State at least five cases under the exclusive appellate jurisdiction of the Court of Tax

Appeals (CTA).
1. Decisions of the Commissioner of Internal Revenue in cases involving disputed
assessments, refunds of internal revenue taxes, fees, or other matters arising under
the NIRC or other laws administered by the BIR;
2. Inaction by the CIR in cases involving disputed assessments, refunds of internal
revenue taxes, fees, or other matters arising under the NIRC or other laws
administered by the BIR, where the NIRC provides a specific period of action, in which
case the inaction shall be deemed a denial;
3. Decisions, orders, or resolutions of the RTC in local tax cases originally decided or
resolved by them in the exercise of their original appellate jurisdiction;
4. Decisions of the Commissioner of Customs in cases involving liability for custom
duties, fees, or other money charges, seizure, detention, or release of property
affected, fines, forfeitures of other penalties in relation thereto, or other matters arising
under the Custom Law or other laws administered by the Bureau of Customs;
5. Decisions of the Central Board of Assessment Appeals in the exercise of its appellate
jurisdiction over cases involving the assessment and taxation of real property originally
decided by the provincial or city board of assessment appeals.

The BIR assessed the Babuyan Water District (BWD) with deficiency income taxes
amounting to P8.5 million, inclusive of interest and surcharge. The BWD disputed the
assessment, and argued that it was a wholly-owned government entity performing
essential government functions. However, the BIR denied the protest. The BWD filed a
petition for arbitration in the Office of the Secretary of Justice pursuant to Sections 66
to 71, Chapter 14, Book IV of the Administrative Code of 1987 to assail the denial of its
protest, and to seek the proper interpretation of Section 32(B)(7)(b) of the Tax Code that
excluded from gross income the income derived by the Government or its political
subdivisions. The Secretary of Justice rendered a decision declaring the BWD exempt
from the payment of income tax. The Commissioner of Internal Revenue appealed to
the CTA on the sole ground that the Secretary of Justice had no jurisdiction to review
the assessment of the BIR.

No. Section 7(a) of R.A. 1125, as amended by R.A. 9282, enumerates the CTA’s exclusive
appellate jurisdiction to review by appeal certain decisions or inaction but not that of the
Secretary of Justice.
Moreover, despite the issue involves the CIR’s assessment, however, Section 7(a)(1) of the
same law, specifically the phrase “other matters” arising under the NIR or other laws
administered by the BIR” must be read together with words proceeding it, i.e., “decisions of
the CIR in cases involving disputed assessments, xxx”, following the statutory construction
principle of ejusdem generis.
Alternative answer:
Yes. GOCCs are taxable entities and they are not exempt from BIR assessment and
collection, unless their charter or the law creating them provides otherwise. Hence. In case of
tax dispute between a GOCC and the BIR, the controversy is cognizable and appealable to
the CTA. The issue cannot be resolved by the DOJ.
P.D. 242 is a general law that deals with administrative settlement or adjudication of disputes,
claims, and controversies including GOCCs; whereas, R.A. 1125 (the law creating CTA) is a
special law. A special law prevails over a general law. The fact that P.D. 242 is the more
recent law is no significance, CTA has jurisdiction when a GOCC is assessed taxes. Disputes,
claims, and controversies falling under R.A. 1125, even though solely among government
offices, agencies, and instrumentalities, including GOCCs, remain solely in the exclusive
jurisdiction of the CTA.

On May 15, 2013, CCC, Inc., received the Final Decision on Disputed Assessment
issued by the Commissioner of Internal Revenue (CIR) dismissing the protest of CCC,
Inc. and affirming the assessment against said corporation. On June 10, 2013, CCC,
Inc., filed a Petition for Review with the Court of Tax Appeals (CTA) in division. On July
31, 2015, CCC, Inc. received a copy of the Decision dated July 22, 2015 of the CTA
division dismissing its Petition. CCC, Inc. immediately filed a Petition for  Review with
the CTA en banc on August 6, 2015. Is the immediate appeal by CCC, Inc. to the CTA en
banc of the adverse Decision of the CTA division the proper remedy?
No, CCC, Inc. should first file a motion for reconsideration or motion for new trial with CTA
Division. Before the CTA En Banc could take cognizance of the petition for review concerning
a case falling under its exclusive appellate jurisdiction or moved for a new trial with the
concerned CTA division.

For calendar year 2011, FFF, Inc. a VAT-registered corporation, reported unutilized
excess input VAT in the amount of P1,000,000 attributable to its zero-rated sales.
Hoping to impress his boss, Mr. G, the accountant of FFF, Inc., filed with the BIR on
January 31, 2013 a claim for tax refund/credit of the P1,000,000 unutilized excess input
VAT of FFF, Inc. for 2011. Not having recieved any communication from the BIR, Mr. G
filed a Petition for Review with the CTA on March 15, 2013, praying for the tax
refund/credit of the P1,000,000 unutilized excess input VAT of FFF, Inc. for 2011. a) Did
the CTA acquire jurisdiction over the Petition of FFF, Inc.?
The CTA has not acquired jurisdiction over the Petition of FFF, Inc. because the judicial claim
has been prematurely filed on March 15, 2013. The Supreme Court ruled that the 30-day
period after the expiration of the 120-day period fixed by law for the CIR to act on the claim for
refund is jurisdictional and failure to comply would bar the appeal and deprive the CTA of its
jurisdiction to entertain the appeal.
In this case Mr. G filed the administrative claim on January 31, 2013. The petition for relief
should have been filed on June 30, 20013. Filing the judicial claim on March 15,2013 is
premature, thus the CTA did not acquire jurisdiction.
GGG, Inc. offered to sell through competitive bidding its shares in HHH Corp.,
equivalent to 40% of the total outstanding capital stock of the latter. JJJ, Inc., acquired
the said shares in HHH Corp. as the highest bidder. Before it could secure a certificate
authorizing registration/tax clearance for the transfer of the shares of stock of JJJ, Inc.,
GGG, Inc., had to request a ruling from the BIR confirming that its sale of the said
shares was at fair market value and thus not subject to donor's tax. In BIR Ruling N.
012-14, the CIR held that the selling price for the shares of stock of HHH Corp., was
lower than their book value, so the difference between the selling price and the book
value of said shares was taxable donation. GGG, Inc., request the Secretary of Finance
to review BIR Ruling No. 012-14, but the Secretary affirmed said ruling. GGG, Inc., filed
with the Court of Appeals a Petition for Review under Rule 43 of the Revised Rules of
Court. The Court of Appeals, however, dismissed the Petition for lack of jurisdiction
declaring that it is the CTA which has jurisdiction over the issue raised. Before which
Court should GGG, Inc., seek recourse from the adverse ruling of the Secretary of
Finance in the exercise of the latter's power of review?
GGG, In. should seek recourse with the CTA which has jurisdiction. There is no provision in
law that expressly provides where exactly the adverse ruling of the Secretary of Finance
under Section 4 of the NIRC is appealable. However, R.A. 1125, as amended, addresses the
seeming gap in the law as it vests upon the CTA, albeit impliedly, with jurisdiction over the
case as “other matters” arising under the NIRC or other laws administered by the BIR.
Furthermore, the Supreme Court held that the jurisdiction to review the rulings of the
Secretary of Finance on the issues raised against a ruling of the CIR pertain to the CTA in the
exercise of its appellate jurisdiction.

The City of Liwliwa assessed local business taxes against Talin Company. Claiming
that there is double taxation, Talin Company filed a Complaint for Refund or Recovery
of Illegally and/or Erroneously-collected Local Business Tax; Prohibition with Prayer to
Issue Temporary Restraining Order and Writ of Preliminary Injunction wit the RTC. The
RTC denied the application for a Writ of Preliminary Injunction. Since its motion for
reconsideration was denied, Talin Company filed a special civil action for certiorari with
the Court of Appeals. The Government lawyer representing the City of Liwliwa prayed
for the dismissal of the petition on the ground that the same should have been  filed
with the Court of Tax Appeals. Talin Company, through its lawyer, Atty. Frank,
countered that the CTA cannot entertain a petition for certiorari since it is not of its
powers and authorities under existing laws and rules. Decide.
The government lawyer is correct that it is the CTA that is vested with proper jurisdiction. The
law is clear when it said that—“The CTA shall have exclusive appellate jurisdiction to review
by appeal decisions, orders, or resolutions of the RTC in local tax cases originally decided or
resolved by them in the exercise of their original and appellate jurisdiction. In a recent case
decided by the Supreme Court, it was held that the CTA has certiorari powers over the issue
of grave abuse of discretion on the part of the RTC in issuing an interlocutory order in cases
falling within the exclusive appellate jurisdiction of the tax court, as this is inherent to its
exercise of appellate jurisdiction.
Congress, after much public hearing and consultations with various sectors of society,
came to the conclusion that it will be good for the country to have only one system of
taxation by centralizing the imposition and collection of all taxes in the national
government. Accordingly, it is thinking of passing a law that would abolish the taxing
power of all local government units. In your opinion, would such a law be valid under
the present Constitution? Explain your answer.
No. The law centralizing the imposition and collection of all taxes in the national
government would contravene the Constitution which mandates that : . . . "Each local
government unit shall have the power to create their own sources of revenue and to
levy taxes, fees, and charges subject to such guidelines and limitations as Congress
may provide consistent with the basic policy of local autonomy." It is clear that Congress
can only give the guidelines and limitations on the exercise by the local governments of
the power to tax but what was granted by the fundamental law cannot be withdrawn by
Congress.

In order to raise revenue for the repair and maintenance of the newly constructed City
hall of Makati, the City Mayor ordered the collection of P1, called "elevator tax," every
time a person rides any of the high-tech elevators in the city hall during the hours of
8:00 a.m. to 10:00 a.m. and 4:00 p.m. to 6:00 p.m. Is the "elevator tax" a valid
imposition? Explain.

No. The imposition of a tax, fee or charge or the generation of revenue under the Local
Government Code shall be exercised by the Sanggunian of the local government unit
concerned through an appropriate ordinance (Section 132 of the Local Government
Code). The city mayor alone could not order the collection of the tax; as such, the
“elevator tax” is an invalid imposition.

BATAS Law is a general professional partnership operating in the City of Valenzuela. It

regularly pays value-added tax on its services. All its lawyers have individually paid the
required professional tax for the year 2017. However, as a condition for the renewal of
its business permit for the year 2017, the City Treasurer of Valenzuela assessed BATAS
Law for the payment of percentage business tax on its gross receipts for the year 2016
in accordance with the Revenue Tax Code of Valenzuela. Is BATAS Law liable to pay
the assessed percentage business tax? Explain your answer.

The City of Maharlika passed an ordinance imposing a tax on any sale or transfer of
real property located within the city at rate of 50% of one percent of the total
consideration of the transaction. Jose sold a parcel of land in the city, which he
inherited from his deceased parents, and refused to pay the aforesaid tax. He instead
filed a case asking that the ordinance be declared null and void since the tax it imposed
can only be collected by the national government, as in fact he has paid the BIR the
required capital gains tax. If you were the City Legal Officer of Maharlika, what
defenses would you raise to sustain the validity of the ordinance?
The City of Manila enacted an ordinance, imposing a five percent tax on gross receipts
on rentals of space in privately-owned public markets. BAT Corporation questioned the
validity of the ordinance, stating that the tx is an income tax, which cannot be imposed
by the city government. Do you agree with the position of BAT Corporation? Explain.

No. The tax imposed is not an income tax but a license tax or fee for the regulation of
the business in which the taxpayers are engaged, that is the leasing of spaces in
privately-owned public markets. (Progressive Development Corporation v. Quezon City,
172 SCRA 629 [1989]). The income tax imposed under the National Internal Revenue
Code which preempts the imposition by the City is one which is imposed on the
privilege enjoyed by a taxpayer in earning income and not a tax on business.

XYZ Shipping Corporation is a branch of an international shipping line with voyages

between Manila and the West Coast of the U.S. The company's vessels load and unload
cargoes at the Port of Manila, albeit it does not have a branch or sales office in Manila.
All the bills of lading and invoices are issued by the branch in Makati which is also the
company's principal office. The City of Manila enacted an ordinance levying a two
percent tax on gross receipts of shipping lines using the Port of Manila. Can the city
government of Manila legally impose said levy on the corporation?

No, Manila cannot legally levy the 2% Gross Receipts Tax on the shipping line, because
taxes on the gross receipts of transportation contractors and persons engaged in the
transportation of passengers or freight by hire and common carriers by air, land or water
is a limitation on the exercise of taxing powers by local government units

ABC Corporation is registered as a holding company and has an office in the City of
Makati. It has no actual business operations. It invested in another company and its
earnings are limited to dividends from this investment, interests on its bank deposits,
and foreign exchange gains from its foreign currency account. The City of Makati
assessed ABC Corporation as a contractor or one that sells services for a fee. Is he
City of Makati correct?

The City of Makati is wrong in assessing ABC Corp. as a contractor.

First, ABC Corp. is not a contractor as defined in Section 131(h) of Republic Act No.
7160 or the Local Government Code (LGC). This provision defines a contractor as a
person, natural or juridical, not subject to professional tax under the LGC, but whose
activity consists essentially of the sale of all kinds of services for a fee, regardless of
whether or not the performance of the service calls for the exercise or use of the
physical or mental faculties of such contractor or his employees.
In the given problem, ABC Corp. is merely a holding company whose earnings are
limited to dividends, interests on bank deposits and foreign exchange gains from foreign
currency account. Evidently, ABC Corp. is not engaged in the sale of services for a fee.
Second, Section 186 of LGC provides that local government units cannot levy taxes,
fees or charges on any base or subject tax under the provisions of the NIRC.
In the given problem, ABC Corp.’s dividends, interest income and foreign exchange
gains from foreign currency account are already subject to final income tax under the
NIRC, specifically, Sections 27(D)(4), 27(D)(1), 32(A), respectively. Consequently, the
City of Makati cannot levy from ABC Corp. taxes on these incomes.

Mr. Fermin, a resident of Quezon City, is a Certified Public Accountant-Lawyer engaged

in the practice of his two professions. He has main office in Makati City and maintains a
branch office in Pasig City. Mr. Fermin pays his professional tax as a CPA in Makati
City and his professional tax as a lawyer in Pasig City. A) May Makati City, where he
has his main office, require him to pay his professional tax as a lawyer? Explain. B)
May Quezon City, where he has his residence and where he also practices his two
professions, go after him for the payment of his professional tax as a CPA and a
lawyer? Explain.

No. Mr. Fermin is given the option to pay either in the city where he practices his
profession or where he maintains his principal office in case he practices his profession
in several places. The professional tax paid as a lawyer in Pasig City, a place where he
practices his profession, will entitle him 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.

No. The professional tax shall be paid only once for every taxable year and the payment
shall be made either in the city where he practices his profession or where he maintains
his principal office. The city of residence cannot require him to pay his professional
taxes.

MNO Corporation was organized on July 1, 2006 to engage in trading of school

supplies, with principal place of business in Cubao, Quezon City. Its books of accounts
and income statement show the following data: July 1, 2006 to December 31, 2006 -
P5,000,000; January 1, 2007 to June 30, 2007 - P10,000,000; July 1, 2007 to December
31, 2007 - P15,000,000. Since MNO Corporation adopted fiscal year ending June 30 as
its taxable year for income tax purposes, it paid its two percent business tax for fiscal
year ended June 30, 2007 based on gross sales of P15,000,000. However, the Quezon
City Treasurer assesses the corporation for deficiency business tax for 2007 based on
gross sales of P25,000,000, alleging that local business taxes shall be computed based
on calendar year. A. Is the position of the city treasurer tenable? Explain. B. May the
deficiency business tax be paid on installments without surcharge and interest?
Explain.
A. Yes. The tax period for local taxes is generally the calendar year. (Section 165, LGC).
b. Accrual of tax
Ferremaro, Inc., a manufacturer of handcrafted shoes, maintains its principal office in
Cubao, Quezon City. It has branches/sales offices in Cebu and Davao. Its factory is
located in Marikina City, where most of its workers live. Its principal office in Quezon
City is also a sales office. Sales of finished products for 2009 in the amount of P10
million were made at the following locations: (i) Cebu - 25%; (ii) Davao - 15%; and (iii)
Quezon City - 60%. Where should the applicable local taxes on the shoes be paid?

Under the LGC, the manufacturers maintaining a branch or sales outlet shall record the
sale in the branch or sales outlet making the sale and pay the tax in the city or
municipality where the branch or sales outlet is located. Since Ferremaro, Inc.,
maintains one factory, the sales recorded in the principal office shall be allocated and
30% of said sales are taxable in the place where the principal office is located while the
70% is taxable in the place where the factory is located.
Hence, 25% of total sales or Php 2.5M shall be taxed in Cebu and 15% of total sales or
Php 1.5M shall be taxed in Davao. For the remaining 60% sales amounting to Php 6.0M
which is recorded in the principal office, 30% thereof or Php 1.8M is taxable in Quezon
City where the principal office is located and 70% or Php 4.2M is taxable in Marikina
City where the factory is located.

In 2014, M City approved an ordinance levying customs duties and fees on goods
coming into the territorial jurisdiction of the city. Said city ordinance was duly
published on February 15, 2014 with effectivity date on March 1, 2014. A) Is there a
ground for opposing said ordinance?

a. Yes, on the ground that the ordinance is ultra-vires. The taxing powers of local
government units, such as M City, cannot extend to the levy of taxes, fees and charges
already imposed by the national government, and this include, among others, the levy of
customs duties under the Tariff and Customs Code.

In accordance with the Local Government Code (LGC), the Sangguniang Panglungsod
(SP) of Baguio City enacted Tax Ordinance No. 19, Series of 2014, imposing a  P50 tax
on all the tourists and travelers going to Baguio City. In imposing the local tax, the SP
reasoned that the tax collected will be used to maintain the cleanliness of Baguio City
and for the beautification of its tourists attractions. Claiming the tax to be unjust,
Baguio City, filed a petition for declaratory relief before the RTC because BTA was
apprehensive that tourists might cancel their bookings with BTA's member agencies.
BTA also prayed for the issuance of a Temporary Restraining Order (TRO) to enjoin
Baguio City from enforcing the local tax on their customers and on all tourists going to
Baguio City. The RTC issued a TRO enjoining Baguio City from imposing the local tax.
Aggrieved, Baguio City filed a petition for certiorari before the Supreme Court (SC)
seeking to set aside the TRO issued by the RTC on the ground that collection of taxes
cannot be enjoined. Will the petition prosper?
No, the petition for certiorari filed by Baguio City will not prosper. As stated in Valley
Trading Co., Inc. v. CFI of Isabela (G.R. No. L-49529, March 31, 1989) and Angeles
City v. Angeles City Electric Corporation (G.R. No. 166134, June 29, 2010), the
prohibition on the issuance of an order or writ enjoining the collection of taxes applies
only to national internal revenue taxes, and not to local taxes. Unlike the NIRC, there is
no express provision in the Local Government Code which prohibits courts from
enjoining the collection of such taxes. Therefore, the RTC was properly vested with
authority to issue the assailed TRO enjoining Baguio City from imposing the local tax.

The Municipality of Argao, Province of Cebu passed a tax ordinance requiring all
professionals practicing in the municipality to pay a tax equivalent to two percent of
their gross income. A certified true copy of the ordinance was sent to the Secretary of
Finance for review on March 1, 1989 and was received by him on the same day. On
August 15, 1989 even as the tax ordinance remained unacted upon by the Secretary of
Finance, the municipality started collecting the tax to question. The members of the
Philippine Bar in the municipality questioned the legality of the ordinance and sought
the suspension of the collection of the tax, but the municipality argued that since the
Secretary has not taken any action on the ordinance for more than one hundred twenty
days after his receipt thereof, the legality of the ordinance can no longer be questioned
and insisted on the collection of the tax. 1. Is the tax ordinance in question legal? 2. Is
the Municipality correct in insisting on collecting the tax? 3. Will the inaction of the
Secretary of Finance bar the professional in the Municipality from questioning the
legality of that ordinance? 4. What remedies are available to the taxpayer to enable him
to question the legality of that ordinance?

No. the tax ordinance is not legal as the Local Tax Code allows provinces and cities, to
the exclusion of municipalities, to impose an annual occupation tax on all persons
engaged in the exercise or practice of their profession or calling in specified amounts
which in the case of lawyers is P75.00 per annum (Secs. 11 and 12 in relation to Sec.
23, Local Tax Code). A person authorized to practice his profession or calling shall pay
the tax to the province where he practices his profession or calling or maintains his
office. No local government unit can impose a tax on income

2. No, the Municipality was incorrect in insisting on the collection of the tax. Once the tax
on occupation is paid as stated in paragraph (a), above, the lawyer is entitled to practice
his profession or calling in all parts of the Philippines without being subject to any other
national or local tax, license or fee for the practice of such profession or calling.

3. The inaction of the Secretary of Finance does not bar the professionals in the
Municipality from questioning the legality of the ordinance. While it is true that the
Secretary of Finance may himself suspend the tax ordinance within a 120-day period
from receipt thereof, his failure to do so, however, has no preclusive effect on taxpayers
who may be adversely affected by the ordinance.
In 2014, M City approved an ordinance levying customs duties and fees on goods
coming into the territorial jurisdiction of the city. Said city ordinance was duly
published on February 15, 2014 with effectivity date on March 1, 2014. What is the
proper procedural remedy and applicable time periods for challenging the ordinance?

b. Any question on the constitutionality or legality of tax ordinances may be raised on

appeal within thirty (30) days from the effectivity to the Secretary of Justice. The
Secretary of Justice shall render a decision within sixty (60) days from the date of
receipt of the appeal. Thereafter, within thirty (30) days after receipt of the decision or
the lapse of the sixty-day period without the Secretary of Justice acting upon the appeal, the
aggrieved party may file the appropriate proceedings with the Regional Trial Court.

How are retiring business taxed under the Local Government Code?*

They are taxed on their sales or gross receipts in the current year and not on the
preceding year. If the tax paid in the current year is less than the tax due on gross sales
or receipts of the current year, the difference shall be paid before the business is
considered officially retired.

On May 15, 2009, La Manga Trading Corporation received a deficiency business tax
assessment of P1,500,000 from the Pasay City Treasurer. On June 30, 2009, the
corporation contested the assessment by filing a written protest with the City
Treasurer. On October 10, 2009, the corporation received a collection letter from the
City Treasurer, drawing it to file on October 25, 2009 an appeal against the assessment
before the Pasay Regional Trial Court. (a) Was the protest of the corporation filed on
time? (b) Was the appeal with the Pasay RTC filed on time?

A. The protest was filed on time. The taxpayer has the right to protest an assessment
within 60 days from receipt thereof.
b. The appeal was not filed on time. When an assessment is protested, the treasurer has
60 days within which to the taxpayer has 30 days from receipt of the denial of the
protest or from the lapse of the 60-day period decide, whichever comes first, otherwise
the assessment becomes conclusive and unappealable. Since no decision on the
protest was made, the taxpayer should have appealed to the RTC within 30 days from
the lapse of the period to decide the protest
X, a taxpayer who believes that an ordinance passed by the City Council of Pasay is
unconstitutional for being discriminatory against him, wants to know from you, his tax
lawyer, whether or not he can file an appeal. In the affirmative, he asks you where such
appeal should be made: the Secretary of Finance, or the Secretary of Justice, or the
Court of Tax Appeals, or the regular courts. What would your advice be to your client,
X?

The appeal should be made with the Secretary of Justice. Any question on the
constitutionality or legality of a tax ordinance may be raised on appeal with the
Secretary of Justice within 30 days from the effectivity thereof.

Dona Evelina, a rich widow engaged in the business of currency exchange, was
assessed a considerable amount of local business taxes by the City Government of
Bagnet by virtue of Tax Ordinance No. 24. Despite her objections thereto, Dona Evelina
paid the taxes. Nevertheless, unsatisfied with said Tax Ordinance, Dona Evelina,
through her counsel Atty. ELP, filed a written claim for recovery of said local business
taxes and contested the assessment. Her claim was denied, and so Atty. ELP elevated
her case to the RTC. The RTC declared Tax Ordinance No. 24 null and void and without
legal effect for having been enacted in violation of the publication requirement of tax
ordinances and revenue measures under the Local Government Code (LGC) and on the
ground of double taxation. On appeal, the Court of Tax Appeals (CTA) affirmed the
decision of the RTC. No motion for reconsideration was filed and the decision became
final and executory. (A) If you were Atty. ELP, what advice will you give Dona Evelina so
that she an recover the subject local business taxes?

Move for the execution of the judgment which has already become final.

Mr. Jose Castillo is a citizen, who purchased a parcel of land in Makati City in 1970 at a
consideration of P1 million. IN 2011, the land, which remained undeveloped and idle,
had a fair market value of P20 million. The Assessor of Makati re-assessed in 2011 the
property at P10 million. When is Mr. Castillo liable for real property tax on the land
based on the re-assessed fair market value, beginning 2011 or 2012?

Mr. Castillo shall be liable to the real property tax based on the re-assessment
beginning 2012. All re-assessment made after the first day of any year shall take
effect on the first day of January of the succeeding year.
A city outside of Metro Manila plans to enact an ordinance that will impose a special
levy on idle lands located in residential subdivisions within its territorial jurisdiction in
addition to the basic real property tax. If the lot owners of a subdivision located in the
said city seeks your legal advice on the mater, what would your advice be? Discuss.
My advice would be that the city's plan to enact an ordinance that will impose such
special levy on idle lands is not legally allowed, unless these lands are specially
benefited by a public works projects or improvements funded by the city government.
(Sec. 240, Local Government Code). I will likewise advise them that before the city
council could enact an ordinance imposing a special levy, it shall conduct a public
hearing thereon; notify in writing the owners of the real property to be affected or the
persons having legal interest therein as to the date and place thereof and afford the
latter the opportunity to express their positions or objections relative to the proposed
ordinance.

In view of the street widening and cementing of roads and the improvement of drainage
and sewers in the district of Ermita, the City Council of the City of Manila passed an
ordinance imposing and collecting a special levy on lands in the district. Jose Reyes, a
landowner and resident of Ermita, submitted a protest against the special levy fifteen
(15) days after the last publication of the ordinance alleging that the special levy was
exorbitant since the rate thereof was more than the maximum rate of two percent (2%)
of the assessed value of the real properties allowed by Section 39 of P.D. 464, as
amended. Assuming that Jose Reyes is able to prove that the rate of the special levy is
more than the aforesaid percentage limitation of 2% will his protest prosper?

The special levy under the Real Property Tax Code on lands, specially benefited by the
proposed infrastructure, may not exceed sixty per cent (60%) of the cost of said
improvement. All lands comprised within the district benefited are subject to the special
levy except lands exempt from the real property tax (Sec. 47. RPT). The protest shall be
filed not later than 30 days after the publication of the ordinance and may be submitted
to the City Sanggunian signed by a majority of the landowners affected by the proposed
work. If no such protest is filed in the manner above specified, the city ordinance shall
become final and effective. The levy imposed under the ordinance should be within the
limit of sixty percent (60%) of the total cost of the proposed improvement. The rate of
two percent (2%) of the assessed value under Sec. 39 of P.D. 464refers to the real
property tax and not to special levies.