LOCAL TREASURY OPERATIONS MANUAL 2" EDITION DEPARTMENT OF FINANCE BUREAU OF LOCAL GOVERNMENT FINANCE Manila, PhilippinesBOOK II Receipt and Collection of Income, Revenues and Other Fund Sources>. _ TABLE OF CONTENTS TABLE OF CONTENTS Section 36. Definition of Terms CHAPTER 1 TAXING POWERS OF LOCAL GOVERNMENT UNITS (LGUs) Section 37. Power of LGUs to Create Sources of Revenue Section 38. Fundamental Principles of Taxing and Other Revenue Raising Powers of LGUs Section 39. Power of LGUs to Levy Taxes, Fees or Charges Section 40. Authority to Adjust Tax Rates Section 41. Valid Tax Ordinances and Revenue Measures Section 42. Taxing Powers of Provinces Section 43. Taxing Powers of Cities Section 44. Taxing Powers of Municipalities Section 45. Taxing Powers of Municipality within the Metropolitan Manila Area (MMA) Section 46. Common Limitations on the Taxing Powers of LGUs Section 47. Collection of Taxes CHAPTER 2 SOURCES OF INCOME in 48. Professional Tax n 49. Community Tax Section 50. Real Property Tax Section 51. Special Provisions Section 52. Special Education Fund (SEF) Section 53. Special Levy on Idle Lands Section 54. Special Levy on Lands Benefited by Public Work Projects Section 55, Disposition of Proceeds Section 56. Tax on Transfer of Real Property Ownership ion 57. Local Business Tax Section 58. Tax on Sand, Gravel, and Other Quarry Resources . Tax on Delivery Trucks or Vans . Amusement Tax Section 61. Franchise Tax see 82. Tax on Printing and Publication See a Tax Revenues — Fines and Penalties n 64. Share from Internal Revenue Allotment (IRA) Section 65, Share from A ; 3 rom Expanded Te T Section 66. Sharaf Rael ee \dded Tax (VAT) Secti Section eal Share in the Proceeds of the Tob: ‘onomic Zones Seren oe Share from Eo acco Excise Tax i - Service | sen Income tion 70. Business IncomeSection 71. Section 72. Section 73. Section 74. Section 75. Section 76. Section 77. Section 78. LTOM, 2° EDITION Share from Philippine Amusement and Gaming Corporations (PAGCOR) Share from Philippine Charity Sweepstakes Office (PCSO) Other Source of Income of LGUs Local Economic Enterprises (LEEs) Establishing and Governing the LEE Basic Services and Facilities Examples of Government Enterprises Private Sector Participation in the Operation and Management of LGU Enterprises CHAPTER 3 COLLECTION PROCEDURES Section 79. Se Section 81. . Use of Electronic Official Receipts (eORs) to Acknowledge Ser Section 83. Section 84, Section 85. Section 86. . Control of Collections . Deposit of Collections . Designation of Liquidating Officers . Reporting for Collections and Deposits Designation of Collecting Officers . Prohibition from Holding Other Positions as Cashier or Treasurer Acknowledgment of Collections Collection of Income and Other Receipts of Government Procedures for Handling Collections Received through the Mail Checks Received in Payment for Taxes or Other Indebtedness to the LGU . Handling of Dishonored Checks Received in Payment of Taxes and Other Indebtedness to the Government Control of Official Receipts and other Accountable Forms Section 91. Receipt and Collection Process FORMS A Annex 9 Annex 10 Annex 11 Annex 12 Annex 13 Annex 14 ND ANNEXES JMC No, 2019-01: Guidelines for the Review, Adjustment, Setting and/or Adoption of Reasonable Regulatory Fees and Charges of Local Government Units Requirements of a Valid Ordinance Local Revenue Toolkit for Philippine Local Government Units (Annex G of A Local Revenue Toolkit for Philippine LGUs, Guidelines on Provincial/Local Planning and Expenditure Management, NEDA/ADB, 2007) Cashbook (Cash in Treasury) (Annex 19 of MNGAS for LGUs, Volume I!) Cashbook (Cash in Bank) (Annex 20 of MNGAS for LGUs, Volume II) Cashbook (Cash Advance) (Annex 21 of MNGAS for LGUs, Volume I!) 95 95 95 95 98 98 101 105 111 1 114 114 116 17 118 129 131 137 138 139TABLE OF CONTENTS LTOM Form No. 1 LTOM Form No. 2 Annex 15 Annex 16 Annex 17 Annex 18 Annex 19 Annex 20 Cashbook (Collector) Cashbook [Liquidating Officer (LO)] Notice of Dishonor (COA Revised Cash Examination Manual, 2013) Report of. Accountability for Accountable Forms (RAAF) (Annex 42 of MNGAS for LGUs, Volume ") Consolidated Report of Accountability for Accountable Forms (CRAAF) (Annex 43 of MNGAS for LGUs, Volume II) Report of Collections and Deposits (RCD) (Annex 41 of MNGAS for LGUs, Volume II) DOF Department Circular No. 01-2017 - Amended Guidelines on Authorized Government Depository Banks BLGF Memorandum Circular No. 07-01-2017 - DOF Department Circular No. 01-2017 (Amended Guidelines on Authorized Government Depository Banks) 140 141 142 143 145 149 154 157LTOM, 2°° EDITION INTRODUCTION LTOM Book II describes and enumerates the taxing powers of provinces, cities, and municipalities, as well as the sources of revenues to support their operations. This Book provides relevant provisions and procedures in the collection of revenues and receipts, as well as illustrations and samples. It also provides illustrations and samples for better understanding of the flow of processes. This Book consists of three (3) Chapters including Forms and Annexes, viz: Chapter 1 Taxing Powers of LGUs Chapter 2 Sources of Income Chapter 3 Collection Procedures\S DEFINITION OF TERM SECTION 36. DEFINITION OF TERMS refers to the principal purpose for which the sr fi “ Pro, A. Actual Use tly utilized by the person in possession thereos, se predominen d devoted principall u fers to land devoted principally to the Plant 1 Lg cultural Land ref aa ;__'e Planting oy C] B. Bone livestock and poultry, dairying, salt making, inland fishin Tees, ti Squacultural activities, and other agricultural activities, Commerciay ang sing! land. [Sec. 199 (d), LGC] oT ind C. Agricultural Product — includes the yield of the soil, such as Corn, tice hay, coconuts, sugarcane, tobacco, root crops, vegetables, fruits, Wheat, Ve their by-products; ordinary salt; all kinds of fish; pout products, whether in their original form or not. is Pris 199 yy « , flow, try; and livestock and = ima 1 The phrase "whether in their original form or not" refers to the transt of said products by the farmer, fisherman, producer or Owner Teoma application of processes to preserve or otherwise to Prepare the saidpe the for the market such as freezing, drying, salting, smoking, or strip od purposes of preserving or otherwise preparing said Products I for for the market [Sec. 34 (a), LGC] 2. To be considered an agricultural product whether in its Original form or not its transformation must have been undertaken by the farmer, fisherman producer or owner. 3. Agricultural products, as defined, include those that have undergone not only simple but even sophisticated processes employing advanced technological means in packaging like dressed chicken or ground coffee in plastic bags or styropor or other packaging materials intended to Process and prepare the products for the market. 4. The term "by-products" shall mean those materials which in the Gui) or processing of an article remain over, and which are still of value ar marketable, like copra cake from copra or molasses from sugar cane. [Art. 220 (a), IRR, implementing Sec. 131 (a), LGC] Branch or Sales Office refers to a fixed place in a locality which oo ceed eal a the business as an extension of the principal office. However Cr used only as display areas of the products where no stocks or items as branch for sale, although orders for the products may be received thereat, are mot orders or sales offices as herein contemplated. A warehouse which eo shall be and/or issues sales invoices independent of a branch with sales office 50, use] “Considered as a sales office. (Art. 243 (a) (2), IRR implementing Sec E. Charges refer to Laban ‘ rsons oF Pecuniary | fees against pe (Sec. 131 (g), Lec) ry liability, as rents or fees ag: F. Ex to ts the offices proper ratio" or corpo. Perimental Farms refer to agricultural lands utilized by @ busines® “tural. 2" conduct studies, test, researches or experiments involving 49)LTOM, 2°° EDITION en or aquatic, livestock, poultry, dairy and other similar products for Pose of improving the quality and quantity of goods or products. ‘ Pay rn natural or juridical, licensed to do business in the Bae e gaged rectly or indirectly in the production, manufacture or trade products or services which earns at least fifty percent (50%) of its normal operating revenues from the sale of its products or services abroad for foreign currency: Provided, That in the case of services, the same shall be limited to information technology services, construction services and other services as defined jointly by the DOF and the DTI. Services rendered by overseas contract workers are not covered by the definition. (Sec. 4 . 4(a), RA 784 Development Act of 1994) (Sec. 4(a) 4 or the Export . Fee means a charge fixed by law or ordinance for the regulation or inspection of a business or activity. [Sec. 134 (I), LGC] Franchise is a right or privilege, affected with public interest which is conferred upon private persons or corporations, under such terms and conditions as the government and its political subdivisions may impose in the interest of public welfare, security, and safety. [Sec. 131 (m), LGC] Gross Sales or Receipts include the total amount of money or its equivalent representing the contract price, compensation or service fee, including the amount charged or materials supplied with the services and deposits or advance payments actually or contructively received during the taxable quarter for the services performed or to be performed for another person excluding discounts if determinable at the time of sales, sales return, excise tax and value-added tax (VAT). [Sec. 131 (h), LGC] _ Income refers to all revenues and receipts collected or received forming the gross accretions of funds of the local government units (LGUs). Principal Office refers to the head or main office of the business appearing in the pertinent documents submitted to the Securities and Exchange Commission, or the Department of Trade and Industry (DTI), or other appropriate agencies as the case may be. [Art. 243 (a) (1), IRR implementing Sec. 150, LGC] . Plantation refers to a tract of agricultural land planted to trees or seedlings whether fruit bearing or not, uniformly spaced or seeded by broadcast methods or normally arranged to allow highest production. For purposes of this Article, inland fishing ground shall be considered as plantation. [Art. 243 (a) (4), IRR implementing Sec. 150, LGC] rom operations and activities of the local in the exercise of its corporate functions red, conveniences furnished, or the price contributions or aids from other entities, purposes. (Sec. 36, Chapter 1, Volume . Receipts refer to income realized fr government or are received by it i consisting of charges for services rendet of a commodity sold, as well as loans, except provisional advances for budgetary 1, GAAM)DEFINITION OF TERMS O. Revenue refers to income derived from the regular system of taxation g, under authority of law or ordinance, and, as such, accrues more or less enforce every year. (Sec. 36, Chapter 1, Volume 1, GAAM) Qularly P. Warehouse refers to a building utilized for the storage of products for sal, from which goods or merchandise are withdrawn for delivery to customer en dealers, or by persons acting in behalf of the business. A warehouse that ‘ e not accept orders and/or issue sales invoices as aforementioned shall nati icc a branch or sales office. [Art. 243 (a) (3), IRR implementing Sec, aeTAXING POWERS OF THE LOCAL GOVERNMENT UNITS (LGUs) SECTION 37. POWER OF LGUs TO CREATE SOURCES OF REVENUE A. Each LGU shall have the power to create its own sources of revenues and to levy taxes, fees and charges subject to the provisions of the Code, consistent with the basic policy of local autonomy. Such taxes, fees and charges shall accrue exclusively to the local governments. (Sec. 129, LGC) B. The revenue collected pursuant to the provisions of the LGC shall inure solely to the benefit of, and be subject to disposition by the LGU levying the tax, fee, charge or other impositions unless otherwise specifically provided in the LGC. [Sec. 130(d), LGC] C. Local revenue is generated only from sources expressly authorized by law or ordinance, and collection thereof shall at all times be acknowledged properly. (Sec. 305 (c ), LGC) D. All monies officially received by a local government officer in any capacity or on any occasion shall be accounted for as local funds, unless otherwise provided by law. (Sec. 305 (d), LGC) SECTION 38. FUNDAMENTAL PRINCIPLES OF TAXING AND OTHER REVENUE RAISING POWERS OF LGUs The following fundamental principles shall govern the exercise of the taxing and other revenue-raising powers of the LGUs. A. Taxation shall be uniform in each LGU. [Sec. 130(a), LGC] rmity in local taxation means that all taxable articles or f the same class shall be taxed at the same rate within the taxing authority of LGU and not necessarily units although belonging to the same political mity is required only within the geographical 416, Tax Law and Jurisprudence, 14. Equality and unifor kinds of property of the territorial jurisdiction of in comparison with other subdivision. In fine, unifort limitation of the taxing authority (p. Second Edition, Vitug and Acosta) Thus, if the tax is a municipal tax, it must be uniform throughout the municipality (Notes on Sec. 130, LGC; p. 20, Philippine Law on Local Government Taxation, Volume 1, Third Edition, Ursal, 2010). The uniformity required is only within the territorial jurisdiction of a province, a city, a municipality or a barangay [Art. 219(a), IRR, implementing Sec. 130(a), LGC] uniform when it operates with the same force and effect in every place where the subject may be found. Where the statute or ordinance applies equally to all persons, firms and corporations placed in similar situations, there is no infringement of the rule on equality. Inequalities 2. A tax is considered{AXING GOVERNMENT UNITS (LGUs) oct cower oF HEE ne sinaling out of one particular Class, in the s { exemption infringe no constity dence, Second Edition, Vitu, sult from It ee oe au aa Iitan classes. Vw and JUrisP! MM Acoso ity in taxation (p. 23, pp; . quivalent to equality in tax \P. 23, Phil, iformity is aeons Volume One, Third Edition, Ursal 0 Loca ruled, “It is true that the uniformity sential fg 1) The or quali Vag Object of ty fo be Vali, mi 4 Satisfied une = Itisbased upon. substantial distinctions which make the Teal dif Peck ig uni ee of taxation does not require identit tances, OF negate the authority to classify the all cirt ee ‘ation made in the exercise of this authority, The cess fe reasonable and this requirement is not deeme, however, be exercise of F These are germane to the purpose of the legislation or erence, i ly te 7 OF Ordinance. The classification applies, not only to present conditions, but, ag future conditions substantially identical to those of the " 380, to je Present: The classification applies equally to all those who belong to ter class.” B. Taxes, fees, charges and other impositions shall: 1 Be equitable and based as far as practicable on the taxpayer's ability to pay. [Sec. 130 (b) (1), LGC] Equitability is characterized by equity. It means being fair to all concemed and that is without prejudice, favor or vigor entailing undue hardship. itis the word faimess that best describes equitable. If the tax is excessive, itis 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, i is not far. The taxpayer's ability to Pay must be considered. It cannot be absolute or it Cannot be based on a hard and fast rule. Ability to pay is more equated with the progressive system of taxation, that is, the more you earn, the more tax you pay. Taxation must be based, as far as practicable, on ability to pay. (p. 209, Local Government Code, Annotated, Nolledo) The question as to when a tax is said to be “equitable,” is related to the sitbution of the tax burden itself. Thus, the most equitable ax | __ |S that which is most closely in conformity with the standards of equity Toate fea i 1 Government i come. (p. on Local Taxation, Volume (p. 24, Philippine Law ————————— One, Third Edi n, Ursal, 2010) Be levied and collected only for public purposes. [Sec.130 (b)(2) LecLTOM, 2°° EDITION Public purpose requires that the proceeds of taxation are used to support the existence of the local government or the pursuit of its governmental objectives. (Local Government Code, Annotated, Nolledo) The tax should be designed to support the services of the government and the recognized public needs. The tax must affect the area as a community rather than as individual. (Local Government Code, Annotated, Nolledo) J Not be unjust, excessive, oppressive, or confiscatory. [Sec. 130, (b) (3), LGC] The tax must be reasonable in order not to be unjust or oppressive. (Local Government Code, Annotated, Nolledo) Not be contrary to law, public policy, national economic policy, or in restraint of trade. [Sec. 130(b) (4), LGC] Atax is contrary to law if it is a tax beyond the authority of an LGU to impose. (Nolledo, Local Government Code, Annotated) 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 notunreasonable. (US vs. Abendan, 24 Phil. 165) A tax must not be in restraint of trade in that it must not deter the free flow of commerce in the country, and cause considerable increase in the price of commodities, to the prejudice of the consuming public. [Sec. 130 (e), Local Government Taxation, Annotated, Ursal] The collection of local taxes, fees, charges and other impositions shall in no case be let to any private person. [Sec. 130(c), LGC] In no case can the National Government share in local taxes even if provided by law. The Constitution provides that local taxes, fees and charges shall accrue exclusively to the local governments. (Sec. 5, Art. X, 1987 Constitution) Each LGU shall, as far as practicable, evolve a progressive system of taxation [Sec. 130 (e), LGC]. 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. (Local Government Taxation, Volume One, Third Edition, Ursal, 2010)jeRNMENT UNITS (uGus) THe Local GO" power OF LGUs TOE axinc POWERS OF EVY TAXES, FEES OR CHaRGpe SECTION 39. levy taxes, fees, OF charges on any p, ower ymerated in the LGC or taxed un, ise t sus may exercise lly en A, LGUs o speical eenue Code (NIRC), a8 amended, jonal In fees or charges shall not b trary to declared nation; 288 oy er the OF other © Unjust s, prov" con applicable laws: P © iscatory OF lal po} pe ressive, cont Er arcaticestor dias: a ot excess a re ordinance levying su provided public hearing conducted for the purpose. (Seo, fa be enact LGC) st such reasonable fe i ay impose and collect 00s » icipality May and except as reserved to the brovince n The city and mun! ipatio ing, commer charges 0 gg and occupation, fession or calli S a 39 of the LGC, on the practice of any professio 9, NSurate . 139 of . spection and licensing before any person ma st of regulation, i - . er business OF occupation, or practice such profession or Calling e (Sec. 147, LGC) To ensure uniform procedure in setting reasonable fees and charges as provided for by the provisions of RA No. 7160, and in order to set a balance between recovering the cost of service and the ease of doing business in compliance with RA No. 11032, DOF-DILG JMC No. 2019.01 dated 14 May 2019, issued by the Secretary of Finance and the Secretary of Interior and Local Government, provides the guidelines for the review, adjustment, setting and/or adoption of reasonable regulatory fees and changes of local government units. (Annex 9) Z For details on the implementation of DOI ILG JMC No. 2019.01, refer to BLGF Memorandum Circular No. 020.2019, dated 02 September 2019, providing for the Local Fees and Charges (LFC) Toolkit on the Review, Setting, andlor Adoption of Reasonable Local Fees and Charges SECTION 40. AUTHORITY TO ADJUST TAX RATES oe shal have the authority to adjust the tax rates not oftener that once every five years but in no case shall such adjustment exceed t 10%) of the rates fixed under the LGC (Sec. 191, tec) as He Hower, a xxx City may rectify and amend their old tax ordinance In oer pel implementation of the LGC, it, however, cannot impose 2 ore ee at its initial implementation of the LGC in so far as retailers ae xx City should, at the very least, start with 1% (the minimum ) as provided under Sec. 143(d) of the LGC. xxx. Consideri 2006, Se Chee years had already elapsed from its implementing in adjust its tax rate twice now which will make its. adjustedLTOM, 2°° EDITION ae ie retailers pegged at 1.2%, in accordance with Sec. 191 of the ~ Toclarify, from 2006- 2011 (first 5 years), the initial tax rate should start with 1%; from 2011-2016 (next five year: 1AY =1.1%, i 2021, the adjustment is 1.21%. Years) ries, forthe years 2017 Clearly, the aforementioned jurisprudence is illustrative that the upward a adjustment of tax rates in accordance with Sec. 191 of the LGC shall T be reckoned with the existing tax rate imposed by the LGU under a dul d / Pp yy the Li ly i However, for this purpose, xxx City should pass an ordinance to give effect to the above discussed tax adjustments. xxx, (GR No. 211093, 06 June 2017) SECTION 41. VALID TAX ORDINANCES AND REVENUE MEASURES i A. The power to impose a tax, fee or charge or to generate revenue under the = LGC shall be exercised by the sanggunian of the LGU concerned through an - appropriate ordinance. (Sec. 132, LGC) r B. For any revenue ordinance to be valid, it must conform to the provisions of Chapter 5, Title 1, Book Il of the LGC, which define both substantive and procedural requirements therefor. r Q As in all revenue measures, it is up to the particular local government to enact the necessary revenue ordinance that would enable it to avail of its power to impose 1 agiven tax, fees, charges and otherimpositions. D. Procedures and the Role of the Local Treasurer in the Adoption/Approval of Local Revenue Measures/Code Stages Activities [ Role of Treasurer | Draft Local Revenue Measures/Code 1 : | __ Provide historical data on collection and estimated | increase. | | - Collate data on existing revenue ordinance from | neighboring LGUs with similar income class! Assistin the | raphical location. - Require revenue generating offices to provide preparation rates of taxes, fees and charges sinance of the i = Discuss/deliberate proposed revenue draft local Drafting Stage Discuss/delipeveneralion offices to come up with taonue the final draft of the revenue ordinance. - Present to the Local Chief Executive, the final draft measures/ of the proposed revenue ordinance ‘code d revenue Local Chief Executive approves the proposes ordinance and endorses the same to the Sanggunian- © ING POWERS OF THE LOCAL GOVERNMENT UNITS (LGUs) tax s 7 ! ‘Sanggunian refers the proposed revenue | ordinance to the Committee on Ways and Means Sanggunian conducts public hearing Deliberation —_piscussion/Deliberation/Modification and Refinement Documentation Stage 1 Sanggunian enacts revenue ordinance and ‘submits to the LCE for approval - Amendments - Approval | ot Publication of approved revenue ordinance = Three (3) consecutive days in newspaper of local circulation ~ Posting in at least two (2) conspicuous and publicly accessible places if there are no Secure copies of newspapers of local circulation enacted/approveg Publication : . revenue ordinances Stage For ame ee with penal for pubic |. Three (3) consecutive days In a newspaper es of general circulation within the territorial jurisdiction of the LGU = Posting in at least two (2) accessible and "conspicuous places in the absence of any | newspaper of general circulation | | | Collection of taxes, fees and charges Implementation Implementation of the approved revenue based on the new Stage ordinance rates as provided in the approved — revenue ordinance E. Procedural Requirements for a Tax Ordinance and Revenue Measures | Written Notices to Interested or Affected Parties - In addition to the foregoing requirement on publication or posting, the sanggunian & Shall cause the sending of written notices of the proposed enclosing a copy thereof, to the interested or affected parties 0Pe"@ onceme’ ydinance, ting O° doing business within the territorial jurisdiction of the LGU conce™?® 276 (b) (2), IRR, implementing Sec. 188, LGC]LTOM, 2"° EDITION Information must reach those that shall be directly affected by the imposition. For example, when the measure is on business tax, the LGU may invite the business community in the public hearing. To ensure compliance with the requirement, sending of written notices is necessary. The notice/s shall specify the date or dates and venue of the public hearing or hearings. [Art. 276 (b) (3), IRR, implementing Sec. 188, LGC] Public Hearing a. The initial public hearing shall be held not earlier than ten (10) days from the sending out of notice/s, or the last day of publication, or date of posting thereof, whichever is later. (Art. 276 (b) (3), IRR, implementing Sec. 188, LGC] Public hearings shall be conducted for the purpose prior to the enactment of the tax ordinance or revenue measure. (Sec. 187, LGC) At the public hearing/s, all affected or interested parties shall be accorded an opportunity to appear and present or express their views, comments and recommendations, and such public hearings shall continue until all issues have been presented and fully deliberated upon and/or a consensus is obtained, whether for or against the enactment of the proposed tax ordinance or revenue measure. [Art. 276 (b) (4), IRR, implementing Sec. 188, LGC] The secretary of the sanggunian concerned shall prepare the minutes of such public hearing and shall attach to the minutes the position Papers, memoranda and other documents submitted by those who participated. [Art. 276(b) (5), IRR, implementing Sec. 188, LGC] No tax ordinance or revenue measure shall be enacted or approved in the absence of a public hearing duly conducted in the manner herein prescribed. [Art. 276 (c), IRR, implementing Sec. 188, LGC] Approval of Ordinances a If the Local Chief Executive (LCE) concerned approves the same, he/ she shall affix his/her signature on each and every page thereof. [Sec. 54 (a), LGC) The LCE may veto any ordinance of the sangguniang panlalawigan, sangguniang panlungsod, or sangguniang bayan on the ground that it is ultra vires or prejudicial to the public welfare, stating his/her reasons therefor. in writing [Sec. 55 (a), LGC], and retum the same to the sanggunian, which may proceed to reconsider the same [Sec. 54 (a), LGC]. The veto shall be communicated by the LCE concerned to the sanggunian within fifteen (15) days in the case of a province, and ten (10) days in the case of a city or a municipality; otherwise, the ordinance shall be deemed approved as if he/she had signed it. [Sec. 54 (b), LGC]4 d. The LCE may veto an ordinance or resolution Lec] Only ong, ©. [Se, ©. 85 © The sanggunian concemed may override the ve, 0) eto of : thirds (2/3) vote of all its members, resolution effective for all legal intone making the ae by Lec] Purposes pa tiMang.” 1800, 28 Publication of Tax Ordinances and Revenue Mea fa), (10) days after their approval, certified true copies of n° ~ (a) wy municipal tax ordinances or revenue measures shal 1 orvincial, el tay for three (3) consecutive days in a newspaper of local be Publish, hs Yi ang, however, that in provinces, cities and municipalities ou tion: Pre.” fu newspapers of local circulation, the same may be poetnere there» deq conspicuous and publicly accessible places. (Sec, 188 | Cat leas Ne no ordinance or revenue measure contains penal brovisions°<) ordinance or revenue measure shall be published in a ne the gist o circulation within the province where the WSPaPEr of gon Uh belongs. In the absence of any newspaper of general Circulation wi Med province, posting of such ordinance or measure shall be m; nF Within th and conspicuous public places in all municipalities and cities IN accessitig to which the sanggunian enacting the ordinance S of the TOvincg ol belongs. (Art. 276, IRR, implementing Sec. 188, Lec). revenue Measure local Sangguniang Effectivity of Tax Ordinances or Revenue Measures —The revenue measures take effect upon compliance with the ix Ordinances o, , abov and substantive requirements. © Procedural In case the effectivity of any tax ordinance or revenue measi date other than the beginning of the quarter, the same shall be consid as falling at the beginning of the next ensuing quarter and the taxes, fees charges due shall begin to accrue therefrom. [Art. 276 (a), IRR, Lec] or Ure falls on an Furnishing of Copies of Tax Ordinances and Revenue Measures — Copies of all provincial, city and municipal tax ordinances and revenue measures shall be furnished the respective local treasurers for public dissemination. (Sec, 189, LGC) Review of Tax Ordinances or Revenue Measures —The LGC provides the following cautionary steps wherein tax ordinances or revenue measures of component cities and municipalities are reviewed by the sangguniang panlalawigan, and ordinances of barangays by the sangguniang panlungsod or sangguniang bayan: a. _ Review of Component City and Municipal Ordinances or Resolutions by the Sangguniang Panlalawigan ry to the i. Within three (3) days after approval, the secretal ard sangguniang panlungsod or sangguniang bayan Sd to the sangguniang panlalawigan for review, copies Ci revenue ordinances and resolutions. [Sec. 56 (a).vi. vii viii LTOM, 2°° EDITION Within thirty (30) days after receipt of copies of such revenue ordinances and resolutions, the sangguniang panlalawigan shall examine the documents or transmit them to the provincial attorney, or if there be none, to the provincial prosecutor for Prompt examination. The provincial attorney or provincial Prosecutor shall, within a period of ten (10) days from receipt of the documents, inform the sangguniang panlalawigan in writing of his/her comments or recommendations, which may be considered by the sangguniang panlalawigan in making its decision. [Sec. 56 (b), LGC] If the sangguniang panlalawigan finds that such an ordinance or resolution is beyond the power conferred upon the sangguniang panlungsod or sangguniang bayan concerned, it shall declare such ordinance or resolution invalid in whole or in part. The sangguniang panlalawigan shall enter its action in the minutes and shall advise the corresponding city or municipal authorities of the action it has taken. [Sec. 56 (c), LGC] The review by the sangguniang panlalawigan of the component city and municipal revenue ordinances is limited to determining the legality thereof or if the same exceed the powers conferred upon by law to the sangguniang panlungsod or sangguniang bayan. Exceeding such powers is ultra vires and amounts to usurpation of the legislative functions of the city or municipal councils. The review by the sangguniang panlalawigan is in the nature of legislative check and it is a measure by which the provincial government exercises its power of general supervision over component units. If no action has been taken by the sangguniang panlalawigan within thirty (30) days after submission of such an ordinance or resolution, the same shall be presumed consistent with law and therefore valid. [Sec. 56 (d), LGC] Pending review by the higher council, a revenue ordinance continues to be in force and effect. Declaration of invalidity of the revenue ordinance is equivalent to disapproval thereof. The signature of the governor is required in relation to the resolution adopted by the sangguniang panlalawigan, approving or disapproving the revenue ordinance or resolution enacted by the sangguniang bayan or sangguniang panlungsod. Review of Barangay Ordinances by the Sangguniang Panlungsod or Sangguniang Bayan_—_—_—_—— RS OF THE LOCA OVERNMENT UNITS (LGUS) OWERS OF THE LOCAL G' /ERNMENT UNITS (LGUs) TAXING P' ten (10) days after its enactment, the bail ai furnish copies of all barangay iting to the sangguniang panlungsod or Sanggunian, ‘ances concerned for review as to whether the ordinance is con, ‘Ayan with law and city or municipal ordinances. 'Sisteny If the sangguniang panlungsod or sangguniang bayan, case may be, fails to take action cn barangay ording within thirty (30) days from receipt thereof, the ances shall be deemed approved. am iii, If the sangguniang panlungsod or Sargguniang bayan, as th case may be, finds the barangay ordinances NConsistent wi i law or city or municipal ordinances, the sanggunian conce, 7 shall within thity (20) days from receipt thereat te the same with its comments and recommendations to pu sangguniang barangay concerned for adjustment, amend 7 or modification; in which case, the effectivity of the barangay ordinance is suspended until such time as the revision calleg for is effected. ment, [Sec. 57, LGC] SECTION 42. TAXING POWERS OF PROVINCES Except as otherwise provided in the LGC, the province may levy only the taxes, fees, and charges specifically reserved to provinces, as follows: (Sec. 134, LGC) . Tax on Transfer of Real Property Ownership (Sec. 135, LGC); . Tax on Business of Printing and Publication (Sec. 136, LGC); . Tax on Sand, Gravel and Other Quarry Resources (Sec. 138, LGC); Professional Tax (with required government examination} (Sec. 139, LGC); Amusement Tax (Sec. 140, LGC, as amended by Republic Act (RA) No. 9640, 21 May 2009); A B. C. Franchise Tax (Sec. 137, LGC); D. E. F. G. Annual Fixed Tax for Every Delivery Truck or Van of Manufacturers or Producers, Wholesalers of, Dealers, or Retailers in, Certain Products (Sec. 141, LGC); H. Real Property Tax (Sec. 232, LGC); a Levy on Real Property for the Special Education Fund (SEF) (See. 235 |. Additional Ad Valorem Tax on Idle Lands (Sec. 236, LGC); —_—————™LTOM, 2"° EDITION . Special Levy on Lands Benefited by Public Works, Projects or Improvements Funded by LGU concerned (Sec. 240, LGC); Service Fees and Charges (Sec. 153, LGC); M. Public Utility Charges (Sec. 154, LGC); and N. Toll Fees or Charges (Sec. 155, LGC) SECTION 43. TAXING POWERS OF CITIES A. Except as otherwise provided in the LGC, the city may levy the taxes, fees, and charges which the province or municipality may impose: provided, however that the taxes, fees, and charges levied and collected by highly urbanized and independent component cities shall accrue to them and distributed in accordance with the provisions of the LGC. _ The rates of taxes that the city may levy 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. (Sec. 151, LGC) The city may levy and collect a percentage tax on any business not otherwise specified under paragraphs (a) to (g), Article 232, IRR of the LGC, at rates not exceeding three percent (3%) of the gross sales or receipts of the preceding calendar year. (Art. 237, IRR implementing Sec. 151, LGC) . A city may levy local business tax in addition to local franchise tax at the same time. (GR No. 213136, 5 September 2018) Cities may levy the following taxes, fees and charges: 4. Taxon Transfer of Real Property Ownership (Sec. 135, LGC); 2. Tax on Business of Printing and Publication (Sec. 136, LGC); 3. Franchise Tax (Sec. 137, LGC); 4. Tax on Sand, Gravel and Other Quarry Resources (excluding component cities) (Sec. 138, LGC); 5. Professional Tax (Sec. 139, LGC); Amusement Tax (Sec. 140, LGC, as amended by RA 9640, 21 May 2009); 7. Annual Fixed Tax for Every Delivery Truck or Van of Manufacturers or Producers; Wholesalers of, Dealers, or Retailers in, Certain Products (Sec. 141, LGC); 8. Tax on Business (Sec. 143, LGC); 9. Community Tax (Sec. 156, LGC);Se Terre rue Local GOVERNMENT uM or anne POWERS Real property Tax (Sec. 232, LGC); : additional Levy 0” Real Property for the Special Education, Fung f "ech Sa ‘Additional Ad Valorem Tax on Idle Lands (Sec. 236, Lec). 12. Specially Benefited by Put Levy on Lands ic Woy 13, Special Leg (Sec. 240, LGC): "Papa, Improvemer 14. Socialized Housing Tax (RA 7279 & LFC 1-97); 45, Fees and Charges on Business and Occupation (Sec. 147, tse) ealing and Licensing of Weights and Measures (See nm Is, Fees and Charges (Sec. 149, LGC); Lo) .d Charges (Sec. 153, LGC), 16. Fees for St 17. Fishery Rental 48. Service Fees an Public Utility Charges (Sec. 154, LGC); and 20. Toll Fees or Charges (Sec. 155, LGC). SECTION 44, TAXING POWERS OF MUNICIPALITIES Except as otherwise provided in the LGC, municipalities may levy taxes, fees ang ‘es not otherwise levied by provinces (Sec. 142, LGC), as follows: charg A. Tax on Business (Sec. 143, LGC); B. Community Tax (See. 156, LGC); C. Special Levy on Lands Specially Benefited by Public Works, Projects or Improvements (Sec. 240, LGC); Fees and Charges on Business and Occupation (Sec. 147, LGC); Fees for Sealing and Licensing of Weights and Measures (Sec. 148, LGC); Fishery Rentals, Fees and Charges (Sec. 149, LGC); Service Fees and Charges (Sec. 153, LGC); zenmmo Public Utility Charges (Sec. 154, LGC); and |. Toll Fees or Charges (Sec. 155, LGC). SECTION 45, TAXING POWERS OF THE MUNICIPALITY WITHIN THE METROPOLITAN MANILA AREA (MMA) erated une A. The munici Article 232 cing pany within MMA may levy taxes on businesses €n\! bes IRR implementing Sec. 143 of the LGC, at rates not &%°— 464 - {TOM 2 EDITION percent (50%) of the maximum rates rescril ‘i (a), IRR implementing Sec. 144, tec). Serbed for said businesses. (Art, 236 B. The municipality may levy and collect taxe: province at the rates not exceeding those pr implementing Sec. 144, LGC] S which may be imposed by the escribed therein. (Art. 236 (b), IRR Real Property Tax (Sec. 232, LGC); D. Additional Levy on Real Propert pete 'y for the Special Education Fund (SEF) (Sec. E. Additional Ad Valorem Tax on Idle Lands (Sec. 236, LGC); F. In the case or a real property tax, the municipality within MMA may fix a uniform rate not exceeding two percent (2%) of the ass d ore (2%) essed value of real SECTION 46. COMMON LIMITATIONS ON THE TAXING POWERS OF LGUs Unless otherwise provided in the LGC, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: 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 otherwise provided in the LGC; 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 LGU concerned; E. Taxes, fees and charges and other impositions upon goods carried into or out of, passing through, the territorial jurisdictions of LGUs 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; F. Taxes, fees or charges on agricultural and aquatic products when sold by marginal farmers or fishermen; G. Taxes on business enterprises certified to by the Board of Investments (BO!) 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 (NIRC), as amended, and taxes, fees, or charges on petroleum products; |. Percentage or value-added tax (VAT) on sales, barters or exchanges or similar transactions on goods or services except as otherwise provided in the LGC; ioTAXING POWERS OF THE LOCAL GOVERNM| | Taxes, fees, or charges on Countryside and Barangay Business Enter, . Taxes, fees or charges of any kind on the National Government, its a ENT UNITS (LGUs) transportation contractors and xes on the gross receipts 0 a ’ Person, a transportation of passengers or freight by hire and common S Nga Carri 'deq land or water, except as provided in the LGC’; Mets by ai, Taxes on premiums paid by way of reinsurance or retrocession; i i f motor vehicles and . Taxes, fees or charges for the registration of and for the of all kinds of licenses or permits for the driving thereof, except tricycleg. Suances Taxes, fees, or charges on Philippine products actually exported o y i he LGC; 1 xcept ag otherwise provided in the ; Prises ang Cooperatives duly registered under RA No. 6810? and RANo. 6938°, as amendeq by RA 9520; and " : gencies ang instrumentalities, and local government units. (Sec. 133, LGC) SECTION 47. COLLECTION OF TAXES A. Tax Period and Manner of Payment — Unless otherwise provided in the LGC, the tax period of all local taxes, fees and charges shall be the calendar year. Such taxes, fees and charges may be paid in quarterly installments. (Sec. 165, LGC) . Accrual of Tax — Unless otherwise provided in the LGC, all local taxes, fees, and charges shall accrue on the first (1st) day of January of each year. However, new taxes, fees or charges, or changes in the rates thereof, shall accrue on the first (1st) day of the quarter next following the effectivity of the ordinance imposing such new levies or rates. (Sec. 166, LGC) . Time of Payment — Unless otherwise provided in the LGC, all local taxes, fees, and charges shall be paid within the first twenty (20) days of January or of each subsequent quarter, as the case may be. The sanggunian concerned may, for a justifiable reason or cause, extend the time for payment of such taxes, fees, oF charges without surcharges or penalties, but only for a period not exceeding six (6) months. (Sec. 167, LGC) . Surcharges and Penalties on Unpaid Taxes, Fees, or Charges — The Sanggunian may impose a surcharge not exceeding twenty-five percent (25%) of the amount Of taxes, fees or charges not paid on time and an interest at the rate not exceeding two percent (2%) per month of the unpaid taxes, fees or charges including surcharges, until such amount is fully paid but in no case shall the total interest recht unpaid amount or portion thereof exceed thirty-six (36) months. (Sec. 168, 1 Cit 3 ai Mente a fon Angel Valera Colet, et al ,GR No. 120051, 10 December 2014 3 Cooperative Code of the PhilippinesLTOM, 2'° EDITION E. Interest on other Unpaid Revenues — Where the amount of any revenue due an LGU, except voluntary contributions or donations, is not paid on the date fixed in the ordinance, or in the contract, expressed or implied, or upon the occurrence of the event which has given rise to its collection, there shall be collected as part of that amount an interest thereon at the rate not exceeding two percent (2%) per month from the date it is due until it is paid, but in no case shall the total interest on the unpaid amount or a portion thereof exceed thirty-six (36) months. (Sec. 169, LGC) F. Collection of Local Revenue by Treasurer — Alll local taxes, fees, and charges shall be collected by the provincial, city, municipal, or barangay treasurer, or their duly authorized deputies. (Sec. 170, LGC)SOURCES OF INCOME TAX REVENUES SECTION 48. PROFESSIONAL TAX each person engaged in the exercise or practice of Professioy or calling, such as but not limited to: lawyers; certified public accountants; doctors of medicine; architects; civil, electrical, chemical, mechanical, structural, industria, mining, sanitary, metallurgical and geodetic engineers; marine surveyors; doctors dentist; professional appraisers, connoisseurs of tobacco: of veterinary science; actuaries; interior decorators, designers, real estate service practitioners (RESP), (ie. real estate consultants, real estate appraisers and real estate brokers) requiring government licensure examination given by the Real Estate Service pursuant to Republic Act No. 9646 insurance agents and actuaries, and all professions requiring government licensure examination regulated by the Professional Regulations Commission, Supreme Court, etc. (Sec. 139, LGC, Revenue Regulations 11-2018) The collection and administration of the professional tax shall be guided by the following: A. The amount of professional tax shall not exceed Php300.00, or the rate provided under a duly enacted local ordinance, subject to adjustment not exceeding ten percent (10%) every five (5) years. [Local Finance Circular (LFC) No. 001.2019, 12 June 2019] B. Every person legally authorized to practice his/her profession shall pay the professional tax to the province, city or the lone municipality within MMA where he/she practices his/her profession or where he/ she maintains his/her principal office in case he/she practices his/her profession in several places: Provided, however, that such person who has paid the corresponding professional tax shall be entitled to practice his/her 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. [Sec. 139 (b), LGC] An annual tax on C. The professional tax shall be payable annually, on or before the thirty-first (31st) day of January. Any person first beginning to practice a profession after the month of January must, however, pay the full tax before engaging therein. [Sec. 139 (d), LGC] The Sanggunian concerned may, for a justifiable reason OF cause, extend the time of payment of such taxes, fees, or charges without surcharges or penalties, but only for a period not exceeding six (6) months. (Sec. 167. LGC. LFC No. 001.2019) D. panel or corporation employing a person subject to professional a emplomment pte by that person of the tax on his/her profession ered and annually thereafter, i duly ena local ordinance. [Sec 139 (c), Lec]. azimay be provided under 8 SYLTOM, 2’° EDITION Aline of profession does not become exempt even if conducted with some other profession for which the tax has been paid. [Sec. 139 (d), LGC] For example, a lawyer who is also a Certified Public Accountant (CPA) must pay the professional tax imposed on lawyers and that fixed for CPAs, if he/she is to practice both professions. [Art. 228 (f), IRR implementing Sec. 139, LGC] Professionals exclusively employed in the government shall be exempt from the payment of this tax [Sec. 139 (d), LGC], unless he/she has been duly authorized to practice the profession outside of his/her official business. (LFC No. 001.2019) Exemption from Payment of Business Permit. A business permit is issued primarily to regulate the conduct of business or trade. However, an LGU cannot, through the issuance of such permit regulate the practice of a profession, which is within the exclusive domain of the agency or office specifically empowered by law to supervise and regulate the profession. Unless covered under Section 7 of LFC No. 001.2019, a professional who has paid his/her professional tax shall be exempt from the payment of business permit fee in the operation of his/her clinic or office. However, a professional shall still be required to secure a business permit, at no cost, from the concerned LGU during the registration of office/clinic and renewal thereof, subject to a duly enacted local ordinance. . Applicability of Local Business Tax on Professionals. \f, upon verification, a professional is actually engaged in selling, trading or distributing of any articles of commerce of whatever kind, or involved in the function of trade, or undertake any business activity that does not constitute the practice of profession, pursuant to applicable law/s governing the practice of such profession, he/she shall be liable to pay the annual local business tax (LBT) to the city or municipality concerned, pursuant to the applicable rates provided under Secs. 143 and 146 of the LGC, and as may be provided under a duly enacted local ordinance. The professional concerned shall likewise be subject to the payment of business permit fee during the registration of the office/clinic and the renewal thereof. A separate recording of the transactions shall be maintained by said professional. Payment of Service Fees and Charges. LGUs may impose and collect other applicable fees and charges (i.e. garbage fee, sanitary inspection fee, occupancy permit fee, etc.), the amount of which shall be reasonable commensurate to the cost of regulation or provision of service, as may be provided under a duly enacted local ordinance; provided, however, that no service charge shall be based on capital investments or gross sales or receipts of the persons or business liable therefor. (LFC No. 001.2019 dated 12 June 2019) Documentation Requirements: 1. Upon Payment of Tax — For purposes of collecting the tax, the Provincial/City Treasurer or his/her duly authorized representative shall require from such professionals their current annual registration cards issued by competent authority before accepting payment of their professional tax for the current year. The Professional Regulation Commission (PRC) shall likewise requireS INCOME sources O entation of proof of payment before ,, | of their licenses. [Art. 228 (f), inp ine tig Peter " nals’ pres or renewal Sec. its of Practicing Professionals — n Documen on i NY Person « on Transact all tax shall write in deeds, receipts, Prescriptions” Ubi to the profess jans and designs, surveys and maps, ag h Ss Fane pl aa i the ca Pt, books of acco f the official receipt issued to him/her. [Sec 13g ,°2¢ a) be, the number 0 *(2) Lge x SECTION 49. COMMUNITY TA mcs Cj municipalities may levy 2 corey ta neu of the former sty, Cities or collected under SeC: 38 of P. D. No. 231, oer ioe . levied an wunicipalities shall enact, for the purpose, a local tax se _ = on mi ‘1992. For purposes of enacting a local tax ordinance lewing the effect 1 a the conduct of a public hearing provided for under See via oe sall be aispensed with, (Art. 245, IRR implementing Sec. 156, LGc) te Ge mmunity Tax - The levy or imposition of community os ity shall be governed by the following rules and preceqy A. Imposition of Co! a city or municipal guidelines: 4. Individuals liable for the payment of the Community Tax: a. __ Every inhabitant of the Philippines eighteen (18) years of age or over who has been regularly employed on a wage or salary basis for at least thirty (30) consecutive working days during any calendar year, b. An individual who is engaged in business or occupation; c. Anindividual who owns real property with an aggregate assessed value of One Thousand Pesos (P1,000.00) or more; and d. An individual who is required by law to file an income tax retum. [Art. 246 (a), IRR, implementing Sec. 157, LGC] 2. Rate of Community Tax Payable by Individuals: a. The rate of the annual community tax that may be levied and collected from said individuals shall be Five Pesos (P5.00) plus an axonal of One Peso (P1.00) for every One Thousand Pesos (P1,000 00) Income’ regardless of whether from business, exercise of profess or from property but which in no case shall exceed Five Thovs® —__ Pesos (P5,000.00). 26, Administra 60, 16 January 199 re syne OF al Orde" No. 260, 16 January 1902 shal ene, elective a 8 and municipalities includ cltan Mane oar seg any #62 hsp tk odnanes ge conn "individual tax 5 SaseTacd pee. tonal tar a ae not exceeding Php5,000.00 forthe following: prs! Salaries he any occupa fo8S 2Cepls or earings derived from the exercise of profession & “ing the preceding year-Php1.00 for every Php1,000.00B. Exemptions — The following fe 2. C. Place of Payment — The cot of the individual, or in the place where the located (Sec. 160, LGC). The following are LTOM, 2°° EDITION b. _ Incase of husband and wife, each of them shall be liable to pay the basic tax of Five Pesos (P5.00), but the additional tax imposable on the husband and wife shall be One Peso (1.00) for every One Thousand Pesos (1,000.00) of income from the total property owned by them andior the total gross receipts or earnings derived by them. [Art. 246 (b), IRR implementing Sec. 157, LGC] Juridical Persons Liable for the Payment of the Community Tax - Every corporation, no matter how created or organized, whether domestic or resident foreign, engaged in or doing business in the Philippines shall pay community tax of Five Hundred Pesos (500.00) and an additional tax, which, in no case, shall exceed Ten Thousand Pesos (P10,000.00) in accordance with the following schedule: a. For every Five Thousand Pesos (P5,000.00) worth of real property in the Philippines, owned by the juridical entity during the preceding year. based on the assessed value used for the payment of the real property tax under existing laws - Two Pesos (P2.00); and b. For every Five Thousand Pesos (P5,000.00) of gross receipts or earnings derived from the business in the Philippines during the preceding year - Two Pesos (P2.00). c. The dividends received by a corporation from another corporation shall, for the purpose of the additional tax, be considered as part of the gross receipts or earnings of said corporation. [Art. 246 (c), IRR implementing Sec. 158, LGC] are exempt from the community tax: Diplomatic and consular representatives; and Transient visitors when their stay in the Philippines does not exceed three (3) months. (Sec. 159, LGC) mmunity tax shall be paid in the place of residence principal office of the juridical entity is the guidelines for the place of payment of the community tax: ac paid in the city or municipality where the residence of the individual is located, or in the city or municipality where the principal office of the juridical entity is located [Art. 246 (e) (1), IRR implementing Sec. 160, LGC]. Thus, a sales office or branch office is not liable to pay community tax in the city or municipality where it is located. (Sec. 2, Office of the President MC No. 153 s. 1992, 04 June 1992) It shall be unlawful for any City or Municipal Treasurer to collect the community tax outside the territorial jurisdiction of the city or the municipality. [Art. 246 (e) (2), IRR implementing Sec. 160, LGC] The community tax shall be—_—_—. sour D. Time 1 ces OF INCOME vs natural o juridical, who pays the annual ality other than the city or municipality where nity principal office in the case of Juridical persons, is locatey ue en fo. pay the community tax. (Sec. 2, Office of the President v2! aiden ye 1992: BLGF 1" Indorsement, 26 July 1993) it Mc Nery . 15% 4 uidelines as to when the community t ‘8X shall be Any perso! or municip’ for Payment — G' ity tax shall accrue on the first (1st) day of y The communi ibe paid not later than the last day of Feb fan year and shal Uary of i Lary Of eagh th If a person reaches the age of eighteen (18) years or each Year benefit of exemption on or before the last day of June roinerwise fa for the community tax on the day he/she reaches ee shall ps he day the exemption ends. However, if a person reaches th, age or 4, aie (18) years OF loses the benefit of exemption on or Bean age of oo"! March, he/she shall have twenty (20) days to pay the commun = ity tax withe. becoming delinquent. With Persons who come to reside in the Philippines or reach the (18) years on or after the first (1st) day of July of any year, oe Of eighteen belong to an exempt class on or after the same date, shall pana Cease ty the community tax for that year. be subject ip Corporations established and organized on or before the | soe thal be liable for the community tax for that year. But coma established and organized on or before the last day of Lee twenty (20) days within which to pay the community tax without a fave delinquent. Corporations established and organized on or after eit of July shall not be subject to the community tax for that year. aes (Sec. 161, LGC) E. Penalties for Late Payment — If the tax is not paid within the time prescribed above, there shall be added to the unpaid amount an interest of twenty-four percent (24%) per annum from the due date until it is paid. (Sec. 1461, LGC) It is clarified, however, that the phrase “until it is paid” must be interpreted 9 prope with the limitations of the LGC on other unpaid revenues impose? y the local government, which in no case shall the total interest on the unpaid amount or portion thereof exceed thirty-si: ul 'y-six (36) months. Thus, for commut the penalty shall not go beyond 36 months or seventy-two percent (72%) rity 2% of the unpaid amount. (BLGF MC No. 01-001-2017, 05 January 2017) 1d to e' Fi : y issuance of Community Tax Certieate (CTC) ACTC shall be issues to any or corporation upon payment of the community tax. It may also be onto person or corporation not subject to the community tax upon One Peso (1.00) (Sec. 162, LGC) G. Printi env? aR a ey) Tax Certificate — The Bureau of Interna ies om se the printing of CTCs and distribute the SAM° © ance wi munici i palities through the City and Municipal Treasurers I0 ol 1 Prescribe " ed regulations. [Art. 249, IRR implementing Sec. 4 (a). tO} _LTOM, 2"° EDITION H. Collection of the Community Tax by Barangay Treasurers — The tax ordinance levying the community tax shall authorize the City or Municipal Treasurer to deputize the Barangay Treasurers to collect the community tax in their respective jurisdictions. Said deputation, however, shall be limited to the community tax payable by individual taxpayers and shall be extended only to Barangay Treasurers who are properly bonded in accordance with existing laws. [Art. 250, IRR implementing Sec. 164 (b), LGC] , Allocation of Proceeds of the Community Tax—The Proceeds of the community tax actually and directly collected by the City or Municipal Treasurer shall accrue entirely to the General Fund of the city or municipality concerned. However, proceeds of the community tax collected through the Barangay Treasurers shall be apportioned as follows: 1. Fifty percent (50% ) shall accrue to the General Fund of the city or municipality concemed; and 2. Fifty percent (50%) shall accrue to the barangay where the tax is collected. (Art. 251, IRR implementing Sec. 164 (c), LGC] SECTION 50. REAL PROPERTY TAX (RPT) The ad valorem tax is a levy on real property determined on the basis of a fixed proportion of the value of the property. [Sec. 199 (c), LGC] A Province or city or a municipality within the Metropolitan Manila Area may levy an annual ad valorem tax on real property such as land, building, machinery, and other improvement not specifically exempted under the LGC. A. FUNDAMENTAL PRINCIPLES The appraisal, assessment, levy and collection of RPT shall be guided by the following fundamental principles: 1. Real property shall be appraised at its current and fair market value. [Sec. 198 (a), LGC] All real property, whether taxable or exempt, shall be appraised at the current and fair market value prevailing in the locality where the property is situated. The Department of Finance (DOF) shall promulgate the necessary rules and regulations for the classification, appraisal, and assessment of real property pursuant to the provisions of the LGC. (Sec. 201, LGC) 2. _ Real property shall be classified for assessment purposes on the basis of its actual use. [Sec. 198 (b), LGC] 3. _ Real property shall be assessed on the basis of a uniform classification within each LGU [Sec. 198 (c), LGC]. To this end, Provincial, City, and the Municipal Assessors of the municipality within the MMA shall prepare a schedule of fair market values for the different classes of real property situated within their respective LGUs for enactment by ordinance of the sanggunian concerned (Sec. 212, LGC) asources OF INC” lection of RPT sh gsment, levy and col shall not e appraisal, asse er . ‘ Le person. (Sec: 198 (d), LGC] ssment of real property shall be equita 5. The appraisal and asse! oi oe : (e), LGC] B, ADMINISTRAT! 4, The provinces primarily respon the RPT, subject appraisal and asst let to any ION OF THE REAL PROPERTY TAX and cities, including the municipality within Mua wh a cor the proper, efficient and effective administ al t to the rules and regulations governing the classi essment of real property issued by the DOF. d the provincial governments shall exerci Accordingly, the DOF and tt | go rettge 2 authority to review and examine ona continuing basis, property assenent® and real property tax records to ensure the proper implementation hero! and determine compliance with existing laws and regulations, of (Art. 291, IRR, implementing Sec. 200, LGC) e ation fication, ‘Administration of real property tax, as contemplated under Sec. 200 of the LGC, refers to the sequential process in the administration of real property tax which starts from the tax mapping phase, through property valuation and tax determination phases, to a final tax collection phase. The distribution and | disbursement of the tax proceeds collected is not part of the real property tax administration cycle. (BLGF Letter to the Provincial Governor of Nueva Vizcaya, 07 January 2013) C. RATES OF LEVY 1. Aprovince or city or municipality within MMA shall fix a uniform rate of basic RPT applicable to their respective jurisdiction as follows: a. For provinces - not exceeding one percent (1%) of the assessedvalue; and b. For cities, or municipality of MMA - not exceeding two percent (2%) of the assessed value. No public hearing shall be required before the enactment of a local tax ordinance levying the basic RPT. (Art. 324, IRR, Implementing Sec. 233, LGC) rax Rates eeu Energy (RE) developers - Special Realty 7% lly an eee and Machinery of a Registered RE Developer actualy 4) aren bal se for RE facilities not exceeding one and a half percent (ae [Sec. ane cost less accumulated normal depreciation or net DOO son c), RA 9513 or an Act Promoting the Development, ui and Commercial other Purposes] lercialization of Renewable Energy Resources an a aan agLTOM, 2°° EDITION Municipalities outside Metro ManilaArea have no power to enactan ordinance levying real Property tax, as such power and authority is vested only upon their respective provinces. (BGLF 1st Indorsement, 05 May 1994) D. EXEMPTIONS FROM PAYMENT OF REAL PROPERTY TAX The following are exempted from payment of the RPT: 1. Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person. [Sec. 234 (a), LGC] Political subdivisions of the Republic of the Philippines are the autonomous regions, provinces, sub-provinces, cities, municipalities and barangays. (Sec. 4, Book |, EO No. 292) Government Owned and Controlled Corporations (GOCCs) are not considered political subdivisions. Charitable institutions, churches, Parsonages, or convents appurtenant thereto, mosques, non-profit or religious cemeteries and all lands, buildings. and improvements actually, directly and exclusively used for religious, charitable or educational purposes. [Sec. 234 (b), LGC] Charitable institutions are those whose principal aim is to give of its material substance or time to benefit those who are in need of such assistance, or will be benefited by such gift or expenditure in some other way than simply by an improvement of morals. Generally, the exemption of charitable institutions is expressly or impliedly limited to property devoted to charitable purposes and does not include property belonging to such institutions not used for secular or non-charitable purposes, such as property used to create revenue. (DOF Assessment Regulations No. 3-75, 10 February 1975) On NGCP’s Franchise. The Central Board of Assessment Appeals (CBAA) should determine whether the subject properties of the National Grid Corporation of the Philippines (NGCP) are used in connection with its franchise. If the subject properties are used in connection with NGCP's franchise, then NGCP is exempt from paying real properties on the subject properties. If the subject properties are not used in connection with NGCPs franchise, then the assessment level should be based on actual use, in accordance with Sec. 218 (a-c) of the LGC. (GR No. 213157, 10 August 2016) On GSIS. The appraisal and assessment of the real properties of the Government Service Insurance System (GSIS) shall be guided by the following: That all real properties of the GSIS are exempt from the payment of real property tax.— gources OF INCOME he beneficial use thereof has been granted or 4, That if tl a rsonventity, the liability for the payment o Nioyed texaalbe shouldered by the beneficial user, and * the real prop 2. That in case the beneficial user fails to pay the real pr v the property cannot in any event, be subject of a public aren tax i withstanding its realty tax delinquency. ction sare [BLGF Memorandum Circular (MC) No. 19-2014, 25 April 2o44 a} On PPA. The Decision of the Supreme Court in the case of ‘ty of Paranaque’ categorically specified that Philippine Ports Autho, not a government-owned or controlled corporation but an instru; the National Government thus, the real properties thereof are exem, the payment of the real property tax. However, it is emphasized then from the beneficial use of these properties has been granted, for consideration” otherwise, to taxable entities, such property becomes taxable, (eLern or No. 101-2013 dated 13 November 2013) Mc MAYS. i ry (PPA Mentality of on SSS. The appraisal and assessment of the real properties of the Socia Security System (SSS) shall be guided by the following: . 1. That all real properties of the SSS are exempt from RPT; 2. That if the beneficial user thereof has been granted to or is allowed to be enjoyed by a taxable person or entity other than the SSS, the payment of RPT shall be borne by the beneficial user; and 3, That in case the benoficial user thereof fails to pay the RPT due thereon, the property in issue cannot in any manner be the subject of a sale through public auction. (BLGF MC No. 023.22018, 13 November 2018) De 3. All machineries and equipment that are actually, directly and exclusively used by local water districts and GOCCs engaged in the supply and distribution of water and/or generation and transmission of electric power. [Sec- 234 (c): Lec] 4. Allreal properties owned by duly registered cooperatives as provided unde" RA No. 6938° as amended by RA No. 9520. [Sec. 234 (d), Lec} 7 tal Machinery and equipment used for pollution control and environme" protection. [Sec. 234 (e), LGC] eviouslY yf RPT Pr ical Except as provided herein, any exemption from payment 0 ri tural or ju! LGC granted to, or presently enjoyed by, all persons, whether na! including all GOCCs are h the effectivity ©! [Sec. 234, LGC] e hereby withdrawn upon nee eemeE TE eEEETERETENES EERE 5 Cooperative Code of the PhilippinesLTOM, 2"° EDITION E. COLLECTION OF REAL PROPERTY TAX (RPT) 1. Date of accrual of RPT. The RPT for any year shall accr ‘ue on the fi day of January and from that date, it shall constitute a lien on the aaa which shall be superior to any other lien, mortgage, or encumbrance of any kind whatsoever, and shall be extinguished only upon the delinquent tax. (Sec. 246, LGC) ° ee Responsibility of Local Treasurers to Collect — The collection of RPT with interest thereon and related expenses, and the enforcement of the remedies provided for in Title 2, Book II of the LGC, or any applicable rules and regulations shall be the responsibility of the City or Municipal concerned. (Sec. 247, LGC) . ‘pal Treasurer Where RPT may be paid — RPT shall be paid to the Office of the City or Municipal Treasurer of the city or municipality where the real property is located. Property owners, however, at their option or convenience, may pay their RPT at the Office of the Provincial Treasurer of the Province to which the municipality where the property is located, belongs. (Art. 338, IRR, implementing Sec. 247, LGC) Real property taxes for properties located in a city or a municipality within MMA, shall be paid with the Office of the City or Municipal Treasurer concerned. Deputation of Barangay Treasurers — The City or Municipal Treasurer may deputize the Barangay Treasurer to collect all taxes on real property located in the barangay: provided, that the Barangay Treasurer is properly bonded for the purpose. Provided, further, that the premium on the bond shall be paid by the city or municipal government concerned. [Sec. 247, LGC] Assessor to Furnish Local Treasurer with Assessment Roll — The provincial, city or municipal assessor shall prepare and submit to the treasurer of the LGU, on or before the thirty-first (31st) day of December each year, an assessment roll containing a list of all persons whose real properties have been newly assessed or reassessed and the values of such properties (Sec. 248, LGC), notwithstanding cases where the Assessor's records are computerized and the same are directly and operationally connected to the Office of the Provincial, City or Municipal Treasurer in the form of Local Area Networking (LAN). Notice of Time for Collection of Tax - The city or municipal treasurer shall, on or before the thirty-first (31*) day of January each year, in the case of the basic real property tax and the additional tax for the Special Education Fund (SEF) or on any other tax levied under Title Two-Real Property Taxation, post the notice of dates when the tax may be paid without interest at a conspicuous and publicly accessible place at the city or municipal hall. Said notice shall likewise be published in a newspaper of general circulation in the locality once a week for two (2) consecutive weeks. (Sec. 249, LGC)LD sourcts OF INCOME t of Real Property Taxes in Installments Payment! 7. y owner of the real property or the person havin a, The Ow ay pay the basic RPT and the additional 42, ®9al, therein may P' ‘al ta mn thereon, without interest, in four (4) equal installments, jo septa ereon, to payable as follows be a an - before the thirty-first (345 «| Installment ener Yost (34%) da pe installment - on or before the thirtieth (30) day Gt Ma, 34 Installment on or before the thirtieth (30) day op une 4% instalment - on or before the thirty-first (34) ay op ete cen, (Sec. 250, LGC) Ma, In the implementation of the installment scheme j in the RPT, the following shall be observed: Collection o i. Paymentof RPT shall first be applied to Prior years detnguen interests and penalties, if any and only after Said Aelinquere es are settled may tax payments be credited for the Current petigg ii, The date for the payment without interest of any other tay imposed under Title 2, Book II of the LGC shall be Prescribed by the sanggunian concerned. iii, Excluded from the above schedule of installment Payments ig the special levy on properties benefited by development, the payments of which shall be governed by the schedule Specified in the enabling ordinance enacted by the Sanggunian concemed, (Sec. 250, LGC) The payment of quarterly installments, having been fixed by law, cannot be extended by way of a local ordinance. (BLGF 2™ Indorsement to the Treasurer of lloilo City, 14 June 1994) F. Tax Discount for Advanced and Prompt Payment 1 Prompt payment advanced Paym 342, IRR, imple, The tax disg enacted ordinance enacrot°® Shall be specified in an appropriate and on send? 3 Of an ordinanne “J °Y the sanggunian of the LGU concerned. n the @ °e, the discounts shall not be granted. ile S may be given a discount of ten percent (10%). Wi ents may be entitled to the maximum discount of 20% menting Sec, 251, LGC)LTOM, 2° EDITION ‘Anent the proper accounting treatment of advance payments of real property ives consisting ofthe basic tax (RPT) and the additional Special Education Fund (SEF), xxx they shall be recognized as Deferted RPT and Deferred SER, respectively. These advance collections are not yet income of the cal Government Unit (LGU); rather, they are stil considered labios until uch time that the taxes for which they are paid become due (COA letter dated 21 January 2019 to BLGF Executive Director) | G. Assessment of Property Subject to Back Taxes 1. Real property declared for the first time shall be assessed for the period during which it would have been liable but in no case for more than ten (10) years prior to the date of initial assessment. Provided, however, that such taxes shall be computed on the basis of the applicable schedule of values in force during the corresponding period. Provided further that the total tax liability shall include the current year in addition to the ten (10) years back taxes. If such taxes are paid on or before the end of the quarter following the date the notice of assessment was received by the owner or his representative, no interest for delinquency shall be imposed thereon; otherwise, such taxes shall be subject to an interest at the rate of two percent (2%) per month or a fraction thereof until such taxes are fully paid. (Sec. 222, LGC) H. Repayment of Excessive Collections 1. When an assessment of the basic RPT, or any other tax levied under Title 2, Book II of the LGC, is found to be illegal or erroneous and the tax is accordingly reduced or adjusted, the taxpayer may file a written claim for refund or credit for taxes and interests with the provincial or city treasurer within two (2) years from the date the taxpayer is entitled to such reduction or adjustment. The provincial or city treasurer shall decide the claim for tax refund or credit within sixty (60) days from receipt thereof. In case the claim for tax refund or credit is denied, the taxpayer may avail of the remedies as provided in Chapter 3, Title 2, Book II of the LGC. (Sec. 253, LGC) In case of tax credit, a Certificate of Tax Credit shall be issued to the property owner or to the person having legal interest therein. ——— ™~\ ‘ome souncts OF INC der the following circu applicable une Mstances ray oper in which to apply the tax cred, No orpronert that was taxed has been declared o, -When eel ff tax paid is more than the annual tax ¢ - ifthe ax refund Kempt ue, be applicable under the folowing circumstances mextating property in which to apply the tax creqi ity is not exempt Tax credit may - There is a - When the prope! ficate i not transferable. In case of tax refund for 4 Pro surer shall ensure budget appropriation ang authors for Tax credit cert the Local Treas payment of prior year obligation. TT oo |. Interest on Delinquent RPT failure to pay the basic RPT or any other tax levied under Title 2, pec upon ae aie of the periods as provided in Sec. 250 Shes I Code, or when due, as the case may be, shall subject the taxpayer to the ey of interest at the rate of two percent (2%) per month on the unpaid amount g- a fraction thereof, until the delinquent tax shall have been fully paid: Provide however, that in no case shall the total interest on the unpaid tax or portion thereof exceed thirty six (36) months. (Sec. 255, LGC) Unpaid real property tax that accrued prior to 1 January 1992 are imposed an interest of 2% per month, with a maximum of 24% per year, in accordance with the law then in force which was PD No. 464. While unpaid real property | tax that accrued on 1 January 1992 onwards are imposed an interest of 2% per month, but not exceeding 36 months or a maximum rate of 72% in ‘accordance with the governing law which is RA No. 7160, which repealed __ PD No, 464, (2 Indorsement to the ICO-Regional Director, Region X!!, Cotabato City, 20 December 2010) Note: Refer to Book IV for sample computation 4. Remedies for the Collection of RPT 1 Tertatve and Judicial Remedies — When the RPT and any ot the Special Bava! Ad Valorem Tax, Additional Levy on Real Proper and Special ecation Fund (SEF), Additional Ad Valorem Tax on le 6, became bY Local Government Units, under Tile 2, Book Provincial er elinquent, the LGU concemed, through the Office ality Within MMA, gai! Teasurer, or the Municipal Treasurer of the munoP " May avail of remedies by administrative or judicial actionLTOM, 2°° EDITION a. The Administrative Remedies which are summary in nature are: i. Levy on Real Property; and ii. Sale of Real Property at Public Auction b. The judicial remedy is availed of in the court of appropriatejurisdiction. 2. The foregoing remedies are cumulative, simultaneous and unconditional, that is, any or all of them or a combination thereof may be resorted to and the use of one remedy shall not be a bar against the institution of the others. Formal demand for the payment of the delinquent taxes and penalties due is not a prerequisite to such remedies. The Notice of Delinquency required under Sec. 254 of the LGC shall be sufficient for the purpose. (Art. 347, IRR, implementing Sec. 256, LGC) K. Local Government's Lien — The basic RPT and any other tax levied under Title Two, Book II of the LGC, constitute a lien on the real property subject to tax. Such lien is superior to all liens, charges or encumbrances in favor of any person, irrespective of the owner or possessor thereof, enforceable by administrative or judicial action, and may only be extinguished upon payment of the tax and the related interests and expenses. (Sec. 257, LGC) L. Treasurer to Certify Delinquencies Remaining Uncollected - The provincial, city or municipal treasurer or his/her deputy shall prepare a certified list of all RPT delinquencies which remained uncollected or unpaid for at least one (1) year in his/her jurisdiction, and a statement of the reason or reasons for such non-collection or non-payment, and shall submit the same to the sanggunian concerned on or before the thirty-first (31% ) of December of the year immediately succeeding the year in which the delinquencies were incurred, with a request for assistance in the enforcement of the remedies for collection provided in the LGC. (Sec. 269, LGC) The Certified list of RPT delinquencies as of 31 December 2018 shall be submitted to the sanggunian on or before the 31* of December 2019. M. Guidelines in Determining Delinquency 1. Taxpayers are delinquent if they fail to pay their taxes within the period fixed by statute or executive order. (GR No. 6133 US. v. Estavillo, 19 Phil. 478) 2. Taxdelinquencies shall be governed by the provisions of applicable laws then in force and effect.oe - sources OF wee ‘Applicable Law < delinquent ° Pena | Year eal RAT160 2% per month na 7 | 4992 ec. 66,PDNo. 2% per month, ¢.1.° Cte, | 4 NOt tog, ty | 4986-1991 46 er an © ercce4 2, ; 2% num ty 985 PD No. 1621 *Permonth, nottog 1979-198 Ber anny 8429, of computation of the real property taxes ; du he penalty or interest imposed is two percent ott co For purposes 96 to 1991, t Ea delinquent tax for each month of delinquency or fracti cd twenty-four ‘shall the total penalty excee percent pa no cas ursuant to Sec. 66 of the Real Property Tay: coda” aty 974 ion there wen delinquent tax, Pt PD No. 464. However from 01 January 1992 onwards, the properbasis forthe rete real property tax payable, including penalties or interests, ayy Pustbe the LGC, which took effect on the 1st of January 1997 inayat Sec. 534 thereof had expressly repealed PD No. 464 or the Real aa TaxCode. Sec. 5(4) of the LGC provides that rights and obligations a athe date of effectivity ofthe new Code and arising out of contracts source of presentation involving an LGU shall be governed by the engey terms and conditions of the said contracts or the law in force at the time such contracts were vested. (The Honorable Secretary of Finance vs. The Honorable Ricardo M. llarde, et al, GR No. 121782, 09 May 2006) Computation Note: Refer to Book IV for sample computation EEE N. Periods Within Which to Collect RPT The basic RPT and any other tax levied under Title 2, Book II of the LGC, shal be collected within five (5) years from the date they become due. No action ‘0 the collection of the tax, whether administrative or judicial shall be instituted ate the expiration of such period. In case of fraud or intent to evade payment of fe ‘ax, such action may be instituted for the collection of the same within te" years from the discovery of such fraud or intent to evade payment. The peri Prescription within which to collect shall be suspended for the time during whit 1. The local treasurer is legally prevented from collecting the tax; " 2. ite Owner of the property or the person having legal interest therein ea [or einvestigation and executes a waiver in writing before the a Period within which to collect; and 3, 1 se ud Owner ofthe property ofthe person having legal interest thee Country or otherwise cannot be located. (Sec. 270, LGC) ALTOM, 2°° EDITION ©. Penalty for Failure to Issue and Execute Warrant — Without prejudice to criminal prosecution under the Revised Penal Code and other applicable laws, any local treasurer or his/her deputy who fails to issue or execute warrant of levy within one (1) year from the date of the issuance thereof, or who is found guilty of abusing the exercise thereof in an administrative or judicial proceeding shall be dismissed from the service. (Sec. 259, LGC) P. Further Distraint or Levy — Levy may be repeated if necessary until the full amount due, including all expenses, is collected. (Sec. 265, LGC) Q. Action Assailing Validity of Tax Sale 1. No court shall entertain any action assailing the validity of any sale at public auction of real property or rights therein under Title 2, Book II of the LGC, until the taxpayer shall have deposited with the court the amount for which the real property was sold, together with interest of two percent (2%) per month from the date of sale to the time of the institution of the action. The amount so deposited shall be paid to the purchaser at the auction sale if the deed is declared invalid but it shall be returned to the depositor if the action fails. 2. Neither shall any court declare a sale at public auction invalid by reason of irregularities or informalities in the proceedings unless the substantive rights of the delinquent owner of the real property or the person having legal interest therein have been impaired. (Sec. 267, LGC) R. Payment of Delinquent Taxes on Property Subject of Controversy In any action involving the ownership or possession of, or succession to, real property, the court may, “motu propio” or upon representation of the provincial, city or municipal treasurer or his/her deputy, award such ownership, possession, or succession to any party to the action upon payment to the court of the taxes with interest due on the property and all other costs that may have accrued, subject to the final outcome of the action. (Sec. 268, LGC) SECTION 51. SPECIAL PROVISIONS A. Condonation or Reduction of RPT and Interest In case of a general failure of crops or substantial decrease in the price of agricultural or agri-based products, or calamity in any province, city, or municipality, the sanggunian concerned, by ordinance passed prior to the first day of January of any year and upon recommendation of the Local Disaster Coordinating Council, may condone or reduce, wholly or partially, the taxes and interest thereon for the succeeding year or years in the city or municipality affected by the calamity. (Sec. 276, LGC)I gquces oF CE B. Condonation The Presiden reduce the within the Metro or r ome ion contemplated under Seo. 276 ip, reduc on . rhe condonation 9, only real property taxesorinterests duc the groove in application me any of the abovementioned incidents happencs®&ng year oF Yen oted the taxpayer S ability to pay. may be condoned or "ich averse afer property taxes OF interests ofthe past year ory et¥eey ts, ‘and not unP’ een abela i y Treasurer of Is ity, asi, 01 dine oy (picF Letter! the Cit or Reduction of Tax by the President of the Philippines es may, when pubic interest so requires : t for any year in any province or city, or mung Daly of the Philippin PT and interes' Solan Manila Area. (Sec. 277, LGC) the Philippines promulgates Executive Orders (Es) tp President of ue der Sec. 277 of the LGC. effect the policy un' since 2014 the following EOs were issued by the President pursuant to See, Srr ot the LGC: (i) EO No. 173, s. 2014, (i) EO No. 19, s. 2017, (ii) EO No. 60, s 2018, and (Wv) EO No. 88, s. 2019. These EOs reduced all labilties for real property fax, including any special levies accruing to the Special Education Fund (SEF), on property, machinery and equipment actually and directly used by Independent Power Producers (IPPs) for the production of electricity under Build-Operate-Transfer scheme and similar contracts, whether denominated power purchase agreements, energy conversion agreements or other contractual agreemerts, with GOCCs, assessed by LGUs and other entities authorized to impose RPT for all years up to the issuance of the EOs, to an amount equivalent to the tax due if computed based on the following: 1. The assessment level to be applied on the fair market value (FMV) of machinery and equipment of the IPP is fifteen percent (15%); 2. The annual depreciation rate of such machinery and equipment shall be at rate of two percent (2%) per annum; and 3 ie resulting tax due shall be less any amounts already paid by the 6. A\linterests on RPT delinquencies on such machinery and equipment were fete condoned and the concerned IPPs were relieved from payment reof.LTOM, 2°° EDITION C. Fees in Court Actions — All court actions, criminal or civil, instituted at the instance of the provincial, city or municipal treasurer under the provisions of the LGC, shall be exempt from the payment of court and sheriff's fees. (Sec. 280, LGC) D. Fees in Registration of Papers of Documents on Sale of Delinquent Real Property to Province, City or Municipality — All certificates, documents and papers covering the sale of delinquent property to the province, city or municipality, if registered in the Registry of Property, shall be exempt from the documentary stamp and registration fees. (Sec. 281, LGC) E. Penalties for Omission of Property from Assessment or Tax Rolls by Officers and Other Acts 1. Any officer charged with the duty of assessing a real property who willfully fails to assess, or who intentionally omits from the assessment or tax roll any real property which he/she knows to be taxable, or who willfully or negligently underassesses any real property, or who intentionally violates or fails to perform any duty imposed upon him/her by law relating to the assessment of taxable real property shall, upon conviction, be punished by imprisonment of not less than one (1) month nor more than six (6) months, or by a fine of not less than One Thousand Pesos (Php1,000.00) nor more than Five Thousand Pesos (Php5,000.00) or both such imprisonment and fine, at the discretion of the court. 2. The same penalty shall be imposed upon any officer in charged with the duty of collecting the tax due on real property who willfully or negligently fails to collect the tax and institute the necessary proceedings for the collection of the same. 3. Any other officer required to perform acts relating to the administration of the RPT or to assist the assessor or treasurer in such administration, who willfully fails to discharge such duties shall, upon conviction, be punished by imprisonment of not less than one (1) month nor more than six (6) months, or by a fine of not less than Five Hundred Pesos (Php500.00) nor mere than Php 5,000.00 or both such imprisonment and fine, at the discretion of the court. (Art. 375, IRR of the LGC) Delinquent Real Property at Public F. Penalties for Failure to Dispose of d who fails to dispose of delinquent real Auction — The local treasurer concerne , property at public auction and any other LGU official whose acts hinder prompt disposition of delinquent real property at public auction shall, upon conviction, be subject to imprisonment of not less than 1 month nor more than 6 months, or a fine of not less than Php1,000.00 nor more than Php5,000.00 or both such imprisonment and fine, at the discretion of the court. (Art. 377, IRR of the LGC) SECTION 52. SPECIAL EDUCATION FUND (SEF) Aprovince or city, or municipality within MMA, may levy and collect an annual tax of ed value of real property which shall be in addition one percent (1%) on the assess: