BASIC COMPETENCY ON LOCAL TREASURY

EXAMINATION

Presented by:

AGUSTIN T. DOLAR
Licensed Professional Teacher
Certified Local Treasurer Eligible
Career Service Professional
Author, BCLTE Review Materials 2019 to present
National Certificate for Bookkeeping Level III
Master of Arts in Curriculum, Design, Development and Supervision
Master in Business Administration (on-going)
 Receipts and Collection of Income,
Revenues and Other Fund Sources
Book 2 Updated LTOM

Session 5
Mobilization of Resources :Principles of Local Taxation, Real Property
Tax Business, and Other tax Regulatory Fees and Charges Part 1 (35%
or 45 items)
SECTION 33. DEFINITION OF TERMS: WHEN
USED IN THIS CHAPTER, THE TERM:

Collection– pertains to the

receipt of payment from
all local taxes, fees, charges
and other impositions due to
local government units in
accordance with the
approved local revenue
code/approved supplemental Income – covers all
ordinances including grants, revenues and receipts
loans, aids, donation in the
form of cash, check and collected or received,
credit memo. forming the gross
accretions of funds of the
government
SECTION 33. DEFINITION OF TERMS: WHEN USED IN
THIS CHAPTER, THE TERM:

“Receipts” refers to income

realized for operations and
activities of the government
or are received by the
government in the exercise of its
corporate functions consisting of
“Revenues” refers to
charges for services rendered or
for conveniences furnished, or income derived from the
the price of commodity sold, as regular system of
well as authorized contributions taxation enforced under
or aids from other entities authority of law or
except provisional advances
ordinance, and, as such,
for budgetary purposes.
Loans for specific projects or accrue more or less
activities shall be considered as regularly every year.
“receipts”.
CHAPTER 1:INCOME FROM LOCAL SOURCES
SECTION 35. FUNDAMENTAL PRINCIPLES:
THE FOLLOWING FUNDAMENTAL PRINCIPLES SHALL GOVERN THE EXERCISE OF THE TAXING
AND OTHER REVENUE-RAISING POWERS OF THE LOCAL GOVERNMENT UNIT

1. Taxation shall be uniform in each local

government unit.

*Equality and uniformity in local taxation means that all taxable

articles or kinds of property of the same class shall be taxed at the
same rate within the territorial jurisdiction of the taxing
authority.
*A tax is considered uniform when it operates with the same force
and effect in every place where the subject may be found
*Uniformity is not equivalent to equality in taxation
CHAPTER 1:INCOME FROM LOCAL SOURCES
SECTION 35. FUNDAMENTAL PRINCIPLES:
THE FOLLOWING FUNDAMENTAL PRINCIPLES SHALL
GOVERN THE EXERCISE OF THE TAXING AND OTHER REVENUE-RAISING POWERS OF THE LOCAL
GOVERNMENT UNIT

2. Taxes, fees, charges and other impositions shall

a. Be equitable and based as far as practicable on the

taxpayer’s ability to pay

Illustrative Case
Equitability is characterized by equity. It means being fair to
all concerned and that it is without prejudice, favor or vigor
entailing undue hardship.
It is the word fairness that best describes equitable.
If the tax is excessive, it is not fair. When the tax
discriminates, aside from violating the rule of uniformity, it is
not fair. If the tax is in restraint of trade (that is, discourages
investors), it is not fair.
CHAPTER 1:INCOME FROM LOCAL SOURCES
SECTION 35. FUNDAMENTAL PRINCIPLES:
THE FOLLOWING FUNDAMENTAL PRINCIPLES SHALL
GOVERN THE EXERCISE OF THE TAXING AND OTHER REVENUE-RAISING POWERS OF THE LOCAL
GOVERNMENT UNIT

2. Taxes, fees, charges and other impositions shall

b. Be levied and collected only for public purposes

c. Not be unjust, excessive, oppressive, or confiscatory
d. Not be contrary to law, public policy, national economic
policy, or in restraint of trade

Illustrative Case
A tax is contrary to law if it is a tax beyond the authority of an
LGU to impose. Thus, a local ordinance, to be valid, must not
contravene the Constitution or any statute; not to be unfair or
oppressive; not be partial or discriminatory; not prohibit but
may regulate trade; be general and consistent with public
policy; and not unreasonable .
CHAPTER 1:INCOME FROM LOCAL SOURCES
SECTION 35. FUNDAMENTAL PRINCIPLES:
THE FOLLOWING FUNDAMENTAL PRINCIPLES SHALL
GOVERN THE EXERCISE OF THE TAXING AND OTHER REVENUE-RAISING POWERS OF THE LOCAL
GOVERNMENT UNIT

3. The collection of local taxes, fees, charges and

other impositions shall in no case be let to any
private person

Illustrative Case
The Supreme Court has said that entrusting the
collection of the fees to a private person does not
destroy the public purpose of the ordinance, stating that
so long as the purpose is public, it does not matter
whether the agency through which the money is
dispensed is public or private.
CHAPTER 1:INCOME FROM LOCAL SOURCES
SECTION 35. FUNDAMENTAL PRINCIPLES:
THE FOLLOWING FUNDAMENTAL PRINCIPLES SHALL
GOVERN THE EXERCISE OF THE TAXING AND OTHER REVENUE-RAISING POWERS OF THE LOCAL
GOVERNMENT UNIT

4. The Constitution provides that local taxes, fees and

charges shall accrue exclusively to the local
governments.

5. Each local government unit shall, as far as

practicable, evolve a progressive system of taxation

A progressive tax is one where the tax rate increases as the

tax base increases. In the case of tax on business,
manufacturers pay more taxes per annum as their gross sales
or receipts for the preceding year increases
 CHAPTER 1:INCOME FROM LOCAL SOURCES
TAXING POWERS
Province City Municipality
Tax on Transfer of Real Tax on Transfer of Real
Property Ownership Property Ownership
Tax on Business of Printing Tax on Business of Printing
and Publication and Publication
Franchise Tax Franchise Tax
Tax on Sand, Gravel and Other Tax on Sand, Gravel and Other
Quarry Resources Quarry Resources
(excluding component
cities)
Professional Tax Professional Tax
Amusement Tax Amusement Tax
Annual Fixed Tax for Every Annual Fixed Tax for Every
Delivery Truck Delivery Truck
Real Property Tax Real Property Tax Real Property Tax
(municipality within
Metropolitan Manila Area)
Additional Levy on Real Additional Levy on Real Additional Levy on Real
Property for the Special Property for the Special Property for the Special
Education Fund Education Fund Education Fund (SEF)
(municipality within
Metropolitan Manila Area)
 CHAPTER 1:INCOME FROM LOCAL SOURCES
TAXING POWERS
Province
Additional Ad Valorem Tax on Idle
Lands
Special Levy on Lands
Benefited by Public Works
Service Fees and Charges
Public Utility Charges
Toll Fees or Charges
City
Additional Ad Valorem Tax on Idle
Lands
Special Levy on Lands
Specially Benefited by Public
Works
Service Fees and Charges
Public Utility charges
Toll Fees or Charges
Tax on Business
Community Tax
Socialized Housing
Fees and Charges on
Business and Occupation
Fees for Sealing and
Licensing of Weights and
Measures
Fishery Rentals, Fees and
Charges
Municipality
Additional Ad Valorem Tax on Idle
Lands (municipality within
Metropolitan Manila Area)
Special Levy on Lands
Specially Benefited by Public
Works
Service Fees and Charges
Public Utility Charges
Toll Fees or Charges
Tax on Business
Community Tax
Fees and Charges on
Business and Occupation
Fees for Sealing and
Licensing of Weights and
Measures
Fishery Rentals, Fees and
Charges
 Chapter 1:INCOME FROM LOCAL SOURCES
Taxing Powers

 The rates of taxes that the city shall collect may exceed the
maximum rates allowed for the province or municipality by not
more than fifty percent (50%) except the rates of professional and
amusement taxes

 Rates of Tax within the Metro Manila Area.–The municipalities

within the Metropolitan Manila Area may levy taxes at rates which
shall not exceed by fifty percent (50%) the maximum rates
prescribed for tax on business

 In the case of the basic real property tax, the municipality within
the Metropolitan Manila Area may fix a uniform rate not
exceeding two percent (2%) of the assessed value of real property
 Chapter 1:INCOME FROM LOCAL SOURCES
Section 42. Taxing Powers of Barangays

 Taxes–On stores or retailers with fixed business establishments

with gross sales or receipts of the preceding calendar year of Fifty
Thousand Pesos ( 50,000.00) ₱ or less, in the case of cities and Thirty
Thousand Pesos (₱30,000.00) or less, in the case of municipalities, at a
rate not exceeding one percent (1%) on such gross sales or receipts;

 Barangay Clearance–No city or municipality may issue any license or

permit for any business or activity unless a clearance is first obtained
from the barangay where such business is located or conducted. For
such clearance, the sangguniang barangay may impose a reasonable
fee.
The application for clearance shall be acted upon within seven (7) working
days from the filing thereof. In the event that the clearance is not issued
within the said period, the city or municipality may issue the said license
or permit
 Chapter 1:INCOME FROM LOCAL SOURCES
Section 42. Taxing Powers of Barangays

 Other Fees and Charges–The barangay may levy reasonable fees

and charges:

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

2. On places of recreation which charge admission fees; and

3. On billboards, signboards, neon signs, and outdoor advertisements.

 Chapter 1:INCOME FROM LOCAL SOURCES
Section 43. Common Limitations on the Taxing Powers of Local Government
Units. SECTION 133 of LGC

a) Income tax, except when levied on banks and other financial

institutions; (32)

b) Documentary stamp tax; (33)

c) Taxes on estates, inheritance, gifts, legacies and other

acquisitions mortis causa, except as otherwise provided in the
Local Government Code of 1991; (34)

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;
(35)
 Chapter 1:INCOME FROM LOCAL SOURCES
Section 43. Common Limitations on the Taxing Powers of Local Government
Units. SECTION 133 of LGC

e) Taxes, fees and charges and other impositions upon goods

carried into or out of, passing through, the territorial
jurisdictions of local government units in the guise of charges for
wharfage, tolls for bridges or otherwise, or other taxes, fees or
charges in any form whatsoever upon such goods or
merchandise;(36)

f) Taxes, fees or charges on agricultural and aquatic products

when sold by marginal farmers or fishermen;(37)

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;(38)
 Chapter 1:INCOME FROM LOCAL SOURCES
Section 43. Common Limitations on the Taxing Powers of Local Government
Units. SECTION 133 of LGC

h) Excise taxes on articles enumerated under the National

Internal Revenue Code, as amended, and taxes, fees, or
charges on petroleum products;(39)

i) Percentage or value-added tax (VAT) on sales, barters or

exchanges or similar transactions on goods or services
except as otherwise provided in the Local Government Code
of 1991;(40)

j) 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, except
as provided in the Local Government Code of 1991. (41)
 Chapter 1:INCOME FROM LOCAL SOURCES
Section 43. Common Limitations on the Taxing Powers of Local Government Units.
SECTION 133 of LGC

k) Taxes on premiums paid by way of reinsurance or retrocession;(42)

l) Taxes, fees or charges for the registration of motor vehicles and for the
issuance of all kinds of licenses or permits for the driving thereof, except
tricycles; (43)

m) Taxes, fees, or charges on Philippine products actually exported, except

as otherwise provided in the Local Government Code of 1991; (44)

n) Taxes, fees, or charges on Countryside and Barangay Business

Enterprises and Cooperatives duly registered under R.A. No. 68105 and R.A.
No. 69386 as amended by R.A.9520; (45) and

o) Taxes, fees or charges of any kind on the National Government, its agencies
and instrumentalities, and local government units.( 46 )
 Chapter 1:INCOME FROM LOCAL SOURCES
Section 46. Receipts from Economic Enterprise Operations

Profits or income derived from the operation of public utilities

and other economic enterprises, after deduction for the cost
of improvement, repair and other related expenses of the public
utility or economic enterprise concerned, shall first be applied
for the return of the advances or loans made therefor.

Any excess shall form part of the General Fund of the local
government unit concerned.
 Chapter 1:INCOME FROM LOCAL SOURCES
Section 47. Other Receipts

a) Sale of Property Plant and Equipment - pertains to the proceeds

from the sale of properties like buildings, equipment, machineries,
lands and tangible assets.
b) Contributions - include contributions in cash from any source.
c) Sale of Waste Materials - includes the proceeds from sale of
waste materials such as office records and equipment authorized to
be disposed and other waste materials.
d) Interest Income pertains to interests earned by LGUs from bank
deposits, and loans receivable and interest-bearing investments.
e) Extraordinary receipts such as disposal of assets and other non-
recurring income.
 Chapter 2.INCOME FROM EXTERNAL SOURCES
Section 48. Internal Revenue Allotment (IRA)

a) Allotment of Internal b) In the event that an

Revenue Taxes–
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 as follows:
1. On the first year of the effectivity of
the Local Government Code of 1991,
Thirty Percent (30%)
2. On the second year, Thirty-Five
Percent (35%) and
3. On the third year and thereafter,
Forty Percent (40%)
unmanageable public sector deficit
is incurred by the national
government, the Secretary of
Finance, the Secretary of the
Interior and Local Government and
the Secretary of Budget and
Management shall submit to the
President of the Philippines, a joint
recommendation that will institute
necessary adjustments in the IRA of
LGUs.
 Chapter 2.INCOME FROM EXTERNAL SOURCES
Section 48. Internal Revenue Allotment (IRA)

The term "budget deficit" means a shortfall of revenues against

disbursements; while "public sector" refers to the national government itself,
plus the fourteen (14) major government corporations, the government
financial institutions, all the local government units, the Bangko Sentral ng
Pilipinas, and the social security institutions. Hence, the sum of the deficits of
all these different units within the public sector is what is referred to as the
"public sector deficit".
 Chapter 2.INCOME FROM EXTERNAL SOURCES
Section 48. Internal Revenue Allotment (IRA)

Allocation to Local Government Share of Each Province, City and

Units. –
The total annual IRA due the
LGUs shall be allocated among
provinces, cities, municipalities
and barangays as follows:
1. General Allocation. –
1.1 Share of All Provinces -Twenty-
Three Percent (23%)
1.2 Share of All Cities - Twenty-
Three Percent (23%)
1.3 Share of All Municipalities -
Thirty-Four Percent (34%)
1.4 Share of All Barangays - Twenty
Percent (20%)
Municipality.–
The share of each province,
city, and municipality shall be
determined on the basis of the
following distribution formula:
2.1 Population - Fifty Percent (50%)
2.2 Land Area - Twenty-Five Percent
(25%)
2.3 Equal Sharing -Twenty-Five
Percent (25%)
 Chapter 2.INCOME FROM EXTERNAL SOURCES
Section 48. Internal Revenue Allotment (IRA)

Share of Each Barangay. – On the first year of the effectivity of

3.1 Every barangay with a population the Local Government Code of 1991
of not less than one hundred (100) (CY 1992):
inhabitants shall be entitled to an IRA
of not less than Eighty Thousand
Pesos (80,000.00) per annum i. Population - Forty Percent (40%)
chargeable against the twenty ii. Equal Sharing - Sixty Percent (60%)
percent (20%) share of the barangay
from the total IRA.
On the second year:
After deducting the aggregate sum of i. Population - Fifty Percent (50%)
the individual barangay share of ii. Equal Sharing - Fifty Percent (50%)
80,000.00 each from the total twenty
percent (20%) allocation for all
On the third year and thereafter:
barangays, the remaining balance of
said twenty percent (20%) allocation i. Population - Sixty Percent (60%)
shall be further distributed to the ii. Equal Sharing Forty Percent (40%)
barangays on the basis of the
following formula:
 Chapter 2.INCOME FROM EXTERNAL SOURCES
Section 48. Internal Revenue Allotment (IRA)
Automatic Release of IRA
Shares
The IRA shall be released directly
by the BTr to the LGU beneficiaries
only through authorized government
servicing banks.
The individual shares in IRA of each
LGU shall be automatically released,
without the need of any further action,
direct to the provincial, city, municipal,
or barangay treasurer, as the case
may be, on a monthly basis but not
beyond five (5) days after the end
of each month.
The BTr shall be the recipient of the
Special Allotment Release (SARO)
and Advice of Notice of Cash
Allocation Issued (ANCAI) while the
corresponding Notice of Cash
Allocation (NCA) shall be issued to
the AGSBs.
The BTr shall issue the disbursement
document, i.e. Authority to Debit
Account (ADA), so as to effect the
transfer of IRA and other funds to
the LGUs from BTr’s MDS subaccount
to the depository account of the
LGUs, and issue the corresponding
Notice of ADA Issued to advise the
LGUs accordingly.
 Chapter 2.INCOME FROM EXTERNAL SOURCES
Section 48. Internal Revenue Allotment (IRA)

Mandatory Appropriation for Local Development Projects. –

It shall be mandatory for each LGU to set aside in its annual

budgets amounts no less than twenty percent (20%) of its IRA for
the year as appropriation for local development projects that are
embodied or contained in the local development plans. Copies of the
development plans of LGUs shall be furnished the DILG.
 Chapter 2.INCOME FROM EXTERNAL SOURCES
Section 49. Share in the Proceeds of the Tobacco Excise Tax
To qualify as beneficiary, a province
must have an average annual
production of Virginia leaf tobacco in
The financial support given by the an amount not less than one million
national government for the kilos.
beneficiary provinces shall be
constituted and collected from the Department of Budget and
proceeds of fifteen percent Management shall each year
(15%) of the excise taxes on determine the beneficiary provinces
locally manufactured Virginia- and their computed share of the
type of cigarettes. funds, referring to the National
Tobacco Administration (NTA)
records of tobacco acceptances, at
the tobacco trading centers for the
immediate past year
 Chapter 2.INCOME FROM EXTERNAL SOURCES
Section50. Share in the Proceeds from the Development and Utilization of
the National Wealth

Amount of Share of Local

Government Units.
LGUs shall, in addition to the IRA, have a
share of forty percent (40%) of the
gross collection derived by the national
government from the preceding fiscal year
from the following.
1. Mining taxes, royalties, forestry
and fishery charges, and such other
taxes, fees, or charges, including
related surcharges, interests, or fine,
and from its share in any co-production,
joint venture or production sharing
agreement in the utilization and
development of the national wealth
within their territorial jurisdiction.
2. Administrative charges enumerated
herein accruing to the National
Government whether collected by the
National Government collecting agencies
or, in certain cases, by LGUs.
3. Proceeds from the development and
utilization of national wealth where the
local government actually collects and
automatically retains its share of at least
forty percent (40%) of such proceeds
shall not form part of the revenue base
in the computation of the forty percent
(40%) share.
 Chapter 2.INCOME FROM EXTERNAL SOURCES
Section50. Share in the Proceeds from the Development and Utilization of
the National Wealth

Share of Local Government Units

from any Government Agency or
Government- Owned or
Controlled Corporation
Local government units shall have a
share based on the preceding fiscal
year from the proceeds derived by any
government agency or government-
owned or controlled-corporation
engaged in the utilization and
development of the national wealth
based on the following formula
whichever will produce a higher
share for the local government unit:
1. One percent (1%) of the gross sales or
receipts of the preceding calendar year;
or
2. Forty percent (40%) of the mining
taxes, royalties, forestry and fishery
charges and such other taxes, fees or
charges, including related surcharges,
interests, or fines the government
agency or government-owned or
controlled-corporation would have paid
if it were not otherwise exempt.
 Chapter 2.INCOME FROM EXTERNAL SOURCES
Section50. Share in the Proceeds from the Development and Utilization of
the National Wealth

Computation and Remittance of

Shares of Local Government Units
in the Utilization and Development
of National Wealth
The computation of the forty percent
(40%) share of each LGU in the
proceeds from the development and
utilization of the national wealth from
the preceding year, indicating the
corresponding share of each province,
city, municipality and barangay where
the national wealth is being developed
and/or utilized, shall be submitted by
the revenue collecting agencies to
the DBM not later than March 15 of
each ensuing year
The allotment representing the
share of each LGU shall be released
without need of any further action,
directly to the provincial, city,
municipal, or barangay treasurer, as
the case may be, on a quarterly
basis within five (5) days after the
end of each quarter, and which shall
not be subject to any lien or
holdback that may be imposed by
the national government
 Chapter 2.INCOME FROM EXTERNAL SOURCES
Section50. Share in the Proceeds from the Development and Utilization of
the National Wealth

Mandatory Appropriation for Local Development and Livelihood Projects

The proceeds from the share of local government units from the national wealth
shall be appropriated by their respective sanggunian to finance local development
and livelihood projects:

Provided, however, That at least eighty percent (80%) of the proceeds derived
from the development and utilization of hydrothermal, geothermal, and other
sources of energy shall be applied solely to lower the cost of electricity in the
local government where such a source of energy is located.
 Chapter 2.INCOME FROM EXTERNAL SOURCES
Section 51. Other Special Shares of Local Government Units from National
Taxes
a) Share in Special Economic
Zones.
Businesses and enterprises in Special
Economic Zones' shall pay gross
income tax of five percent (5%) in
lieu of all national and local
taxes.
1. three percent (3%) to the National
Government
2. two percent (2%) to be directly
remitted to the treasurer’s office of the
municipality or city where the
enterprise is located
b) Share from Excess Collection in Value
Added Tax (VAT).
(a) In addition to the Internal Revenue Allotment,
fifty percent (50%) of the national taxes
collected by the Bureau of Internal Revenue
(BIR) under Sections 106 and 108 of the
National Internal Revenue Code (NIRC) of
1997 in excess of the increase in collection for
the immediately preceding year shall be
distributed as follows:
a) Twenty percent (20%) shall accrue to the city
or municipality where such taxes are collected
and shall be allocated in accordance with Section
150 of R. A. No. 7160 or the Local Government
Code of 1991; and
b) Eighty percent (80%) shall accrue to the
national government.
 Chapter 3.COLLECTION PROCEDURES
Section 53. General Control on Collection

a) Separation of Personal Money

from the Public Funds
1. Local Treasurers and other
accountable officers shall keep
personal monies separate and
distinct from local public funds in
their custody and shall not make
profit out of public money or
otherwise apply the same to any
use not authorized by law or
ordinance
2. Collections shall be deposited daily and
intact with the authorized depository
bank. Collections remitted after banking
hours shall be kept in the official vault of
the LGU. All collections after the
preparation of the daily Report of
Collections and Deposits (RCD), subject to
the cut-off period adopted by the LGU,
shall be remitted to the Liquidating
Officers /Cashier. Such collections shall
form part of the RCD of the following day

3. Local Treasurers/Cashiers are prohibited

from holding positions as treasurers or
cashiers of savings and loan association or
any other association or organization.
 Chapter 3.COLLECTION PROCEDURES
Section 53. General Control on Collection

Drawing of Check Payable to the Local

Government Unit.

Checks in payment of taxes and other

a) Prohibition Against the Use of
Temporary/Provisional
Receipts.
At no instance shall temporary
receipts be issued to acknowledge
the receipt of public funds.
indebtedness to the government must be
drawn by the payor himself/herself and made
payable to the LGU. (Examples: “Provincial
Treasurer of Ilocos Norte; City Government of
Makati”) Under no circumstance shall the
following checks be accepted:
1. Checks drawn payable to the name of the
head of the LGU or any of its officers;
2. Checks drawn payable to “Cash”;
3. Indorsed checks;
4. Post-dated checks; and
5. Stale checks.
 Chapter 3.COLLECTION PROCEDURES
Section 53. General Control on Collection

Transfer of Government Funds from One

Accountable Officer to Another Notification to the Auditor: Application
for Relief from Accountability for
Government Funds
1. Transfer of government funds from
one accountable officer to another
shall, except as allowed by law or When loss of government funds
regulation, be made only upon prior occur while they are in transit or the
direction or authorization of the loss is caused by fire, theft, or other
Commission on Audit or its casualty or force majeure, the officer
representative. accountable therefor or having custody
thereof shall immediately notify the
2. When government funds are transferred Commission on Audit or the auditor
from one accountable officer to another, or
concerned, and within thirty (30)
from an outgoing officer to his successor,
it shall be done upon properly itemized days
invoice and receipt which shall invariably
support the clearance to be issued to
the relieved or outgoing officer subject to
regulations of the Commission on
Audit
 Chapter 3.COLLECTION PROCEDURES
Section 54. Control and Accountability for Official Receipts and Other
Accountable Forms

Custodianship of accountable forms

The Local Treasurer shall be the custodian of all accountable forms

requisitioned by the local government unit.

He/She shall maintain a complete record of the receipt, issue and transfer of
accountable forms
 Chapter 3.COLLECTION PROCEDURES
Section 54. Control and Accountability for Official Receipts and Other
Accountable Forms

The Accountable Forms with money value The Accountable Forms with money
consist of the following: value consist of the following:

(1) Cash Tickets, Accountable Forms (3) Certificate of Ownership of Large

No. 55 (55A-F)
Cattle, Accountable Form No. 53
For the temporary use of market spaces,
Evidence of original ownership of large
parking areas and other income cattle
generating activities where the issuance of
a regular receipt is not practicable

(4) Marriage License Certificate,

(2) Certificate of Transfer of Large Accountable Form No. 54
Cattle, Accountable Form No. 52 Issued to contract marriage
Evidence of transfer of large cattle, when
issued, it supersedes the original
certificate of ownership
 Chapter 3.COLLECTION PROCEDURES
Section 54. Control and Accountability for Official Receipts and Other
Accountable Forms

The Accountable Forms without specific The Accountable Forms without specific money
money value printed on the face of each value printed on the face of each form consist of the
form consist of the following following

1) Official Receipt, Accountable Form
No.51
To acknowledge payment of taxes,
licenses and other dues or fees to the
government for which no special
accountable forms have been authorized
(2) Real Property Tax Receipt,
Accountable Form No. 56
To acknowledge payment of real property
taxes
(3) Slaughter Permit Fee Receipt,
Accountable Form No. 57
Serves as permit and official receipt for
slaughtering of large cattle
(4) City/Municipal Burial Permit Fee Receipt,
Accountable Form No. 58
Serves as funeral permit and official receipt for
fees collected
(5) Checks
Serially numbered forms purchased from the
servicing bank for use in disbursement charged
against the account with the bank
(6) Community Tax Certificate, BIR Form
Nos. 0016 and 0017
For the use of individual taxpayers and
corporate entities, respectively
 Chapter 3.COLLECTION PROCEDURES
Section 54. Control and Accountability for Official Receipts and Other
Accountable Forms

Guidelines on the Procurement of Printing Use of Computer-Generated Official

Service Receipts and Other Accountable Forms.

Printing of accountable forms and sensitive high

quality/volume printing requirements shall only be
undertaken by recognized government printers, The use by local government units of
namely Bangko Sentral ng Pilipinas, computer-generated official receipts
National Printing Office and APO and other accountable forms in lieu of
Production Unit. (Resolution No. 05-2010, the printed forms by the National Printing
GPPB Office or accredited printers shall require the
prior approval of the Commission on
Inspection of Accountable Forms Received from Audit(Sec. 68(2), P.D. No. 1445).
the National Printing Office or Accredited Printers

This is to ensure that all the pertinent

Upon receipt of the accountable forms from the
information and control features are
National Printing Office or accredited printers,
substantially included on the face of the
the Local Treasurer shall carefully examine
each book or pad. He shall segregate any book or computer-generated forms
pad found to contain defects, such as incorrect
series of numbers, or missing leaves or sheets,
etc., and submit the same to the Commission on
Audit (COA) together with a statement of the
 Chapter 3.COLLECTION PROCEDURES
Section 54. Control and Accountability for Official Receipts and Other
Accountable Forms

The Local Treasurer’s Report of Accountability for Accountable Forms

Collectors/Tellers and other accountable officers shall render their report of

accountability for accountable forms in the Report of Accountability for
Accountable Forms at least once a month. Such report shall also be
prepared in the case of transfer of office or accountability by the accountable
officer.

The Local Treasurer shall summarize/consolidate these reports in the

Consolidated Report of Accountability for Accountable Forms, and submit
the consolidated report accompanied by the individual reports to the Unit
Auditor concerned not later than the fifth day of the ensuing month.
 Chapter 3.COLLECTION PROCEDURES
Section 54. Control and Accountability for Official Receipts and Other
Accountable Forms

Report of Collections and Deposits (RCD)

All collectors shall accomplish the RCD at the close of each business day.

All accountable forms’ beginning balances, received, issued, and on hand shall be
reported in Box C of the RCD

All issued and non-issued accountable forms in the possession of collectors should be
included in the report of daily collections

The RCD shall be accomplished in five (5) copies

The Local Treasurer or Liquidating Officer or the designated verifier shall verify the
RCD, check the statement of accountable forms as to initial balances on-hand, receipts,
issues, and the ending balances on hand
 Chapter 3.COLLECTION PROCEDURES
Section 54. Control and Accountability for Official Receipts and Other
Accountable Forms

Immediate Issuance of Notice of Loss of Accountable Forms

1. Any loss of accountable forms in the custody of Accountable Forms Custodian

shall immediately be reported in writing to the Local Treasurer and shall specify the
kind, quantity, and inclusive serial numbers of the lost accountable forms and the place
or places where, and approximate dates, when the same were lost.

2. Upon receipt of the report, the Local Treasurer shall at once issue a circular or notice
of loss for the information and guidance of all concerned and immediately notify COA
to prevent the possible fraudulent use of such accountable forms.

3. The notice of loss shall be posted in the official website of the LGU and any
conspicuous place within the LGU.
 Chapter 3.COLLECTION PROCEDURES
Section 55.Handling of Dishonored Checks Received in Payment of Taxes and Other
Indebtedness to the Government
a) Dishonored Checks.
A check is considered to be dishonored by non-payment when, upon being presented for
payment, such payment is refused or cannot be obtained for the following reasons

1. Lack or insufficiency of funds

2. Formal defects, such as, lack of countersignature, amount in words not the same as amount in
figures, etc.

b) Non-Acceptance of Checks.
When a check drawn in favor of the LGU is not accepted by the drawee bank for any reason, the
drawer-payor shall continue to be liable for the sum due including all penalties as a result of
delayed payment.

Custody of Dishonored Checks.

Pending their redemption, dishonored checks shall remain in the custody of the Local Treasurer,
unless the court shall direct otherwise, in which case appropriate receipts should be secured from the
officer authorized to take custody of the checks.
The Local Treasurer shall immediately advise the auditor concerned of the transfer of custody of
the checks
 Chapter 3.COLLECTION PROCEDURES
Section 56. Daily Turnover and Verification of Collections

a) Daily Turnover of Collections

At the close of the business day, Collectors shall turn over all their collections intact to
the Local Treasurer or Liquidating Officer.

They shall accomplish the Report of Collections and Deposits (RCD) in five (5) copies.

The original and three (3) copies together with the duplicates of official receipts
issued and the cash collected shall be submitted to the Auditor, Local Accountant,
Local Treasurer and Liquidating Officer. The fifth copy of the RCD shall be retained by
the collector concerned
 Chapter 3.COLLECTION PROCEDURES
Section 56. Daily Turnover and Verification of Collections

2. In the case of collectors assigned to the field, where travel time

from their places of assignment to the Local Treasury Office is more than
one (1) day, the turnover of collections shall be made at least once a week
or as soon as the collections reach Five Thousand Pesos ( 5,000.00).

Collections by field collectors shall be remitted to the Cashier or designated

liquidating officer of the field office of the LGU.

When the distance of the field office to the local treasury may expose
government fund to the risk of loss while in transit, the cashier or designated
liquidating officer, upon authorization by the Treasurer, may deposit the
collections in the authorized depository bank near the field office of the LGU.
 Chapter 3.COLLECTION PROCEDURES
Section 58.Procedures and Controls on Deposit of Collections with Authorized
Depository Banks

Opening of Depository Accounts

Local government units must have deposit accounts only with Government
Financial Institutions (GFIs) that have a universal bank license and a CAMELS
(Capital Adequacy, Asset Quality, Management, Earnings, Liquidity and
Sensitivity to Market Risks) rating of at least “3”.

Local government units may engage the payment and collection services of a
bank thru a transaction fee-based arrangement, without the need for prior
approval from the BLGF, provided that all collections shall be transferred to
any of the GFIs referred hereof on the next banking day counted from the
collection date.
 Chapter 3.COLLECTION PROCEDURES
Section 58.Procedures and Controls on Deposit of Collections with Authorized
Depository Banks

Opening of Depository Accounts

Bank accounts with banks other than GFIs referred hereof, may be allowed
for the LGU under the following circumstances:

3.1 Where the GFIs cannot provide the necessary banking products and services;

3.2 Where there are no accessible (within the twenty (20) kilometer radius)
GFIs, the LGU shall furnish the BLGF a copy of the vicinity map showing the location
and distance between the LGU, the GFIs and the (proposed) bank; and,

3.3 Where security and safety are the reasons for opening and maintaining an
account in a (proposed) bank, the LGU shall furnish the BLGF an Independent Report
or Certification from the Philippine National Police Provincial Office confirming the
existence of the security risks.
 Chapter 3.COLLECTION PROCEDURES
Section 58.Procedures and Controls on Deposit of Collections with Authorized
Depository Banks

Daily Deposit of Collections with the Banks

1. The Local Treasurer or Cashier shall deposit intact all collections, as well as all
collections turned over by the Collectors with the authorized depository bank
daily or not later than the next banking day. All deposits shall be recorded in the
Cashbook – Cash in Vault and Cashbook – Cash in Bank.

Time Deposit Account

1. Provinces, cities, municipalities and barangays may deposit with duly authorized
government depository banks, idle funds in the General Fund under time deposit
accounts, upon prior authority of the sanggunian and approval of the Local Chief
Executive.

Idle Funds refers to cash which the local government unit can freely invest in
government securities and/or fixed term deposits with authorized government
depository banks, after considering provisions for the coverage of regular and
recurring operating expenses
 Chapter 3.COLLECTION PROCEDURES
Section 60. Forms and Reports Used by Local Treasury Officials

a) Report of Collection and Deposits 3.2 For Real Property Tax payments,
(RCDs) separate RCD shall be prepared for the
The RCD shall be prepared daily by the collections pertaining to the Basic Tax
following: and additional tax accruing to the
1. Collectors Special Education Fund (SEF).
2. Liquidating Officers
3. Local Treasurer In case of Real Property Tax payments in
municipal treasuries, additional copies of
RCD for the Basic Tax and SEF shall be
3.1 The Local Treasurer shall verify and prepared for submission to the Office of
acknowledge the submitted consolidated the Provincial Treasurer for reference in
RCD and shall deposit “intact” all the computation of the provincial share
collections turned-over by the therefrom.
Liquidating Officer to the authorized
depository banks.
The procedures to be followed in filling-
up the form shall be the same
 Chapter 3.COLLECTION PROCEDURES
Section 60. Forms and Reports Used by Local Treasury Officials

c) Consolidated Report of Accountability for Accountable Forms (CRAAF)

The CRAAF shall be prepared by the Local Treasurer to consolidate the RAAF of all
Accountable Officers. The consolidated report accompanied by the individual
reports shall be submitted to the Unit Auditor concerned not later than the fifth
(5th) day of the ensuing month for verification.
 Chapter 4.EXAMINATION OF BOOKS OF ACCOUNTS AND PERTINENT RECORDS
OF BUSINESSES BY THE LOCAL TREASURER

Examination of Books of Accounts and Access to the Bureau of Internal

Pertinent Records of Businessmen by Revenue Records.
Local Treasurer.
1. Only the Local Treasurer, or his duly The records of the Revenue District
authorized representative, of the LGU Office of the Bureau of Internal Revenue
imposing the tax, fee or charge, may shall be made available to the Local
examine the books of accounts and Treasurer, his deputy or duly authorized
pertinent records of business in order representative.
to ascertain, assess and collect the
correct amount of tax, fee or
charge.
Consequently, no personnel from the
Office of the Local Chief Executive and
other departments within the LGU may
inspect records of businessmen unless
duly deputized in writing by the Local
Treasurer concerned.
 Chapter 4.EXAMINATION OF BOOKS OF ACCOUNTS AND PERTINENT RECORDS
OF BUSINESSES BY THE LOCAL TREASURER
Section 62. Guidelines in the Conduct of the Examination of Book of
Accounts.
Preparation of Working Papers and Tax Tax Data and Assessment Form.
Data and Assessment Form
This shall be accomplished in triplicate and
1. Tax Data Working Papers or Tax submitted by the deputies to their immediate
Data Sheet. supervisor for every examination and inspection
conducted.
This working paper shows the
comparison between the gross It contains all the pertinent information on the
receipts/sales declared per business business concerned and the detailed findings of
permit application and the gross the deputies.
receipts/sales as appearing in the
sales documents examined. This form shows the detailed computation of the
additional assessment for business tax based on
The amount of the understatement or the computed understatement of sales/receipts
overstatement in gross receipts/sales is declared in the business permit application, the
likewise presented in the working amount of surcharges and penalties, the interest on
papers. the deficiency tax assessed, as well as the
signatures of the Examination Team and the Local
Treasurer.
 Annex 1:Procedural Requirements for a Valid Ordinance
1) Written Notices to Interested or
Affected Parties
The notice or notices shall specify the date
or dates and venue of the public hearing
or hearings
2) Public Hearing
(a) The initial public hearing shall be held
not earlier than ten (10) days from the
sending out of notice or notices, or last
day of publication, or date of posting
thereof, whichever is later.
(b) Public hearing shall be conducted
prior to the enactment of the tax
ordinance or revenue measure
3) Preparation of Minutes.
The secretary of the sanggunian concerned
shall prepare the minutes of such public
hearing and shall attach the minutes the
position papers, memoranda, and the like
submitted by those who participated
4) Approval.
(a) Every ordinance enacted by the
sangguniang panlalawigan, sangguniang
panlungsod, or sangguniang bayan, shall be
presented to the provincial governor or city
or municipal mayor, as the case may be.
If the local chief executive concerned approves
the same, he shall affix his signature on each
and every page thereof
 Annex 1:Procedural Requirements for a Valid Ordinance

5) Publication of Tax Ordinances and Revenue Measures.

(a) Within ten (10) days after their approval, certified true copies of all provincial, city,
and municipal tax ordinances or revenue measures shall be published in full for
three (3) consecutive days in a newspaper of local circulation:

Provided, however, That in provinces, cities and municipalities where there are no
newspapers of local circulation, the same may be posted in at least two (2)
conspicuous and publicly accessible places.
 Annex 1:Procedural Requirements for a Valid Ordinance

A. Substantive Requirements for a Valid Revenue Ordinance.

To be valid, a tax, or revenue ordinance must conform to the following substantive

requirements:

1) It must not contravene the Constitution or any statute;

2) It must not be unfair or oppressive;
3) It must not be partial or discriminatory;
4) It must not prohibit but may regulate trade;
5) It must be generally consistent with public policy; and
6) It must not be unreasonable.
 Annex 2:Policies, Rules and Procedures on Barangay Collections,
Remittances and Deposits

A. Policies and Procedures for Deposit of Barangay Collections:

(1) The Barangay Treasurer shall deposit all his collections including those turned
over by the deputized Barangay Collectors with the Authorized Government
Depository Bank intact daily or not later than the following banking day. In the case
of a barangay where travel time to the depository bank is more than one (1)
day, deposit of collections shall be made at least once a week or as soon as the
collections reach P10,000.00.

(2) In the absence of an Authorized Government-Owned Depository Bank, deposits may

be made in any bank nearest the barangay and authorized by the Monetary Board (MB)
of the Bangko Sentral ng Pilipinas as government depository bank.
 Annex 2:Policies, Rules and Procedures on Barangay Collections,
Remittances and Deposits

C. Policies and Procedures on the Receipt and Remittance of Collections by the

Barangay Treasurer as Deputized by the City/Municipal Treasurer

(3) For a barangay where the travel time to the City/Municipal Treasurer’s Office is more
than one (1) day, remittance of collections shall be made at least once a week, or as soon
as the collections reach P5,000.00

(4) All remittances shall be supported by a Summary of Collections and Remittances.