Chapter I

Real Property Taxes

A. Basic Real Property Tax

Basic real property tax (RPT) is ad valorem tax assessed, levied and collected in all provinces, cities and municipalities within the
Metropolitan Manila area on land, buildings, machineries and other improvements affixed to the real property and not specifically exempted
by law.

1. Taxpayer
All persons, natural or juridical, owning or administering real property (land, building, machineries and other improvements) are subject to
the real property tax. The tax is based on the assessed value of the property which is a certain percentage of its market value.

Market value is defined as the estimated amount for which a property is sold/trade. It serves as basis for a uniform appraisal of real
property prepared prior t any general revision of property assessment in the LGU.

2. Tax Base
Provinces, cities and municipalities within the Metro Manila Area (MMA)1 impose basic real property tax at the
following rates: 2

Provinces Not exceeding 1% of the assessed value of the real

property; and
Cities or Not exceeding 2% of the assessed value of the real
Municipalities property
Within the MMA

3. Appraisal and Assessment of Real Property

Appraisal is the act or process of determining the market value of a property as of a specific date.

The appraisal of real property shall be based on the latest schedule of market value (SMV) prepared by the provincial assessor, the
city assessor or municipal assessor of a municipality within the MMA as embodied in an ordinance passed by the respective local
Sanggunian or local council.

Assessment is the act or process of determining the proportion of the market value subject to tax. The assessment level is the percentage
applied to the market value of property to determine its assessed or taxable value. Assessment levels are fixed by an ordinance enacted by
the local Sanggunian depending on the actual use of the property, at rates not exceeding the following: 3

a. Lands

Class Assessment
Levels (%)

Residential 20
Agricultural 40
Commercial, Industrial 50
& Mineral

Timberland 20

1
Pateros is the only municipality within the MMA as of this writing.
2
Section 233, LGC.
3
Section 218, LGC.
b. Buildings and Other Structures
The assessment level progresses directly with the fair market value FMV as follows:

Class Assessment Levels (%)

Residential

Fair Market Value

Over Not Over
PhP 175,000 0
300,000 175,000 10
500,000 300,000 20
750,000 500,000 25
1,000,000 750,000 30
2,000,000 1,000,000 35
5,000,000 2,000,000 40
10,000,000 5,000,000 50
10,000,000 60

Agricultural

Fair Market Value

Over Not Over
300,000 0
500,000 300,000 10
750,000 500,000 20
1,000,000 750,000 25
2,000,000 1,000,000 30
2,000,000 35

Commercial/Indu
strial

Fair Market Value

Over Not Over
300,000 30
500,000 300,000 35
750,000 500,000 40
1,000,000 750,000 50
2,000,000 1,000,000 60
5,000,000 2,000,000 70
10,000,000 5,000,000 75
10,000,000 80

Timberland

Fair Market Value

Over Not Over
300,000 45
500,000 300,000 50
750,000 500,000 55
1,000,000 750,000 60
2,000,000 1,000,000 65
2,000,000 70

c. Machineries

Class Assessment Levels (%)

Agricultural 40
Residential 50
Commercial 80
Industrial 80

2
 d. Special Classes

For all lands, buildings, machineries, and other improvements:

Actual Use Assessment levels (%)

Cultural 15
Scientific 15
Hospital 15
Local Water Districts 10
Government-owned and/or controlled 10
corporations (GOCCs) engaged in the supply and
distribution of water and/or generation and
transmission of electric power

4. Manner of Computing the RPT

Consider a residential land in Naga City has a MV of PhP 1,000,000 with an assessment level (AL) of 20% and 1% tax rate (TR). It
should be mentioned that these are maximum levels that LGUs may otherwise apply/implement lower assessment levels to cushion the impact
of a general revision. Derive the Assessed value (AL) by multiplying the MV and the AL:

AV = MV X AL
= PhP 1,000,000.00 x 0.20
= PhP 200,000.00

To determine the RPT, multiply AV and the TR. Thus:

RPT = AV x TR
= PhP 200,000.00 x 0.01
RPT = PhP 2,000

5. Exemption from the Payment of RPT

Any person who claims a property tax exemption shall file with the provincial, city or municipal assessor within 30 days from the date of
declaration of real property with sufficient documentary evidence to support such claim i.e., corporate charters, title of ownership, articles
of incorporation, bylaws, contracts, affidavits, certifications and mortgage deeds, and similar documents.4 The following are exempted
from payment of the RPT: 5

a. Real property owned by the Republic of the Philippines or any of its political subdivisions, except when the beneficial use thereof has
been granted, for consideration or otherwise, to a taxable person;

b. Charitable institutions, churches, parsonages, or convents belonging thereto, mosques, non-profit or religious cemeteries, and all lands,
buildings, and improvements actually, directly, and exclusively used for religious, charitable or educational purposes;

c. All machineries and equipment that are actually, directly and exclusively used by local water districts and government-owned and/or
controlled corporations (GOCCs) engaged in the supply and distribution of water and/or generation and transmission of electric power;

d. All real property owned by duly registered cooperatives as provided for under RA No. 6938; 6
and

e. Machinery and equipment used for pollution control and environmental protection.

4
Section 206, Ibid.
5
Section 299, Ibid.
6
Entitled, An Act to Ordain a Cooperative Code in the Philippines (Approved 10 March 1990).

3
 6. Collection of RPT
The RPT for any year shall accrue on the first day of January and paid where the property is located. The basic RPT may be paid
without interest in four (4) equal installments; the first installment to be due and payable on or before March 31; the second
installment on or before June 30; the third installment, on or before September 30; and the last installment on or before December 31. 7

7. Tax Discount for Advance Prompt Payment8

An added incentive to real property taxpayers under the LGC is the grant of a discount not exceeding 20% of the annual tax due if the basic
RPT and the additional tax for SEF are paid in advance of the prescribed schedule or period of payment.

It should be noted, however, the provision in Sec. 251 of the LGC states that discounts are granted to advanced prompt payment, while
Article (ART.) 341 of the Rules and Regulations Implementing (IRR) the LGC refer to the words advance and prompt separately. Such
that the Sanggunian concerned may grant a discount of 10% for prompt payments, and a discount of 20% for advance payments. For
purposes of this Rule, a prompt payment which grants a 10% discount indicate real property taxes paid quarterly even if said taxes are paid on
the last day of each quarter.

Mentioned below are cities offering tax discounts to taxpayers:9

8. Interest on Unpaid RPT10

The taxpayer shall be subject to an interest of 2% per month on the unpaid amount of tax or a fraction thereof, until the delinquent
tax shall have been fully paid but in no case shall the total interest on the unpaid tax or portion thereof exceed 36 months.

9. Distribution of Proceeds11
Province

35% - Province
40% - Municipality where the property is located
25% - Barangay where the property is located
City

70% - City
15% - Barangay where property is located
15% - To accrue equally to all component barangays of the city

Municipalities within Metro Manila

35% - MMDA
35% - Municipality
15% - Barangay where property is located
15% - To accrue equally to all component barangays of the
Municipality

7
Sections 247, LGC.
8
Section 251, Ibid.
9
Per interview with the personnel of the City Treasurers Office of Makati, Pasig and Quezon (18 June 2014).
10
Section 255, LGC.
11
Section 271, Ibid.

4
B. Other Impositions on Real Property

1. Special Education Fund (SEF) Tax12

a. Taxpayer
The SEF tax is imposed addition to the basic RPT. It is imposed on owners or administrators of real property.

b. Tax Base and Rate

A province, city or municipality with the MMA may collect an annual tax of one percent (1%) of the assessed value of the real property.

c. Application of the Proceeds of the SEF Tax

The proceeds of the tax shall accrue exclusively to the Special Education Fund (SEF). The SEF shall be automatically released to the local
school boards (provincial, city and municipal).

The proceeds of the tax shall be allocated for the operation and maintenance of public schools, construction and repair of school buildings,
facilities and equipment, education research, purchase of books, and sport development as determined and approved by the local school board.

d. Distribution of Proceeds
Province

50% - Provincial School Board

50% - Municipal School Board

City

100% - City School Board

Municipality within Metro Manila

100% - Municipality School Board

2. Idle Land Tax13

a. Taxpayer
The idle land tax is imposed in addition to the basic RPT. It is imposed on owners and administrators of idle lands and shall be based on
the assessed value of the property.
b. Coverage of the Tax: 14

- Agricultural lands more than one (1) hectare, one-half (1/2) of which remains uncultivated or unimproved.
Not considered as idle lands are: 15

i. agricultural lands planted to permanent or perennial crops with

at least 50 trees to a hectare; and

ii. lands actually used for grazing purposes

- Lands located in a city or municipality more than 1,000 square meters in area, of which remain unutilized or unimproved. Regardless of
land area, the tax shall also apply to residential lots in subdivisions wherein the ownership of which has been transferred to individual owners,
who shall be liable for the additional tax. Conversely, lots that have not been transferred to the buyer will still be subject to the said tax
payable by subdivision owner or operator.16

c. Tax Base and Rate

12
Section 235, Ibid.
13
Section 236, Ibid.
14
Section 237, Ibid.
15
Ibid.
16
Section 237 (b), Ibid.

5
 A province, city or a municipality within MMA, may levy an annual tax on idle lands at the rate not exceeding five percent (5%) of
the assessed value of the property.

d. Exemptions
Idle lands may be exempt from additional levy by reason of force majeure, civil disturbance, natural calamity or any cause or circumstance
which physically or legally prevents the owner of the property or person having legal interest therein from improving, utilizing or
cultivating the same. 17

e. Distribution of Proceeds18
Collections accrue to the respective general fund of the province or city where the land subject to tax is situated.
In case of municipality within Metro Manila, the same shall accrue equally to the MMDA and the municipality where the land is situated.

3. Special Levy19

a. Taxpayer
The special levy is imposed on owners and administrators of lands comprised within the territorial jurisdiction of a province, city or
municipality especially benefitted by public works projects or improvements funded by the LGU concerned.

b. Tax Base and Rate

The tax shall not exceed 60% of the accrual cost of the project/improvement, including the cost of acquiring lands. The special levy
shall be apportioned, computed, and assessed according to the assessed value of the lands affected as shown by the books of the assessor
concerned. The assessor shall determine the annual amount of special levy assessed against each parcel of land comprised within the area
especially benefited by public works or projects. The number of annual installments for the payments of the special levy shall not be less
than five nor more than 10 years.

c. Exemptions
The special levy shall not apply to lands exempt from basic RPT and the remainder of the land portions of which have been donated to the
LGU concerned for the construction of such projects/improvements.

d. Distribution of Proceeds
Proceeds accrue to the general fund of the LGU which financed such public works, projects or other improvements. 20

17
Section 238, LGC.
18
Section 273, Ibid.
19
Section 240, Ibid.
20
Section 274, Ibid.

6
 4. Socialized Housing Tax (SHT) 21

The collection of the SHT shall form part of the funds for the urban development and housing program of the LGU with the objective of
providing housing benefits to their constituents.

a. Taxpayer
The SHT is imposed on the owners or administrators of lands in urban areas of an LGU with assessed value in excess of PhP 50,000. The
tax shall be in addition to the basic RPT and SEF tax. The cities of Tacloban, Cebu, Talisay and Quezon are examples of LGUs that
impose the SHT.

b. Tax Base and Rate22

A province, city or municipality may levy and collect an annual tax of of 1% of the assessed value of the land.

c. Distribution of Proceeds23
Proceeds accrue directly to the general fund under a special account to be established for the purpose by the city or municipality within
Metro Manila where the land subject to tax is situated.

However, proceeds of the SHT collected by municipal treasurers, outside Metropolitan Manila Area shall be apportioned between the
province and municipality concerned as determined and approved by the Local Sanggunian.

5. Tax on Transfer of Real Property Ownership24

a. Taxpayer
The tax on transfer of real property ownership is paid by the seller, donor, transferor, executor or administrator of real property on the sale,
donation, barter, or any mode of transferring ownership or title of real property.

b. Tax Base and Rate

The province may impose a tax not exceeding fifty percent (50%) of one percent (1%) of the total consideration involved in the
acquisition of the property or of the fair market value in case monetary consideration involved in the transfer is not substantial, whichever is
higher. The city may impose a rate of seventy five percent (75%) of one percent (1%). The tax shall be paid within 60 days from the
date of the execution of the deed or from the date of the decedents death.

c. Exemption
The sale, transfer, or other disposition of real property pursuant to RA 6657, otherwise known as the Comprehensive Agrarian Reform
Law of 1988, 25 is exempt from the tax.

21
Section 43, RA No. 7279, otherwise known as the Urban Development and Housing Act of 1992,(Effectivity date 22 July 1991) as implemented by Local
Circular No. 1-97, dated 10 April 1997.
22
Section 6 (6.1)(c)(1), DOF- LFC No. 1-97.
23
Section 6 (6.1)(c)(2), DOF- LFC No. 1-97.
24
Section 135, LGC.
25
Approved 10 June 1988.

7
C. Prescriptive Period26
The basic RPT and other tax or property levied under the LGC shall be collected within five (5) years from the date they become due.
No action for the collection of the tax, whether administrative or judicial shall be instituted after such period has expired.

In case of fraud or intent to evade payment of the tax, such action may be instituted for the collection of the tax within ten (10) years from
the discovery of such fraud or intent to evade payment. The period of prescription within which to collect shall be suspended for time during
which:

1. The local treasurer is legally prevented from collecting the tax;

2. The property owner or the person having legal interest therein may request for a reinvestigation and execute a waiver in writing before
the period within which to collect expires; and

3. The property owner or the person having legal interest therein is out of the country or otherwise cannot be located.

26
Section 270, Ibid.

8
 Chapter II
Business Taxes

Kinds of Business Taxes that Municipalities and Cities May Impose

Municipalities and cities may impose and collect any of the following business taxes. The rate of taxes that may be imposed and collected
by a city may exceed the maximum rates allowed for the municipality by not more than 50%.

A. On Manufacturers27, Assemblers, Repackers, Processors, Brewers, Distillers, Rectifiers and Compounders of Liquors, Distilled
Spirits, Wines of Whatever Kind or Nature: 28

Gross Sales/Receipts29 Municipality City

For the Preceding Calendar Year Maximum Amount of Tax/Annum (PhP)
(PhP)
Less than 10,000 165.00 247.50

10,000 or more but less than 15,000 220.00 330.00

15,000 or more but less than 20,000 302.00 453.00

20,000 or more but less than 30,000 440.00 660.00

30,000 or more but less than 40,000 660.00 990.00

40,000 or more but less than 50,000 825.00 1,237.50

50,000 or more but less than 75,000 1,320.00 1,980.00

75,000 or more but less than 1,650.00 2,475.00

100,000

100,00 or more but less than 2,200.00 3,300.00

150,000

150,000 or more but less than 2,750.00 4,125.00

200,000

200,000 or more but less than 3,850.00 5,775.00

300,000

300,000 or more but less than 5,500.00 8,250.00

500,000

500,000 or more but less than 8,000.00 12,000.00

750,000

750,000 or more but less than 10,000.00 15,000.00

1,000,000

1,000,000 or more but less than 13,750.00 20,625.00

2,000,000

2,000,000 or more but less than 16,500.00 24,750.00

3,000,000

3,000,000 or more but less than 19,800.00 29,700.00

4,000,000

27
Includes every person who, by physical or chemical process, alters the exterior texture or form or inner substance of any raw material or manufactured or partially
manufactured product in such manner as to prepare it for special use or uses to which it could not have been put in its original condition, or who by any such process alters
the quality of any such raw material or manufactured or partially manufactured products so as to reduce it to marketable shape or prepare it for any of the use of industry, or
who by any such process combines any such raw material or manufactured or partially manufactured products with other materials or products in their original condition
could not have been put, and who in addition alters such raw material or manufactured or partially manufactured products, or combines the same to produce such finished
products for the purpose of their sale or distribution to others and not for his own use or consumption.
28
Section 143(a), LGC.
29
Include the total amount of money or its equivalent representing the contract price, compensation or service fee, including the amount charged or materials supplied
with the services and deposits or advance payments actually or constructively received during the taxable quarter for the services performed or to be performed for another
person excluding discounts if determinable at the time of sales, sales return, excise tax, and valued-added tax (VAT).

9
 Gross Sales/Receipts29 Municipality City
For the Preceding Calendar Year Maximum Amount of Tax/Annum (PhP)
(PhP)
4,000,000 or more but less than 23,100.00 34,650.00
5,000,000

5,000,000 or more but less than 24,375.00 36,562.50

6,500,000

6,500,000 or more At a rate not At a rate not

exceeding 37 % exceeding 56%
of 1% of 1%

B. On Wholesalers30, Distributors, or Dealers31 in Any Article of Commerce of Whatever Kind or Nature: 32

Gross Sales/Receipts For Municipality City

the Preceding Calendar Year (PhP) Maximum Amount of Tax/Annum
(PhP)
Less than 1,000.00 18.00 27.00

1,000 or more but less than 2,000 33.00 49.50

2,000 or more but less than 3,000 50.00 75.00

3,000 or more but less than 4,000 72.00 108.00

4,000 or more but less than 5,000 100.00 150.00

5,000 or more but less than 6,000 121.00 181.50

6,000 or more but less than 7,000 143.00 214.50

7,000 or more but less than 8,000 165.00 247.50

8,000 or more but less than 10,000 187.00 280.50

10,000 or more but less than 15,000 220.00 330.00

15,000 or more but less than 20,000 275.00 412.50

20,000 or more but less than 30,000 330.00 495.00

30,000 or more but less than 40,000 440.00 660.00

40,000 or more but less than 50,000 660.00 990.00

50,000 or more but less than 75,000 990.00 1,485.00

75,000 or more but less than 100,000 1,320.00 1,980.00

100,000 or more but less than 150,000 1,870.00 2,805.00

150,000 or more but less than 300,000 3,300.00 4,950.00

300,000 or more but less than 500,000 4,400.00 6,600.00

500,000 or more but less than 750,000 6,600.00 9,900.00

750,000 or more but less than 1,000,000 8,800.00 13,200.00

1,000,000 or more but less than 10,000.00 15,000.00

2,000,000

2,000,000 or more At a rate not At a rate not

exceeding 50% of exceeding 75%
1% of 1%

30
A person who buys or imports the commodities for resale to persons other than the end user regardless of the quantity of the transaction.
31
A person whose business is to buy and sell merchandise, goods, chattels as a merchant; stands immediately between the producer or manufacturer and the
consumer and depends for his profit upon the labor he bestows upon his commodities but upon the skill and foresight with which he watches the market.
32
Section 143(b), LGC.

10
 C. On Exporters and Manufacturers, Millers, Producers, Wholesalers, Distributors, Dealers or Retailers of Essential Commodities: 33

Particular Municipality City

Maximum Amount of Tax/Annum
(PhP)
Rice and corn Not more than of Not more than of
- Wheat or cassava flour, meat, dairy products, the rates prescribed the rates prescribed
locally manufactured, processed or preserved for manufacturers, for manufacturers,
food, sugar, salt and other agricultural wholesalers and wholesalers and
marine, and fresh water products, whether in retailers of other retailers of other
their original state or not products. products.
- Cooking oil and cooking gas
- Laundry soap, detergents and medicine
- Agricultural implements, equipment and
post-harvest facilities, fertilizers, pesticides,
insecticides, herbicides and other farm inputs
- Poultry feeds and other animal feed
- School supplies
- Cement

D. On Contractors34 and Other Independent Contractors 35:

Gross Sales/Receipts Municipality City
For the Preceding Calendar Year Maximum Amount of Tax/Annum
(PhP) (PhP)
Less than 5,000 27.50 41.25

5,000 or more but less than 10,000 61.60 92.40

10,000 or more but less than 15,000 104.50 156.75

15,000 or more but less than 20,000 165.00 247.50

20,000 or more but less than 30,000 275.00 412.50

30,000 or more but less than 40,000 385.00 577.50

40,000 or more but less than 50,000 550.00 825.00

50,000 or more but less than 75,000 880.00 1,320.00

75,000 or more but less than 1,320.00 1,980.00

100,000

100,000 or more but less than 1,980.00 2,970.00

150,000

150,000 or more but less than 2,640.00 3,960.00

200,000

200,000 or more but less than 3,630.00 5.445.00

250,000

250,000 or more but less than 4,620.00 6.930.00

300,000

300,000 or more but less than 6,160.00 9.240.00

400,000

500,000 or more but less than 9,250.00 13,875.00

750,000

750,000 or more but less than 10,250.00 15,375.00

33
Section 143(d), Ibid.
34
Includes persons, natural or juridical, not subject to professional tax under Section139 of the LGC, whose activity consists essentially of the sale of all kinds of
services for the exercise or use of the physical or mental faculties of such contractor or his employees.
35
Section 143(e), LGC.

11
 Gross Sales/Receipts Municipality City
For the Preceding Calendar Year Maximum Amount of Tax/Annum
(PhP) (PhP)
1,000,000

1,000,000 or more but less than 11,500.00 17,250.00

2,000,000

2,000,000 or more At a rate not At a rate not

exceeding 50% of exceeding 75% of
1% 1%

E. On Retailers: 36

Retailer Municipality City

Gross receipts of PhP 400,000 or less 2% 3%

Gross receipts over PhP 400,000 1% 1.5%

F. On Banks and Other Financial Institutions:37

Municipality City
gross receipts of the preceding Not exceeding Not exceeding
calendar year derived from interest, 50% of 1% of 75% of 1% of
commissions and discounts from gross receipts gross receipts
lending activities, income from
financial leasing, dividends, rentals
on property and profit from exchange
or sale of property, insurance
premium

G. On Other Businesses:38
Municipality City
If business is subject to excise tax, VAT Rate shall not Rate shall not
or percentage tax under the NIRC exceed 2% of exceed 3% of
the gross sales the gross sales
or receipts of the or receipts of
preceding the preceding
calendar year calendar year

H. On Peddlers:39
Gross Sales/Receipts Municipality City
For the Preceding Calendar Year Maximum Amount of Tax/Annum
(PhP)
Peddlers engaged in the sale of any At a rate not At a rate not
merchandise or article of commerce40 exceeding PhP exceeding PhP
50/ peddler 75/ peddler
annually annually

36
A purchaser that buys the commodity for his own consumption, irrespective of the quantity of the commodity sold; Section 143(d), LGC.
37
Section 143(f), LGC.
38
Section 143(h), Ibid.
39
Any person who, either for himself or on commission, travels from place to place and sells his goods or offers to sell and deliver the same. Whether a peddler is a
wholesale peddler or retail peddler of a particular commodity shall be determined from the definition of wholesale dealer or retail dealer as provided in the LGC.
40
Section 143(g), LGC

12
I. Situs of the Local Business Tax41
For the purpose of collection of the business taxes, situs of the local business tax is the place where transactions and sales take place
and are recorded. For this purpose, the gross receipts/sales are allocated among the business units that contribute to the total sales.
These include the principal office (PO); branch or sales office/s (B/SO); warehouse/s (WH); plantation (PL); factory/ies (F); experimental
farm/s (EF); project office/s (PrOs); port of loading (POL); and route sales (RS). Under the LGC, allocation of sales shall be as
follows:

BUSINESS BUSINES LGC SALES

CLUSTER/S S PROVISI ALLOCATION
UNIT/S ON
i. Manufacturers, Business Section All sales will be recorded in the
assemblers, maintains 150(a) B/SO making the sale or
repackers, brewers, a B/SO. transaction. The tax will
distillers, rectifiers accrue and be 100% payable to
and compounders the city or municipality where
of liquor, distilled the B/SO is located.
spirits and wines,
millers, producers, Business -do- In case there is no B/SO in the
exporters, does not city or municipality where the
wholesalers, have a sale or transaction is made, all
distributors, B/SO but sales/receipts will be recorded
dealers contractors, maintains in the PO and the taxes due
banks & other a PO. thereon will accrue and be
financial paid to the city or municipality
institutions, etc. where the PO is located.

2. Manufacturers, Business Section 30% of all sales recorded in the

assemblers, maintains 150(b) PO will be taxable by the city
contractors, a PO as or municipality where the PO is
producers, or well as located, and the remaining 70%
exporters F, PrO or will be taxable by the city/ies or
PL. municipality/ies where the F,
PrO, or PL is/are located.

LGUs where only EFs are

located will not be entitled to
the sales allocation provided in
the subsection.

The PL is Section In case the PL is located in

located 150(d) another place other than the
elsewhere. locality where the F is located,
the 70% mentioned above will
be divided as follows:
i. 60% to the city or
municipality where the F is
located; and
ii. 40% to the city or
municipality where the PL is
located.

There are Section The 70% sales allocation

two or 150(d) mentioned above will be
more Fs, prorated among the city/ies or
PrOs, or municipality/ies where said Fs,
Pls. PrOs, or PLs are located in
proportion to their respective
volumes of production during
the taxing period.

41
Section 150, Ibid.

13
 In addition to the above, the LGC Implementing Rules and Regulations (IRR) provide the following regulations on POL, EFs and sales
made by route trucks, vans, and other vehicles (RS), viz.:

BUSINESS BUSINESS IRR SALES

CLUSTERS UNIT/S PROVISI ALLOCATION
ON

1. Exporters Business Article City or municipality where a

maintains either 243(c) POL is located shall not be
a PO, B/SO, authorized to levy or collect
WH, F or PL business tax unless the exporter
in a locality maintains a PO, B/SO, or WH,
where there is F, PL in said city or
POL. municipality

2. Manufacturers, RS Article RS made in the locality where a

producers, 243(d)(1) manufacturer, producer,
wholesalers, retailers Business wholesaler, retailer, or dealer
or dealers
maintains a has a B/SO or WH will be
B/SO or WH. recorded therein. The tax will
be payable to the city or
municipality where the B/SO or
WH is located.

RS Article RS will be recorded in the

24(d)(2) B/SO or WH where the route
Business does trucks withdraw their products
not maintain for sale. The tax will accrue
a B/SO or WH to the city or municipality
where the B/SO or WH is
located.

14
 Chapter III

Other Taxes Imposed by Provinces and Cities

A. Tax on Business of Printing and Publication42

1. Taxpayer
The tax is imposed on persons engaged in the printing and/or publication of books, cards, posters, leaflets, handbills, certificates, receipts,
pamphlets and other similar in nature.

2. Tax Base and Rate

In the case of a province, the tax should not exceed fifty percent (50%) of one percent (1%) of the gross annual receipts for the preceding
calendar year. For newly started business, the tax should not exceed one-twentieth (1/20) of one percent (1%) of the capital investment.

In the case of a city or a municipality within MMA, the tax should not exceed seventy-five percent (75%) of one percent (1%) of the gross
annual receipts for the preceding calendar year. For newly started businesses, the tax shall not exceed three-fortieth (3/40) of one percent
(1%) of the capital investment.

3. Exemption
The receipts from the printing and/or publishing of books or other reading materials prescribed by the Department of Education (DepEd) as
school texts or references shall be exempt from the tax.

4. Time and Place of Payment

The tax shall be paid within the first twenty (20) days of January or of each subsequent quarter, as the case may be, to the province or city
where the business of printing and publication is located.
B. Franchise Tax

1. Taxpayer
The tax is imposed on persons engaged in businesses enjoying a franchise. 43

2. Tax Base and Rate

In the case of a province, the tax should not exceed fifty percent (50%) of one percent (1%) of the gross annual receipts for the
preceding year. For newly started business, the tax should not exceed one-twentieth (1/20) of the capital investment.

In the case of a city or municipality within MMA, the tax should not exceed seventy-five percent (75%) of one percent (1%) of the gross
annual receipts for the preceding calendar year. For newly started business, the tax should not exceed three-fortieth (3/40) of one percent
(1%) of the capital investment.

3. Time and Place of Payment

The tax shall be paid within the first twenty (20) days of January or of each subsequent quarter, as the case may be, the province or city
where the business enjoying a franchise is located.

4. Exclusions

(i) Franchise tax is not applicable to businesses enjoying franchise operating within the territorial jurisdiction of any city located
within the province.

42
Section 136, Ibid.
43
A franchise is a right or privilege, affected with public interest which is conferred upon private persons or corporations, under such terms and conditions as the
government and its political subdivisions may impose in the interest of public welfare, security and safety; Section 137, LGC.

15
 (ii) The term business enjoying franchise shall not include holders of certificates of public convenience for the operation of public
utility vehicles for reason that such certificates are not considered as franchise.

C. Tax on Sand, Gravel and Other Quarry Resources44

1. Taxpayer
The tax is imposed on persons engaged in quarrying of sand, gravel and other quarry resources. It is based on the fair market value of
quarry material.

2. Tax Base and Rate

The tax should not exceed ten percent (10%) of the fair market value per cubic meter of ordinary stones, sand, gravel, earth and other
quarry resources, as defined under the National Internal Revenue Code (NIRC), as amended,45 extracted from public lands or from the
beds of seas, lakes, rivers, streams, creeks, and other public waters within its territorial jurisdiction.

3. Permit to Extract Quarry Resources

The permit to extract sand, gravel and other quarry resources shall be issued exclusively by the Provincial Governor.

4. Distribution of Proceeds

30% - Province
30% - Component City/Municipality where the sand, gravel and other quarry resources are extracted
40% - Barangays where the sand gravel and other quarry resources are extracted

5. Time and Place of Payment

The tax levied shall be due and payable upon removable of the sand, gravel and other quarry resources from the locality where mined.

D. Professional Tax46

1. Taxpayer
The tax is issued on persons engaged in the exercise or practice of professions requiring government examination such as lawyers,
engineers, accountants, etc. or professionals who passed the bar examinations, or any board, or other examinations conducted by the
Professional Regulatory Commission (PRC).

2. Tax Rate
The annual professional tax shall not exceed three hundred pesos (PhP 300).

3. Exemption
Professionals exclusively employed by the government.

4. Time and Place of Payment

The tax shall be paid annually on or before the thirty-first (31) of January to the province or city where the profession is being practiced or
where the principal office is located in case the profession is practiced in several places.

5. Administrative Provisions

(i) Every person who has paid the corresponding professional tax shall be entitled to practice his profession in any part of the
Philippines without being subjected to any other national or local tax, license, or fee for the practice of such profession.

44
Section 138, LGC.
45
Section 151 (B) (4) of the NIRC, as amended, defines quarry resources as any common stone or other common mineral substances as the Director of Bureau of
Mines and Geo-Sciences may declare to be quarry resources such as, but not restricted to, marl, marble, granite, volcanic cinders, basal, tuff and rock phosphate; Provided,
That they contain no metal or metals or other valuable minerals in economically workable quantities.
46
Section 139, Ibid.

16
(ii) Any individual or corporation employing a person subject to professional tax shall require payment by that person of the tax of his
profession before employment and annually thereafter.

(iii) Any person subject to the professional tax shall write in deeds, receipts, prescriptions, reports, books of account, plans and
design, surveys and maps, as the case may be, the number of the official receipts issued to him.

(iv) For the purpose of collecting the tax, the Provincial Treasurer or his duly authorized representative shall require from such professionals
their current annual registration cards issued by competent authority before accepting payment of their professional tax for the current year.
The PRC shall likewise require professionals presentation of proof of payment before registration of professionals or renewal of their licenses.

E. Amusement Tax47

1. Taxpayer
The amusement tax is levied on proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other
places of amusement.

2. Tax Base and Rate

The tax shall not be more than 10% of the gross receipts from admission fees.

3. Manner of Computing the Tax

The tax shall first be deducted and withheld by their proprietors, lessees, or operators and paid to the Provincial Treasurer or City Treasurer,
as the case may be, before the gross receipts are divided between the proprietors, lessees, or operators and the distributors.

4. Exemptions
The amusement tax shall not apply to the holding of operas, concerts, dramas, recitals, painting and art exhibitions, flower shows, musical
programs, literary and oratorical presentations, except pop, rock or similar concerts, subject to the guidelines to be issued by the DOF.

5. Sharing of Proceeds of the Tax

The proceeds from the amusement tax shall be shared equally by the province and municipality where the amusement places are located.

In the case of a city, the entire proceeds (100%) accrue to the city.

6. Time and Place of Payment

The tax shall be paid within the first twenty (20) days of January or of each subsequent quarter, as the case may be, to the province or city
where the place of amusement is located.

F. Annual Fixed Tax for Every Delivery Truck or Van of Manufacturers or Producers, Wholesalers of, Dealers, or Retailers in,
Certain Products48

1. Taxpayer and Tax Base

The tax is imposed on manufacturers, producers, wholesalers, dealers or retailers in the delivery, distribution of distilled spirits, fermented
liquors, soft drinks, cigars, and cigarettes and other products as may be determined by the Sangguniang Panlalawigan/Panglunsod for every
truck, van or any vehicle used by the former.
2. Rate of Levy
The tax shall not exceed five hundred pesos (PhP 500.00) for the province and not to exceed seven hundred fifty pesos (PhP750.00) per
truck or van for the city.

47
Section 140, Ibid, as amended by RA 9640 (Approved 21 May 2009).
48
Section 141, LGC.

17
3. Time and Place of Payment
The tax shall be paid within the first twenty (20) days of January or of each subsequent quarter, as the case may be, to the province or city
where goods are transported by delivery trucks or vans. Owner of the truck is liable to pay said tax to each province or city if the said truck
or van is used to transport goods to several provinces or cities.

18
 Chapter IV
Common Revenue-Raising Powers

A. Service Fees and Charges49

LGUs may impose and collect such reasonable fees and charges for services rendered.

B. Public Utility Charges50

LGUs may also impose for the operation of public utilities owned, operated and maintained by LGUs within their respective
jurisdiction

C. Toll Fees and Charges51

Toll fees and charges may be imposed for the use of any public road, pier or wharf, waterway, bridge,
ferry or telecommunication system funded and constructed by the LGU concerned.

No such toll or charges shall be collected from officers and enlisted men of the Armed Forces of the Philippines (AFP) and
members of the Philippine National Police (PNP) on mission, post office personnel delivering mail, physically-handicapped, and disabled
citizens who ate sixty-five (65) years or older.

49
Section153, Ibid.
50
Section 154, Ibid .
51
Section 155, Ibid.
 Chapter V
Community Tax52

Cities or municipalities may levy the community tax.

A. Tax Subject

1. Individuals Liable to Community Tax

Every individual eighteen (18) years of age or over who has been regularly employed on a wage salary basis for at least thirty (30)
consecutive working days during any calendar year, or who is engaged in business or occupation, or who owns real property with an
aggregate assessed value of one thousand pesos (PhP 1,000.00) or more, or who is required by law to file an income tax return shall pay
community tax.

2. Juridical Persons Liable to Community Tax

Every corporation, whether domestic or resident foreign, engaged in or doing business in the Philippines shall pay a community tax.

B. Tax Base and Rate

1. Individuals
Every individual shall pay an annual community tax of five pesos (PhP 5.00) and an annual additional tax of one peso (PhP 1.00)
for every one thousand pesos (PhP 1,000.00) of income regardless of whether from business, exercise of profession or from property which in
no case shall exceed five thousand pesos (PhP 5,000.00).

2. Corporations
Corporations, whether domestic or resident foreign, shall pay an annual community tax of five hundred pesos (PhP500.00) and an
additional tax that shall not exceed ten thousand pesos (PhP 10,000.00) in accordance with the following schedule:

a. for every PhP5,000 worth of real property in the Philippines owned during the preceding year based on the valuation used for the real
property tax under existing laws, found in the assessment rolls of the city or municipality where the real property is situated two pesos (PhP
2.00)

b. for every PhP 5,000 worth for gross receipts/earnings derived from business during the preceding year - PhP 2.00

3. Exemptions53

a. Diplomatic and consular representatives;

b. Transient visitors when their stay in the Philippines does not exceed three (3) months.

4. Time and Place of Payment

The tax shall accrue on the first (1st) day of Janaury annually which shall be paid not later than the last day of February and paid to the
place of residence of the individual, or in the place where the principal office of the juridical entity is located.

6. Community Tax Certificate

A community tax certificate shall be issued to every person or corporation upon payment of the community tax. This may also be
issued to any person or corporation not subject to the community tax upon payment of one peso (PhP 1.00).

52
Section 156, LGC; and Article 251 of the 1991 Internal Revenue Regulations (IRR).
53
Section 240, LGC.

20
 Chapter VI
Barangay Impositions

A. Tax on Retailers

Tax on stores or retailers with fixed business establishments with annual gross sales or receipts of PhP 50,000.00 or less in the case of cities;
and PhP 30,000.00 or less, in the case of municipalities, at a rate not exceeding 1% of gross sales or receipts.54

B. Service Fees and Charges

Reasonable fees and charges for services rendered in connection with regulation or the use of barangay-owned properties or service
facilities at rates to be prescribed by the Sangguniang Barangay. 55

C. Fees for Issuance of Barangay Clearance

Any business located or conducted within the territorial jurisdiction of the Barangay before the city or municipality may issue a license or
permit to the said business. 56

D. Other Fees and Charges

1. On commercial breeding of fighting cocks, cockfights and cockpits;

2. On places of recreation which charge admission fees at rates prescribed by the Sangguniang Barangay; and
3. On billboards, 57 signboards, neon signs and outdoor advertisements at rates not less than the following:58

a. Billboards or signboards for advertisement of business, per square meter or fraction thereof :
Single-Faced - PhP 10.00
Double-Faced - PhP 20.00

b. Billboards or signs for professionals per square meter or fraction thereof - PhP 8.00

c. Billboards, signs or advertisement for business and professions painted on any buildings or structures or otherwise separated or detached
therefrom, per square meter thereof - PhP 9.00

d. Advertisement for business or professions by means of slides in movies payable by the advertisers - PhP 100.00

e. Advertisement by means of vehicles, balloons kites, etc.:

- Per day or fraction thereof - PhP 40.00
- Per week or fraction thereof - 60.00
- Per month or fraction thereof - 80.00

f. Privileged panels shall be subject to of the rates herein prescribed.

54
Section 152(a), Ibid.
55
Section 152(b), Ibid.
56
Section 152(c), Ibid.
57
For the use of electric or neon lights in billboard under items (a) to (b) above, the amount of PhP 10.00 per square meter or fraction thereof shall be imposed in
addition to the above prescribed rates.
58
Article 240(d)(4), Rules and Regulations Implementing the LGC.

21
 Chapter VII
Tax Period and Manner of Payment59

1. The tax period of all local taxes, fees and charges may be paid in quarterly installments.60

2. Local taxes, fees and charges shall accrue on the first (1st) day of January of each year. However, new taxes and charges, or changes in
the rates thereof, shall accrue on the 1st day of the quarter next following the effectivity of the ordinance imposing such new levies or rates.61

3. Local taxes, fees and charges are paid within the first twenty (20) days of January or of each subsequent quarter as the case may be.
An extension of the grace period for payment of taxes without penalties or surcharges is granted for a period not exceeding 6 months .62

4. The Sanggunian may impose a surcharge not exceeding 25% of the amount of taxes, fees or charges not paid on time and an interest
at the rate not exceeding 2% per month of the unpaid taxes, fees or charges including surcharges, until such amount is fully paid but in no
case shall the total interest on the unpaid amount or portion thereof exceed 36 months.63

5. Local taxes, fees, charges and other revenues constitute a lien. The local government has a right to seize or hold back any property used
for business, desist practice of profession or exercise of privilege with respect to which the lien is imposed. This may only be extinguished
upon full payment of the delinquent local taxes, fees and charges including related surcharges and interest.64

6. The following civil remedies may be availed by the LGU concerned on the collection of any delinquent local tax, fee, charge or other
revenue:65

a. Administrative action thru distraint of goods, chattels, or effects, and other personal property of whatever character, and by
levy upon real property and interest in or rights to real property; and

b. Judicial action.

59
Either of these remedies or all may be applied concurrently or simultaneously at the discretion of the LGU concerned.
60
Section 165, LGC.
61
Section 166, Ibid.
62
Section 167, Ibid.
63
Section 168, Ibid.
64
Section 173, Ibid.
65
Section 256, Ibid.

22
 Chapter VIII
Related Provisions

A. Taxpayers Remedies

Periods of Assessment and Collection66

a. Local taxes, fees and charges shall be assessed within five (5) years from the date they become due. No action for the
collection of such taxes, fees or charges shall be instituted after the expiration of such period.

b. In case of fraud or intent to evade the payment of taxes, fees or charges, the same may be assessed within ten (10) years
from discovery of the fraud or intent to evade payment.

c. Local taxes, fees, or charges may be collected within five (5 years from the date of assessment by administrative or
judicial action. No such action shall be instituted after the expiration of said period.

B. Power of LGUs to Levy Other Taxes, Fee and Charges67

LGUs may exercise the power to levy taxes, fees and charges on any base or subject not otherwise specifically enumerated under the LGC,
the NIRC, or other applicable laws. However, such taxes, fees or charges shall not be unjust, excessive, oppressive, confiscatory or contrary
to declared national policy.

All taxes, fees and charges levied by the LGUs shall be in accordance with a duly enacted ordinance. Such ordinances shall not be enacted
by the Local Sanggunian without any prior public hearing conducted for the purpose.

C. Authority of LGUs to Adjust Rates68

LGUs shall have the authority to adjust the tax rates not oftener than once every five (5) years, but in no case shall such adjustment exceed
the ten percent (10%) of the rates fixed under the LGC.

66
Section 194, Ibid.
67
Section 186, Ibid.
68
Section 191, Ibid.

23