Local Government Taxation

in the Philippines
• Local Government Taxation in the
Philippines is based on Republic
Act 7160, otherwise known as
Local Government Code of 1991
which was signed into law on 10
October 1991 and took effect on 1
January 1992.

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 Power to Create Sources of
Revenue
(Sec. 129)
• Each local government unit (LGU) has the
power to create its own sources of revenue
and to levy taxes, fees, and charges

• The grant of power to create sources of

revenue is consistent with the basic policy
of local autonomy

• The taxes, fees and charges shall accrue

exclusively to the LGUs

Sec. 133 - Common Limitations on the

Taxing Powers of Local Government
Units
a. Income tax, except when levied on banks
and other financial institutions;
b. Documentary stamp tax;
c. Taxes on estates, inheritance, gifts,
legacies and other acquisitions mortis
causa, except as otherwise provided herein;
d. Customs duties, registration fees of
vessel and wharfage on wharves, tonnage
dues , and all other kinds of customs fees,
charges and dues except wharfage on
wharves constructed and maintained by the
local government unit concerned;

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e. Taxes, fees and charges and other
impositions upon goods carried into or
out of, or passing through, the
territorial jurisdictions of local
government units in the guise of
charges for wharfage, tools for
bridges or otherwise, or other taxes,
fees and charges in any form
whatsoever upon such goods or
merchandise;
f. Taxes, fees and charges on
agricultural and aquatic products
when sold by marginal farmers or
fisherman.

g. Taxes on business enterprises

certified to by the Board of
Investments as pioneer or non-
pioneer for a period of six (6) and
four (4) years, respectively from the
date of registration.
h. Excise taxes on articles enumerated
under the National Internal Revenue
Code, as amended, and taxes, fees
or charges on petroleum product
i. Percentage or value-added tax (VAT)
on sales, barters or exchanges or
similar transactions on goods or
services except as otherwise
provided herein;

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j. Taxes on the gross receipts of
transportation of passengers of freight by
hire and common carriers by air, land or
water, except as provided in this code.
k. Taxes on premiums paid by way of
reinsurance or retrocession
l. Taxes , fees and charges for the
registration of motor vehicles and for the
issuance of all kinds of licenses or
permits for the driving thereof, except
tricycles;
m. Taxes, fees and other charges on
Philippine products actually exported,
except as otherwise provided herein;

n. Taxes, fees and charges, on

Countryside and Barangay Business
Enterprises and cooperative duly
registered under R.A. No. 6810 and
Republic Act Numbered Sixty-nine
hundred thirty eight (R.A. No. 6938)
otherwise known as the “cooperative
code of the Philippines” respectively;
and
o. Taxes, fees or charges of any kinds
on the National Government, its
agencies and instrumentalities, and
Local Government Units.

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1.) GENERAL FUND – USED TO ACCOUNT FOR
SUCH MONIES AND RESOURCES AS MAY BE
RECEIVED BY AND DISBURSED FROM THE LOCAL
TREASURY.
2.) SPECIAL EDUCATION FUND – SHALL CONSIST
OF THE RESPECTIVE SHARES OF PROVINCES,
CITIES , MUNICIPALITIES, AND BARANGAYS IN
THE PROCEEDS OF THE ADDITIONAL TAX ON
REAL PROPERTY.
3.) TRUST FUND – SHALL CONSIST OF PRIVATE
AND PUBLIC MONIES WHICH HAVE OFFICIALLY
COME INTO THE POSSESSION OF THE LGU OR OF
A LOCAL GOVERNMENT OFFICAIL AS TRUSTEE,
AGENT OR ADMINISTRATORR, WHICH HAVE BEEN
RECEIVED AS A GUARANTY FOR FULFILLMENT OF
SOME OBLIAGATION.

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 SOURCES OF INCOME FOR
LOCAL GOVERNMENT UNITS
I. LOCAL SOURCES
a) Real Property Taxes
b) Business Taxes
c) Non-tax Revenues
II. EXTERNAL SOURCES
a) Internal Revenue Allotment
b) National Aids
c) National Wealth
III. BORROWINGS

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 REAL PROPERTY TAX
The province or city or municipality within the
Metropolitan Manila area shall fix a uniform
rate of basic real property tax.

A. Province - at rate not exceeding 1% of the

assessed value of the real property.
Province - 35%
Municipality - 40%
Barangay - 25%
B. City or Municipality within Metropolitan
Manila Area - at rate not exceeding 2% of
the assessed value of real property.
City - 70%
Barangay - 30%

Formula in Computing
Real Property Tax
FMV x AL = AV
AV x Rate = RPT
Assessment level LGC Q.C.
15%
Where : Residential - 20%
Commercial - 50% 40%
FMV = Fair Market 40%
Industrial - 50%
Value
Machinery - 80%
AL = Assessment Level Commercial - 70%

AV = Assessed Value Industrial - 50%

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 REAL PROPERTY TAX
Special Levy on Real Property for Special Educational Fund
A. province or city or a municipality within the Metropolitan
Manila area may levy and collect an annual tax of 1% on the
assessed value of real property in addition to the basic real
property tax.
Additional ad Valorem Tax on Idle Lands
B. Manila area may levy an annual tax on idle lands at the rate
not exceeding 5% of the assessed value of the property in
addition to the basic real property tax.
Real Property for Assessment Purpose
Classes Types
1) Residential 1. Land
2) Agricultural 2. Building
3) Commercial 3. Machineries
4) Industrial
5) Mineral
6) Timberland

Local Business Taxes

• Revenues
Taxes - enforced contribution
Kinds:
1. Property taxes
2. Business and other taxes

• Receipts
Fees – imposed on the exercise of
regulatory powers
Charges – cost recovery impositions
for services delivered or use of
facilities

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 BUSINESS TAXES
TAXING POWERS OF LOCAL GOVERNMENT UNITS
PROVINCES - They may collect taxes, fees and charges
on:
1) Tax on Transfer of Real Property Ownership - at rate
not more than 50% of 1% of total consideration
2) Franchise Tax - at rate not exceeding 50% of 1 % of
the gross receipts for the preceding calendar year
3) Tax on Sand, Gravel and Other Resources - at rate
not more than 10% of fair market value
4) Tax on Business of Printing and Publication -at rate
not exceeding 50% of 1%
5) Professional Tax - at rate not more than
P 300.00 annually
6) Amusement Tax - at rate not more than 30% of gross
receipts from admission fees
7) Annual fixed Tax for every Delivery Truck, or Van of
Manufacturers or Producers, Wholesalers of, Dealers,
or Retailers in, Certain Products - at rate not
exceeding P 500.00 annually.

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 TAXING POWERS OF LOCAL
GOVERNMENT UNITS
MUNICIPALITIES - They may collect taxes, fees and
charges not otherwise levied by provinces.
1.) Manufacturer - at rate not exceeding 37 1/2 %
of 1% of gross sales or receipts for the
preceding calendar year.
2.) Wholesalers - at rate not exceeding 50% of 1 %
of gross sales or receipts for the preceding
calendar year.
3.) On Exporters, Manufacturers, Wholesalers or
Retailers of essential commodities - at rate not
exceeding 1/2 of the rate prescribed under
letters A, B, and D.
4.) Retailers -at rate with gross sales or receipts
for the preceding calendar year or
P 400,000 or less 2% per annum
More than P 400,000 1% per annum

5.) Contractors – at rate not exceeding 50%

of 1% on the gross sales or receipts for
the preceding calendar year.
6.) Banks and other financial Institution –
at rate not exceeding 50% of 1% on the
gross receipts of the preceding calendar
year derived from interest, commissions
and discounts from lending activities.
7.) Peddlers – at rate not exceeding P 50.00
annually.
8.) On any business, not otherwise
specified – at rate not exceeding 2% of
gross sales or receipts of the preceding
calendar year.

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 TAXING POWERS OF LOCAL
GOVERNMENT UNITS
CITIES - They may levy taxes, fees and charges which the
province or municipalities may impose and may exceed the
maximum rates allowed for provinces or municipalities by not
more than 50% except the rates for professional and
amusement taxes.
BARANGAY - They may levy taxes, fees and charges which shall
exclusively accrue to them.
1) Taxes - on stores or retailers with gross sales or
receipts of the preceding calendar year of P 50,000 or less
in the case of cities and P 30,000 or less in the case of
municipalities.
2) Service Fees and Charges - they may collect reasonable
fees or charges for services rendered.
3) Barangay Clearance - no city or municipality may issue
any license or permit unless a clearance is first obtained
from the barangay at reasonable rate.
4) Other Fees and Charges - reasonable fees and charges.

•BARANGAY INCOME
SOURCES
I. Internal Revenue Allotment
(IRA)
II. Real Property Tax (RPT)
III. Barangay Taxing Power
IV. Community Tax

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 SHARES OF LOCAL GOVERNMENT UNITS IN
THE PROCEEDS OF NATIONAL TAXES
A. INTERNAL REVENUE ALLOTMENT - Local government
units shall have a share in the national internal revenue
taxes based on the collection of the third fiscal year
preceding the current fiscal year at 40% allocated in the
following manner.
1) Provinces 23%
2) Cities 23%
3) Municipalities 34%
4) Barangays 20%
The share of each province, city and municipality shall
be determined on the bases of the following formula.
a) Population 50%
b) Land Area 25%
c) Equal Sharing 25%

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B. SHARES OF LGU IN THE PROCEEDS
OF NATIONAL WEALTH - Local
government units shall have an
equitable share in the proceeds
derived from the utilization and
development areas at 40% of the
gross collection derived by the
national government from the
preceding year from mining taxes,
royalties, forestry and fishery charges
in addition to the internal revenue
allotment.

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 Tax on Transfer of Real
Property
• Tax subject: sale, donation, barter or any
mode of transfer of ownership or title of real
property
• Tax rate: not to exceed

Tax Base Provinces Cities

Fair market value, 50% of 1% 75% of 1%
or total consideration
whichever is higher

Tax on Transfer of Real

Property
• payment must be made within 60 days
from date of execution of deed or from
date of owner’s death

• proceeds not shared

• exemption: disposition of real property

under CARP (Republic Act No. 6657)

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 Tax on Business of Printing
and/or Publication
• Tax subject: printing and/or publication of
books, cards, posters, leaflets, handbills,
certificates, receipts, pamphlets, and
printed materials of similar nature
• Tax rate: not to exceed
Tax Base Provinces Cities
Gross receipts 50% of 1% 75% of 1%

Capital investment
For start-ups 1/20 of 1% 3/40 of 1%

Tax on Business of Printing

and/or Publication
• Capital Investment
The capital which a person employs in any
undertaking, or which he contributes to the
capital of a partnership, corporation, or any
other judicial entity or association in a
particular taxing jurisdiction.

• proceeds not shared

• exemptions: receipts from printing and/or

publishing of books and reading materials
prescribed by DECS as text and references

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 Franchise Tax
• Franchise
Right or privilege, affected with public interest
conferred upon private person or corporation,
under government- imposed terms and conditions
in interest of public welfare, security and safety
• Tax rate: not to exceed
Tax Base Provinces Cities
Gross receipts 50% of 1% 75% of 1%

Capital investment
For start- ups 1/20 of 1% 3/40 of 1%

Franchise Tax

•proceed not shared

•exemption: holders of
certificates of public
convenience for
operation of public utility
vehicle

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 BLGF Opinion dated 06
February 2003
• The province should impose
the tax on business enjoying a
franchise within its territorial
jurisdiction, excluding the
territorial limits of any city
located therein.

FRANCHISE TAX

• Meralco, Globe, Smart,

Manila Water Maynilad
and PLDT are subject
to franchise tax on the
receipts derived within
the LGU

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 Tax on sand, gravel and other
quarry resources
• Tax subject: extraction of ordinary
stones, sand, gravel, earth. Etc. from
public lands or beds of public waters
within LGU
• Tax rate: not to exceed

Tax Base Provinces Cities

Fair market value
Of extract at site 10% 15%

Tax on sand, gravel and other

quarry resources
• proceeds shared (Sec. 10 of P.D. No. 426):

• Provinces
province 30%
component city/municipality 30%
barangay 40%
• Cities
highly urbanized city 60%
barangay 40%

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 Tax on Professionals
• Tax subject: persons engaged in the practice of
profession requiring government exams
• Tax rate:
Provinces- maximum of Php 300/ profession
Cities- maximum of Php 300/ profession
• Payment: on or before January 31 in the
province/city where practice is done, or principal
office is located

• proceeds not shared

• exemption: practice of profession exclusively as

government employee

BLGF Opinion dated 29

April 2003
• The municipality is authorized to
impose reasonable fees and
charges on professionals which
do not require govt. examination
in the exercise of their
profession. The imposition,
however, shall be denominated
as fee not tax.

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 Amusement Tax
• Tax subject: patrons of shows and
entertainment activities; collected
and remitted by proprietors, lessees
and operators
• Tax rate:
Provinces-not to exceed 30% of
paid admission fees.
Cities- not to exceed 30% of paid
admission fees
• “no admission fee, no tax”

Amusement Tax
• proceeds shared: 50-50 between
province and municipality

• exemptions: operas, concerts,

dramas, recitals, painting and art
exhibition, flower shows, musical
and literary presentations except
rock and similar concerts

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 Annual fixed tax on delivery
trucks and vans
• Tax subject: trucks, vans or any motor
vehicle used by manufacturers, producers,
wholesalers, dealers or retailers within LGU
territory
• Tax rate: maximum of
Province - Php 500/vehicle
City - Php 750/vehicle
• collected with other business taxes
. proceeds not shared
• potential source of avoiding payment of
other business taxes, when vehicle used as
sales outlet

Computation of
Business-related Taxes
• Exclusions to gross
sales/receipts

1. Discounts, at the time of

sales, if determinable
2. Sales return
3. Excise tax
4. Value-added tax

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 Computation of Business-
related Taxes
• Three-step process

Step 1. Classify the business

Step 2. Determine gross receipts
Step 3. Determine tax due
- locate tax due on tax
schedule then compute

• Tax due= tax base x tax rate +/-

penalty/discount

BLGF Opinion dated 05

August 2002
• Where Pepsi-Cola Products Phils. Inc.
(PCPPI) maintains sales offices and
warehouse in certain municipalities or
cities for purposes of selling to
retailers, wholesalers and distributors
the softdrinks products it
manufacture, such municipalities or
cities should classify PCPPI for
business tax purposes as a
manufacturer, not as a wholesaler,
distributor, dealer, or contractor.

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 BLGF Opinion dated 26
September 2002
• The tax on contractors is NOT
imposed on the project
itself but on the business of
constructing the project,
irrespective of whether those are
exempt from the real
property taxes.

BLGF Opinion dated 27

November 2002
• Bistro Americano (Q.C.)
Corporation as restaurant
operators and caterers shall
be subject to the business
tax pursuant to Section 143(h)
of the LGC (others).

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Sec. 193. Withdrawal of Tax
Exemption Privileges
• Unless otherwise provided in this Code, tax
exemptions or incentives granted to, or presently
enjoyed by all persons, whether natural or judicial,
including government- owned or controlled
corporations are hereby withdrawn upon the
effectivity of this Code except:
• 1. Local water districts
2. Cooperatives registered under R.A. No. 6938
3. Non- stock non - profit hospitals and educational
institutions
4. Business enterprises certified by BOI as pioneer
or non- pioneer
5. Business entity, association or cooperatives
registered under R.A. No. 6810
6. Printer and/or publisher of books and other
reading materials prescribed by DECS

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 Administrative Procedures
Requirements for Existing
Business
•Mayor’s Permit must be
renewed within January 1-20
of every year

•Renewal of existing business

permit is not automatic

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 Sec. 191. Authority of Local
Government Units to adjust
Rates of Taxes.
• Local government shall have the
authority to adjust the tax rates
as prescribed herein not oftener
than once every five (5) years, but
in no case shall such adjustment
exceed ten (10) percent of the
rates fixed under this code.

Sec. 196 Claim for

Refund of Tax Credit
- No case or proceeding shall be maintained
in any court for the recovery of any tax, fee,
or charge erroneously or illegally collected
until a written claim for refund or credit has
been filed with the local treasurer. No case
or proceeding shall be entertained in any
court after the expiration of two(2) years
from the date of the payment of such tax,
fee, or charge, or from the date the
taxpayer is entitled to a refund or credit.

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 ART. 242 - RELATED OR
COMBINED BUSINESS
(a) The conduct or operation of
two or more related
businesses provided in Article
232 of this Rule by any one
person, natural or juridical,
shall require the issuance of a
separate permit or license to
each business

(b) If a person conducts or

operates two (2) or more
related businesses which
are subject to the same
rate of imposition, the tax
shall be computed on the
basis of the combined total
gross sales or receipts of
the said two (2) or more
related businesses.

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(c) If, however, the businesses
operated by one person are
governed by separate tax
schedules or the rates of the
taxes are different, the
taxable gross sales or receipts
of each business shall be
reported independently and
the tax thereon shall be
computed on the basis of the
appropriate schedule.

SITUS OF THE TAX

• Taxable 100% where the sale is made or
effected 30% of all sales recorded in the
principal
• office shall be taxable by the city or
municipality where the principal office is
located.
• 70% of all sales recorded in the principal
office shall be taxable by the city or
municipality where the factory, project
office, plant or plantation is located.
• In cases where 2 or more factories, project
offices, plants or plantation located in
different localities, the 70% sales allocation
shall be prorated among the localities.

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 Assessment
• Assessment is the inherent function
of the local treasurer.
• Securing/applying business permit is
under the Office of the City Mayor.
• EDP for Billing functions.
• Acceptance of payment is again a
function of the Treasurer’s Office.

Community Tax
• Should be paid in the place of
residence of the individual or
in the place where the
principal office of the
juridical entity is located.
• Branches are not required to
secure community tax.

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 Manufacturers
• Manufacturers sales office
which distributes its product
should also be classified as
manufacturers and taxable as
such and not as
distributor/wholesaler/retailer.

Retailer
• Car dealers should not be
classified as wholesalers/dealers
simply because they are
commonly known as car dealers.

• They should be classified as

retailers since they sell directly
to end-user or customers.

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 Real Estate Dealers
• Real Estate
dealers/developers/lessors are subject
to the 70-30 allocation of sales.

• Principal office – 30% of gross sales.

• Project office or location of the real

estate is subject to 70% of gross
sales.

Non Profit, Non Stock

Corporation
• Only hospitals and educational institutions
are exempt from paying business tax.

• Income derived from non-members who use

or rent the facilities are subject to business
taxes.

• Required to pay regulatory fees and

charges.

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 Retirement of Business
• Should be retired on or before the
20th day of January.

• Should pay for the entire year

after January 20.

• Sales realized from January up to

the time of retirement should
likewise be paid.

Security Agency
• Security agency are subject
to business tax as
contractor and subject to
situs of tax at 70% - 30%

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 Educational Institutions
• Canteens and bookstore
operated by the school are
exempted from the payment of
business tax.

• Concessionaires operating
canteen and bookstores are
subject to business taxes.

Contractors
• Contractors doing business in an
LGU are subject to business tax at
70%.
• Main or Principal office are subject
to 30%.
• Sub-contractors are not subject to
contractors tax. Only main
contractors are liable to pay the tax.
Tantamount to double taxation if
collected from sub-contractors.
• Income derived from abroad are not
taxable.

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 Examination of
Books of Accounts
• Function of the Provincial, City,
Municipal or Barangay Treasurer or
their duly authorized representatives.

• Books of Accounts and records of

business establishments could only be
examined for a maximum period of 5
years.

Liquefied Petroleum
Products

LPG is not subject to local

tax. However, said LPG
business shall still be liable
to pay the Mayor’s permit
and other regulatory fees or
service charges.

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 RE-EXPORTATION
Re-exportation of finished
product should not be
classified as exporter or
local/domestic sale but
should be classified as
rendering service ”contractor”

FRANCHISE TAX ON ELECTRIC

COOPERATIVE
BLGF Ruling Dated May 12, 2006
Electric cooperative shall be subject to
or liable to the payment of franchise
tax imposed by the province or city.
Base on the Ordinance approved by
the province or city.
Before the EPIRA Law (1997-2001)
Gross receipts less:
NPC Basic Power Cost
Allowance for system loss
Reinvestment fund
Amortization Cost

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Upon the effectivity of the
EPIRA Law (2002)

Gross receipts less:

NPC Charges
TransCo charges
Reinvestment fund
Universal Charges

Remedies for Collection

of Taxes
• Civil Remedies
• Administrative Remedies – thru
distraint of goods or other personal
properties.
• Closure of business establishments
by the office of the mayor.
• Judicial Action
• Filing of Tax evasion case

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 VICTOR B. ENDRIGA, Ph.D.
Quezon City Treasurer

QUEZON CITY
• Former Capital of the Philippines
• Largest City in Metro Manila in terms
of population and land area with 2.17
Million residents occupying over
16,000 hectares of land area
• Was known as the most financially
distressed Local Government Unit in
Metro Manila and probably nationwide
in 2001

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THE FINANCIAL RECOVERY OF QUEZON
CITY
• Cash Balance in the General Fund of Quezon
City was negative P10.35 million when Mayor
Belmonte assumed office on July 1, 2001

• Inherited claims for payment amounting to P1.4

billion, including GSIS, Phil Health, BIR,
Meralco etc.

• Bank Loan of P1.25 billion left by previous

administration with the Land Bank of the
Philippines

1. Auction Sale of
real property
instead of Tax
Amnesty every
quarter.

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 PERIOD OF DELINQUENCY TO BE
INCLUDED IN THE AUCTION SALE

1. For residential – 5 years

2. For commercial and industrial
– 3 years
3. For machineries – 3 years
This is an internal rule
promulgated by the auction
committee

2.) Reassignment of
permanent employees to
avoid familiarization with
Taxpayer.
3.) Prepared at least 20
delinquency letters per day
per employee assigned in the
Real Estate Division.
4.) Computerization of
systems and processes.

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5.) Issued new Official Receipts
with security features to
identify and curb the
proliferation of fake receipts.
6.) Constructed the taxpayers
assessment and payment
lounges (free Coffee & Ice
Tea).
7.) Recognized the 10
outstanding Taxpayers for
Business and Real Property.

8.) Increased the discount given to Real

Property Taxpayers paying annually from
10% to 20%, and from 5% to 10% for
those paying promptly quarterly.

9.) Conducted Auction Sale of Government

Owned and Controlled Corp. such as
Heart Center, Lung Center, Kidney
Center and MWSS.

10.) Hired an independent and private

encoding company to encode all RPT
payment records and Tax Declarations.

11.) Automatically Generated and issued

Computerized Delinquency Letters
amounting to P10.7 Billion Pesos.

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12.) Filed anti-graft cases with the office of
the Ombudsman against employees issuing
fake RPT Receipts, that resulted to the
dismissal of 6 employees.

13.) Declared Tax Amnesty on Machinery and

Equipment from Oct. to Dec. 2002.

14.) Created a special Task Force on

Machinery composed of representatives
from the Treasury, Assessor’s and
Engineering Departments to conduct
physical inventories of all machinery and
equipment which failed to avail of the Tax
Amnesty.

15.) Posted 300 Billboards in

major thoroughfares informing the
date of the Auction Sale and the
increased discount from 10% to
20%, if RP Tax is paid annually.

16.) Allowed staggered payment of

Delinquent Real Property Taxes
upon payment of a minimum of
30% down and the balance
payable within 6 months.

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17.) Verified the total value of
machinery as appearing in the Tax
Declaration issued by the
Assessor’s Office and counter
checked this ,with that appearing
in the financial statements.
18.) Instruct the Building Official to
forward to the City Assessor the
building / occupancy permit,
stating the total value of the
construction cost, for issuance of
a new tax declaration.

19.) Instruct the City Engineer to

forward to the City Assessor all
application for mechanical
permit for issuance of a new tax
declaration on machineries.

20.) Implemented the Geographic

Information System (GIS) for
future tax mapping of Real
Property.

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Parcels with No Tax
Declaration Record

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Undeclared Buildings Map

44
 Misclassification of
Land Use

All Tax Payments records

Analysis
By pointing and clicking
to a parcel, payment
history can be displayed
and delinquent tax payers
can be easily identified.

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1.) Required taxpayers with gross
receipts of over P500,000.00 to
submit BIR stamped 2005
financial statements and
records of monthly payments
of VAT and NON-VAT for the
year 2006; for comparison
against declared gross
receipts for 2006 before
renewing their Mayor’s Permit
for 2007.

2.) Utilized the

presumptive income
level approach
(implementing a
schedule of minimum
gross) to make gross
tax declarations more
realistic and current.

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3.) Alignment of Business
Taxes with Metro Manila
Rates

4.) Consultation and

Dialogue with the
Business Sector
particularly QCCCI

5.) SEC / BIR gross-sales data versus

declared gross sales with LGU’s.

6.) Census and listing of tax payers.

7.) Adequate and competent staffing.

8.) Examinations of books of account

and pertinent records by the Treasurer
or his authorize representative.

9.) Revenue target setting

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10.) Required
contractors to pay
business tax prior to
the release of the
building, excavation
and occupancy
permits.

11.) Required dealers, sellers,

and developers of real
estate, such as land,
building, condominium units
and the like, especially
corporations and other
juridical entities, to present
their Mayor’s Permit and
proof of payment of Business
Taxes before processing the
Transfer Tax.

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12.) Instructed the City
Accountant to deduct
from the voucher the
amount owing to the
payment of Business
Tax for contractors and
suppliers doing
business with the City.

13.) Instructed the BPLO to

conduct a door to door, street by
street, inspection and verification
of all unlicensed establishments.

14.) Identified establishments

having decreased current
declared gross receipts compared
to previous years and examined
their Books of Accounts for
verification of actual sales.

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15.) Used (ink) color
coding in signing the
tax bills and stamp
pad with my picture
on it, and other
official documents
during renewal period.

16.) Employed the

raffle system in
the assignment of
Letters of Authority
to revenue
examiners.

50
17.) Grounded a number of
revenue examiners with
low collection outputs
every month.

18.) Rewarded top collector

revenue examiner with a
free trip to Hong Kong and
other incentives.

19.) Created a special team to

compare Treasury records of
Transfer Tax payments with
those found in the Land
Registration Authority.

(Transfer Tax Records in 2001

revealed that 58% of those
recorded in the LRA were fake
receipts and only 42% were
valid and legitimate.)

51
20.) Maintained a
photo gallery of all
permanent and casual
employees with
corresponding
assignments, for
easier identification.

21.) Required
advertising agency
to pay contractors
tax prior to the
release of the
billboard permit.

52
22.) Update local business
tax ordinances by 10%
once every 5 years.
23.) Adjust existing fees
and charges.
24.) Require payment of
community tax on all
transaction with LGU’s.

QUEZON CITY IS THE RICHEST

CITY NOT ONLY IN METRO
MANILA BUT IN THE ENTIRE
COUNTRY AS WELL, AS
AUTHENTICATED BY THE
COMMISSION ON AUDIT,
BEATING MAKATI AND MANILA
IN TERMS OF REVENUE
COLLECTION FOR THE YEAR
2002,2003,2004 AND 2005

53
 FMV along EDSA

• Caloocan P55,000
• Quezon City P 5,500
• Mandaluyong P12,000
• Makati P48,000
• Pasay P25,000

The highest FMV in Quezon City is only

P5,500

Report Collection for CY 2002

2001-2002
Nature of Collection %
2001 2002
Real Estate 722,437,380 847.964,965 17.38
Business Taxes 1,209,965,603 2,467,209,132 103.91

Fees and Charges 149,224,960 231,964,478 93.51

Transfer Tax 107,510,561 200,013,469 86.04
Amusement Tax 146,400,840 131,480,835 -10.19
LOCAL SOURCES 2,335,539,344 3,878,632,879 66.07
BIR Allotment 1,300,485,734 1,290,701,951 -0.75
MMDA Contribution 97,716,000 126,564,000 29.52
Other Income 47,929,204 106,091,335 121.35
GENERAL FUND 3,781,670,287 5,401,990,168 42.85
Barangay Share RPT 330,991,390.01 364,308,924 10.07
SEF 626,228,233 721,696,806 15.25
Other Trusts 39,564,876 65,517,016 65.59
GROSS COLLECTION 4,778,454,787 6,553,512,915 37.15

54
 Report of Collection for CY 2005
as of January to December 31, 2006
2005 2006 Increase %
(decrease)
Real Estate 1,017,808,956 1,337,428,919 319,619,963 31.40
Business Taxes 2,633,377,989 2,899,388,991 266,011,001 10.01
Other Regulatory/Misc Fees 265,051,332 352,074,538 87,023,205 32.83
Transfer Tax 237,212,000 235,725,565 (1,486,434) (0.63)
Amusement Tax 143,141,648 131,262,836 (11,878,812) (8.30)
Community Tax 59,941,629 66,833,390 6,891,761 11.50
Other Income 218,481,333 526,562,216 308,080,882 141.01

SUBTOTAL 4,575,014,890 5,549,276,458 974,261,568 21.30

IRA 1,325,076,782 1,295,641,743 (29,435,039) (2.22)
IRA Contribution to MMDA 213,845,000 252,528,000 38,683,000 19.09
GENERAL FUND 6,113,936,804 7,097,446,201 983,509,529 16.09
Special Education Fund 826,935,804 1,038,674,677 211,738,872 25.61
Bgy. Share 437,656,191 550,756,457 113,100,266 25.84
Total City Collection 7,378,528,668 8,686,877,336 1,308,348,668 17.73
Other Trusts 81,957,537 143,021,796 61,064,258 74.51
GROSS COLLECTION 7,460,486,205 8,829,899,133 1,369,412,927 18.36

GENERAL FUND
as of December 31, 2006
BUDGET 6,250,000,000

ACTUAL 7,097,446,201

SURPLUS 847,446,201

55
 Top 10 in terms of highest total income generated
for CY 2004 as compared to 2001
(NCR) CLASS RANK 2004 RANK 2001
CITY

QUEZON CITY S 1ST 6,496,282,210 3RD 4,276,721,410

MAKATI 1 2ND 6,247,252,757 1ST 5,122,321,279
MANILA S 3RD 6,029,451,082 2ND 4,422,171,694
PASIG 1 4TH 2,969,849,218 4TH 2,220,682,718
KALOOKAN 1 5TH 1,681,228,300 6TH 1,493,125,921
MANDALUYONG 1 6TH 1,601,355,056 7TH 1,165,955,784
PARANAQUE 1 7TH 1,590,065,300 5TH 1,533,439,002
MUNTINLUPA 1 8TH 1,250,547,925 8TH 1,087,802,228
PASAY 1 9TH 1,246,598,000 9TH 1,075,895,000
VALENZUELA 1 10TH 1,1,73,179,686 10TH 872,868,370
MUNICIPALITY
SAN JUAN 1 1ST 519,580,000 2ND 430,370,000
NAVOTAS 1 2ND 276,671,818 3RD 292,835,782
PATEROS 3 3RD 72,952,324 4TH 62,188,114

TRUST
FUNDS GEN. FUND S.E.F. FUND TOTALS

Funds
Available
Today 83,216,459 107,266,365 154,191,123 345,001,948

Time Deposits 1,423,966,330 431,777,055 431,925,255 2,287,668,641

Cash on Hand &

in Bank 1,512,560,010 539,043,420 586,444,378 2,638,047,810

56
 FINANCIAL PERFORMANCE OF LOCAL GOVERNMENT UNITS
COA REPORT / National Capital Region – CY 2002
Cities/Municipalities Internal Sources External Sources Grand Total
1. Quezon City 3,946,465.3 1,339,568.0 5,286,033.3
2. Makati 3,816,458.7 403,992.6 4,220,451.3
3. Manila City 3,116,507.8 1,047,027.1 4,163,534.9
4. Pasig City 1,677,114.8 388,438.6 2,065,553.3
5. Caloocan City 640,142.2 740,218.3 1,380,360.5
6. Mandaluyong City 778,135.5 280,363.8 1,058,499.3
7.) Paranaque City 708,046.2 345,447.7 1,053,493.8
8. Pasay City 639,536.0 306,163.3 945,699.3
9. La Pinas City 467,153.0 373,755.2 840,908.2
10. Muntinlupa City 533.984.0 304,334.4 838,318.3
11. Valenzuela City 434,465.2 375,762.2 810,227.3
12. Marikina City 382,179.0 318,950.7 701,129.7
13. Taguig 337,956.7 226,678.0 564,634.7
14. Malabon City 139,776.2 289,257.2 429,033.4
15. San Juan 314,598.4 66,611.7 381,210.9
16. Navotas 91,122.0 116,296.9 207,418.9
17. Pateros 23,734.1 37877.1 61,611.2

2004 INCOME STATEMENT

GENERAL FUND
INCOME QUEZON CITY MANILA MAKATI
Tax revenues 3,932,060,660 3,017,485,962 3,422,250,392
Real property tax 897,657,280 608,287,258 1,405,161,315
Business tax 2,753,350,830 2,234,148,853 1,826,109,950
Other tax 281,052,550 175,049,851 190,379,126
Non-Tax Revenues 390,022,310 593,099,926 337,607,540
Regulatory fees 213,071,460 178,841,429 214,303,596
Service/User charges 53,899,860 161,887,878 45,243,634
Economic Enterprise 20,302,230 154,474,482 37,601,206
Other receipts 102,748,770 96,871,990 40,459,102
Shares from national tax 1,472,766,930 1,100,610,001 629,435,809
collection/Grants/Aids

Loans and borrowings ------- -------- 108,866,054

Inter-Local Transfers ------- 830,345,778 -------
TOTAL INCOME 5,794,829,900 5,541,541,667 4,489,159,795

57
 STATEMENT OF INCOME AND EXPENDITURES
CY
- 2005
INCOME EXPENDITURES EXCESS/DEFICIT
1.Quezon City 7,376,391,780.00 4,769,022,210.00 2,580,389,570.00
2.Manila City 7,119,823,858.00 5,902,084,336.00 1,217,739,522.00
3.Makati City 6,320,342,864.75 4,416,865,605.91 1,903,477,258.84
4.Pasig City 2,969,849,218.46 2,897,677,927.86 72,171,290.60
5.Parañaque City 1,997,001,967.15 1,892,401,933.02 104,599,764.13
6.Kalookan City 1,681,228,300.25 1,456,825,963.54 224,402,336.71
7.Mandaluyong City 1,601,355,056.00 1,422,370,155.00 178,984,901.00
8.Muntinlupa City 1,364,082,104.90 1,329,592,287.06 34,489,817.84
9.Valenzuela City 1,173,179,685.75 942,242,676.82 230,937,008.93
10.Marikina City 1,123,019,340.00 778,312,420.00 344,706,920.00
11.Las Piñas City 1,098,864,570.00 1,011,286,870.00 87,577,700.00
12.Taguig 831,014,000.00 812,357,000.00 18,657,000.00
13.Malabon City 570,243,044.42 463,194,670.88 107,048,373.54
14.San Juan 519,580,000.00 459,200,000.00 60,380,000.00
15.Navotas 276,671,818.05 253,653,320.10 23,018,497.95
16.Pateros 83,297,713.42 79,738,124.59 3,559,588.83
TOTAL 37,352,537,051.15 29,852,591,500.78 7,499,945,550.37

PARTICULARS QUEZON CITY MANILA MAKATI

INCOME 7,376,391,780.00 7,119,823,858.00 6,320,342,864.75

LOCAL SOURCES 5,828,214,960.00 5,103,606,479.00 5,810,054,849.16
TAX REVENUE 5,240,530,690.00 4,438,344,332.00 5,264,943,985.16
Real Property 2,299,519,760.00 1,889,166,686.00 2,462,986,843.28
Business Taxes 2,635,229,130.00 2,351,070,156.00 2,513,988,823.49
Other Taxes 305,781,800.00 198,107,490.00 287,968,318.39
NON-TAXES REVENUE 587,684,270.00 665,262,147.00 545,110,864.00
Regulatory Fees 304,124,060.00 269,796,183.00 187,575,606.84
Service/User Chrages 122,166,900.00 166,311,490.00 66,601,993.32
Receipts from Eco. Ent. 30,658,620.00 185,458,341.00 105,744,778.21
Toll Fees 0.00 9,913.00 0.00
Other Receipts 130,734,690.00 43,686,220.00 185,188,485.63
SHARES FROM NATIONAL TAX
COLLECTIONS 1,548,176,820.00 1,156,140,434.00 431,979,800.00
EXTRAORDINARY
RECEIPTS/GRANTS/AIDS 0.00 500,000.00 26,608,118.85
LOANS AND BORROWINGS 0.00 0.00 51,700,096.74
INTER-LOCAL TRANSFER 0.00 859,576,945.00 0.00

58
 1999-2005 Estimate VS. Actual Comparative

6,000,000,000

6,122,034,764.55
5,820,000,000.00
5,707,509,556
5,600,000,000.00
5,286,033,298
5,000,000,000

5,304,608,683
5,175,000,000.00

5,200,000,000.00
4,700,000,000.00
4,000,000,000

4,072,000,000.00
3,870,000,000.00

3,788,687,846

3,641,861,948
3,286,396,701

3,000,000,000

2,000,000,000

1,000,000,000

-
Estimate
1999 2000 2001 2002 2003 2004 2005
Actual

Report of Collection as of Feb. 27, 2007

2006 2007 Increase (decrease) % surf (def)

Real Estate 274,682,517 284,534,710 9,852,192 3.59

Business Taxes 1,201,456,187 1,279,649,917 78,193,729 6.51
Other Reg./Misc Fees 61,844,723 152,218,191 90,473,467 146.29
Transfer Tax 31,631,495 39,779,550 8,148,054 25.76
Amusement Tax 22,340,412 13,099,296 (9,241,116) (41.37)
Community Tax 45,190,061 53,389,517 8,199,456 18.14
Other Income 42,060,602 102,179,426 60,118,823 142.93

Special Accounts 8,572,061 23,980,793 15,480,732 179.76

SUBTOTAL 1,687,778,062 1,948,931,403 261,153,341 15.47
IRA 88,485,716 133,847,738 45,362,022 51.26

IRA Contribution to MMDA 18,407,000 21,923,000 3,516,000 19.10

GENERAL FUND 1,794,670,778 2,104,702,141 310,031,363 17.28

Special Education Fund 230,823,737 239,292,657 8,468,920 3.67

Barangay Share 116,380,658 121,933,264 5,552,605 4.77

TOTAL City collection 2,141,875,175 2,465,928,063 324,052,888 15.13

Other Trusts 16,319,502 31,341,864 15,022,361 92.05
GROSS COLLECTION 2 158 194 678 2 497 269 928 339 075 250 15 71

59
 Cash Report
as of Feb. 27, 2007

TRUST
FUNDS GEN. FUND S.E.F. FUND TOTALS

Funds
Available
Today 432,716,682 174,710,097 446,251,976 1,053,678,955

Time
Deposits 5,086,775,946 230,654,885 184,794,997 5,502,225,829

Cash on
Hand & in
Bank 5,539,826,738 405,364,982 631,046,973 6,576,238,694

60
 OTHER TREASURY
FUNCTIONS:
1.GASOLINE CALIBRATION
2.INSPECTION OF WEIGHTS
AND MEASURES
3.BILLBOARDS

GASOLINE CALIBRATION
Increase penalty of defective gasoline
pumps:
1. 1st Offense - from P200 to P4,000
2. 2nd Offense - from P500 to P5,000
3. 3rd Offense - cancellation/revocation
of mayor’ permit to operate a business
* Calibration of gas pump from annually to
quarterly.
Note: The court may impose 3 months to 1
year imprisonment or both fine and
imprisonment at the discretion of court

61
CALIBRATING BUCKET

62
TEST WEIGHTS

63
 Ordinance 1508, S-2005

An Ordinance authorizing the

city treasurer to accept as an
alternative mode of payment
for taxes and fees from
taxpayers through the use of
over the counter payments in
accredited banks, internet
banking and automated teller
machines.

64
 ACCREDITED BANKS
REPRESENTED BY
1. LANDBANK OF THE PHILIPPINES
– MS. GILDA E. PICO – Pres.& CEO
2. DEVELOPMENT BANK OF THE PHILS.
- MR. REYNALDO DAVID – Pres. & CEO
3. PHILIPPINE NATIONAL BANK
- MR. OMAR BRYON T. MIER – Pres.& CEO
4. PHILIPPINE VETERANS BANK
- MR. RICARDO A. BALBIDO, JR. –Pres.& CEO
5. UNION BANK OF THE PHILS.
- MR. EDWIN R. BAUTISTA – Exec. Vice-Pres.
6. PHILIPPINE POSTAL SAVINGS BANK
- MR. ROLANDO L. MACASAET – Pres. & CEO

ORDINANCE NO. 1663,

S-2006
An Ordinance authorizing the
city Mayor to require the city
treasurer or his duly authorized
representatives to apprehend
persons, corporations and
entities doing business in
Quezon City not issuing
receipts and/or sales invoice.

65
66
VICTOR B. ENDRIGA, Ph.D.

Cel. NO. 0920-9555444

Tel. No. (02) 928-8336

67
68