Basic Taxation Law

2nd Semester, SY 2023-2024

Local Taxation

A. Local Autonomy
Nature and source of local taxing power
Mactan Cebu Int’l Airport vs. Marcos, G.R. No. 120082, September
11, 1996

B. Fundamental Principles
a. Uniformity in taxation
b. Local exactions shall (i) equitable and based on taxpayer’s ability to
pay; (ii) be for public purposes; (iii) not be unjust, excessive,
oppressive, or confiscatory; (iv) not to be contrary to law, public
policy, national economic policy, or in the restraint of trade
c. Collection shall not be let to private persons
d. Revenue collections shall accrue exclusively to LGUs
e. System of taxation must be progressive

Pepsi Cola Bottling Co. of the Phils., Inc. vs. Municipality of Tanuan,
G.R. No. L-31156, February 27, 1976
Mactan Coconut vs. Mun. Council of Malabang, 143 SCRA 404

C. Common limitations on Taxing Power

***Section 133 of the Local Government Code of 1991 (“LGC”)

Province of Bulacan vs. CA, G.R. No. 126232, November 27, 1998
Phil. Petroleum Corp. vs. Municipality of Pililia, G.R. No. 90776, June
3, 1991
 Petron Corporation vs. Tiangco, G.R. No. 158881, April 16, 2008
San Miguel Corp. vs. Mun. Council of Mandaue, G.R. No. L-30761,
July 11, 1973

D. Scope of Taxing Powers of Local Government Units

Provinces
a. Tax on transfer of real property ownership (Section 135 of LGC)
b. Printer’s or publisher’s tax (Section 136 of LGC)
c. Franchise tax (Section 137 of LGC)
d. Tax on sand, gravel, and other quarry resources (Section 138 of
LGC)
e. Professional tax (Section 139 of LGC)
f. Amusement tax (Section 140 of LGC)
g. Fixed tax on delivery trucks and vans (Section 141 of LGC)
h. Service fees and charges (Section 153 of LGC)
i. Public utility charges (Section 154 of LGC)
j. Toll fees or charges (Section 155 of LGC)
Municipalities

Scope: Section 142 of LGC

Section 143 (a to g) of LGC
Section 144 of LGC

Fees and charges:

Section 147 of LGC
Section 153 of LGC
Section 154 of LGC
Section 155 of LGC

Cities
 Section 151 of LGC

Barangays

E. Community Tax Certificate (“CTC”)

Who are authorized to levy or collect CTCs? Section 156 of LGC
Who are liable? Section 157 of LGC and Section 158 of LGC
Who are exempt? Section 159 of LGC
Place and time of payment

F. Local Business Tax

Tax period - Section 165 of LGC
Manner of payment - Section 165 of LGC
Accrual of tax - Section 166 of LGC
Time of payment - Section 167 of LGC, Section 145 of LGC
Place of Payment (Situs Rules)
a. Branch or Sales Office Rule
b. Allocation Rule
c. Sales Made by Route Trucks, Vans or Vehicles

G. Enactment of Tax Ordinances and Other Revenue Measures

a. Public hearing and publication of Tax Ordinances
Sections 186 and 187 of LGC
Figuerres vs. CA, G.R. No. 119172, March 25, 1999

b. Appeal of Tax Ordinances

H. Remedies of Local Government and Taxpayer

a. Section 171 of LGC
 b. Sections 194 and 195 of LGC
c. Sections 168 and 169 of LGC
d. Sections 175, 176, 178-182, and 184 of LGC
e. Section 183 of LGC

Real Property Taxation

A. General Principles
Province of Nueva Ecija vs. Imperial Mining Co. Inc, 118 SCRA 632
(1982)
Ty vs. Trampe, 250 SCRA 500 (1995)
Lopez vs. City of Manila, 303 SCRA 448 (1999)

B. Appraisal and Assessment of Real Property

C. Real Property Tax and Additional or Special Levies
Sections 233, 235, 236-237, 240-243 of LGC

D. Exemptions from Real Property Tax

Sections 206, and 234 of LGC

LRTA v. CBAA, 342 SCRA 692 (2000)

BLGF Opinion dated November 20, 1992
BLGF Opinion dated March 15, 1993
BLGF Opinion April 22, 1999

E. When does RPT accrue? Section 246 of LGC

F. When does special levy accrue? Section 245 of LGC
G. What rule will apply if the same are paid in installments? Section 250
of LGC
H. Are there tax discounts for advanced prompt payments of RPT and
SEF? Section 251 of LGC
I. Remedies of LGU
Sections 254, 255, 256-257, 266, 270, 257 of LGC
J. Remedies of Taxpayer
Callanta vs. Office of the Ombudsman, G.R. Nos. 115253-74,
January 30, 1998

Erroneous vs. illegal assessment

Section 252 of LGC
City of Lapu-Lapu vs. PEZA, G.R. No. 184203, November 26, 2014