhem flxes Lhelr resldence ln a
parLlcular provlnceţ clLyţ or munlclpallLyŦ ln Lhe absence of such lawţ [urldlcal
persons are resldenLs of Lhe provlnceţ clLyţ or munlclpallLy where Lhey have
8LvlLWL8 1Ax2Ŵ ?uMl 7Lhelr legal resldence or prlnclpal place of buslness or where Lhey conducL
Lhelr prlnclpal buslness or occupaLlonŤ
(w) ƍ8eLallƍ means a sale where Lhe purchaser buys Lhe commodlLy for hls
own consumpLlonţ lrrespecLlve of Lhe quanLlLy of Lhe commodlLy soldŤ (x)
ƍvesselƍ lncludes every Lype of boaLţ crafLţ or oLher arLlflclal conLrlvance usedţ
or capable of belng usedţ as a means of LransporLaLlon on waLerŤ
(y) ƍWharfageƍ means a fee assessed agalnsL Lhe cargo of a vessel
engaged ln forelgn or domesLlc Lrade based on quanLlLyţ welghLţ or measure
recelved and/or dlscharged by vesselŤ and
(z) ƍWholesaleƍ means a sale where Lhe purchaser buys or lmporLs Lhe
commodlLles for resale Lo persons oLher Lhan Lhe end user regardless of Lhe
quanLlLy of Lhe LransacLlonŦ
dŦ Common LlmlLaLlons
CerLaln Laxesţ such as Lhe followlngţ may noL be lmposed by local
governmenL unlLsť
lŦ lncome 1ax
1Ŧ CorrelaLe wlLh SecŦ 143 (f) Cn banks and oLher flnanclal lnsLlLuLlonsţ aL a
raLe noL exceedlng flfLy percenL (30Ʒ) of one percenL (1Ʒ) on Lhe gross
recelpLs of Lhe precedlng calendar year derlved from lnLeresLţ commlsslons
and dlscounLs from lendlng acLlvlLlesţ lncome from flnanclal leaslngţ
dlvldendsţ renLals on properLy and proflL from exchange or sale of properLyţ
lnsurance premlumŦ
llŦ uocumenLary SLamp 1ax
lllŦ 1ransfer 1axes
1Ŧ CorrelaLe wlLh SecŦ 133
SLCŦ 133Ŧ 1ax on 1ransfer of 8eal ÞroperLy CwnershlpŦ Ŵ (a) 1he provlnce
may lmpose a Lax on Lhe saleţ donaLlonţ barLerţ or on any oLher mode of
Lransferrlng ownershlp or LlLle of real properLy aL Lhe raLe of noL more Lhan flfLy
percenL (30Ʒ) of one percenL (1Ʒ) of Lhe LoLal conslderaLlon lnvolved ln Lhe
acqulslLlon of Lhe properLy or of Lhe falr markeL value ln case Lhe moneLary
conslderaLlon lnvolved ln Lhe Lransfer ls noL subsLanLlalţ whlchever ls hlgherŦ
1he saleţ Lransfer or oLher dlsposlLlon of real properLy pursuanL Lo 8ŦAŦ noŦ
6637 shall be exempL from Lhls LaxŦ
lvŦ CusLoms uuLles
CusLoms duLlesţ reglsLraLlon fees of vessels (excepL llcense fees lmposed
under SecLlon 149ţ and SecLlon 131 of Lhe Code)ţ wharfage on wharvesţ
Lonnage dues and all oLher klnds of cusLoms feesţ charges and dues excepL
wharfage on wharves consLrucLed and malnLalned by Lhe local governmenL
unlL concernedŤ
vŦ 1axesţ lees and Charges (1lC) on Coods Þasslng 1hrough Lhe
1errlLorlal !urlsdlcLlon of LCus
1axesţ feesţ charges and oLher lmposlLlons upon goods carrled lnLo or ouL ofţ
or passlng Lhroughţ Lhe LerrlLorlal [urlsdlcLlons of local governmenLs ln Lhe
gulse of charges for wharfageţ Lolls for brldges or oLherwlseţ or oLher Laxes ln
any form whaLever upon such goods or merchandlseŤ
1Ŧ CorrelaLe wlLh SecŦ 133
SLCŦ 133Ŧ 1oll lees or ChargesŦ Ŵ 1he sanggunlan concerned may prescrlbe
Lhe Lerms and condlLlons and flx Lhe raLes for Lhe lmposlLlon of Loll fees or
charges for Lhe use of any publlc roadţ pler or wharfţ waLerwayţ brldgeţ ferry
or LelecommunlcaLlon sysLem funded and consLrucLed by Lhe local
governmenL unlL concernedť Þrovldedţ 1haL no such Loll fees or charges shall
be collecLed from offlcers and enllsLed men of Lhe Armed lorces of Lhe
Þhlllpplnes and members of Lhe Þhlllpplne naLlonal Þollce on mlsslonţ posL
offlce personnel dellverlng mallţ physlcallyŴhandlcappedţ and dlsabled
clLlzens who are slxLyŴflve (63) years or olderŦ When publlc safeLy and
welfare so requlresţ Lhe sanggunlan concerned may dlsconLlnue Lhe
collecLlon of Lhe Lollsţ and LhereafLer Lhe sald faclllLy shall be free and open
for publlc useŦ
CASLť Þanallgan vsŦ ClLy of 1acloban Ŷ C8 noŦ LŴ9319ţ SepLember 27ţ
1937
8LvlLWL8 1Ax2Ŵ ?uMl 8SC annulled an ordlnance of 1acloban ClLy levylng lnspecLlon fees (ln realLy
Laxes) upon anlmals exporLed or Laken away from Lhe ClLyŦ1Lhe lnspecLlon
fee soughL Lo be collecLed Ŵ upon every head of speclfled anlmals Lo be
LransporLed ouL of Lhe ClLy of 1acloban (Þ2Ŧ00 per hogţ Þ10Ŧ00 per cow and
20Ŧ00 per carabao) Ŵ was ln reallLy an exporL Lax speclflcally wlLhheld from
munlclpal Laxlng power under SecLlon 2287 of Lhe 8evlsed AdmlnlsLraLlve
CodeŦ
Þalma uevelopmenL Corp vsŦ MunlclpallLy of Malangas Ŷ C8 noŦ
132492ţ CcLober 16ţ 2003
ln accordance wlLh Lhe Local CovernmenL Code of 1991ţ a munlclpal
ordlnance lmposlng fees on goods LhaL pass Lhrough Lhe lssulng
munlclpallLy's LerrlLory ls null and voldŦ
ÞeLlLloner Þalma uevelopmenL CorporaLlon ls engaged ln mllllng and selllng
rlce and corn Lo wholesalers ln Zamboanga ClLyŦ lL uses Lhe munlclpal porL of
Malangasţ Zamboanga del Sur as LransshlpmenL polnL for lLs goodsŦ 1he
porLţ as well as Lhe surroundlng roads leadlng Lo lLţ belong Lo and are
malnLalned by Lhe MunlclpallLy of Malangasţ Zamboanga del SurŦ
Cn !anuary 16ţ 1994ţ Lhe munlclpallLy passed Munlclpal 8evenue Code noŦ
09ţ Serles of 1993ţ whlch was subsequenLly approved by Lhe Sanggunlang
Þanlalawlgan of Zamboanga del Sur ln 8esoluLlon noŦ 1330 daLed AugusL 4ţ
1994Ŧ SecLlon 3CŦ01 of Lhe ordlnance readsť
ºSecLlon 3CŦŦ01Ŧ lmposlLlon of feesŦ 1here shall be collecLed servlce fee for
lLs use of Lhe munlclpal roadżsŽ or sLreeLs leadlng Lo Lhe wharf and Lo any
polnL along Lhe shorellnes wlLhln Lhe [urlsdlcLlon of Lhe munlclpallLy and for
pollce survelllance on all goods and all equlpmenL harbored or shelLered ln
Lhe premlses of Lhe wharf and oLher wlLhln Lhe [urlsdlcLlonŦ Accordlnglyţ Lhe
servlce fees lmposed by SecLlon 3CŦ01 of Lhe ordlnance was pald by
peLlLloner under proLesLŦ lL conLended LhaL under 8epubllc AcL noŦŦ 7160ţ
oLherwlse known as Lhe Local CovernmenL Code of 1991ţ munlclpal
governmenLs dld noL have Lhe auLhorlLy Lo Lax goods and vehlcles LhaL
passed Lhrough Lhelr [urlsdlcLlonsŦ 1hereafLerţ before Lhe 8eglonal 1rlal
CourL (81C) of Þagadlan ClLyţ peLlLloner flled agalnsL Lhe MunlclpallLy of
Malangas on november 20ţ 1993ţ an acLlon for declaraLory rellef assalllng
Lhe valldlLy of SecLlon 3CŦ01 of Lhe munlclpal ordlnanceŦ
8y express language of SecLlons 133 and 133 of 8A noŦ 7160ţ local
governmenL unlLsţ Lhrough Lhelr Sanggunlanţ may prescrlbe Lhe Lerms and
condlLlons for Lhe lmposlLlon of Loll fees or charges for Lhe use of any publlc
roadţ pler or wharf funded and consLrucLed by LhemŦ A servlce fee lmposed
on vehlcles uslng munlclpal roads leadlng Lo Lhe wharf ls Lhus valldŦ
Poweverţ SecLlon 133(e) of 8A noŦ 7160 prohlblLs Lhe lmposlLlonţ ln Lhe
gulse of wharfageţ of fees ŴŴ as well as all oLher Laxes or charges ln any form
whaLsoever ŴŴ on goods or merchandlseŦ lL ls Lherefore lrrelevanL lf Lhe fees
lmposed are acLually for pollce survelllance on Lhe goodsţ because any oLher
form of lmposlLlon on goods passlng Lhrough Lhe LerrlLorlal [urlsdlcLlon of Lhe
munlclpallLy ls clearly prohlblLed by SecLlon 133(e)Ŧ
vlŦ 1lC on producLs sold by marglnal farmers of flshermen
1Ŧ ueflnlLlon of Marglnallzed llshermen (SecŦ 122)
ƍMarglnal larmer or llshermanƍ refers Lo an lndlvldual engaged ln
subslsLence farmlng or flshlng whlch shall be llmlLed Lo Lhe saleţ barLer or
exchange of agrlculLural or marlne producLs produced by hlmself and hls
lmmedlaLe famlly
CASLť ClLy of Cebu vsŦ lAC 144 SC8A 710
1he aforequoLed provlslon prohlblLs a local governmenL from lmposlng an
lnspecLlon fee on agrlculLural producLs and flsh ls an agrlculLural producLŦ
ConLrary Lo Lhe clalm of peLlLlonersţ under SecLlon 102 of ClLy Crdlnance noŦ
1 a flsherman selllng hls flsh wlLhln Lhe clLy has Lo pay Lhe lnspecLlon fee of
Þ0Ŧ03 for every kllo of flsh soldŦ lurLhermoreţ Lhe lmposlLlon of Lhe Lax wlll
deflnlLely resLrlcL Lhe free flow of fresh flsh Lo Cebu ClLy because Lhe prlce of
flsh wlll have Lo lncreaseŦ
1hls power Lo Lax arLlcles sub[ecL Lo speclflc Lax whlch was expressly granLed
Lo clLles by Lhe orlglnal provlslons of secLlon 24ţ was deleLed ln Lhe
amendmenLŦ 1he sald secLlon 24ţ as lL now readsţ merely granLs Lhe clLy Lhe
power Lo ƍlevy any Laxţ fee or oLher lmposlLlon noL speclflcally enumeraLed or
oLherwlse provlded forƍ ln Lhe Local 1ax CodeŦ 1he amendmenL evlnces Lhe
lnLenL of Lhe lawmaker Lo remove such Laxlng auLhorlLy (on arLlcles already
sub[ecL Lo Lhe naLlonal speclflc Lax) from Lhe clLles llke Cebu ClLyŦ
vllŦ 1axes on 8ClŴreglsLered enLerprlses ( 8oard of lnvesLmenLs)
1axes on buslness enLerprlses cerLlfled by Lhe 8oard of lnvesLmenLs as
ploneer or nonŴploneer for a perlod of slx and four yearsţ respecLlvelyţ from
Lhe daLe of reglsLraLlonŤ
vlllŦ Lxclse Laxes under Lhe nl8C/1lC on ÞeLroleum ÞroducLs
8LvlLWL8 1Ax2Ŵ ?uMl 9Lxclse Laxes on arLlcles enumeraLed under Lhe naLlonal lnLernal 8evenue
Code and Laxesţ feesţ or charges on peLroleum producLsţ buL noL a Lax on Lhe
buslness of lmporLlngţ manufacLurlng or produclng sald producLs
CASLť ÞeLron CorpŦ vsŦ Mayor 1oblas 1langco Ŷ C8 noŦ 138881ţ Aprll
16ţ 2008
AdmlLLedlyţ Lhe proffered deflnlLlon of an exclse Lax as ºa Lax upon Lhe
performanceţ carrylng onţ or exerclse of some rlghLţ prlvllegeţ acLlvlLyţ calllng
or occupaLlon" derlves from Lhe compendlum Amerlcan !urlsprudenceţ
popularly referred Lo as Am !urţţand has been clLed ln prevlous declslons of
Lhls CourLţ lncludlng Lhose clLed by ÞeLron lLselfŦ Such a deflnlLlon would noL
have been lnconslsLenL wlLh prevlous lncarnaLlons of our 1ax Codeţ such as
Lhe nl8C of 1939ţ as amendedţ or Lhe nl8C of 1977 because ln Lhose laws
Lhe Lerm ºexclse Lax" was noL used aL allŦ ln conLrasLţ Lhe nomenclaLure used
ln Lhose prlor laws ln referrlng Lo Laxes lmposed on speclflc arLlcles was
ºspeclflc LaxŦ"?eL beglnnlng wlLh Lhe naLlonal lnLernal 8evenue Code of 1986ţ
as amendedţ Lhe Lerm ºexclse Laxes" was used and deflned as appllcable ºLo
goods manufacLured or produced ln Lhe Þhlllpplnesŧand Lo Lhlngs lmporLedŦ"
1hls deflnlLlon was carrled over lnLo Lhe presenL nl8C of 1997ŦlurLherţ Lhese
Lwo laLesL codes caLegorlze Lwo dlfferenL klnds of exclse Laxesť ºspeclflc Lax"
whlch ls lmposed and based on welghL or volume capaclLy or any oLher
physlcal unlL of measuremenLŤ and ºad valorem Lax" whlch ls lmposed and
based on Lhe selllng prlce or oLher speclfled value of Lhe goodsŦ ln oLher
wordsţ Lhe meanlng of ºexclse Lax" has undergone a LransformaLlonţ
morphlng from Lhe Am !ur deflnlLlon Lo lLs currenL slgnlflcaLlon whlch ls a Lax
on cerLaln speclfled goods or arLlclesŦ
ln conLrasLţ afLer Lhe Lax code was amended Lo classlfy speclflc Laxes as a
subseL of exclse Laxesţ nolledoţ ln hls 1994 commenLarlesţ wroLeť
1Ŧ Lxclse Laxesţ as used ln Lhe 1ax Codeţ refers Lo Laxes appllcable Lo cerLaln
speclfled goods or arLlcles manufacLured or produced ln Lhe Þhlllpplnes for
domesLlc sale or consumpLlon or for any oLher dlsposlLlon and Lo Lhlngs
lmporLed lnLo Lhe ÞhlllpplnesŦ 1hey are elLher speclflc or ad valoremŦ
2Ŧ naLure of exclse LaxesŦ Ŷ 1hey are lmposed dlrecLly on cerLaln speclfled
goodsŦ (lnfra) 1hey areţ Lhereforeţ Laxes on properLyŦ (See Medlna vŦ ClLy of
8aguloţ 91 Þhll 834Ŧ)
A Lax ls noL exclse where lL does noL sub[ecL dlrecLly Lhe produce or goods Lo
Lax buL lndlrecLly as an lncldenL Loţ or ln connecLlon wlLhţ Lhe buslness Lo be
LaxedŦŽ
We Lhus can asserL wlLh clear comforL LhaL exclse Laxesţ as lmposed under
Lhe nl8Cţ do noL perLaln Lo ºLhe performanceţ carrylng onţ or exerclse of an
acLlvlLyţ" aL leasL noL Lo Lhe exLenL of equaLlng exclse wlLh buslness LaxesŦ
Þrovlnce of 8ulacan vsŦ CA Ŷ C8 noŦ 126232ţ november 27ţ 1998
Cn !une 26ţ 1992ţ Lhe Sanggunlang Þanlalawlgan of 8ulacan passed
Þrovlnclal Crdlnance noŦ 3ţ known as ƍAn ordlnance LnacLlng Lhe 8evenue
Code of Lhe 8ulacan Þrovlnceţƍ whlch was Lo Lake effecL on !uly 1ţ 1992ţ
secLlon 21 of Lhe ordlnance provldes as followsť
SecLlon 21Ŧ lmposlLlon of 1axŦ 1here ls hereby levled and collecLed a Lax of
10Ʒ of Lhe falr markeL value ln Lhe locallLy per cublc meLer of ordlnary sLonesţ
sandţ gravelţ earLh and oLher quarry resourcesţ suchţ buL noL llmlLed Lo
marbleţ granlLeţ volcanlc clndersţ basalLţ Luff and rock phosphaLeţ exLracLed
from publlc lands or from beds of seasţ lakesţ rlversţ sLreamsţ creeks and
oLher publlc waLers wlLhln lLs LerrlLorlal [urlsdlcLlonŦ
ÞursuanL LhereLoţ Lhe Þrovlnclal 1reasurer of 8ulacanţ ln a leLLer daLed
november 11ţ 1993ţ assessed prlvaLe respondenL 8epubllc CemenL
CorporaLlon (hereafLer 8epubllc CemenL) Þ2ţ324ţ692Ŧ13 for exLracLlng
llmesLoneţ shale and slllca from several parcels of prlvaLe land ln Lhe
provlnce durlng Lhe Lhlrd quarLer of 1992 unLll Lhe second quarLer of 1993Ŧ
8ellevlng LhaL Lhe provlnceţ on Lhe basls of aboveŴsald ordlnanceţ had no
auLhorlLy Lo lmpose Laxes on quarry resources exLracLed from prlvaLe landsţ
8epubllc CemenL formally conLesLed Lhe same on uecember 23ţ 1993Ŧ 1he
same wasţ howeverţ denled by Lhe Þrovlnclal 1reasurer on !anuary 17ţ
1994Ŧ 8epubllc CemenLţ consequenLly flled a peLlLlon for declaraLory rellef
wlLh Lhe 8eglonal 1rlal CourL of 8ulacan on lebruary 14ţ 1994Ŧ 1he provlnce
flled a moLlon Lo dlsmlss 8epubllc CemenLƌs peLlLlonţ whlch was granLed by
Lhe Lrlal courL on May 13ţ 1993ţ whlch ruled LhaL declaraLory rellef was
lmproperţ allegedly because a breach of Lhe ordlnance had been commlLLed
by 8epubllc CemenLŦ
lL ls clearly apparenL from Lhe above provlslon LhaL Lhe naLlonal lnLernal
8evenue Code levles a Lax on all quarry resourcesţ regardless of orlglnţ
wheLher exLracLed from publlc or prlvaLe landŦ 1husţ a provlnce may noL
ordlnarlly lmpose Laxes on sLonesţ sandţ gravelţ earLh and oLher quarry
resourcesţ as Lhe same are already Laxed under Lhe naLlonal lnLernal
8evenue CodeŦ 1he provlnce canţ howeverţ lmpose a Lax on sLonesţ sandţ
gravelţ earLh and oLher quarry resources exLracLed from publlc land because
lL ls expressly empowered Lo do so under Lhe Local CovernmenL CodeŦ As Lo
sLonesţ sandţ gravelţ earLh and oLher quarry resources exLracLed from prlvaLe
landţ howeverţ lL may noL do soţ because of Lhe llmlLaLlon provlded by
SecLlon 133 of Lhe Code ln relaLlon Lo SecLlon 131 of Lhe naLlonal lnLernal
8evenue CodeŦ Clven Lhe above dlsqulslLlonţ peLlLloners cannoL clalm LhaL
Lhe appellaLe courL un[usLly deprlved Lhem of Lhe power Lo creaLe Lhelr
sources of revenueţ Lhelr assessmenL of Laxes agalnsL 8epubllc CemenL
8LvlLWL8 1Ax2Ŵ ?uMl 10belng ulLra vlresţ Lraverslng as lL does Lhe llmlLaLlons seL by Lhe Local
CovernmenL CodeŦ
lxŦ ÞercenLage Laxes and vA1
ÞercenLage Lax or valueŴadded Lax on salesţ barLers or exchanges of goods
or servlces or slmllar LransacLlons Lhereon (buL noL flxed graduaLed Laxes on
gross sales or on volume of producLlon)
xŦ 1axes on LransporLaLlon conLracLors and common carrlers
1axes on Lhe gross recelpLs of LransporLaLlon conLracLors and persons
engaged ln Lhe LransporLaLlon of passengers or frelghL by hlre and common
carrlers by alrţ land or waLer excepL as provlded by Lhe CodeŤ
CASL ť llrsL Þhlllpplne lndusLrlal CorporaLlon vsŦ CA Ŷ C8 noŦ 123948ţ
uecember 29ţ 1998
ÞeLlLloner ls a granLee of a plpellne concesslon under 8epubllc AcL noŦ 387ţ
as amendedţ Lo conLracLţ lnsLall and operaLe oll plpellnesŦ 1he orlglnal
plpellne concesslon was granLed ln 1967ż1Ž and renewed by Lhe Lnergy
8egulaLory 8oard ln 1992
SomeLlme ln !anuary 1993ţ peLlLloner applled for a mayorƌs permlL wlLh Lhe
Cfflce of Lhe Mayor of 8aLangas ClLyŦ Poweverţ before Lhe mayorƌs permlL
could be lssuedţ Lhe respondenL ClLy 1reasurer requlred peLlLloner Lo pay a
local Lax based on lLs gross recelpLs for Lhe flscal year 1993 pursuanL Lo Lhe
Local CovernmenL CodeŦż3Ž 1he respondenL ClLy 1reasurer assessed a
buslness Lax on Lhe peLlLloner amounLlng Lo Þ936ţ076Ŧ04 payable ln four
lnsLallmenLs based on Lhe gross recelpLs for producLs pumped aL CÞSŴ1 for
Lhe flscal year 1993 whlch amounLed Lo Þ181ţ681ţ131ŦŦ00Ŧ ln order noL Lo
hamper lLs operaLlonsţ peLlLloner pald Lhe Lax under proLesL ln Lhe amounL of
Þ239ţ019Ŧ01 for Lhe flrsL quarLer of 1993Ŧ
ÞeLlLloner clalms LhaL Lhe respondenL CourL of Appeals erred ln holdlng LhaL
(1) Lhe peLlLloner ls noL a common carrler or a LransporLaLlon conLracLorţ and
(2) Lhe exempLlon soughL for by peLlLloner ls noL clear under Lhe lawŦ
A ƍcommon carrlerƍ may be deflnedţ broadlyţ as one who holds hlmself ouL Lo
Lhe publlc as engaged ln Lhe buslness of LransporLlng persons or properLy
from place Lo placeţ for compensaLlonţ offerlng hls servlces Lo Lhe publlc
generallyŦ
ArLlcle 1732 of Lhe Clvll Code deflnes a ƍcommon carrlerƍ as ƍany personţ
corporaLlonţ flrm or assoclaLlon engaged ln Lhe buslness of carrylng or
LransporLlng passengers or goods or boLhţ by landţ waLerţ or alrţ for
compensaLlonţ offerlng Lhelr servlces Lo Lhe publlcŦƍ
1he LesL for deLermlnlng wheLher a parLy ls a common carrler of goods lsť
1Ŧ Pe musL be engaged ln Lhe buslness of carrylng goods for oLhers as a
publlc employmenLţ and musL hold hlmself ouL as ready Lo engage ln Lhe
LransporLaLlon of goods for person generally as a buslness and noL as a
casual occupaLlonŤ
2Ŧ Pe musL underLake Lo carry goods of Lhe klnd Lo whlch hls buslness ls
conflnedŤ
3Ŧ Pe musL underLake Lo carry by Lhe meLhod by whlch hls buslness ls
conducLed and over hls esLabllshed roadsŤ and
4Ŧ 1he LransporLaLlon musL be for hlreŦż13Ž
8ased on Lhe above deflnlLlons and requlremenLsţ Lhere ls no doubL LhaL
peLlLloner ls a common carrlerŦ lL ls engaged ln Lhe buslness of LransporLlng
or carrylng goodsţ lŦeŦ peLroleum producLsţ for hlre as a publlc employmenLŦ
lL underLakes Lo carry for all persons lndlfferenLlyţ LhaL lsţ Lo all persons who
choose Lo employ lLs servlcesţ and LransporLs Lhe goods by land and for
compensaLlonŦ 1he facL LhaL peLlLloner has a llmlLed cllenLele does noL
exclude lL from Lhe deflnlLlon of a common carrlerŦ
lurLhermoreţ SecLlon 21 of Þrovlnclal Crdlnance noŦ 3 ls pracLlcally only a
reproducLlon of SecLlon 138 of Lhe Local CovernmenL CodeŦ A cursory
readlng of boLh would show LhaL boLh refer Lo ordlnary sandţ sLoneţ gravelţ
earLh and oLher quarry resources exLracLed from publlc landsŦ Lven lf we
dlsregard Lhe llmlLaLlon seL by SecLlon 133 of Lhe Local CovernmenL Codeţ
peLlLloners may noL lmpose Laxes on sLonesţ sandţ gravelţ earLh and oLher
quarry resources exLracLed from prlvaLe lands on Lhe basls of SecLlon 21 of
Þrovlnclal Crdlnance noŦ 3 as Lhe laLLer clearly applles only Lo quarry
resources exLracLed from publlc landsŦ ÞeLlLloners may noL lnvoke Lhe
8egallan docLrlne Lo exLend Lhe coverage of Lhelr ordlnance Lo quarry
resources exLracLed from prlvaLe landsţ for Laxesţ belng burdensţ are noL Lo
be presumed beyond whaL Lhe appllcable sLaLuLe expressly and clearly
declaresţ Lax sLaLuLes belng consLrued sLrlcLlsslml [urls agalnsL Lhe
governmenLŦ
xlŦ 1axes on premlums
1axes on premlums pald for relnsurance or reLrocesslonŤ
xllŦ 1lC for reglsLraLlon of moLor vehlcles and lssuance of llcenses for
drlvlng
1axesţ fees or charges for Lhe reglsLraLlon of moLor vehlcles and for Lhe
lssuance of all klnds of llcenses or permlLs for Lhe drlvlng Lhereofţ excepL
Lrlcycles
8LvlLWL8 1Ax2Ŵ ?uMl 111Ŧ CorrelaLe wlLh SecŦ 438 (3)(vl) and ArLŦ 99(a)(3)(vl) of Lhe l88 of Lhe
LCC
SecŦ 438 (3)(vl)
Sub[ecL Lo Lhe guldellnes prescrlbed by Lhe ueparLmenL of 1ransporLaLlon and
CommunlcaLlonsţ regulaLe Lhe operaLlon of Lrlcycles and granL franchlses for
Lhe operaLlon Lhereof wlLhln Lhe LerrlLorlal [urlsdlcLlon of Lhe clLy
L1C vsŦ ClLy of 8uLuan Ŷ C8 noŦ 131312ţ !anuary 20ţ 2000
1he CourL ls asked ln Lhls lnsLance Lo resolve Lhe lssue of wheLher under Lhe
presenL seL up Lhe power of Lhe Land 8eglsLraLlon Cfflce (ƍL1Cƍ) Lo reglsLerţ
Lrlcycles ln parLlcularţ as well as Lo lssue llcenses for Lhe drlvlng Lhereofţ has
llkewlse devolved Lo local governmenL unlLsŦ
1he ueparLmenL of 1ransporLaLlon and CommunlcaLlons (ƍuC1Cƍ)ţ Lhrough
Lhe L1C and Lhe L1l88ţ has slnce been Lasked wlLh lmplemenLlng laws
perLalnlng Lo land LransporLaLlonŦ 1he L1C ls a llne agency under Lhe uC1C
whose powers and funcLlonsţ pursuanL Lo ArLlcle lllţ SecLlon 4 (d) (1)ţ of 8ŦAŦ
noŦ4136ţ oLherwlse known as Land 1ransporLaLlon and 1rafflc Codeţ as
amendedţ deal prlmarlly wlLh Lhe reglsLraLlon of all moLor vehlcles and Lhe
llcenslng of drlvers LhereofŦ 1he L1l88ţ upon Lhe oLher handţ ls Lhe
governlng body Lasked by LŦCŦ noŦ 202ţ daLed 19 !une 1987ţ Lo regulaLe Lhe
operaLlon of publlc uLlllLy or ƍfor hlreƍ vehlcles and Lo granL franchlses or
cerLlflcaLes of publlc convenlence (ƍCÞCƍ)Ŧ llnely puLţ reglsLraLlon and
llcenslng funcLlons are vesLed ln Lhe L1C whlle franchlslng and regulaLory
responslblllLles had been vesLed ln Lhe L1l88Ŧ
LCus lndublLably now have Lhe power Lo regulaLe Lhe operaLlon of LrlcyclesforŴhlre and Lo granL
franchlses for Lhe operaLlon LhereofŦ ƍ1o regulaLeƍ means
Lo flxţ esLabllshţ or conLrolŤ Lo ad[usL by ruleţ meLhodţ or esLabllshed modeŤ Lo
dlrecL by rule or resLrlcLlonŤ or Lo sub[ecL Lo governlng prlnclples or lawsŦ A
franchlse ls deflned Lo be a speclal prlvllege Lo do cerLaln Lhlngs conferred by
governmenL on an lndlvldual or corporaLlonţ and whlch does noL belong Lo
clLlzens generally of common rlghLŦ Cn Lhe oLher handţ ƍLo reglsLerƍ means Lo
record formally and exacLlyţ Lo enrollţ or Lo enLer preclsely ln a llsL or Lhe llkeţ
and a ƍdrlverƌs llcenseƍ ls Lhe cerLlflcaLe or llcense lssued by Lhe governmenL
whlch auLhorlzes a person Lo operaLe a moLor vehlcleŦ 1he devoluLlon of Lhe
funcLlons of Lhe uC1Cţ performed by Lhe L1l88ţ Lo Lhe LCusţ as so apLly
observed by Lhe SollclLor Ceneralţ ls almed aL curblng Lhe alarmlng lncrease
of accldenLs ln naLlonal hlghways lnvolvlng LrlcyclesŦ lL has been Lhe
percepLlon LhaL local governmenLs are ln good poslLlon Lo achleve Lhe end
deslred by Lhe lawŴmaklng body because of Lhelr proxlmlLy Lo Lhe slLuaLlon
LhaL can enable Lhem Lo address LhaL serlous concern beLLer Lhan Lhe naLlonal
governmenLŦ
lL may noL be amlss Lo sLaLeţ neverLhelessţ LhaL under ArLlcle 438 (a)ż3ŴvlŽ of
Lhe Local CovernmenL Codeţ Lhe power of LCus Lo regulaLe Lhe operaLlon of
Lrlcycles and Lo granL franchlses for Lhe operaLlon Lhereof ls sLlll sub[ecL Lo Lhe
guldellnes prescrlbed by Lhe uC1CŦ ln compllance LherewlLhţ Lhe ueparLmenL
of 1ransporLaLlon and CommunlcaLlons (ƍuC1Cƍ) lssued ƍCuldellnes Lo
lmplemenL Lhe uevoluLlon of L1l88s lranchlslng AuLhorlLy over 1rlcycleslorŴPlre Lo Local CovernmenL
unlLs pursuanL Lo Lhe Local CovernmenL
CodeŦƍ
Such as can be gleaned from Lhe expllclL language of Lhe sLaLuLeţ as well as
Lhe correspondlng guldellnes lssued by uC1Cţ Lhe newly delegaLed powers
perLaln Lo Lhe franchlslng and regulaLory powers LhereLofore exerclsed by Lhe
L1l88 and noL Lo Lhe funcLlons of Lhe L1C relaLlve Lo Lhe reglsLraLlon of
moLor vehlcles and lssuance of llcenses for Lhe drlvlng LhereofŦ
xlllŦ 1axesţ leesţ or Charges on Þhlllpplne ÞroducLs AcLually
LxporLedŤ
1axesţ feesţ or oLher charges on Þhlllpplne producLs acLually exporLed excepL
as provlded by Lhe Code (Lhe prohlblLlon applles Lo any local exporL Laxţ feeţ
or levy on Þhlllpplne exporL producLs buL noL Lo any local Laxţ feeţ or levy LhaL
may be lmposed on Lhe buslness of exporLlng sald producLs)Ť
1Ŧ CorrelaLe wlLh SecŦ 143 (c)
Cn exporLersţ and on manufacLurersţ mlllersţ producersţ wholesalersţ
dlsLrlbuLorsţ dealers or reLallers of essenLlal commodlLles enumeraLed
hereunder aL a raLe noL exceedlng oneŴhalf (1/2) of Lhe raLes prescrlbed
under subsecLlons (a)ţ (b) and (d) of Lhls SecLlonť
xlvŦ 1lC on C88Ls under 8A noŦ 6810 and 8A 6983
1axesţ fees or charges on duly organlzed and reglsLered CounLryslde and
8arangay 8uslness LnLerprlses (8ŦAŦ noŦ 6810) and on cooperaLlves
xvŦ 1lC on Lhe naLlonal CovernmenLţ lLs agencles and
lnsLrumenLallLles and LCus
8LvlLWL8 1Ax2Ŵ ?uMl 121axesţ fees or charges of any klnd on Lhe naLlonal CovernmenLţ lLs agencles
and lnsLrumenLallLlesţ and local governmenL unlLs (SecLlon 133ţ LCC)
CASLSť
nuC vsŦ Cebu ClLy 213 SC8A 382
ls a publlc land reserved by Lhe ÞresldenL for warehouslng purposes ln favor
of a governmenLŴowned or conLrolled corporaLlonţ as well as Lhe warehouse
subsequenLly erecLed Lhereonţ exempL from real properLy Lax?
CL8u lnslsLs on LaxablllLy of Lhe sub[ecL properLlesţ clalmlng LhaL no law
granLs nuC exempLlon from real esLaLe Laxesţ and LhaL nuCţ as reclplenL of
Lhe land reserved by Lhe ÞresldenL pursuanL Lo SecŦ 83 of Lhe Þubllc Land
AcLţ ls llable for paymenL or ordlnary (real esLaLe) Laxes under SecŦ 113
LhereforeŦ CL8u conLends LhaL Lhe properLles have ceased Lo be Lax exempL
under Lhe AssessmenL LawŦ when Lhe governmenL dlsposed of Lhem ln
favor of nuCţ and even assumlng LhaL LlLle Lo Lhe land remalns wlLh Lhe
governmenL (ownershlp belng Lhe basls for real esLaLe LaxablllLy under Lhe
AssessmenL Law)ţ Lhe Supreme CourL rullngs esLabllsh lncreaslng raLher
Lhan ƍownershlpƍ as basls for real esLaLe Lax llablllLyŦ 1he effecL of reservaLlon
under SecŦ 83 ls Lo segregaLe a plece of publlc land and Lransform lL lnLo nonallenable or nonŴdlsposable
under Lhe Þubllc Land AcLŦ SecLlon 113ţ on Lhe
oLher handţ applles Lo dlsposable publlc landsŦ Clearlyţ Lhereforeţ SecŦ 113
does noL apply Lo lands reserved under SecŦ 83Ŧ ConsequenLlyţ Lhe sub[ecL
reserved publlc land remalns Lax exempLŦ Poweverţ as regards Lhe
warehouse consLrucLed on a publlc reservaLlonţ a dlfferenL rule should apply
because ƍżLŽhe exempLlon of publlc properLy from LaxaLlon does noL exLend Lo
lmprovemenLs on Lhe publlc lands made by preŴempLlonersţ homesLeaders
and oLher clalmanLsţ or occupanLsţ aL Lhelr own expenseţ and Lhese are
Laxable by Lhe sLaLe Ŧ Ŧ Ŧƍ ConsequenLlyţ Lhe warehouse consLrucLed on Lhe
reserved land by nWC (now under admlnlsLraLlon by nuC)ţ lndeedţ should
properly be assessed real esLaLe Lax as such lmprovemenL does noL appear
Lo belong Lo Lhe 8epubllcŦSlnce Lhe reservaLlon ls exempL from realLy Laxţ Lhe
erroneous Lax paymenLs collecLed by CL8u should be refunded Lo nuCŦ 1hls
ls ln consonance wlLh SecŦ 40ţ parŦ (a) of Lhe former 8eal ÞroperLy 1ax Code
whlch exempLed from LaxaLlon real properLy owned by Lhe 8epubllc of Lhe
Þhlllpplnes or any of lLs pollLlcal subdlvlslonsţ as well as any CCCC so
exempL by lLs charLerŦ 30
Þhlllpplne llsherles uev'L AuLhorlLy vsŦŦ CA C8 noŦ 169836ţ C8 noŦ !uly
31ţ 2007
Assalled ln Lhls peLlLlon for revlew ls Lhe !une 21ţ 2003 ueclslon of Lhe CourL
of Appeals ln CAŴCŦ8Ŧ SÞ noŦ 81228ţ whlch held LhaL peLlLloner Þhlllpplne
llsherles uevelopmenL AuLhorlLy (hereafLer referred Lo as AuLhorlLy) ls llable
Lo pay real properLy Laxes on Lhe land and bulldlngs of Lhe llollo llshlng ÞorL
Complex (llÞC) whlch are owned by Lhe 8epubllc of Lhe Þhlllpplnes buL
operaLed and governed by Lhe AuLhorlLyŦ SomeLlme ln May 1988ţ Lhe ClLy of
llollo assessed Lhe enLlre llÞC for real properLy LaxesŦ 1he assessmenL
remalned unpald unLll Lhe alleged LoLal Lax dellnquency of Lhe AuLhorlLy for
Lhe flscal years 1988 and 1989 amounLed Lo Þ3ţ037ţ349Ŧ67ţ lncluslve of
penalLles and lnLeresLsŦ 1o saLlsfy Lhe Lax dellnquencyţ Lhe ClLy of llollo
scheduled on AugusL 30ţ 1990ţ Lhe sale aL publlc aucLlon of Lhe llÞCŦ
PLLuť 1he CourL held LhaL Lhe ÞluAţ as an lnsLrumenLallLy of Lhe naLlonal
governmenLţ ls generally LaxŴexempLŦ 1husţ lL ruled LhaL Lhe ÞluA ls llable Lo
pay real properLy Laxes assessed by Lhe ClLy of llollo on Lhe llÞC only wlLh
respecL Lo Lhose porLlons whlch are leased Lo prlvaLe enLlLlesŦ Moreoverţ Lhe
CourL held LhaL Lhe llÞCţ belng a reclalmed properLy and Lhus parL of publlc
domalnţ cannoL be Lhe sub[ecL of a sale and be sold aL a publlc aucLlonŦ As
suchţ Lhe Lax dellnquency has Lo be seLLled Lhrough means oLher Lhan Lhe
sale of Lhe complexŦ 1he CourL also declared Lhe real properLy Lax
assessmenLs lssued by Lhe ClLy of llollo on Lhe land and bulldlngs of Lhe llÞC
as vold excepL on Lhose porLlons leased Lo Lhe prlvaLe parLlesŦ lL also dlrecLed
Lhe ClLy of llollo Lo refraln from levylng on Lhe llÞC Lo saLlsfy Lhe paymenL of
Lhe real properLy Lax dellnquencyŦ
MacLan Cebu lnLernaLlonal AlrporL AuLhorlLy vsŦ Marcos Ŷ C8 noŦ
120082ţ SepLŦ 11ţ 1996
ÞeLlLloner MacLan Cebu lnLernaLlonal AlrporL AuLhorlLy (MClAA) was creaLed
by vlrLue of 8epubllc AcL noŦ 6938ţ mandaLed Lo ƍprlnclpally underLake Lhe
economlcalţ efflclenL and effecLlve conLrolţ managemenL and supervlslon of
Lhe MacLan lnLernaLlonal AlrporL ln Lhe Þrovlnce of Cebu and Lhe Lahug
AlrporL ln Cebu ClLyţ Ŧ Ŧ Ŧ and such oLher AlrporLs as may be esLabllshed ln Lhe
Þrovlnce of CebuŦ Slnce Lhe Llme of lLs creaLlonţ peLlLloner MClAA en[oyed
Lhe prlvllege of exempLlon from paymenL of realLy Laxes ln accordance wlLh
SecLlon 14 of lLs CharLerŦ Cn CcLober 11ţ 1994ţ howeverţ MrŦ LusLaqulo 8Ŧ
Cesaţ CfflcerŴlnŴChargeţ Cfflce of Lhe 1reasurer of Lhe ClLy of Cebuţ
demanded paymenL for realLy Laxes on several parcels of land belonglng Lo
Lhe peLlLlonerŦ ÞeLlLloner ob[ecLed Lo such demand for paymenL as baseless
and un[usLlfledţ clalmlng ln lLs favor Lhe aforeclLed SecLlon 14 of 8A 6938
whlch exempL lL from paymenL of realLy LaxesŦ
8LvlLWL8 1Ax2Ŵ ?uMl 13PLLuť 1he peLlLloner can no longer lnvoke Lhe general rule ln SecLlon 133
LhaL Lhe Laxlng powers of Lhe local governmenL unlLs cannoL exLend Lo Lhe
levy ofť
(o) Laxesţ feesţ or charges of any klnd on Lhe naLlonal CovernmenLţ lLs
agenclesţ or lnsLrumenLallLlesţ and local governmenL unlLsŦ lL musL show LhaL
Lhe parcels of land ln quesLlonţ whlch are real properLyţ are any one of Lhose
enumeraLed ln SecLlon 234ţ elLher by vlrLue of ownershlpţ characLerţ or use of
Lhe properLyŦ MosL llkelyţ lL could only be Lhe flrsLţ buL noL under any expllclL
provlslon of Lhe sald secLlonţ for one exlsLsŦ
Accordlnglyţ Lhe poslLlon Laken by Lhe peLlLloner ls unLenableŦ 8ellance on
8asco vsŦ Þhlllpplne AmusemenL and Camlng CorporaLlon 39 ls unavalllng
slnce lL was declded before Lhe effecLlvlLy of Lhe LCCŦ 8esldesţ noLhlng can
prevenL Congress from decreelng LhaL even lnsLrumenLallLles or agencles of
Lhe governmenL performlng governmenLal funcLlons may be sub[ecL Lo LaxŦ
Where lL ls done preclsely Lo fulflll a consLlLuLlonal mandaLe and naLlonal
pollcyţ no one can doubL lLs wlsdomŦ
MlAA vsŦ CA Ŷ C8 noŦ 133630ţ !uly 20ţ 2006
8endered a favorable rullng for governmenL lnsLrumenLallLles (as
dlsLlngulshed from governmenLŴowned or conLrolled corporaLlons) by decldlng
LhaL no Laxesţ fees or charges of any klnd may be lmposed by any local
governmenL unlL agalnsL Lhe naLlonal CovernmenLţ lLs agencles or
lnsLrumenLallLlesŦ
1he Manlla lnLernaLlonal AlrporL AuLhorlLy (MlAA)ţ 8ases Converslon
uevelopmenL AuLhorlLy (8CuA)ţ Þhlllpplne ÞorLs AuLhorlLy (ÞÞA)ţ MacLan
lnLernaLlonal AlrporL AuLhorlLy (MClAA)ţ unlverslLy of Lhe Þhlllpplnes (uÞ)ţ
8angko SenLral ng Þlllplnas (8SÞ) and all oLher so called CCCCs whlch are
noL organlzed as sLock or nonŴsLock corporaLlonsţ are noL consldered as
CCCCs buL as governmenL lnsLrumenLallLles or ƍgovernmenL corporaLe
enLlLlesƍŦ Accordlng Lo Lhe sald Supreme CourL ueclslonţ Lhey are noL sub[ecL
Lo Lhe paymenL of any Laxesţ fees or charges of any klnd lmposed by
provlncesţ clLlesţ munlclpallLlesţ and barangays pursuanL Lo SecLlon 133(o) of
Lhe Local CovernmenL CodeŦ 1he CovernmenL Servlce and lnsurance
SysLem (CSlS)ţ Lhe Soclal SecurlLy Servlces SysLem (SSS)ţ 1he naLlonal
kldney loundaLlon of Lhe Þhlllpplnes ţ Lhe Lung CenLer of Lhe Þhlllpplnes
(LCÞ)ţ Lhe Þhlllpplne PearL CenLer (ÞPC)ţ Lhe Þhlllpplne Lconomlc Zone
AuLhorlLy (ÞLZA)ţ Lo name a fewţ are llkewlse Lo be consldered as
governmenL lnsLrumenLallLles or ƍgovernmenL corporaLe enLlLlesŦƍ
SC ruled We uLCLA8L Lhe AlrporL Lands and 8ulldlngs of Lhe Manlla
lnLernaLlonal AlrporL AuLhorlLy LxLMÞ1 from Lhe real esLaLe Lax lmposed by
Lhe ClLy of ÞaranaqueŦ We declare vClu all Lhe real esLaLe Lax assessmenLsţ
lncludlng Lhe flnal noLlces of real esLaLe Lax dellnquenclesţ commlLLed Lo
uphold [usLlce under Lhe rule of law lssued by Lhe ClLy of Þaranaque on Lhe
AlrporL Lands and 8ulldlngs of Lhe Manlla lnLernaLlonal AlrporL AuLhorlLyţ
excepL for Lhe porLlons LhaL Lhe Manlla lnLernaLlonal AlrporL has leased Lo
prlvaLe parLlesŦ We also declare vClu Lhe assalled aucLlon saleţ and all lLs
effecLsţ of Lhe AlrporL Lands and 8ulldlngs of Lhe Manlla lnLernaLlonal AlrporL
AuLhorlLy
MlAA vsŦ ClLy of Þasay Ŷ C8 noŦ 163072ţ Aprll 2ţ 2009
lSSuLť WheLher Lhe nAlA Þasay properLles of MlAA are exempL from real
properLy LaxŦ
1he Manlla lnLernaLlonal AlrporL AuLhorlLy (MlAA) ls noL a governmenLŴ owned
or ŶconLrolled corporaLlonţ as deflned under SecLlon 2(13) of Lhe lnLroducLory
Þrovlslons of Lhe AdmlnlsLraLlve Codeţ because lL ls noL organlzed as a sLock
or nonŴsLock corporaLlonŦ nelLher ls MlAA a governmenLŴowned or Ŷ
conLrolled corporaLlon under SecLlon 16ţ ArLlcle xll of Lhe 1987 ConsLlLuLlon
because MlAA ls noL requlred Lo meeL Lhe LesL of economlc vlablllLyŦ MlAA ls
a governmenL lnsLrumenLallLy vesLed wlLh corporaLe powers and performlng
essenLlal publlc servlces pursuanL Lo SecLlon 2(10) of Lhe lnLroducLory
Þrovlslons of Lhe AdmlnlsLraLlve CodeŦ As a governmenL lnsLrumenLallLyţ
MlAA ls noL sub[ecL Lo any klnd of Lax by local governmenLs under SecLlon
133(o) of Lhe Local CovernmenL CodeŦ 1he excepLlon Lo Lhe exempLlon ln
SecLlon 234(a) does noL apply Lo MlAA because MlAA ls noL a Laxable enLlLy
under Lhe Local CovernmenL CodeŦ 1he real properLles of MlAA are lnLended
for publlc useţ and aL Lhe very leasL lnLended for publlc servlceŦ WheLher
lnLended for publlc use or publlc servlceţ sald real properLles are properLles of
publlc domlnlonŦ As properLles of publlc domlnlonţ Lhey are owned by Lhe
8epubllc and Lhus exempL from real esLaLe Lax under Lhe provlslons of
SecLlon 234(a) of Lhe Local CovernmenL CodeŦ
ClLy of uavao ClLy vsŦ 81C Ŷ C8 noŦ 127383ţ AugusL 18ţ 2003
CSlS uavao ClLy branch offlce recelved a noLlce of Þubllc AucLlonţ
schedullng publlc blddlng of lLs properLles for nonŴpaymenL of realLy Laxes
from 1992Ŵ1994ţ amounLlng Lo Lhe sum LoLal of Þhp 293ţ 721Ŧ61Ŧ 1he aucLlon
wasţ howeverţ subsequenLly reseL by vlrLue of a deadllne exLenslon glven by
uavao ClLyŦ
Cn !uly 28ţ 1994ţ CSlS recelved WarranLs of Levy and noLlces of Levy on
Lhree parcels of land lL owned and anoLher noLlce of Þubllc AucLlonŦ ln
SepLember of LhaL same yearţ CSlS flled a peLlLlon for CerLlorarlţ ÞrohlblLlonţ
Mandamus and/or ueclaraLory 8ellef wlLh Lhe uavao ClLy 81CŦ
8LvlLWL8 1Ax2Ŵ ?uMl 14uurlng preŴLrlalţ Lhe only lssue ralsed was wheLher secŦ 234 and 334 of Lhe
Local CovernmenL Codeţ whlch have wlLhdrawn real properLy Lax from
CCCCsţ have also wlLhdrawn from Lhe CSlS lLs rlghL Lo be exempLed from
paymenL of realLy LaxŦ81C rendered declslon ln favor of CSlSŦ Pence Lhls
peLlLlonŦ
lSSuL/SťWheLher Lhe CSlS Lax exempLlons can be deemed as wlLhdrawn by
Lhe LCC W/n secŦ 33 of ÞŦuŦ 1146 has been repealed by Lhe LCC
PLLuť8eadlng LogeLher secŦ 133ţ 232ţ and 234 of Lhe LCCţ as a general
ruleť Lhe Laxlng powers of LCus cannoL exLend Lo Lhe levy of ºLaxesţ feesţ and
charges of any klnd on Lhe naLlonal CovernmenLţ lLs agencles and
lnsLrumenLallLlesţ and LCusŦ" Poweverţ under secŦ 234ţ exempLlons from
paymenL of real properLy Laxes granLed Lo naLural or [urldlcal personsţ
lncludlng CCCCsţ excepL as provlded ln sald secLlonţ are wlLhdrawn upon
effecLlvlLy of LCCŦ CSlS belng a CCCCţ Lhen lL necessarlly follows LhaL lLs
exempLlon has been wlLhdrawnŦ 8egardlng ÞŦuŦ 1146 whlch lald down
requlslLes for repeal on Lhe laws granLlng exempLlonţ Supreme CourL found a
fundamenLal flaw ln SecŦ 33ţ parLlcularly Lhe amendaLory second paragraphŦ
Sald paragraph effecLlvely lmposes resLrlcLlons on Lhe compeLency of Lhe
Congress Lo enacL fuLure leglslaLlon on Lhe LaxablllLy of CSlSŦ 1hls places an
undue resLralnL on Lhe plenary power of Lhe leglslaLure Lo amend or repeal
lawsŦ Cnly Lhe ConsLlLuLlon may operaLe Lo preclude or place resLrlcLlons on
Lhe amendmenL or repeal lawsŦ 1hese condlLlons lmposed under ÞŦuŦ 1146ţ
lf honoredţ have Lhe preclse effecL of llmlLlng Lhe powers of CongressŦ
Supreme CourL held LhaL Lhey cannoL render effecLlve Lhe amendaLory
second paragraph of secŦ 33ţ for by dolng soţ Lhey would be glvlng sancLlon
Lo a dlslngenuous means employed Lhrough leglslaLlve power Lo blnd
subsequenL leglslaLors Lo a subsequenL mode of repealŦ 1husţ Lhe Lwo
condlLlons under secŦ 33 cannoL bear relevance wheLher Lhe LCC removed
Lhe LaxŴexempL sLaLus of CSlSŦlurLhermoreţ secŦ 3 on Lhe rules of
lnLerpreLaLlon of LCC sLaLes LhaL ºany Lax exempLlonţ lncenLlve or rellef
granLed by any LCu pursuanL Lo Lhe provlslon of Lhls Code shall be consLrued
sLrlcLly agalnsL Lhe person clalmlng lLŦ" 1he CSlS LaxŴexempL sLaLsţ ln sumţ
was wlLhdrawn ln 1992 by Lhe LCC buL resLored by Lhe CSlS AcL of 1997ţ
secŦ 39Ŧ 1he sub[ecL real properLy Laxes for Lhe years 1992Ŵ1994 were
assessed agalnsL CSlS whlle Lhe LCC provlslons prevalled and Lhus may be
collecLed by Lhe ClLy of uavaoŦ
lllŦ 1AxlnC Anu C1PL8 8LvLnuL 8ASlnC ÞCWL8S Cl LCuS
aŦ Þrovlnces
lŦ Local 1ransfer 1ax (SecŦ 133)
SLCŦ 133Ŧ 1ax on 1ransfer of 8eal ÞroperLy CwnershlpŦ Ŵ (a) 1he provlnce
may lmpose a Lax on Lhe saleţ donaLlonţ barLerţ or on any oLher mode of
Lransferrlng ownershlp or LlLle of real properLy aL Lhe raLe of noL more Lhan flfLy
percenL (30Ʒ) of one percenL (1Ʒ) of Lhe LoLal conslderaLlon lnvolved ln Lhe
acqulslLlon of Lhe properLy or of Lhe falr markeL value ln case Lhe moneLary
conslderaLlon lnvolved ln Lhe Lransfer ls noL subsLanLlalţ whlchever ls hlgherŦ
1he saleţ Lransfer or oLher dlsposlLlon of real properLy pursuanL Lo 8ŦAŦ noŦ
6637 shall be exempL from Lhls LaxŦ
(b) lor Lhls purposeţ Lhe 8eglsLer of ueeds of Lhe provlnce concerned shallţ
before reglsLerlng any deedţ requlre Lhe presenLaLlon of Lhe evldence of
paymenL of Lhls LaxŦ 1he provlnclal assessor shall llkewlse make Lhe same
requlremenL before cancelllng an old Lax declaraLlon and lssulng a new one
ln place LhereofŦ noLarles publlc shall furnlsh Lhe provlnclal Lreasurer wlLh a
copy of any deed Lransferrlng ownershlp or LlLle Lo any real properLy wlLhln
LhlrLy (30) days from Lhe daLe of noLarlzaLlonŦ lL shall be Lhe duLy of Lhe sellerţ
donorţ Lransferorţ execuLor or admlnlsLraLor Lo pay Lhe Lax hereln lmposed
wlLhln slxLy (60) days from Lhe daLe of Lhe execuLlon of Lhe deed or from Lhe
daLe of Lhe decedenLƌs deaLhŦ
llŦ 8uslness 1ax on ÞrlnLlng and ÞubllcaLlon (SecŦ 136)
SLCŦ 136Ŧ 1ax on 8uslness of ÞrlnLlng and ÞubllcaLlonŦ Ŵ 1he provlnce may
lmpose a Lax on Lhe buslness of persons engaged ln Lhe prlnLlng and/or
publlcaLlon of booksţ cardsţ posLersţ leafleLsţ handblllsţ cerLlflcaLesţ recelpLsţ
pamphleLsţ and oLhers of slmllar naLureţ aL a raLe noL exceedlng flfLy percenL
(30Ʒ) of one percenL (1Ʒ) of Lhe gross annual recelpLs for Lhe precedlng
calendar yearŦ ln Lhe case of a newly sLarLed buslnessţ Lhe Lax shall noL
exceed oneŴLwenLleLh (1/20) of one percenL (1Ʒ) of Lhe caplLal lnvesLmenLŦ ln
Lhe succeedlng calendar yearţ regardless of when Lhe buslness sLarLed Lo
operaLeţ Lhe Lax shall be based on Lhe gross recelpLs for Lhe precedlng
calendar yearţ or any fracLlon Lhereofţ as provlded herelnŦ 1he recelpLs from
Lhe prlnLlng and/or publlshlng of books or oLher readlng maLerlals prescrlbed
by Lhe ueparLmenL of LducaLlonţ CulLure and SporLsţ as school LexLs or
references shall be exempL from Lhe Lax hereln lmposedŦ
lllŦ lranchlse 1ax (SecŦ 137)
SLCŦ 137Ŧ lranchlse 1axŦ Ŵ noLwlLhsLandlng any exempLlon granLed by any
law or oLher speclal lawţ Lhe provlnce may lmpose a Lax on buslnesses
en[oylng a franchlseţ aL a raLe noL exceedlng flfLy percenL (30Ʒ) of one
8LvlLWL8 1Ax2Ŵ ?uMl 13percenL (1Ʒ) of Lhe gross annual recelpLs for Lhe precedlng calendar year
based on Lhe lncomlng recelpLţ or reallzedţ wlLhln lLs LerrlLorlal [urlsdlcLlonŦ ln
Lhe case of a newly sLarLed buslnessţ Lhe Lax shall noL exceed oneŴLwenLleLh
(1/20) of one percenL (1Ʒ) of Lhe caplLal lnvesLmenLŦ ln Lhe succeedlng
calendar yearţ regardless of when Lhe buslness sLarLed Lo operaLeţ Lhe Lax
shall be based on Lhe gross recelpLs for Lhe precedlng calendar yearţ or any
fracLlon Lhereofţ as provlded herelnŦ
CASLť
SmarL CommunlcaLlons vsŦ ClLy of uavao Ŷ C8 noŦ 133491ţ SepLember
16ţ 2008 (Also read declslon on MoLlon for 8econslderaLlon daLed !uly
21ţ 2009)
1ax exempLlons ln franchlses are always sub[ecL Lo wlLhdrawalŦ Moreoverţ
SmarL's franchlse was granLed wlLh Lhe express condlLlon LhaL lL ls sub[ecL Lo
amendmenLţ alLeraLlonţ or repealŦ (1987 CCnS1l1u1lCnţ ArLŦ xllţ SecŦ 11)
lL ls enough Lo say LhaL Lhe parLles Lo a conLracL cannoLţ Lhrough Lhe
exerclse of propheLlc dlscernmenLţ feLLer Lhe exerclse of Lhe Laxlng power of
Lhe SLaLeŦ lor noL only are exlsLlng laws read lnLo conLracLs ln order Lo flx
obllgaLlons as beLween parLlesţ buL Lhe reservaLlon of essenLlal aLLrlbuLes of
soverelgn power ls also read lnLo conLracLs as a baslc posLulaLe of Lhe legal
orderŦ 1he pollcy of proLecLlng conLracLs agalnsL lmpalrmenL presupposes Lhe
malnLenance of a governmenL whlch reLalns adequaLe auLhorlLy Lo secure Lhe
peace and good order of socleLyŦ
ln LruLhţ Lhe ConLracL Clause has never been LhoughL as a llmlLaLlon on
Lhe exerclse of Lhe SLaLe's power of LaxaLlon save only where a Lax
exempLlon has been granLed for a valld conslderaLlonŦ SmarL
CommunlcaLlonsţ lncŦ vŦ 1he ClLy of uavaoţ eLcŦţ eL alŦţ CŦ 8Ŧ noŦ 133491ţ
SepLember 16ţ 2008 clLlng 1olenLlno vŦ SecreLary of llnanceţ CŦ 8Ŧ noŦ
113433ţ AugusL 23ţ 1994ţ 233 SC8A 630ţ 683Ŧ 1he auLhor oplnes LhaL slnce
pracLlcally all franchlses granLed Lo LelecommunlcaLlons companles are
slmllarly worded LhaL Lhe above docLrlne flnds appllcaLlon Lo Lhe oLhers)
lvŦ 1ax on Sandţ Cravel and Cuarry 8esources (SecŦ 138)
LCŦ 138Ŧ 1ax on Sandţ Cravel and CLher Cuarry 8esourcesŦ Ŵ 1he provlnce
may levy and collecL noL more Lhan Len percenL (10Ʒ) of falr markeL value ln
Lhe locallLy per cublc meLer of ordlnary sLonesţ sandţ gravelţ earLhţ and oLher
quarry resourcesţ as deflned under Lhe naLlonal lnLernal 8evenue Codeţ as
amendedţ exLracLed from publlc lands or from Lhe beds of seasţ lakesţ rlversţ
sLreamsţ creeksţ and oLher publlc waLers wlLhln lLs LerrlLorlal [urlsdlcLlonŦ 1he
permlL Lo exLracL sandţ gravel and oLher quarry resources shall be lssued
excluslvely by Lhe provlnclal governorţ pursuanL Lo Lhe ordlnance of Lhe
sanggunlang panlalawlganŦ 1he proceeds of Lhe Lax on sandţ gravel and
oLher quarry resources shall be dlsLrlbuLed as followsť
(1) Þrovlnce Ŵ 1hlrLy percenL (30Ʒ)Ť (2) ComponenL clLy or munlclpallLy
where Lhe sandţ gravelţ and oLher quarry resources are exLracLed Ŵ 1hlrLy
percenL (30Ʒ)Ť and (3) barangay where Lhe sandţ gravelţ and oLher quarry
resources are exLracLed Ŵ lorLy percenL (40Ʒ)Ŧ
CASLť MunlclpallLy of San lernando vsŦ SLaŦ 8omana LŴC8 noŦ 30139ţ
MarŦ 31ţ 1987
WheLher or noL Lhe MunlclpallLy of Luna has Lhe auLhorlLy Lo pass an
ordlnance and lmpose Lhe llcense fees ln quesLlonŦŦ
Peldť SecLlon 10 of Lhe Local 1ax Codeţ as amended by Þu noŦ 426ţ readsť
ºSecŦ 10Ŧ Sand and gravel LaxŦ Ŷ 1he Þ8CvlnCL may levy and collecL a Lax
of noL exceedlng sevenLyŴflve cenLavos per cublc meLer of ordlnary sLonesţ
sandţ gravelţ earLh and oLher maLerlals exLracLed from publlc and prlvaLe
lands of Lhe governmenL or from Lhe beds of seasţ lakesţ rlversţ sLreamsţ
creeks and oLher publlc waLer wlLhln Lhe [urlsdlcLlon of Lhe provlnceŦ 1he
munlclpallLy where Lhe maLerlals are exLracLed shall share ln Lhe proceeds of
Lhe Lax hereln auLhorlzed aL a raLe of noL less Lhan LhlrLy per cenL Lhereof as
may be deLermlned by Lhe Þrovlnclal 8oardŦ"
under Lhe aboveŴquoLed provlslons of Lhe Local 1ax Codeţ Lhere ls no
quesLlon LhaL Lhe auLhorlLy Lo lmpose Lhe llcense fees ln dlspuLeţ properly
belongs Lo Lhe provlnce concerned and noL Lhe MunlclpallLy of Luna whlch ls
speclflcally prohlblLed under SecLlon 22 of Lhe same Code ºfrom levylng
Laxesţ fees and charges LhaL Lhe provlnce or clLy ls auLhorlzed Lo levy ln Lhls
CodeŦ" Cn Lhe oLher handţ Lhe MunlclpallLy of San lernando cannoL exLracL
sand and gravel from Lhe MunlclpallLy of Luna wlLhouL paylng Lhe
correspondlng Laxes and fees LhaL may be lmposed by Lhe provlnce of La
unlonŦ
Þrovlnce of 8ulacan vsŦ CA Ŷ C8 noŦ 126232ţ november 27ţ 1998
lL ls clearly apparenL from Lhe above provlslon LhaL Lhe naLlonal lnLernal
8evenue Code levles a Lax on all quarry resourcesţ regardless of orlglnţ
wheLher exLracLed from publlc or prlvaLe landŦ 1husţ a provlnce may noL
ordlnarlly lmpose Laxes on sLonesţ sandţ gravelţ earLh and oLher quarry
resourcesţ as Lhe same are already Laxed under Lhe naLlonal lnLernal
8evenue CodeŦ 1he provlnce canţ howeverţ lmpose a Lax on sLonesţ sandţ
gravelţ earLh and oLher quarry resources exLracLed from publlc land because
8LvlLWL8 1Ax2Ŵ ?uMl 16lL ls expressly empowered Lo do so under Lhe Local CovernmenL CodeŦ As Lo
sLonesţ sandţ gravelţ earLh and oLher quarry resources exLracLed from prlvaLe
landţ howeverţ lL may noL do soţ because of Lhe llmlLaLlon provlded by
SecLlon 133 of Lhe Code ln relaLlon Lo SecLlon 131 of Lhe naLlonal lnLernal
8evenue CodeŦ
Clven Lhe above dlsqulslLlonţ peLlLloners cannoL clalm LhaL Lhe appellaLe courL
un[usLly deprlved Lhem of Lhe power Lo creaLe Lhelr sources of revenueţ Lhelr
assessmenL of Laxes agalnsL 8epubllc CemenL belng ulLra vlresţ Lraverslng as
lL does Lhe llmlLaLlons seL by Lhe Local CovernmenL CodeŦ
vŦ Þrofesslonal 1ax (SecŦ 139)
SLCŦ 139Ŧ Þrofesslonal 1axŦ Ŵ (a) 1he provlnce may levy an annual
professlonal Lax on each person engaged ln Lhe exerclse or pracLlce of hls
professlon requlrlng governmenL examlnaLlon aL such amounL and
reasonable classlflcaLlon as Lhe sanggunlang panlalawlgan may deLermlne
buL shall ln no case exceed 1hree hundred pesos (Þƹ300Ŧ00)Ŧ
(b) Lvery person legally auLhorlzed Lo pracLlce hls professlon shall pay Lhe
professlonal Lax Lo Lhe provlnce where he pracLlces hls professlon or where
he malnLalns hls prlnclpal offlce ln case he pracLlces hls professlon ln several
placesť Þrovldedţ howeverţ 1haL such person who has pald Lhe
correspondlng professlonal Lax shall be enLlLled Lo pracLlce hls professlon ln
any parL of Lhe Þhlllpplnes wlLhouL belng sub[ecLed Lo any oLher naLlonal or
local Laxţ llcenseţ or fee for Lhe pracLlce of such professlonŦ
(c) Any lndlvldual or corporaLlon employlng a person sub[ecL Lo professlonal
Lax shall requlre paymenL by LhaL person of Lhe Lax on hls professlon before
employmenL and annually LhereafLerŦ
(d) 1he professlonal Lax shall be payable annuallyţ on or before Lhe LhlrLyflrsL (31sL) day of !anuaryŦ Any
person flrsL beglnnlng Lo pracLlce a professlon
afLer Lhe monLh of !anuary musLţ howeverţ pay Lhe full Lax before engaglng
LherelnŦ A llne of professlon does noL become exempL even lf conducLed wlLh
some oLher professlon for whlch Lhe Lax has been paldŦ Þrofesslonals
excluslvely employed ln Lhe governmenL shall be exempL from Lhe paymenL of
Lhls LaxŦ
(e) Any person sub[ecL Lo Lhe professlonal Lax shall wrlLe ln deedsţ recelpLsţ
prescrlpLlonsţ reporLsţ books of accounLţ plans and deslgnsţ surveys and
mapsţ as Lhe case may beţ Lhe number of Lhe offlclal recelpL lssued Lo hlmŦ
1Ŧ ueflnlLlon of Þrofesslonals (SecŦ 238 (f) l88 of Lhe LCC)
Þrofesslonal Lax may be lmposed by a provlnce or clLy buL noL by a
munlclpallLy or barangayŦ
aŦ 1ransacLlon Laxedť Lxerclse or pracLlce of professlon requlrlng governmenL
llcensure examlnaLlonŦ
bŦ 1ax raLeť noL be exceed Þ300Ŧ00Ŧ
cŦ 1ax baseť 8easonable classlflcaLlon by Lhe sanggunlanŦ
dŦ LxcepLlonť ÞaymenL Lo one provlnce or clLy no longer sub[ecL Lo any oLher
naLlonal or local Laxţ llcense or fee for Lhe pracLlce of such professlon ln any
parL of Lhe Þhlllpplne professlonals excluslvely employed ln Lhe governmenLŦ
eŦ uaLe of paymenLť or on before !anuary 31 or engaglng ln Lhe professlonŦ
fŦ Þlace of paymenLť Þrovlnce or clLy where Lhe professlonal pracLlces hls
professlon or where he malnLalns hls prlnclpal offlce ln case he pracLlces hls
professlon ln several placesŦ
8equlremenLsť Any lndlvldual or corporaLlon employlng a person sub[ecL Lo
professlonal Lax shall requlre paymenL by LhaL person of Lhe Lax on hls
professlon before employmenL and annually LhereafLerŦ
Any person sub[ecL Lo Lhe professlonal Lax shall wrlLe ln deedsţ recelpLsţ
prescrlpLlonsţ reporLsţ books of accounLţ plans and deslgnsţ surveys and
mapsţ as Lhe case may beţ Lhe number of Lhe offlclal recelpL lssued Lo hlmŦ
LxempLlonť Þrofesslonals excluslvely employed ln Lhe governmenL shall be
exempL from paymenLŦ (SecŦ 139ţ LCC)
2Ŧ Þrofesslonal pracLlces hls professlon ln several places (SecŦ 228 (b)
l88 of LCC)
Ŧ Þrofesslonals who are sub[ecL Lo professlonal Laxţ deflnedŦ 1he
professlonals sub[ecL Lo Lhe professlonal Lax are only Lhose who have passed
Lhe bar examlnaLlonsţ or any board or oLher examlnaLlons conducLed by Lhe
Þrofesslonal 8egulaLlon Commlsslon (Þ8C)Ŧ for exampleţ a lawyer who ls
also a CerLlfled Þubllc AccounLanL (CÞA) musL pay Lhe professlonal Lax
lmposed on lawyers and LhaL flxed for CÞAsţ lf he ls Lo pracLlce boLh
professlonsŦ żSecŦ 238 (f)ţ 8ule xxxţ 8ules and 8egulaLlons lmplemenLlng
Lhe Local CovernmenL Code of 1991Ž
vlŦŦ AmusemenL 1ax (SecŦ 140) as amended by 8A noŦ 9640 daLed May
21ţ 2009
8LvlLWL8 1Ax2Ŵ ?uMl 17SLCŦ 140Ŧ AmusemenL 1axŦ Ŵ (a) 1he provlnce may levy an amusemenL Lax
Lo be collecLed from Lhe proprleLorsţ lesseesţ or operaLors of LheaLersţ
clnemasţ concerL hallsţ clrcusesţ boxlng sLadlaţ and oLher places of
amusemenL aL a raLe of noL more Lhan LhlrLy percenL (30Ʒ) of Lhe gross
recelpLs from admlsslon feesŦ
(b) ln Lhe case of LheaLers or clnemasţ Lhe Lax shall flrsL be deducLed and
wlLhheld by Lhelr proprleLorsţ lesseesţ or operaLors and pald Lo Lhe provlnclal
Lreasurer before Lhe gross recelpLs are dlvlded beLween sald proprleLorsţ
lesseesţ or operaLors and Lhe dlsLrlbuLors of Lhe clnemaLographlc fllmsŦ
(c) 1he holdlng of operasţ concerLsţ dramasţ reclLalsţ palnLlng and arL
exhlblLlonsţ flower showsţ muslcal programsţ llLerary and oraLorlcal
presenLaLlonsţ excepL popţ rockţ or slmllar concerLs shall be exempL from Lhe
paymenL of Lhe Lax hereln lmposedŦ
(d) 1he sanggunlang panlalawlgan may prescrlbe Lhe Llmeţ mannerţ Lerms
and condlLlons for Lhe paymenL of LaxŦ ln case of fraud or fallure Lo pay Lhe
Laxţ Lhe sanggunlang panlalawlgan may lmpose such surchargesţ lnLeresLs
and penalLles as lL may deem approprlaLeŦ
(e) 1he proceeds from Lhe amusemenL Lax shall be shared equally by Lhe
provlnce and Lhe munlclpallLy where such amusemenL places are locaLedŦ
CASLť Þ8A vsŦ CA C8 noŦ 119122ţ AugusL 8ţ 2000
ls Lhe amusemenL Lax on admlsslon LlckeLs Lo Þ8A games a naLlonal or local
Lax? CLherwlse puLţ who beLween Lhe naLlonal governmenL and local
governmenL should peLlLloner pay amusemenL Laxes?
Peldť ÞeLlLloner's conLenLlon ls berefL of merlLŦ SecLlon 13 of Lhe Local 1ax
Code provldes LhaL Lhe provlnce shall lmpose a Lax on admlsslon Lo be
collecLed from Lhe proprleLorsţ lesseesţ or operaLors of LheaLersţ
clnemaLographsţ concerL hallsţ clrcuses and oLher places of amusemenL xxxŦƍ
1he foregolng provlslon of law ln polnL lndlcaLes LhaL Lhe provlnce can only
lmpose a Lax on admlsslon from Lhe proprleLorsţ lesseesţ or operaLors of
LheaLersţ clnemaLographsţ concerL hallsţ clrcuses and oLher places of
amusemenLŦ 1he auLhorlLy Lo Lax professlonal baskeLball games ls noL Lhereln
lncludedŦ lrom Lhe foregolng lL ls clear LhaL Lhe ƍproprleLorţ lessee or operaLor
of xxx professlonal baskeLball gamesƍ ls requlred Lo pay an amusemenL Lax
equlvalenL Lo flfLeen per cenLum (13Ʒ) of Lhelr gross recelpLs Lo Lhe 8ureau of
lnLernal 8evenueţ whlch paymenL ls a naLlonal LaxŦ 1he sald paymenL of
amusemenL Lax ls ln lleu of all oLher percenLage Laxes of whaLever naLure and
descrlpLlonŦ
Whlle SecLlon 13 of Lhe Local 1ax Code menLlons ƍoLher places of
amusemenLƍţ professlonal baskeLball games are deflnlLely noL wlLhln lLs
scopeŦ under Lhe prlnclple of e[usdem generlsţ where general words follow
an enumeraLlon of persons or Lhlngsţ by words of a parLlcular and speclflc
meanlngţ such general words are noL Lo be consLrued ln Lhelr wldesL exLenLţ
buL are Lo be held as applylng only Lo persons or Lhlngs of Lhe same klnd or
class as Lhose speclflcally menLlonedŦ Þrofesslonal baskeLball games do noL
fall under Lhe same caLegory as LheaLersţ clnemaLographsţ concerL halls and
clrcuses as Lhe laLLer baslcally belong Lo arLlsLlc forms of enLerLalnmenL whlle
Lhe former caLers Lo sporLs and gamlngŦ
vllŦ Annual llxed 1ax on uellvery 1rucks / vans (SecŦ 141)
SLCŦ 141Ŧ Annual llxed 1ax lor Lvery uellvery 1ruck or van of
ManufacLurers or Þroducersţ Wholesalers ofţ uealersţ or 8eLallers lnţ CerLaln
ÞroducLsŦ Ŵ (a) 1he provlnce may levy an annual flxed Lax for every Lruckţ van
or any vehlcle used by manufacLurersţ producersţ wholesalersţ dealers or
reLallers ln Lhe dellvery or dlsLrlbuLlon of dlsLllled splrlLsţ fermenLed llquorsţ
sofL drlnksţ clgars and clgareLLesţ and oLher producLs as may be deLermlned
by Lhe sanggunlang panlalawlganţ Lo sales ouLleLsţ or consumersţ wheLher
dlrecLly or lndlrecLlyţ wlLhln Lhe provlnce ln an amounL noL exceedlng llve
hundred pesos (Þ300Ŧ00)Ŧ
(b) 1he manufacLurersţ producersţ wholesalersţ dealersţ and reLallers
referred Lo ln Lhe lmmedlaLely foregolng paragraph shall be exempL from Lhe
Lax on peddlers prescrlbed elsewhere ln Lhls CodeŦ
bŦ MunlclpallLles
lŦ 8uslness 1axes (SecŦ 143)
CASLSť
Lrlcsson 1elecommunlcaLlon vsŦ ClLy of Þaslg C8 noŦ 176667ţ
november 22Ŧ 2007
WheLher Lhe local buslness Lax on conLracLors should be based on gross
recelpLs or gross revenues
1he lmposlLlon of local buslness Lax based on peLlLlonerƌs gross revenue wlll
lnevlLably resulL ln Lhe consLlLuLlonally proscrlbed double LaxaLlon Ŷ Laxlng of
Lhe same person Lwlce by Lhe same [urlsdlcLlon for Lhe same LhlngŶ lnasmuch
as peLlLlonerƌs revenue or lncome for a Laxable year wlll deflnlLely lnclude lLs
gross recelpLs already reporLed durlng Lhe prevlous year and for whlch local
buslness Lax has already been paldŦ
1husţ respondenL commlLLed a palpable error when lL assessed peLlLlonerƌs
local buslness Lax based on lLs gross revenue as reporLed ln lLs audlLed
flnanclal sLaLemenLsţ as SecLlon 143 of Lhe Local CovernmenL Code and
SecLlon 22(e) of Lhe Þaslg 8evenue Code clearly provlde LhaL Lhe Lax should
be compuLed based on gross recelpLsŦ
8LvlLWL8 1Ax2Ŵ ?uMl 18?amane vsŦ 8A LepanLo Ŷ C8 no 134992ţ CcLober 23ţ 2003
WheLher a local governmenL unlL canţ under Lhe Local CovernmenL Codeţ
lmpel a condomlnlum corporaLlon Lo pay buslness Laxes?
8ullngť Local Lax on buslnesses ls auLhorlzed under SecLlon 143 of Lhe LCCŦ
1he word ºbuslness" lLself ls deflned under SecLlon 131(d) of Lhe Code as
ºLrade or commerclal acLlvlLy regularly engaged ln as a means of llvellhood or
wlLh a vlew Lo proflLŦ" 1hls deflnlLlon of ºbuslness" Lakes on lmporLanceţ slnce
SecLlon 143 allows local governmenL unlLs Lo lmpose local Laxes on
buslnesses oLher Lhan Lhose speclfled under Lhe provlslonŦ lL ls Lhus
lmperaLlve LhaL ln order LhaL Lhe CorporaLlon may be sub[ecLed Lo buslness
Laxesţ lLs acLlvlLles musL fall wlLhln Lhe deflnlLlon of buslness as provlded ln
Lhe LCCŦ And Lo hold LhaL Lhey do ls Lo lgnore Lhe very sLaLuLory naLure of a
condomlnlum corporaLlonŦ 1he creaLlon of Lhe condomlnlum corporaLlon ls
sancLloned by 8epubllc AcL noŦ 4726 (Condomlnlum AcL)Ŧ under Lhe lawţ a
condomlnlum ls an lnLeresL ln real properLy conslsLlng of a separaLe lnLeresL
ln a unlL ln a resldenLlalţ lndusLrlal or commerclal bulldlng and an undlvlded
lnLeresL ln commonţ dlrecLly or lndlrecLlyţ ln Lhe land on whlch lL ls locaLed and
ln oLher common areas of Lhe bulldlngŦ 1o enable Lhe orderly admlnlsLraLlon
over Lhese common areas whlch are [olnLly owned by Lhe varlous unlL
ownersţ Lhe Condomlnlum AcL permlLs Lhe creaLlon of a condomlnlum
corporaLlonţ whlch ls speclally formed for Lhe purpose of holdlng LlLle Lo Lhe
common areaţ ln whlch Lhe holders of separaLe lnLeresLs shall auLomaLlcally
be members or shareholdersţ Lo Lhe excluslon of oLhersţ ln proporLlon Lo Lhe
appurLenanL lnLeresL of Lhelr respecLlve unlLsŦ ln llne wlLh Lhe auLhorlLy of Lhe
condomlnlum corporaLlon Lo manage Lhe condomlnlum pro[ecLţ lL may be
auLhorlzedţ ln Lhe deed of resLrlcLlonsţ ºLo make reasonable assessmenLs Lo
meeL auLhorlzed expendlLuresţ each condomlnlum unlL Lo be assessed
separaLely for lLs share of such expenses ln proporLlon Lo lLs owner's
fracLlonal lnLeresL ln any common areasŦ" lL ls Lhe collecLlon of Lhese
assessmenLs from unlL owners LhaL form Lhe basls of Lhe ClLy 1reasurer's
clalm LhaL Lhe CorporaLlon ls dolng buslnessŦ As ellclLed from Lhe
Condomlnlum AcLţ a condomlnlum corporaLlon ls precluded by sLaLuLe from
engaglng ln corporaLe acLlvlLles oLher Lhan Lhe holdlng of Lhe common areasţ
Lhe admlnlsLraLlon of Lhe condomlnlum pro[ecLţ and oLher acLs necessaryţ
lncldenLal or convenlenL Lo Lhe accompllshmenL of such purposesŦ Lven
Lhough Lhe CorporaLlon ls empowered Lo levy assessmenLs or dues from Lhe
unlL ownersţ Lhese amounLs collecLed are noL lnLended for Lhe lncurrence of
proflL by Lhe CorporaLlon or lLs membersţ buL Lo shoulder Lhe mulLlLude of
necessary expenses LhaL arlse from Lhe malnLenance of Lhe Condomlnlum
Þro[ecLŦ !usL as much ls conflrmed by SecLlon 1ţ ArLlcle v of Lhe Amended
8yŴLawsţ whlch enumeraLe Lhe parLlcular expenses Lo be defrayed by Lhe
regular assessmenLs collecLed from Lhe unlL ownersŦ Penceţ lf any proflL ls
obLalned by Lhe sale of Lhe unlLsţ lL accrues noL Lo Lhe corporaLlon buL Lo Lhe
unlL ownerŦ Secondţ lf Lhe unlL owner does obLaln proflL from Lhe sale of Lhe
corporaLlonţ Lhe owner ls already requlred Lo pay caplLal galns Lax on Lhe
appreclaLed value of Lhe condomlnlum unlLŦ Moreoverţ Lhe MakaLl 8evenue
Code already forewarns LhaL a clear demonsLraLlon ls essenLlal on Lhe parL of
Lhe ClLy 1reasurer on why Lhe CorporaLlon should be Laxed anywayŦ ºlull
appreclaLlve llvlng values" ls noLhlng buL blaLher ln search of meanlngţ and Lo
lmpose a Lax hlnged on LhaL sLandard ls boLh arblLrary and oppresslveŦ
Accordlnglyţ condomlnlum corporaLlons are generally exempL from local
buslness LaxaLlon under Lhe Local CovernmenL Codeţ lrrespecLlve of any
local ordlnance LhaL seeks Lo declare oLherwlseŦ
1Ŧ CaLch all provlslon Ŷ SecŦ 143 (h)
(h) Cn any buslnessţ noL oLherwlse speclfled ln Lhe precedlng paragraphsţ
whlch Lhe sanggunlan concerned may deem proper Lo Laxť Þrovldedţ 1haL on
any buslness sub[ecL Lo Lhe exclseţ valueŴadded or percenLage Lax under Lhe
naLlonal lnLernal 8evenue Codeţ as amendedţ Lhe raLe of Lax shall noL
exceed Lwo percenL (2Ʒ) of gross sales or recelpLs of Lhe precedlng calendar
yearŦ 1he sanggunlan concerned may prescrlbe a schedule of graduaLed Lax
raLes buL ln no case Lo exceed Lhe raLes prescrlbed herelnŦ
2Ŧ 8aLes of 1ax wlLhln MeLropollLan Manlla (SecŦ 144)
SLCŦ 144Ŧ 8aLes of 1ax wlLhln Lhe MeLropollLan Manlla AreaŦ Ŵ 1he
munlclpallLles wlLhln Lhe MeLropollLan Manlla Area may levy Laxes aL raLes
whlch shall noL exceed by flfLy percenL (30Ʒ) Lhe maxlmum raLes prescrlbed
ln Lhe precedlng SecLlonŦ
3Ŧ 8eLlremenL of 8uslness (SecŦ 143)
SLCŦ 143Ŧ 8eLlremenL of 8uslnessŦ Ŵ A buslness sub[ecL Lo Lax pursuanL Lo
Lhe precedlng secLlons shallţ upon LermlnaLlon Lhereofţ submlL a sworn
sLaLemenL of lLs gross sales or recelpLs for Lhe currenL yearŦ lf Lhe Lax pald
durlng Lhe year be less Lhan Lhe Lax due on sald gross sales or recelpLs of Lhe
currenL yearţ Lhe dlfference shall be pald before Lhe buslness ls consldered
offlclally reLlredŦ
CASLť Mobll ÞhllsŦ vsŦ ClLy 1reasurer of MakaLl C8 noŦ 134092ţ !uly 14ţ
2003
ÞeLlLloner ls a domesLlc corporaLlon engaged ln Lhe manufacLurlngţ lmporLlngţ
exporLlng and wholesallng of peLroleum producLsţ whlle respondenLs are Lhe
local governmenL offlclals of Lhe ClLy of MakaLl charged wlLh Lhe
lmplemenLaLlon of Lhe 8evenue Code of Lhe ClLy of MakaLlţ as well as Lhe
8LvlLWL8 1Ax2Ŵ ?uMl 19collecLlon and assessmenL of buslness Laxesţ llcense fees and permlL fees
wlLhln sald clLyŦ Cn AugusL 1998ţ Mobll Þhlllpplnes flled an appllcaLlon wlLh
Lhe ClLy 1reasurer of MakaLl for Lhe reLlremenL of lLs buslness wlLhln Lhe ClLy
of MakaLl as lL moved lLs prlnclpal place of buslness Lo Þaslg ClLyŦ upon
evaluaLlon of peLlLloner's appllcaLlonţ Lhen ClC of Lhe Llcense ulvlslon lssued
Lo peLlLlonerţ a bllllng sllp assesslng peLlLloner Lhe amounL of Þ1ţ898ţ106Ŧ96Ŧ
ÞeLlLloner pald Lhe assessed amounL under proLesL clalmlng a refund of
Þ1ţ331ţ638Ŧ84Ŧ 1hls was however denled by Lhe respondenL on Lhe basls
LhaL peLlLloner was merely Lransferrlng and noL reLlrlng lLs buslnessţ and LhaL
Lhe gross sales reallzed whlle peLlLloner sLlll malnLalned offlce ln MakaLl
should be Laxed ln Lhe ClLy of MakaLlŦ
lssueť Are Lhe buslness Laxes pald by peLlLloner ln 1998ţ buslness Laxes for
1997 or 1998?
PLLuť
1he Lrlal courL erred when lL consldered LhaL Lhe paymenLs made by Lhe
peLlLloner ln 1998 are paymenLs for buslness Lax lncurred ln 1997 whlch only
accrued ln !anuary1998Ŧ Llkewlseţ lL erred when lL ruled LhaL peLlLloner was
sLlll llable for buslness Laxes based on lLs gross lncome for !anuary and
AugusL 1998Ŧ under Lhe MakaLl 8evenue Codeţ lL appears LhaL Lhe buslness
Laxţ llke lncome Laxţ ls compuLed based on Lhe prevlous year's flguresŦ 1hls
ls Lhe reason for Lhe confuslonŦ A newlyŴsLarLed buslness ls already llable for
buslness Laxes (lŦeŦ llcense fees) aL Lhe sLarL of Lhe quarLer when lL
commences operaLlonsŦ ln compuLlng Lhe amounL of Lax due for Lhe flrsL
quarLer of operaLlonsţ Lhe buslness' caplLal lnvesLmenL ls used as Lhe baslsŦ
lor Lhe subsequenL quarLers of Lhe flrsL yearţ Lhe Lax ls based on Lhe gross
sales/recelpLs for Lhe prevlous quarLerŦ ln Lhe followlng year(s)ţ Lhe buslness
ls Lhen Laxed based on Lhe gross sales or recelpLs of Lhe prevlous yearŦ 1he
buslness Laxes pald ln Lhe year 1998 ls for Lhe prlvllege of engaglng ln
buslness for Lhe same yearţ and noL for havlng engaged ln buslness for
1997Ŧ
Cn Lhe year an esLabllshmenL reLlres or LermlnaLes lLs buslness wlLhln Lhe
munlclpallLyţ lL would be requlred Lo pay Lhe dlfference ln Lhe amounL lf Lhe
Lax collecLedţ based on Lhe prevlous year's gross sales or recelpLsţ ls less
Lhan Lhe acLual Lax due based on Lhe currenL year's gross sales or recelpLsŦ
lor Lhe year 1998ţ peLlLloner pald a LoLal of Þ2ţ262ţ122Ŧ48 Lo Lhe ClLy
1reasurer of MakaLl as buslness Laxes for Lhe year 1998Ŧ 1he amounL of Lax
as compuLed based on peLlLloner's gross sales for 1998 ls only
Þ1ţ331ţ638Ŧ84Ŧ Slnce Lhe amounL pald ls more Lhan Lhe amounL compuLed
based on peLlLloner's acLual gross sales for 1998ţ peLlLloner upon lLs
reLlremenL ls noL llable for addlLlonal Laxes Lo Lhe ClLy of MakaLlŦ 1husţ we
flnd LhaL Lhe respondenL erroneously LreaLed Lhe assessmenL and collecLlon of
buslness Lax as lf lL were lncome Laxţ by renderlng an addlLlonal assessmenL
of Þ1ţ331ţ638Ŧ84 for Lhe revenue generaLed for Lhe year 1998Ŧ
4Ŧ ÞaymenL of 8uslness 1axes (SecŦ 146)
SLCŦ 146Ŧ ÞaymenL of 8uslness 1axesŦ Ŵ (a) 1he Laxes lmposed under
SecLlon 143 shall be payable for every separaLe or dlsLlncL esLabllshmenL or
place where buslness sub[ecL Lo Lhe Lax ls conducLed and one llne of
buslness does noL become exempL by belng conducLed wlLh some oLher
buslness for whlch such Lax has been paldŦ 1he Lax on a buslness musL be
pald by Lhe person conducLlng Lhe sameŦ
(b) ln cases where a person conducLs or operaLes Lwo (2) or more of Lhe
buslnesses menLloned ln SecLlon 143 of Lhls Code whlch are sub[ecL Lo Lhe
same raLe of Laxţ Lhe Lax shall be compuLed on Lhe comblned LoLal gross
sales or recelpLs of Lhe sald Lwo (2) or more relaLed buslnessesŦ
(c) ln cases where a person conducLs or operaLes Lwo (2) or more
buslnesses menLloned ln SecLlon 143 of Lhls Code whlch are sub[ecL Lo
dlfferenL raLes of Laxţ Lhe gross sales or recelpLs of each buslness shall be
separaLely reporLed for Lhe purpose of compuLlng Lhe Lax due from each
buslnessŦ
3Ŧ SlLus of 1ax (SecŦ 130) Ŷ Where Lo pay buslness Lax?
SLCŦ 130Ŧ SlLus of Lhe 1axŦ Ŵ (a) lor purposes of collecLlon of Lhe Laxes under
SecLlon 143 of Lhls Codeţ manufacLurersţ assemblersţ repackersţ brewersţ
dlsLlllersţ recLlflers and compounders of llquorţ dlsLllled splrlLs and wlnesţ
mlllersţ producersţ exporLersţ wholesalersţ dlsLrlbuLorsţ dealersţ conLracLorsţ
banks and oLher flnanclal lnsLlLuLlonsţ and oLher buslnessesţ malnLalnlng or
operaLlng branch or sales ouLleL elsewhere shall record Lhe sale ln Lhe branch
or sales ouLleL maklng Lhe sale or LransacLlonţ and Lhe Lax Lhereon shall
accrue and shall be pald Lo Lhe munlclpallLy where such branch or sales
ouLleL ls locaLedŦ ln cases where Lhere ls no such branch or sales ouLleL ln Lhe
clLy or munlclpallLy where Lhe sale or LransacLlon ls madeţ Lhe sale shall be
duly recorded ln Lhe prlnclpal offlce and Lhe Laxes due shall accrue and shall
be pald Lo such clLy or munlclpallLyŦ
(b) 1he followlng sales allocaLlon shall apply Lo manufacLurersţ assemblersţ
conLracLorsţ producersţ and exporLers wlLh facLorlesţ pro[ecL offlcesţ planLsţ
and planLaLlons ln Lhe pursulL of Lhelr buslnessť
8LvlLWL8 1Ax2Ŵ ?uMl 20(1) 1hlrLy percenL (30Ʒ) of all sales recorded ln Lhe prlnclpal offlce shall be
Laxable by Lhe clLy or munlclpallLy where Lhe prlnclpal offlce ls locaLedŤ and
(2) SevenLy percenL (70Ʒ) of all sales recorded ln Lhe prlnclpal offlce shall be
Laxable by Lhe clLy or clLy or munlclpallLy where Lhe facLory ls locaLedŤ and
(2) lorLy percenL (40Ʒ) Lo Lhe clLy ormunlclpallLy where Lhe planLaLlon ls
locaLedŦ
(d) ln cases where a manufacLurerţ assemblerţ producerţ exporLer or
conLracLor has Lwo (2) or more facLorlesţ pro[ecL offlcesţ planLsţ or planLaLlons
locaLed ln dlfferenL locallLlesţ Lhe sevenLy percenL (70Ʒ) sales allocaLlon
menLloned ln subparagraph (b) of subsecLlon (2) above shall be proraLed
among Lhe locallLles where Lhe facLorlesţ pro[ecL offlcesţ planLsţ and
planLaLlons are locaLed ln proporLlon Lo Lhelr respecLlve volumes of producLlon
durlng Lhe perlod for whlch Lhe Lax ls dueŦ
(e) 1he foregolng sales allocaLlon shall be applled lrrespecLlve of wheLher or
noL sales are made ln Lhe locallLy where Lhe facLoryţ pro[ecL offlceţ planLţ or
plan ls locaLedŦ
CASLSť
Shell Co vsŦ MunŦ Cf SlpocoL Ŷ 103 ÞhllŦ 1263
Sales 1ax Ŷ lL ls Lhe place of Lhe consummaLlon of Lhe saleţ assoclaLed wlLh
Lhe dellvery of Lhe Lhlngs whlch are Lhe sub[ecL maLLer of Lhe conLracL LhaL
deLermlnes Lhe slLus of Lhe conLracL for purposes of LaxaLlonţ and noL merely
Lhe place of Lhe perfecLlon of Lhe conLracLŦ
ÞhllŦ MaLch vsŦ ClLy of Cebu Ŷ LŴ30743 Ŷ
lacLsť Cebu ClLy lmposed a quarLerly Lax (sales Lax of 1Ʒ) on gross sales or
recelpLs of merchanLsţ dealersţ lmporLers and manufacLurers or any
commodlLy dolng buslness ln Cebu ClLyţ Lhrough Crdlnance 279Ŧ SecLlon 9 of
Lhe Crdlnance provlded LhaLţ for Lhe purpose of Lhe Laxţ ºall dellverles of
goods or commodlLles sLored ln Cebu ClLyţ or lf noL sLored are solld ln LhaL
clLy sahll be consldered as sales ln Lhe clLy and shall be LaxableŦ" Þhlllpplne
MaLch CoŦ LLdŦţ wlLh prlnclpal offlce ln Manllaţ quesLloned Lhe legallLy of Lhe
Lax collecLed by Lhe ClLy of Cebu on sales of maLches sLored by Lhe company
ln Cebu ClLy buL dellvered Lo cusLomers ouLslde Lhe clLyŦ
lssueť WheLher Lhe ClLy of Cebu can Lax sales of maLches whlch were
perfecLed and pald for ln Cebu ClLy buL where Lhe maLches were dellvered Lo
cusLomers ouLslde Lhe clLyŦ
Peldť 1he clLy can valldly Lax Lhe sales of maLches Lo cusLomers ouLslde of
Lhe clLy as long as Lhe orders were booked and pald for ln Lhe company's
branch offlce ln Lhe clLyŦ 1hose maLches can be regarded as sold ln Lhe clLyţ
as conLemplaLed ln Lhe ordlnanceţ because Lhe maLches were delvered Lo Lhe
carrler ln Cebu ClLyŦ Cenerallyţ dellvery Lo Lhe carrler ls dellvery Lo Lhe buyer
(ArLlcle 1323ţ Clvll Code)Ŧ A dlfferenL lnLerpreLaLlon would defeaL Lhe Lax
ordlnance ln quesLlon or encourage Lax evaslon Lhrough Lhe slmple expedlenL
of arranglng for Lhe dellvery of Lhe maLches aL Lhe ouLsklrLs of Lhe clLy Lhough
Lhe purchases were effecLed and pald for ln Lhe company's branch offlce ln
Lhe clLyŦ 1he munlclpal board of Lhe clLy ls empowered Lo provlde for Lhe levy
and collecLlon of Laxes for general and speclal purposes ln accordance wlLh
lawŦ
llollo boLLlers vsŦ ClLy of llollo C8 noŦ 32019 Ŷ AugŦ 18ţ 1988
lssueť WheLher Lhe ÞlalnLlffţ whlch had lLs boLLllng planL ln Þavla llolloţ buL
whlch sold sofLdrlnks ln llollo ClLyţ ls llable under Lhe Lax ordlnance enacLed
by llollo ClLyŦ
Peldť ÞlalnLlff ls obllged Lo pay Lhe Lax llablllLyŦ 1he Lax ordlnance enacLed
by Lhe clLy lmposes Lax on every personţ flrm or corporaLlon engaged ln Lhe
buslness ofť1Ŧ dlsLrlbuLlon of sofLdrlnksŤ2Ŧ manufacLure of sofLdrlnksŤ or 3Ŧ
boLLllng of sofLdrlnks wlLhln Lhe [urlsdlcLlon of llollo ClLyŦ ln order Lo deLermlne
wheLher an enLlLy engaged ln Lhe prlnclpal buslness of manufacLurlngţ ls
llkewlse engaged ln Lhe separaLe buslness of selllngţ lLs markeLlng sysLem or
sales operaLlons musL be looked lnLoŦ 1here are Lwo (2) markeLlng sysLems
LhaL Lhe Supreme CourL lald downŦ under Lhe flrsL sysLemţ Lhe manufacLurer
enLers lnLo LransacLlons and lnvolces Lhe same aL lLs prlnclpal offlce before
dellvery orders are senL Lo Lhe companyƌs warehousesţ whlch dellvers Lhe
producLsŦ under Lhe second sysLemţ LransacLlons are enLered lnLo and
perfecLed aL sLores or warehouses malnLalned by Lhe companyŦ
ln Lhe case aL barţ Lhe company dlsLrlbuLed lLs sofL drlnks by means of lLs
Lrucks whlch wenL dlrecLly Lo cusLomers ln Lhe dlfferenL places ln llollo
provlnceŦ 1he dellvery Lrucks were noL used solely for Lhe purpose of
dellverlng sofLdrlnks prevlously sold aL ÞavlaŦ 1hey served as selllng unlLsŦ
1hey were whaL were calledţ unLll recenLlyţ ƍrolllng sLoresƍŦ 1he dellvery
Lrucks were Lherefore much Lhe same as Lhe sLores and warehouses under
Lhe second markeLlng sysLem
aŦ WlLh 8ranch or Sales CuLleL Ŵ operaLlng branch or sales ouLleL elsewhere
shall record Lhe sale ln Lhe branch or sales ouLleL maklng Lhe sale or
8LvlLWL8 1Ax2Ŵ ?uMl 21LransacLlonţ and Lhe Lax Lhereon shall accrue and shall be pald Lo Lhe
munlclpallLy where such branch or sales ouLleL ls locaLed
bŦ no 8ranch Sales or CuLleL Ŵ Ŧ
cŦ WlLh lacLorlesţ Þro[ecL Cfflcesţ ÞlanLs and ÞlanLaLlons
dŦ ÞlanLaLlon LocaLed aL a place oLher Lhan Lhe place where facLory ls
locaLed
eŦ 1wo (2) or more facLorlesţ pro[ecL offlcesţ planLs or planLaLlons ln
dlfferenL locallLles
6Ŧ lees and Charges (SecŦ 147)
SLCŦ 147Ŧ lees and ChargesŦ Ŵ 1he munlclpallLy may lmpose and collecL
such reasonable fees and charges on buslness and occupaLlon andţ excepL
as reserved Lo Lhe provlnce ln SecLlon 139 of Lhls Codeţ on Lhe pracLlce of
any professlon or calllngţ commensuraLe wlLh Lhe cosL of regulaLlonţ
lnspecLlon and llcenslng before any person may engage ln such buslness or
occupaLlonţ or pracLlce such professlon or calllngŦ
7Ŧ CLhers (SecŦ 148 and SecŦ 149)
SLCŦ 148Ŧ lees for Seallng and Llcenslng of WelghLs and MeasuresŦ Ŵ (a)
1he munlclpallLy may levy fees for Lhe seallng and llcenslng of welghLs and
measures aL such reasonable raLes as shall be prescrlbed by Lhe
sanggunlang bayanŦ
(b) 1he sanggunlang bayan shall prescrlbe Lhe necessary regulaLlons for Lhe
use of such welghLs and measuresţ sub[ecL Lo such guldellnes as shall be
prescrlbed by Lhe ueparLmenL of Sclence and 1echnologyŦ 1he sanggunlan
concerned shallţ by approprlaLe ordlnanceţ penallze fraudulenL pracLlces and
unlawful possesslon or use of lnsLrumenLs of welghLs and measures and
prescrlbe Lhe crlmlnal penalLy Lherefor ln accordance wlLh Lhe provlslons of
Lhls CodeŦ Þrovldedţ howeverţ 1haL Lhe sanggunlan concerned may
auLhorlze Lhe munlclpal Lreasurer Lo seLLle an offense noL lnvolvlng Lhe
commlsslon of fraud before a case Lherefor ls flled ln courLţ upon paymenL of
a compromlse penalLy of noL less Lhan 1wo hundred pesos (Þƹ200Ŧ00)Ŧ
SLCŦ 149Ŧ llshery 8enLalsţ lees and Charges Ŧ Ŵ (a) MunlclpallLles shall
have Lhe excluslve auLhorlLy Lo granL flshery prlvlleges ln Lhe munlclpal waLers
and lmpose renLalsţ fees or charges Lherefor ln accordance wlLh Lhe
provlslons of Lhls SecLlonŦ (b) 1he sanggunlang bayan mayť
(1) CranL flshery prlvlleges Lo erecL flsh corralsţ oysLerţ mussels or oLher
aquaLlc beds or bangus fry areasţ wlLhln a deflnlLe zone of Lhe munlclpal
waLersţ as deLermlned by lLť Þrovldedţ howeverţ 1haL duly reglsLered
organlzaLlons and cooperaLlves of marglnal flshermen shall have Lhe
preferenLlal rlghL Lo such flshery prlvllegesť Þrovldedţ furLherţ 1haL Lhe
sanggunlang bayan may requlre a publlc blddlng ln conformlLy wlLh and
pursuanL Lo an ordlnance for Lhe granL of such prlvllegesť Þrovldedţ flnallyţ
1haL ln Lhe absence of such organlzaLlons and cooperaLlves or Lhelr fallure Lo
exerclse Lhelr preferenLlal rlghLţ oLher parLles may parLlclpaLe ln Lhe publlc
blddlng ln conformlLy wlLh Lhe above clLed procedureŦ
(2) CranL Lhe prlvllege Lo gaLherţ Lake or caLch bangus fryţ prawn fry or
kawagŴkawag or fry of oLher specles and flsh from Lhe munlclpal waLers by
neLsţ Lraps or oLher flshlng gears Lo marglnal flshermen free of any renLalţ
feeţ charge or any oLher lmposlLlon whaLsoeverŦ
(3) lssue llcenses for Lhe operaLlon of flshlng vessels of Lhree (3) Lons or less
for whlch purpose Lhe sanggunlang bayan shall promulgaLe rules and
regulaLlons regardlng Lhe lssuances of such llcenses Lo quallfled appllcanLs
under exlsLlng lawsŦ
Þrovldedţ howeverţ 1haL Lhe sanggunlan concerned shallţ by approprlaLe
ordlnanceţ penallze Lhe use of exploslvesţ noxlous or polsonous subsLancesţ
elecLrlclLyţ muroŴamlţ and oLher deleLerlous meLhods of flshlng and prescrlbe
a crlmlnal penalLy Lherefor ln accordance wlLh Lhe provlslons of Lhls Codeť
Þrovldedţ flnallyţ 1haL Lhe sanggunlan concerned shall have Lhe auLhorlLy Lo
prosecuLe any vlolaLlon of Lhe provlslons of appllcable flshery lawsŦ
cŦ ClLles (SecŦ 131)
SLCŦ 131Ŧ Scope of 1axlng ÞowersŦ Ŵ LxcepL as oLherwlse provlded ln Lhls
Codeţ Lhe clLyţ may levy Lhe Laxesţ feesţ and charges whlch Lhe provlnce or
munlclpallLy may lmposeť Þrovldedţ howeverţ 1haL Lhe Laxesţ fees and
charges levled and collecLed by hlghly urbanlzed and lndependenL
componenL clLles shall accrue Lo Lhem and dlsLrlbuLed ln accordance wlLh Lhe
provlslons of Lhls CodeŦ 1he raLes of Laxes LhaL Lhe clLy may levy may exceed
Lhe maxlmum raLes allowed for Lhe provlnce or munlclpallLy by noL more Lhan
flfLy percenL (30Ʒ) excepL Lhe raLes of professlonal and amusemenL LaxesŦ
dŦ 8arangay
lŦ 1ax on reLallers (SecŦ 132 a)
8LvlLWL8 1Ax2Ŵ ?uMl 22 (a) 1axes Ŵ Cn sLores or reLallers wlLh flxed buslness esLabllshmenLs wlLh
gross sales or recelpLs of Lhe precedlng calendar year of llfLy Lhousand
pesos (Þƹ30ţ000Ŧ00) or lessţ ln Lhe case of clLles and 1hlrLy Lhousand pesos
(Þƹ30ţ000Ŧ00) or lessţ ln Lhe case of munlclpallLlesţ aL a raLe noL exceedlng
one percenL (1Ʒ) on such gross sales or recelpLsŦ
llŦ Servlce lees or Charges (SecŦ 132 b)
(b) Servlce lees or Charges Ŵ barangays may collecL reasonable fees or
charges for servlces rendered ln connecLlon wlLh Lhe regulaLlon or Lhe use of
barangayŴowned properLles or servlce faclllLles such as palayţ copraţ or
Lobacco dryersŦ
lllŦ 8arangay Clearance (SecŦ 132 c)
8arangay Clearance Ŵ no clLy or munlclpallLy may lssue any llcense or permlL
for any buslness or acLlvlLy unless a clearance ls flrsL obLalned from Lhe
barangay where such buslness or acLlvlLy ls locaLed or conducLedŦ lor such
clearanceţ Lhe sanggunlang barangay may lmpose a reasonable feeŦ 1he
appllcaLlon for clearance shall be acLed upon wlLhln seven (7) worklng days
from Lhe flllng LhereofŦ ln Lhe evenL LhaL Lhe clearance ls noL lssued wlLhln Lhe
sald perlodţ Lhe clLy or munlclpallLy may lssue Lhe sald llcense or permlL
lvŦ CLher lees (SecŦ 132 b)
eŦ Common 8evenue 8alslng Þowers
lŦ Servlce lees and Charges (SecŦ 134)
SLCŦ 134Ŧ Þubllc uLlllLy ChargesŦ Ŵ Local governmenL unlLs may flx Lhe raLes
for Lhe operaLlon of publlc uLlllLles ownedţ operaLed and malnLalned by Lhem
wlLhln Lhelr [urlsdlcLlonŦ
llŦ Þubllc uLlllLy Charges (SecŦ 133)
SLCŦ 133Ŧ 1oll lees or ChargesŦ Ŵ 1he sanggunlan concerned may prescrlbe
Lhe Lerms and condlLlons and flx Lhe raLes for Lhe lmposlLlon of Loll fees or
charges for Lhe use of any publlc roadţ pler or wharfţ waLerwayţ brldgeţ ferry
or LelecommunlcaLlon sysLem funded and consLrucLed by Lhe local
governmenL unlL concernedť Þrovldedţ 1haL no such Loll fees or charges shall
be collecLed from offlcers and enllsLed men of Lhe Armed lorces of Lhe
Þhlllpplnes and members of Lhe Þhlllpplne naLlonal Þollce on mlsslonţ posL
offlce personnel dellverlng mallţ physlcallyŴhandlcappedţ and dlsabled
clLlzens who are slxLyŴflve (63) years or olderŦ When publlc safeLy and
welfare so requlresţ Lhe sanggunlan concerned may dlsconLlnue Lhe
collecLlon of Lhe Lollsţ and LhereafLer Lhe sald faclllLy shall be free and open
for publlc useŦ
lllŦ 1oll lees or Charges (SecŦ 136)
SLCŦ 136Ŧ CommunlLy 1axŦ Ŵ ClLles or munlclpallLles may levy a communlLy
Lax ln accordance wlLh Lhe provlslons of Lhls ArLlcleŦ
fŦ CLher MaLLers
lŦ AuLhorlLy Lo Ad[usL 1ax 8aLes (SecŦ 191)
SLCŦ 191Ŧ AuLhorlLy of Local CovernmenL unlLs Lo Ad[usL 8aLes of 1ax
ordlnancesŦ Ŵ Local governmenL unlLs shall have Lhe auLhorlLy Lo ad[usL Lhe
Lax raLes as prescrlbed hereln noL ofLener Lhan once every flve (3) yearsţ buL
ln no case shall such ad[usLmenL exceed Len percenL (10Ʒ) of Lhe raLes flxed
under Lhls Code
llŦ AuLhorlLy Lo CranL 1ax LxempLlons (SecŦ 192)
SLCŦ 192Ŧ AuLhorlLy Lo CranL 1ax LxempLlon ÞrlvllegesŦ Ŵ Local governmenL
unlLs mayţ Lhrough ordlnances duly approvedţ granL Lax exempLlonsţ
lncenLlves or rellefs under such Lerms and condlLlons as Lhey may deem
necessaryŦ
lllŦ WlLhdrawal of 1ax LxempLlon Þrlvlleges (SecŦ 193)
SLCŦ 193Ŧ WlLhdrawal of 1ax LxempLlon ÞrlvllegesŦ Ŵ unless oLherwlse
provlded ln Lhls Codeţ Lax exempLlons or lncenLlves granLed Loţ or presenLly
en[oyed by all personsţ wheLher naLural or [urldlcalţ lncludlng governmenLowned or ŴconLrolled
corporaLlonsţ excepL local waLer dlsLrlcLsţ cooperaLlves
duly reglsLered under 8ŦAŦ noŦ 6938ţ nonŴsLock and nonŴproflL hosplLals and
educaLlonal lnsLlLuLlonsţ are hereby wlLhdrawn upon Lhe effecLlvlLy of Lhls
CodeŦ
nÞC vsŦ ClLy of CabanaLuan C8 noŦ 149110ţ Aprll 9ţ 2003
lacLsť nAÞCCC8ţ Lhe peLlLlonerţ ls a governmenLŴowed and conLrolled
corporaLlon creaLed under CommonwealLh AcL 120Ŧ lL ls Lasked Lo underLake
Lhe ºdevelopmenL of hydroelecLrlc generaLlons of power and Lhe producLlon of
elecLrlclLy from nuclearţ geoLhermalţ and oLher sourcesţ as well asţ Lhe
Lransmlsslon of elecLrlc power on a naLlonwlde baslsŦ"
8LvlLWL8 1Ax2Ŵ ?uMl 23lor many years nowţ nAÞCCC8 sells elecLrlc power Lo Lhe resldenL
CabanaLuan ClLyţ posLlng a gross lncome of Þ107ţ814ţ187Ŧ96 ln 1992Ŧ
ÞursuanL Lo SecŦ 37 of Crdlnance noŦ 163Ŵ92ţ Lhe respondenL assessed Lhe
peLlLloner a franchlse Lax amounLlng Lo Þ808ţ606Ŧ41ţ represenLlng 73Ʒ of 1Ʒ
of Lhe former's gross recelpLs for Lhe precedlng yearŦ
ÞeLlLlonerţ whose caplLal sLock was subscrlbed and wholly pald by Lhe
Þhlllpplne CovernmenLţ refused Lo pay Lhe Lax assessmenLŦ lL argued LhaL Lhe
respondenL has no auLhorlLy Lo lmpose Lax on governmenL enLlLlesŦ ÞeLlLloner
also conLend LhaL as a nonŴproflL organlzaLlonţ lL ls exempLed from Lhe
paymenL of all forms of Laxesţ chargesţ duLles or fees ln accordance wlLh
SecŦ 13 of 8A 6393ţ as amendedŦ
1he respondenL flled a collecLlon sulL ln Lhe 81C of CabanaLuan ClLyţ
demandlng LhaL peLlLloner pay Lhe assessed Laxţ plus surcharge equlvalenL Lo
23Ʒ of Lhe amounL of Lax and 2Ʒ monLhly lnLeresLŦ 8espondenL alleged LhaL
peLlLloner's exempLlon from local Laxes has been repealed by SecŦ 193 of 8A
7160 (Local CovernmenL Code)Ŧ 1he Lrlal courL lssued an order dlsmlsslng
Lhe caseŦ Cn appealţ Lhe CourL of Appeals reversed Lhe declslon of Lhe 81C
and ordered Lhe peLlLloner Lo pay Lhe clLy governmenL Lhe Lax assessmenLŦ
lssueť ls Lhe nAÞCCC8's exempLlon from all forms of Laxes repealed by Lhe
provlslons of Lhe Local CovernmenL Code (LCC)?
Peldť ?LSŦ Cne of Lhe mosL slgnlflcanL provlslons of Lhe LCC ls Lhe removal
of Lhe blankeL excluslon of lnsLrumenLallLles and agencles of Lhe naLlonal
CovernmenL from Lhe coverage of local LaxaLlonŦ AlLhough as a general ruleţ
LCus cannoL lmpose Laxesţ feesţ or charges of any klnd on Lhe naLlonal
CovernmenLţ lLs agencles and lnsLrumenLallLlesţ Lhls rule now admlLs an
excepLlonţ lŦeŦ when speclflc provlslons of Lhe LCC auLhorlze Lhe LCus Lo
lmpose Laxesţ feesţ or charges on Lhe aforemenLloned enLlLlesŦ 1he
leglslaLlve purpose Lo wlLhdraw Lax prlvlleges en[oyed under exlsLlng laws or
charLer ls clearly manlfesLed by Lhe language used on SecŦ 137 and 193
caLegorlcally wlLhdrawlng such exempLlon sub[ecL only Lo Lhe excepLlons
enumeraLedŦ Slnce lL would be Ledlous and lmpracLlcal Lo aLLempL Lo
enumeraLe all Lhe exlsLlng sLaLuLes provldlng for speclal Lax exempLlons or
prlvllegesţ Lhe LCC provlded for an expressţ albelL generalţ wlLhdrawal of
such exempLlons or prlvllegesŦ no more unequlvocal language could have
been usedŦ
lvŦ CommunlLy 1ax
1Ŧ Who may lmpose(SecŦ 136)
CommunlLy 1axŦ Ŵ ClLles or munlclpallLles may levy a communlLy Lax ln
accordance wlLh Lhe provlslons of Lhls ArLlcleŦ
2Ŧ lndlvlduals Llable Lo pay (SecŦ 137)
SLCŦ 137Ŧ lndlvlduals Llable Lo CommunlLy 1axŦ Ŵ Lvery lnhablLanL of Lhe
Þhlllpplnes elghLeen (18) years of age or over who has been regularly
employed on a wage or salary basls for aL leasL LhlrLy (30) consecuLlve
worklng days durlng any calendar yearţ or who ls engaged ln buslness or
occupaLlonţ or who owns real properLy wlLh an aggregaLe assessed value of
Cne Lhousand pesos (Þƹ1ţ000Ŧ00) or moreţ or who ls requlred by law Lo flle
an lncome Lax reLurn shall pay an annual communlLy Lax of llve pesos
(Þƹ3Ŧ00) and an annual addlLlonal Lax of Cne peso (Þƹ1Ŧ00) for every Cne
Lhousand pesos (Þƹ1ţ000Ŧ00) of lncome regardless of wheLher from
buslnessţ exerclse of professlon or from properLy whlch ln no case shall
exceed llve Lhousand pesos (Þƹ3ţ000Ŧ00)Ŧ ln Lhe case of husband and wlfeţ
Lhe addlLlonal Lax hereln lmposed shall be based upon Lhe LoLal properLy
owned by Lhem and Lhe LoLal gross recelpLs or earnlngs derlved by LhemŦ
3Ŧ !urldlcal Þersons Llable Lo CommunlLy 1ax (SecŦ 138)
SLCŦ 138Ŧ !urldlcal Þersons Llable Lo CommunlLy 1axŦ Ŵ Lvery corporaLlon no
maLLer how creaLed or organlzedţ wheLher domesLlc or resldenL forelgnţ
engaged ln or dolng buslness ln Lhe Þhlllpplnes shall pay an annual
communlLy Lax of llve hundred pesos (Þƹ300Ŧ00) and an annual addlLlonal
Laxţ whlchţ ln no caseţ shall exceed 1en Lhousand pesos (Þƹ10ţ000Ŧ00) ln
accordance wlLh Lhe followlng scheduleť
(1) lor every llve Lhousand pesos (Þƹ3ţ000Ŧ00) worLh of real properLy ln Lhe
Þhlllpplnes owned by lL durlng Lhe precedlng year based on Lhe valuaLlon
used for Lhe paymenL of Lhe real properLy Lax under exlsLlng lawsţ found ln
Lhe assessmenL rolls of Lhe clLy or munlclpallLy where Lhe real properLy ls
slLuaLed Ŵ 1wo pesos (Þƹ2Ŧ00)Ť and (2) lor every llve Lhousand pesos
(Þƹ3ţ000Ŧ00) of gross recelpLs or earnlngs derlved by lL from lLs buslness ln
Lhe Þhlllpplnes durlng Lhe precedlng year Ŵ 1wo pesos (Þƹ2Ŧ00)Ŧ 1he
dlvldends recelved by a corporaLlon from anoLher corporaLlon however shallţ
for Lhe purpose of Lhe addlLlonal Laxţ be consldered as parL of Lhe gross
recelpLs or earnlngs of sald corporaLlonŦ
4Ŧ LxempLlons (SecŦ 139)
SLCŦ 139Ŧ LxempLlonsŦ Ŵ 1he followlng are exempL from Lhe communlLy Laxť
(1) ulplomaLlc and consular represenLaLlvesŤ and (2) 1ranslenL vlslLors when
Lhelr sLay ln Lhe Þhlllpplnes does noL exceed Lhree (3) monLhsŦ
3Ŧ Þlace of ÞaymenL (SecŦ 160)
8LvlLWL8 1Ax2Ŵ ?uMl 24SLCŦ 160Ŧ Þlace of ÞaymenLŦ Ŵ 1he communlLy Lax shall be pald ln Lhe place
of resldence of Lhe lndlvldualţ or ln Lhe place where Lhe prlnclpal offlce of Lhe
[urldlcal enLlLy ls locaLedŦ
6Ŧ 1lme of ÞaymenL (SecŦ 161)
SLCŦ 161Ŧ 1lme for ÞaymenLŤ ÞenalLles for uellnquencyŦ Ŵ (a) 1he communlLy
Lax shall accrue on Lhe flrsL (1sL) day of !anuary of each year whlch shall be
pald noL laLer Lhan Lhe lasL day of lebruary of each yearŦ lf a person reaches
Lhe age of elghLeen (18) years or oLherwlse loses Lhe beneflL of exempLlon on
or before Lhe lasL day of !uneţ he shall be llable for Lhe communlLy Lax on Lhe
day he reaches such age or upon Lhe day Lhe exempLlon endsŦ Poweverţ lf a
person reaches Lhe age of elghLeen (18) years or loses Lhe beneflL of
exempLlon on or before Lhe lasL day of Marchţ he shall have LwenLy (20) days
Lo pay Lhe communlLy Lax wlLhouL becomlng dellnquenLŦ Þersons who come
Lo reslde ln Lhe Þhlllpplnes or reach Lhe age of elghLeen (18) years on or afLer
Lhe flrsL (1sL) day of !uly of any yearţ or who cease Lo belong Lo an exempL
class on or afLer Lhe same daLeţ shall noL be sub[ecL Lo Lhe communlLy Lax for
LhaL yearŦ
(b) CorporaLlons esLabllshed and organlzed on or before Lhe lasL day of !une
shall be llable for Lhe communlLy Lax for LhaL yearŦ 8uL corporaLlons
esLabllshed and organlzed on or before Lhe lasL day of March shall have
LwenLy (20) days wlLhln whlch Lo pay Lhe communlLy Lax wlLhouL becomlng
dellnquenLŦ CorporaLlons esLabllshed and organlzed on or afLer Lhe flrsL day
of !uly shall noL be sub[ecL Lo Lhe communlLy Lax for LhaL yearŦ lf Lhe Lax ls noL
pald wlLhln Lhe Llme prescrlbed aboveţ Lhere shall be added Lo Lhe unpald
amounL an lnLeresL of LwenLyŴfour percenL (24Ʒ) per annum from Lhe due
daLe unLll lL ls paldŦ
7Ŧ CommunlLy 1ax CerLlflcaLe (SecŦ 162)
SLCŦ 162Ŧ CommunlLy 1ax CerLlflcaLeŦ Ŵ A communlLy Lax cerLlflcaLe shall be
lssued Lo every person or corporaLlon upon paymenL of Lhe communlLy LaxŦ A
communlLy Lax cerLlflcaLe may also be lssued Lo any person or corporaLlon
noL sub[ecL Lo Lhe communlLy Lax upon paymenL of Cne peso (Þƹ1Ŧ00)Ŧ
8Ŧ ÞresenLaLlon of C1C on cerLaln occaslons (SecŦ 163)
SLCŦ 163Ŧ ÞresenLaLlon of CommunlLy 1ax CerLlflcaLe Cn CerLaln CccaslonsŦ
Ŵ (a) When an lndlvldual sub[ecL Lo Lhe communlLy Lax acknowledges any
documenL before a noLary publlcţ Lakes Lhe oaLh of offlce upon elecLlon or
appolnLmenL Lo any poslLlon ln Lhe governmenL servlceŤ recelves any llcenseţ
cerLlflcaLeţ or permlL from any publlc auLhorlLyŤ pays any Lax or feeŤ recelves
any money from any publlc fundŤ LransacLs oLher offlclal buslnessŤ or recelves
any salary or wage from any person or corporaLlonţ lL shall be Lhe duLy of any
personţ offlcerţ or corporaLlon wlLh whom such LransacLlon ls made or
buslness done or from whom any salary or wage ls recelved Lo requlre such
lndlvldual Lo exhlblL Lhe communlLy Lax cerLlflcaLeŦ 1he presenLaLlon of
communlLy Lax cerLlflcaLe shall noL be requlred ln connecLlon wlLh Lhe
reglsLraLlon of a voLerŦ
(b) Whenţ Lhrough lLs auLhorlzed offlcersţ any corporaLlon sub[ecL Lo Lhe
communlLy Lax recelves any llcenseţ cerLlflcaLeţ or permlL from any publlc
auLhorlLyţ pays any Lax or feeţ recelves money from publlc fundsţ or LransacLs
oLher offlclal buslnessţ lL shall be Lhe duLy of Lhe publlc offlclal wlLh whom
such LransacLlon ls made or buslness doneţ Lo requlre such corporaLlon Lo
exhlblL Lhe communlLy Lax cerLlflcaLeŦ
(c) 1he communlLy Lax cerLlflcaLe requlred ln Lhe Lwo precedlng paragraphs
shall be Lhe one lssued for Lhe currenL yearţ excepL for Lhe perlod from
!anuary unLll Lhe flfLeenLh (13Lh) of Aprll each yearţ ln whlch caseţ Lhe
cerLlflcaLe lssued for Lhe precedlng year shall sufflceŦ
lvŦ CCLLLC1lCn Cl 1AxLS Anu 8LMLulLS
aŦ CollecLlon of 1axes
lŦ 1ax Þerlod and Manner of ÞaymenL (SecŦ 163)
SLCŦ 163Ŧ 1ax Þerlod and Manner of ÞaymenLŦ Ŵ unless oLherwlse provlded
ln Lhls Codeţ Lhe Lax perlod of all local Laxesţ fees and charges shall be Lhe
calendar yearŦ Such Laxesţ fees and charges may be pald ln quarLerly
lnsLallmenLsŦ
llŦ Accrual of 1ax (SecŦ 166)
SLCŦ 166Ŧ Accrual of 1axŦ Ŵ unless oLherwlse provlded ln Lhls Codeţ all local
Laxesţ feesţ and charges shall accrue on Lhe flrsL (1sL) day of !anuary of each
yearŦ Poweverţ new Laxesţ fees or chargesţ or changes ln Lhe raLes Lhereofţ
8LvlLWL8 1Ax2Ŵ ?uMl 23shall accrue on Lhe flrsL (1sL) day of Lhe quarLer nexL followlng Lhe effecLlvlLy
of Lhe ordlnance lmposlng such new levles or raLesŦ
lllŦ 1lme of ÞaymenL (SecŦ 167)Ŧ
SLCŦ 167Ŧ 1lme of ÞaymenLŦ Ŵ unless oLherwlse provlded ln Lhls Codeţ all
local Laxesţ feesţ and charges shall be pald wlLhln Lhe flrsL LwenLy (20) days
of !anuary or of each subsequenL quarLerţ as Lhe case may beŦ 1he
sanggunlan concerned mayţ for a [usLlflable reason or causeţ exLend Lhe Llme
for paymenL of such Laxesţ feesţ or charges wlLhouL surcharges or penalLlesţ
buL only for a perlod noL exceedlng slx (6) monLhs Ŧ
lvŦ Surcharges and ÞenalLles (SecŦ 168)
SLCŦ 168Ŧ Surcharges and ÞenalLles on unpald 1axesţ leesţ or ChargesŦ Ŵ
1he sanggunlan may lmpose a surcharge noL exceedlng LwenLyŴflve percenL
(23Ʒ) of Lhe amounL of Laxesţ fees or charges noL pald on Llme and an
lnLeresL aL Lhe raLe noL exceedlng Lwo percenL (2Ʒ) per monLh of Lhe unpald
Laxesţ fees or charges lncludlng surchargesţ unLll such amounL ls fully pald
buL ln no case shall Lhe LoLal lnLeresL on Lhe unpald amounL or porLlon Lhereof
exceed LhlrLyŴslx (36) monLhsŦ
vŦ lnLeresLs on CLher unpald 8evenues (SecŦ 169)
SLCŦ 169Ŧ lnLeresLs on CLher unpald 8evenuesŦ Ŵ Where Lhe amounL of any
oLher revenue due a local governmenL unlLţ excepL volunLary conLrlbuLlons or
donaLlonsţ ls noL pald on Lhe daLe flxed ln Lhe ordlnanceţ or ln Lhe conLracLţ
expressed or lmplledţ or upon Lhe occurrence of Lhe evenL whlch has glven
rlse Lo lLs collecLlonţ Lhere shall be collecLed as parL of LhaL amounL an lnLeresL
Lhereon aL Lhe raLe noL exceedlng Lwo percenL (2Ʒ) per monLh from Lhe daLe
lL ls due unLll lL ls paldţ buL ln no case shall Lhe LoLal lnLeresL on Lhe unpald
amounL or a porLlon Lhereof exceed LhlrLyŴslx (36) monLhsŦ
vlŦ CollecLlon of Local 8evenues by 1reasurer (SecŦ 170)
SLCŦ 170Ŧ CollecLlon of Local 8evenues by 1reasurerŦ Ŵ All local Laxesţ feesţ
and charges shall be collecLed by Lhe provlnclalţ clLyţ munlclpalţ or barangay
Lreasurerţ or Lhelr duly auLhorlzed depuLlesŦ 1he provlnclalţ clLy or munlclpal
Lreasurer may deslgnaLe Lhe barangay Lreasurer as hls depuLy Lo collecL local
Laxesţ feesţ or chargesŦ ln case a bond ls requlred for Lhe purposeţ Lhe
provlnclalţ clLy or munlclpal governmenL shall pay Lhe premlums Lhereon ln
addlLlon Lo Lhe premlums of bond LhaL may be requlred under Lhls CodeŦ
vllŦ LxamlnaLlon of 8ooks of AccounLs and ÞerLlnenL 8ecords (SecŦ 171)
SLCŦ 171Ŧ LxamlnaLlon of 8ooks of AccounLs and ÞerLlnenL 8ecords of
8uslnessmen by Local 1reasurerŦ Ŵ 1he provlnclalţ clLyţ munlclpal or
barangay Lreasurer mayţ by hlmself or Lhrough any of hls depuLles duly
auLhorlzed ln wrlLlngţ examlne Lhe booksţ accounLsţ and oLher perLlnenL
records of any personţ parLnershlpţ corporaLlonţ or assoclaLlon sub[ecL Lo
local Laxesţ fees and charges ln order Lo ascerLalnţ assessţ and collecL Lhe
correcL amounL of Lhe Laxţ feeţ or chargeŦ Such examlnaLlon shall be made
durlng regular buslness hoursţ only once for every Lax perlodţ and shall be
cerLlfled Lo by Lhe examlnlng offlclalŦ Such cerLlflcaLe shall be made of record
ln Lhe books of accounLs of Lhe Laxpayer examlnedŦ ln case Lhe examlnaLlon
hereln auLhorlzed ls made by a duly auLhorlzed depuLy of Lhe local Lreasurerţ
Lhe wrlLLen auLhorlLy of Lhe depuLy concerned shall speclflcally sLaLe Lhe
nameţ addressţ and buslness of Lhe Laxpayer whose booksţ accounLsţ and
perLlnenL records are Lo be examlnedţ Lhe daLe and place of such
examlnaLlonţ and Lhe procedure Lo be followed ln conducLlng Lhe sameŦ lor
Lhls purposeţ Lhe records of Lhe revenue dlsLrlcL offlce of Lhe 8ureau of
lnLernal 8evenue shall be made avallable Lo Lhe local Lreasurerţ hls depuLy or
duly auLhorlzed represenLaLlveŦ
bŦ 8emedles of Lhe CovernmenL
lŦ Local CovernmenL's Llen (SecŦ 173)
SLCŦ 173Ŧ Local CovernmenLƌs LlenŦ Ŵ Local Laxesţ feesţ charges and oLher
revenues consLlLuLe a llenţ superlor Lo all llensţ charges or encumbrances ln
favor of any personţ enforceable by approprlaLe admlnlsLraLlve or [udlclal
acLlonţ noL only upon any properLy or rlghLs Lhereln whlch may be sub[ecL Lo
Lhe llen buL also upon properLy used ln buslnessţ occupaLlonţ pracLlce of
professlon or calllngţ or exerclse of prlvllege wlLh respecL Lo whlch Lhe llen ls
lmposedŦ 1he llen may only be exLlngulshed upon full paymenL of Lhe
ellnquenL local Laxes fees and charges lncludlng relaLed surcharges and
lnLeresLŦ
llŦŦ Clvll 8emedles (SecŦ 174)
SLCŦ 174Ŧ Clvll 8emedlesŦ Ŵ 1he clvll remedles for Lhe collecLlon of local
Laxesţ feesţ or chargesţ and relaLed surcharges and lnLeresL resulLlng from
dellnquency shall beť
(a) 8y admlnlsLraLlve acLlon Lhru dlsLralnL of goodsţ chaLLelsţ or effecLsţ and
oLher personal properLy of whaLever characLerţ lncludlng sLocks and oLher
securlLlesţ debLsţ credlLsţ bank accounLsţ and lnLeresL ln and rlghLs Lo
8LvlLWL8 1Ax2Ŵ ?uMl 26personal properLyţ and by levy upon real properLy and lnLeresL ln or rlghLs Lo
real properLyŤ and
(b) 8y [udlclal acLlonŦ LlLher of Lhese remedles or all may be pursued
concurrenLly or slmulLaneously aL Lhe dlscreLlon of Lhe local governmenL unlL
concernedŦ
lllŦ ulsLralnL (SecŦ 173)
SLCŦ 173Ŧ ulsLralnL of Þersonal ÞroperLyŦ Ŵ 1he remedy by dlsLralnL shall
proceed as followsť
(a) Selzure Ŵ upon fallure of Lhe person owlng any local Laxţ feeţ or charge Lo
pay Lhe same aL Lhe Llme requlredţ Lhe local Lreasurer or hls depuLy mayţ
upon wrlLLen noLlceţ selze or conflscaLe any personal properLy belonglng Lo
LhaL person or any personal properLy sub[ecL Lo Lhe llen ln sufflclenL quanLlLy
Lo saLlsfy Lhe Laxţ feeţ or charge ln quesLlonţ LogeLher wlLh any lncremenL
LhereLo lncldenL Lo dellnquency and Lhe expenses of selzureŦ ln such caseţ
Lhe local Lreasurer or hls depuLy shall lssue a duly auLhenLlcaLed cerLlflcaLe
based upon Lhe records of hls offlce showlng Lhe facL of dellnquencycy and
Lhe amounLs of Lhe Laxţ feeţ or charge and penalLy dueŦ Such cerLlflcaLe shall
serve as sufflclenL warranL for Lhe dlsLralnL of personal properLy
aforemenLlonedţ sub[ecL Lo Lhe Laxpayerƌs rlghL Lo clalm exempLlon under Lhe
provlslons of exlsLlng lawsŦ ulsLralned personal properLy shall be sold aL
publlc aucLlon ln Lhe manner hereln provlded forŦ
(b) AccounLlng of dlsLralned goods Ŵ 1he offlcer execuLlng Lhe dlsLralnL shall
make or cause Lo be made an accounL of Lhe goodsţ chaLLels or effecLs
dlsLralnedţ a copy of whlch slgned by hlmself shall be lefL elLher wlLh Lhe
owner or person from whose possesslon Lhe goodsţ chaLLels or effecLs are
Lakenţ or aL Lhe dwelllng or place of buslness of LhaL person and wlLh
someone of sulLable age and dlscreLlonţ Lo whlch llsL shall be added a
sLaLemenL of Lhe sum demanded and a noLe of Lhe Llme and place of saleŦ
(c) ÞubllcaLlon Ŵ 1he offlcer shall forLhwlLh cause a noLlflcaLlon Lo be exhlblLed
ln noL less Lhan Lhree (3) publlc and consplcuous places ln Lhe LerrlLory of Lhe
local governmenL unlL where Lhe dlsLralnL ls madeţ speclfylng Lhe Llme and
place of saleţ and Lhe arLlcles dlsLralnedŦ 1he Llme of sale shall noL be less
Lhan LwenLy (20) days afLer noLlce Lo Lhe owner or possessor of Lhe properLy
as above speclfled and Lhe publlcaLlon or posLlng of Lhe noLlceŦ Cne place for
Lhe posLlng of Lhe noLlce shall be aL Lhe offlce of Lhe chlef execuLlve of Lhe
local governmenL unlL ln whlch Lhe properLy ls dlsLralnedŦ
(d) 8elease of dlsLralned properLy upon paymenL prlor Lo sale Ŵ lf aL any Llme
prlor Lo Lhe consummaLlon of Lhe saleţ all Lhe proper charges are pald Lo Lhe
offlcer conducLlng Lhe saleţ Lhe goods or effecLs dlsLralned shall be resLored
Lo Lhe ownerŦ
(e) Þrocedure of sale Ŵ AL Lhe Llme and place flxed ln Lhe noLlceţ Lhe offlcer
conducLlng Lhe sale shall sell Lhe goods or effecLs so dlsLralned aL publlc
aucLlon Lo Lhe hlghesL bldder for cashŦ WlLhln flve (3) days afLer Lhe saleţ Lhe
local Lreasurer shall make a reporL of Lhe proceedlngs ln wrlLlng Lo Lhe local
chlef execuLlve concernedŦ Should Lhe properLy dlsLralned be noL dlsposed of
wlLhln one hundred and LwenLy (120) days from Lhe daLe of dlsLralnLţ Lhe
same shall be consldered as sold Lo Lhe local governmenL unlL concerned for
Lhe amounL of Lhe assessmenL made Lhereon by Lhe CommlLLee on Appralsal
and Lo Lhe exLenL of Lhe same amounLţ Lhe Lax dellnquencles shall be
cancelledŦ Sald CommlLLee on Appralsal shall be composed of Lhe clLy or
munlclpal Lreasurer as chalrmanţ wlLh a represenLaLlve of Lhe Commlsslon on
AudlL and Lhe clLy or munlclpal assessor as membersŦ
(f) ulsposlLlon of proceeds Ŵ 1he proceeds of Lhe sale shall be applled Lo
saLlsfy Lhe Laxţ lncludlng Lhe surchargesţ lnLeresLţ and oLher penalLles lncldenL
Lo dellnquencyţ and Lhe expenses of Lhe dlsLralnL and saleŦ 1he balance over
and above whaL ls requlred Lo pay Lhe enLlre clalm shall be reLurned Lo Lhe
owner of Lhe properLy soldŦ 1he expenses chargeable upon Lhe selzure and
sale shall embrace only Lhe acLual expenses of selzure and preservaLlon of
Lhe properLy pendlng Lhe saleţ and no charge shall be lmposed for Lhe
servlces of Lhe local offlcer or hls depuLyŦ Where Lhe proceeds of Lhe sale are
lnsufflclenL Lo saLlsfy Lhe clalmţ oLher properLy mayţ ln llke mannerţ be
dlsLralned unLll Lhe full amounL dueţ lncludlng all
lvŦ Levy of 8eal ÞroperLy (SecŦ 176)
SLCŦ 176Ŧ Levy on 8eal ÞroperLy Ŧ Ŵ AfLer Lhe explraLlon of Lhe Llme requlred
Lo pay Lhe dellnquenL Laxţ feeţ or chargeţ real properLy may be levled on
beforeţ slmulLaneouslyţ or afLer Lhe dlsLralnL of personal properLy belonglng Lo
Lhe dellnquenL LaxpayerŦ 1o Lhls endţ Lhe provlnclalţ clLy or munlclpal
Lreasurerţ as Lhe case may beţ shall prepare a duly auLhenLlcaLed cerLlflcaLe
showlng Lhe name of Lhe Laxpayer and Lhe amounL of Lhe Laxţ feeţ or chargeţ
and penalLy due from hlmŦ Sald cerLlflcaLe shall operaLe wlLh Lhe force of a
legal execuLlon LhroughouL Lhe ÞhlllpplnesŦ Levy shall be effecLed by wrlLlng
upon sald cerLlflcaLe Lhe descrlpLlon of Lhe properLy upon whlch levy ls madeŦ
AL Lhe same Llmeţ wrlLLen noLlce of Lhe levy shall be malled Lo or served upon
Lhe assessor and Lhe 8eglsLrar of ueeds of Lhe provlnce or clLy where Lhe
properLy ls locaLed who shall annoLaLe Lhe levy on Lhe Lax declaraLlon and
cerLlflcaLe of LlLle of Lhe properLyţ respecLlvelyţ and Lhe dellnquenL Laxpayer orţ
8LvlLWL8 1Ax2Ŵ ?uMl 27lf he be absenL from Lhe Þhlllpplnesţ Lo hls agenL or Lhe manager of Lhe
buslness ln respecL Lo whlch Lhe llablllLy aroseţ or lf Lhere be noneţ Lo Lhe
occupanL of Lhe properLy ln quesLlonŦ ln case Lhe levy on real properLy ls noL
lssued before or slmulLaneously wlLh Lhe warranL of dlsLralnL on personal
properLyţ and Lhe personal properLy of Lhe Laxpayer ls noL sufflclenL Lo saLlsfy
hls dellnquencyţ Lhe provlnclalţ clLy or munlclpal Lreasurerţ as Lhe case may
beţ shall wlLhln LhlrLy (30) days afLer execuLlon of Lhe dlsLralnLţ proceed wlLh
Lhe levy on Lhe Laxpayerƌs real properLyŦ A reporL on any levy shallţ wlLhln Len
(10) days afLer recelpL of Lhe warranLţ be submlLLed by Lhe levylng offlcer Lo
Lhe sanggunlan concernedŦ
vŦ AdverLlsemenL and Sale (SecŦ 178)
SLCŦ 178Ŧ AdverLlsemenL and SaleŦ Ŵ WlLhln LhlrLy (30) days afLer levyţ Lhe
local Lreasurer shall proceed Lo publlcly adverLlse for sale or aucLlon Lhe
properLy or a usable porLlon Lhereof as may be necessary Lo saLlsfy Lhe clalm
and cosL of saleŤ and such adverLlsemenL shall cover a perlod of aL leasL LhlrLy
(30) daysŦ lL shall be effecLed by posLlng a noLlce aL Lhe maln enLrance of Lhe
munlclpal bulldlng or clLy hallţ and ln a publlc and consplcuous place ln Lhe
barangay where Lhe real properLy ls locaLedţ and by publlcaLlon once a week
for Lhree (3) weeks ln a newspaper of general clrculaLlon ln Lhe provlnceţ clLy
or munlclpallLy where Lhe properLy ls locaLedŦ 1he adverLlsemenL shall conLaln
Lhe amounL of Laxesţ fees or chargesţ and penalLles due Lhereonţ and Lhe
Llme and place of saleţ Lhe name of Lhe Laxpayer agalnsL whom Lhe Laxesţ
feesţ or charges are levledţ and a shorL descrlpLlon of Lhe properLy Lo be soldŦ
AL any Llme before Lhe daLe flxed for Lhe saleţ Lhe Laxpayer may sLay Lhe
proceedlngs by paylng Lhe Laxesţ feesţ chargesţ penalLles and lnLeresLsŦ lf he
falls Lo do soţ Lhe sale shall proceed and shall be held elLher aL Lhe maln
enLrance of Lhe provlnclalţ clLy or munlclpal bulldlngţ or on Lhe properLy Lo be
soldţ or aL any oLher place as deLermlned by Lhe local Lreasurer conducLlng
Lhe sale and speclfled ln Lhe noLlce of saleŦ WlLhln LhlrLy (30) days afLer Lhe
saleţ Lhe local Lreasurer or hls depuLy shall make a reporL of Lhe sale Lo Lhe
sanggunlan concernedţ and whlch shall form parL of hls recordsŦ AfLer
consulLaLlon wlLh Lhe sanggunlanţ Lhe local Lreasurer shall make and dellver
Lo Lhe purchaser a cerLlflcaLe of saleţ showlng Lhe proceedlngs of Lhe saleţ
descrlblng Lhe properLy soldţ sLaLlng Lhe name of Lhe purchaser and seLLlng
ouL Lhe exacL amounL of all Laxesţ feesţ chargesţ and relaLed surchargesţ
lnLeresLsţ or penalLlesť Þrovldedţ howeverţ 1haL any excess ln Lhe proceeds
of Lhe sale over Lhe clalm and cosL of sales shall be Lurned over Lo Lhe owner
of Lhe properLyŦ 1he local Lreasurer mayţ by ordlnance duly approvedţ
advance an amounL sufflclenL Lo defray Lhe cosLs of collecLlon by means of
Lhe remedles provlded for ln Lhls 1lLleţ lncludlng Lhe preservaLlon or
LransporLaLlon ln case of personal properLyţ and Lhe adverLlsemenL and
subsequenL saleţ ln cases of personal and real properLy lncludlng
lmprovemenLs LhereonŦ
vlŦ 8edempLlon of ÞroperLy Sold (SecŦ 179)
SLCŦ 179Ŧ 8edempLlon of ÞroperLy SoldŦ Ŵ WlLhln one (1) year from Lhe daLe
of saleţ Lhe dellnquenL Laxpayer or hls represenLaLlve shall have Lhe rlghL Lo
redeem Lhe properLy upon paymenL Lo Lhe local Lreasurer of Lhe LoLal amounL
of Laxesţ feesţ or chargesţ and relaLed surchargesţ lnLeresLs or penalLles from
Lhe daLe of dellnquency Lo Lhe daLe of saleţ plus lnLeresL of noL more Lhan Lwo
percenL (2Ʒ) per monLh on Lhe purchase prlce from Lhe daLe of purchase Lo
Lhe daLe of redempLlonŦ Such paymenL shall lnvalldaLe Lhe cerLlflcaLe of sale
lssued Lo Lhe purchaser and Lhe owner shall be enLlLled Lo a cerLlflcaLe of
redempLlon from Lhe provlnclalţ clLy or munlclpal Lreasurer or hls depuLyŦ 1he
provlnclalţ clLy or munlclpal Lreasurer or hls depuLyţ upon surrender by Lhe
purchaser of Lhe cerLlflcaLe of sale prevlously lssued Lo hlmţ shall forLhwlLh
reLurn Lo Lhe laLLer Lhe enLlre purchase prlce pald by hlm plus Lhe lnLeresL of
noL more Lhan Lwo percenL (2Ʒ) per monLh hereln provlded forţ Lhe porLlon of
Lhe cosL of sale and oLher leglLlmaLe expenses lncurred by hlmţ and sald
properLy LhereafLer shall be free from Lhe llen of such Laxesţ feesţ or chargesţ
relaLed surchargesţ lnLeresLsţ and penalLlesŦ 1he owner shall noLţ howeverţ
be deprlved of Lhe possesslon of sald properLy and shall be enLlLled Lo Lhe
renLals and oLher lncome Lhereof unLll Lhe explraLlon of Lhe Llme allowed for lLs
redempLlonŦ
vllŦ Þurchase of ÞroperLy by LCu for wanL of bldder (SecŦ 181)
SLCŦ 181Ŧ Þurchase of ÞroperLy 8y Lhe Local CovernmenL unlLs for WanL of
8ldderŦ Ŵ ln case Lhere ls no bldder for Lhe real properLy adverLlsed for sale as
provlded herelnţ or lf Lhe hlghesL bld ls for an amounL lnsufflclenL Lo pay Lhe
Laxesţ feesţ or chargesţ relaLed surchargesţ lnLeresLsţ penalLles and cosLsţ
Lhe local Lreasurer conducLlng Lhe sale shall purchase Lhe properLy ln behalf
of Lhe local governmenL unlL concerned Lo saLlsfy Lhe clalm and wlLhln Lwo (2)
days LhereafLer shall make a reporL of hls proceedlngs whlch shall be
reflecLed upon Lhe records of hls offlceŦ lL shall be Lhe duLy of Lhe 8eglsLrar of
ueeds concerned upon reglsLraLlon wlLh hls offlce of any such declaraLlon of
forfelLure Lo Lransfer Lhe LlLle of Lhe forfelLed properLy Lo Lhe local governmenL
unlL concerned wlLhouL Lhe necesslLy of an order from a compeLenL courLŦ
WlLhln one (1) year from Lhe daLe of such forfelLureţ Lhe Laxpayer or any of hls
represenLaLlveţ may redeem Lhe properLy by paylng Lo Lhe local Lreasurer Lhe
full amounL of Lhe Laxesţ feesţ chargesţ and relaLed surchargesţ lnLeresLsţ or
penalLlesţ and Lhe cosLs of saleŦ lf Lhe properLy ls noL redeemed as provlded
8LvlLWL8 1Ax2Ŵ ?uMl 28herelnţ Lhe ownershlp Lhereof shall be fully vesLed on Lhe local governmenL
unlL concernedŦ
vlllŦ 8esale of 8eal LsLaLe 1ax for 1lC
lxŦ !udlclal AcLlon (SecŦ 183)
SLCŦ 183Ŧ CollecLlon of uellnquenL 1axesţ leesţ Charges or oLher 8evenues
Lhrough !udlclal AcLlonŦ Ŵ 1he local governmenL unlL concerned may enforce
Lhe collecLlon of dellnquenL Laxesţ feesţ charges or oLher revenues by clvll
acLlon ln any courL of compeLenL [urlsdlcLlonŦ 1he clvll acLlon shall be flled by
Lhe local Lreasurer wlLhln Lhe perlod prescrlbed ln SecLlon 194 of Lhls CodeŦ
xŦ lurLher ulsLralnL and Levy (SecŦ 184)
SLCŦ 184Ŧ lurLher ulsLralnL or LevyŦ Ŵ 1he remedles by dlsLralnL and levy may
be repeaLed lf necessary unLll Lhe full amounL dueţ lncludlng all expensesţ ls
collecLedŦ
xlŦ Þersonal ÞroperLy LxempL from ulsLralnL or Levy (SecŦ 183)
SLCŦ 183Ŧ Þersonal ÞroperLy LxempL from ulsLralnL or LevyŦ Ŵ 1he followlng
properLy shall be exempL from dlsLralnL and Lhe levyţ aLLachmenL or execuLlon
Lhereof for dellnquency ln Lhe paymenL of any local Laxţ fee or chargeţ
lncludlng Lhe relaLed surcharge and lnLeresLť
(a) 1ools and Lhe lmplemenLs necessarlly used by Lhe dellnquenL Laxpayer ln
hls Lrade or employmenLŤ
(b) Cne (1) horseţ cowţ carabaoţ or oLher beasL of burdenţ such as Lhe
dellnquenL Laxpayer may selecLţ and necessarlly used by hlm ln hls ordlnary
occupaLlonŤ
(c) Pls necessary cloLhlngţ and LhaL of all hls famllyŤ
(d) Pousehold furnlLure and uLenslls necessary for housekeeplng and used
for LhaL purpose by Lhe dellnquenL Laxpayerţ such as he may selecLţ of a
value noL exceedlng 1en Lhousand pesos (Þƹ10ţ000Ŧ00)Ť
(e) Þrovlslonsţ lncludlng cropsţ acLually provlded for lndlvldual or famlly use
sufflclenL for four (4) monLhsŤ
(f) 1he professlonal llbrarles of docLorsţ englneersţ lawyers and [udgesŤ
(g) Cne flshlng boaL and neLţ noL exceedlng Lhe LoLal value of 1en Lhousand
pesos (Þƹ10ţ000Ŧ00)ţ by Lhe lawful use of whlch a flsherman earns hls
llvellhoodŤ and (h) Any maLerlal or arLlcle formlng parL of a house or
lmprovemenL of any real properLyŦ
cŦ 1axpayer's 8emedles
lŦ CuesLlon ConsLlLuLlonallLy of Crdlnance (SecŦ 187)
SLCŦ 187Ŧ Þrocedure for Approval and LffecLlvlLy of 1ax ordlnances and
8evenue MeasuresŤ MandaLory Þubllc PearlngsŦ Ŵ 1he procedure for
approval of local Lax ordlnances and revenue measures shall be ln
accordance wlLh Lhe provlslons of Lhls Codeť Þrovldedţ 1haL publlc hearlngs
shall be conducLed for Lhe purpose prlor Lo Lhe enacLmenL Lhereofť Þrovldedţ
furLherţ 1haL any quesLlon on Lhe consLlLuLlonallLy or legallLy of Lax ordlnances
or revenue measures may be ralsed on appeal wlLhln LhlrLy (30) days from
Lhe effecLlvlLy Lhereof Lo Lhe SecreLary of !usLlce who shall render a declslon
wlLhln slxLy (60) days from Lhe daLe of recelpL of Lhe appealť Þrovldedţ
howeverţ 1haL such appeal shall noL have Lhe effecL of suspendlng Lhe
effecLlvlLy of Lhe ordlnance and Lhe accrual and paymenL of Lhe Laxţ feeţ or
charge levled Lherelnť Þrovldedţ flnallyţ 1haL wlLhln LhlrLy (30) days afLer
recelpL of Lhe declslon or Lhe lapse of Lhe slxLyŴday perlod wlLhouL Lhe
SecreLary of !usLlce acLlng upon Lhe appealţ Lhe aggrleved parLy may flle
approprlaLe proceedlngs wlLh a courL of compeLenL [urlsdlcLlonŦ
urllon vsŦ Llm C8 noŦ 111249ţ AugusL 4ţ 1994
1he prlnclpal lssue ln Lhls case ls Lhe consLlLuLlonallLy of SecLlon 187 of Lhe
Local CovernmenL CodeŦ
ÞursuanL LhereLoţ Lhe SecreLary of !usLlce hadţ on appeal Lo hlm of four oll
companles and a Laxpayerţ declared Crdlnance noŦ 7794ţ oLherwlse known
as Lhe Manlla 8evenue Codeţ null and vold for nonŴcompllance wlLh Lhe
prescrlbed procedure ln Lhe enacLmenL of Lax ordlnances and for conLalnlng
cerLaln provlslons conLrary Lo law and publlc pollcyŦ
ln a peLlLlon for cerLlorarl flled by Lhe ClLy of Manllaţ Lhe 8eglonal 1rlal CourL
of Manlla revoked Lhe SecreLaryƌs resoluLlon and susLalned Lhe ordlnanceţ
holdlng lnLer alla LhaL Lhe procedural requlremenLs had been observedŦ More
lmporLanLlyţ lL declared SecLlon 187 of Lhe Local CovernmenL Code as
unconsLlLuLlonal because of lLs vesLure ln Lhe SecreLary of !usLlce of Lhe
power of conLrol over local governmenLs ln vlolaLlon of Lhe pollcy of local
auLonomy mandaLed ln Lhe ConsLlLuLlon and of Lhe speclflc provlslon Lhereln
conferrlng on Lhe ÞresldenL of Lhe Þhlllpplnes only Lhe power of supervlslon
over local governmenLsŦ
PLLuť SecLlon 187 auLhorlzes Lhe SecreLary of !usLlce Lo revlew only Lhe
consLlLuLlonallLy or legallLy of Lhe Lax ordlnance andţ lf warranLedţ Lo revoke lL
on elLher or boLh of Lhese groundsŦ When he alLers or modlfles or seLs aslde
8LvlLWL8 1Ax2Ŵ ?uMl 29a Lax ordlnanceţ he ls noL also permlLLed Lo subsLlLuLe hls own [udgmenL for
Lhe [udgmenL of Lhe local governmenL LhaL enacLed Lhe measureŦ SecreLary
urllon dld seL aslde Lhe Manlla 8evenue Codeţ buL he dld noL replace lL wlLh
hls own verslon of whaL Lhe Code should beŦ Pe dld noL pronounce Lhe
ordlnance unwlse or unreasonable as a basls for lLs annulmenLŦ Pe dld noL
say LhaL ln hls [udgmenL lL was a bad lawŦ WhaL he found only was LhaL lL was
lllegalŦ All he dld ln revlewlng Lhe sald measure was deLermlne lf Lhe
peLlLloners were performlng Lhelr funcLlons ln accordance wlLh lawţ LhaL lsţ
wlLh Lhe prescrlbed procedure for Lhe enacLmenL of Lax ordlnances and Lhe
granL of powers Lo Lhe clLy governmenL under Lhe Local CovernmenL CodeŦ
As we see lLţ LhaL was an acL noL of conLrol buL of mere supervlslonŦ
An offlcer ln conLrol lays down Lhe rules ln Lhe dolng of an acLŦ lf Lhey are noL
followedţ he mayţ ln hls dlscreLlonţ order Lhe acL undone or reŴdone by hls
subordlnaLe or he may even declde Lo do lL hlmselfŦ Supervlslon does noL
cover such auLhorlLyŦ 1he supervlsor or superlnLendenL merely sees Lo lL LhaL
Lhe rules are followedţ buL he hlmself does noL lay down such rulesţ nor does
he have Lhe dlscreLlon Lo modlfy or replace LhemŦ lf Lhe rules are noL
observedţ he may order Lhe work done or reŴdone buL only Lo conform Lo Lhe
prescrlbed rulesŦ Pe may noL prescrlbe hls own manner for Lhe dolng of Lhe
acLŦ Pe has no [udgmenL on Lhls maLLer excepL Lo see Lo lL LhaL Lhe rules are
followedŦ ln Lhe oplnlon of Lhe CourLţ SecreLary urllon dld preclsely Lhlsţ and
no more nor less Lhan Lhlsţ and so performed an acL noL of conLrol buL of
mere supervlslonŦ
llŦ ÞubllcaLlon (SecŦ 188)
SLCŦ 188Ŧ ÞubllcaLlon of 1ax ordlnances and 8evenue MeasuresŦ Ŵ WlLhln
Len (10) days afLer Lhelr approvalţ cerLlfled Lrue coples of all provlnclalţ clLyţ
and munlclpal Lax ordlnances or revenue measures shall be publlshed ln full
for Lhree (3) consecuLlve days ln a newspaper of local clrculaLlonť Þrovldedţ
howeverţ 1haL ln provlncesţ clLles and munlclpallLles where Lhere are no
newspapers of local clrculaLlonţ Lhe same may be posLed ln aL leasL Lwo (2)
consplcuous and publlcly accesslble placesŦ
CocaŴCola 8oLLlers vsŦ ClLy of Manlla Ŵ C8 noŦ 136232ţ !une 27ţ 2006
ÞeLlLloner CocaŴCola 8oLLlers Þhlllpplnesţ lncŦ ls a corporaLlon engaged ln Lhe
buslness of manufacLurlng and selllng beverages and malnLalns a sales
offlce locaLed ln Lhe ClLy of ManllaŦ Cn 23 lebruary 2000ţ Lhe ClLy Mayor of
Manlla approved 1ax Crdlnance noŦ 7988ţ oLherwlse known as º8evlsed
8evenue Code of Lhe ClLy of Manlla" repeallng 1ax Crdlnance noŦ 7794
enLlLledţ º8evenue Code of Lhe ClLy of ManllaŦ" 1ax Crdlnance noŦ 7988
amended cerLaln secLlons of 1ax Crdlnance noŦ 7794 by lncreaslng Lhe Lax
raLes appllcable Lo cerLaln esLabllshmenLs operaLlng wlLhln Lhe LerrlLorlal
[urlsdlcLlon of Lhe ClLy of Manllaţ lncludlng hereln peLlLlonerŦ Aggrleved by
sald Lax ordlnanceţ peLlLloner flled a ÞeLlLlon before Lhe ueparLmenL of !usLlce
(uC!)ţ agalnsL Lhe ClLy of Manlla and lLs Sanggunlang Þanlungsodţ lnvoklng
SecLlon 187of Lhe Local CovernmenL Code of 1991 (8epubllc AcL noŦ 7160)Ŧ
Sald ÞeLlLlon quesLlons Lhe consLlLuLlonallLy or legallLy of SecLlon 21 of 1ax
Crdlnance noŦ 7988Ŧ
Cn 17 AugusL 2000ţ Lhen uC! SecreLary ArLemlo CŦ 1uquero lssued a
8esoluLlon declarlng 1ax Crdlnance noŦ 7988 null and vold and wlLhouL legal
effecLŦ
PLLuť lL ls undlspuLed from Lhe facLs of Lhe case LhaL 1ax Crdlnance noŦ
7988 has already been declared by Lhe uC! SecreLaryţ ln lLs Crderţ daLed 17
AugusL 2000ţ as null and vold and wlLhouL legal effecL due Lo respondenLs'
fallure Lo saLlsfy Lhe requlremenL LhaL sald ordlnance be publlshed for Lhree
consecuLlve days as requlred by lawŦ nelLher ls Lhere qulbbllng on Lhe facL
LhaL Lhe sald Crder of Lhe uC! was never appealed by Lhe ClLy of Manllaţ
Lhusţ lL had aLLalned flnallLy afLer Lhe lapse of Lhe perlod Lo appealŦ
lurLhermoreţ Lhe 81C of Manllaţ 8ranch 21ţ ln lLs ueclslon daLed 28
november 2001ţ relLeraLed Lhe flndlngs of Lhe uC! SecreLary LhaL
respondenLs falled Lo follow Lhe procedure ln Lhe enacLmenL of Lax measures
as mandaLed by SecLlon 188 of Lhe Local CovernmenL Code of 1991ţ ln LhaL
Lhey falled Lo publlsh 1ax Crdlnance noŦ 7988 for Lhree consecuLlve days ln a
newspaper of local clrculaLlonŦ lrom Lhe foregolngţ lL ls evldenL LhaL 1ax
Crdlnance noŦ 7988 ls null and vold as sald ordlnance was publlshed only for
one day ln Lhe 22 May 2000 lssue of Lhe Þhlllpplne ÞosL ln conLravenLlon of
Lhe unmlsLakable dlrecLlve of Lhe Local CovernmenL Code of 1991Ŧ
As held by Lhls CourL ln Lhe case of Þeople vŦ Llmţ lf an order or law soughL Lo
be amended ls lnvalldţ Lhen lL does noL legally exlsLţ Lhere should be no
occaslon or need Lo amend lLŦ
lllŦ Þerlods of AssessmenL and CollecLlon (SecŦ 194)
SLCŦ 194Ŧ Þerlods of AssessmenL and CollecLlonŦ Ŵ
(a) Local Laxesţ feesţ or charges shall be assessed wlLhln flve (3) years from
Lhe daLe Lhey became dueŦ no acLlon for Lhe collecLlon of such Laxesţ feesţ or
chargesţ wheLher admlnlsLraLlve or [udlclalţ shall be lnsLlLuLed afLer Lhe
explraLlon of such perlodť Þrovldedţ 1haLţ Laxesţ fees or charges whlch have
accrued before Lhe effecLlvlLy of Lhls Code may be assessed wlLhln a perlod
of Lhree (3) years from Lhe daLe Lhey became dueŦ
(b) ln case of fraud or lnLenL Lo evade Lhe paymenL of Laxesţ feesţ or chargesţ
Lhe same may be assessed wlLhln Len (10) years from dlscovery of Lhe fraud
or lnLenL Lo evade paymenLŦ
8LvlLWL8 1Ax2Ŵ ?uMl 30(c) Local Laxesţ feesţ or charges may be collecLed wlLhln flve (3) years from
Lhe daLe of assessmenL by admlnlsLraLlve or [udlclal acLlonŦ no such acLlon
shall be lnsLlLuLed afLer Lhe explraLlon of sald perlodť Þrovldedţ howeverţ
1haLţ Laxesţ fees or charges assessed before Lhe effecLlvlLy of Lhls Code may
be collecLed wlLhln a perlod of Lhree (3) years from Lhe daLe of assessmenLŦ
(d) 1he runnlng of Lhe perlods of prescrlpLlon provlded ln Lhe precedlng
paragraphs shall be suspended for Lhe Llme durlng whlchť
(1) 1he Lreasurer ls legally prevenLed from maklng Lhe assessmenL of
collecLlonŤ
(2) 1he Laxpayer requesLs for a relnvesLlgaLlon and execuLes a walver ln
wrlLlng before explraLlon of Lhe perlod wlLhln whlch Lo assess or collecLŤ and
(3) 1he Laxpayer ls ouL of Lhe counLry or oLherwlse cannoL be locaLedŦ
lvŦ ÞroLesL of AssessmenL (SecŦ 193)
SLCŦ 193Ŧ ÞroLesL of AssessmenLŦ Ŵ When Lhe local Lreasurer or hls duly
auLhorlzed represenLaLlve flnds LhaL correcL Laxesţ feesţ or charges have noL
been paldţ he shall lssue a noLlce of assessmenL sLaLlng Lhe naLure of Lhe Laxţ
fee or chargeţ Lhe amounL of deflclencyţ Lhe surchargesţ lnLeresLs and
penalLlesŦ WlLhln slxLy (60) days from Lhe recelpL of Lhe noLlce of assessmenLţ
Lhe Laxpayer may flle a wrlLLen proLesL wlLh Lhe local Lreasurer conLesLlng Lhe
assessmenLŤ oLherwlseţ Lhe assessmenL shall become flnal and execuLoryŦ
1he local Lreasurer shall declde Lhe proLesL wlLhln slxLy (60) days from Lhe
Llme of lLs flllngŦ lf Lhe local Lreasurer flnds Lhe proLesL Lo be wholly or parLly
merlLorlousţ he shall lssue a noLlce cancellng wholly or parLlally Lhe
assessmenLŦ Poweverţ lf Lhe local Lreasurer flnds Lhe assessmenL Lo be
wholly or parLly correcLţ he shall deny Lhe proLesL wholly or parLly wlLh noLlce
Lo Lhe LaxpayerŦ 1he Laxpayer shall have LhlrLy (30) days from Lhe recelpL of
Lhe denlal of Lhe proLesL or from Lhe lapse of Lhe slxLy (60) day perlod
prescrlbed hereln wlLhln whlch Lo appeal wlLh Lhe courL of compeLenL
[urlsdlcLlon oLherwlse Lhe assessmenL becomes concluslve and
unappealableŦ
San !uan vsŦ CasLro Ŷ C8 noŦ 174617ţ uecember 27ţ 2007
ÞeLlLloner San !uan conveyed real properLles Lo a corporaLlon ln exchange
for lLs shares of sLockŦ uslng as basls SecLlon 133 of Lhe LCCţ San !uan
wanLed Lo pay Lhe Lransfer Lax based on Lhe conslderaLlon sLaLed ln Lhe ueed
of AsslgnmenLŦ 8espondenL CasLroţ as Lhe 1reasurerţ lnformed hlm LhaL Lhe
Lax due ls based on Lhefalr markeL value of Lhe properLyŦ ÞeLlLloner CasLro
proLesLed Lhe 1reasurer's compuLaLlon ln wrlLlngţ whlch Lhe 1reasurer also
denled ln wrlLlngŦ ÞeLlLloner CasLro Lhen flled a ÞeLlLlon for mandamus and
damages agalnsL Lhe 1reasurer praylng LhaL he be compelled Lo accepL
paymenL of Lhe Lransfer Lax based on Lhe acLual conslderaLlon of Lhe
Lransfer/asslgnmenLŦ
PLLuť1haL peLlLloner proLesLed ln wrlLlng agalnsL Lhe assessmenL of Lax due
and Lhe basls Lhereof ls on record as ln facL lL was on LhaL accounL LhaL
respondenL senL hlm Lhe aboveŴquoLed !uly 13ţ 2003 leLLer whlch operaLed
as a denlal of peLlLloner's wrlLLen proLesLŦ ÞeLlLloner should Lhus haveţ
followlng Lhe earller aboveŴquoLed SecLlon 193 of Lhe Local CovernmenL
Codeţ elLher appealed Lhe assessmenL before Lhe courL of compeLenL
[urlsdlcLlon or pald Lhe Lax and Lhen soughL a refundŦ
ÞeLlLloner dld noL observe any of Lhese remedles avallable Lo hlmţ howeverŦ
Pe lnsLead opLed Lo flle a peLlLlon for mandamus Lo compel respondenL Lo
accepL paymenL of Lransfer Lax as compuLed by hlmŦ
Mandamus lles only Lo compel an offlcer Lo perform a mlnlsLerlal duLy (one
whlch ls so clear and speclflc as Lo leave no room for Lhe exerclse of
dlscreLlon ln lLs performance) buL noL a dlscreLlonary funcLlon (one whlch by
lLs naLure requlres Lhe exerclse of [udgmenL)Ŧ 8espondenL's argumenL LhaL
ºżmŽandamus cannoL lle Lo compel Lhe ClLy 1reasurer Lo accepL as full
compllance a Lax paymenL whlch ln hls reasonlng and assessmenL ls
deflclenL and lncorrecL" ls Lhus persuaslveŦ
vŦ Appeal Lo Lhe C1A
vlŦ Clalm for 8efund (SecŦ 196)
SLCŦ 196Ŧ Clalm for 8efund of 1ax CredlLŦ Ŵ no case or proceedlng shall be
malnLalned ln any courL for Lhe recovery of any Laxţ feeţ or charge
erroneously or lllegally collecLed unLll a wrlLLen clalm for refund or credlL has
been flled wlLh Lhe local LreasurerŦ no case or proceedlng shall be
enLerLalned ln any courL afLer Lhe explraLlon of Lwo (2) years from Lhe daLe of
Lhe paymenL of such Laxţ feeţ or chargeţ or from Lhe daLe Lhe Laxpayer ls
enLlLled Lo a refund or credlLŦ
8LvlLWL8 1Ax2Ŵ ?uMl 31

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