Professional Documents
Culture Documents
PART I - REAL PROPERTY TAX necessary expenditures to extract and utilize such
Real property tax is an ad valorem tax collected by a mineral.
city, municipality or province on real property such as 6. SPECIAL - lands, buildings and other improve-
land, buildings, machinery and other improvements ments thereon, actually, directly and exclusively
affixed or attached to real property. used for (a) hospitals, (b) cultural, or (c) scientific
purposes, and (d) those owned and used by local
Exemptions from real property tax
water districts, and (e) GOCCs rendering essential
1. Real property owned by the Republic of the
public services in the supply and distribution of
Philippines or any of its political subdivision except
water and/or generation and transmission of
when the beneficial use thereof has been granted
electric power.
to taxable person;
2. Charitable institutions, churches, and parsonages Assessment level and assessed value
or convents appurtenant thereto, mosques, non- 1. ASSESSMENT LEVEL- the percentage applied to
profit cemeteries, and all lands, buildings and the FMV to determine the assessed value of the
improvements, actually, directly, and exclusively property.
used for religious, charitable, or educational 2. ASSESSED VALUE (taxable value)-the FMV of the
purposes. real property multiplied by the assessment level.
Additional levy (in addition to basic RPT) OTHER LOCAL TAXES, FEES AND CHARGES
Special Education Fund Tax (SEF) – 1% of AV
Fundamental principles
Transfer tax on transfer of real property The following fundamental principles shall govern the
ownership exercise of the taxing and other revenue-raising
Tax on the sale, donation, barter, or on any other powers of local government units:
mode of transferring ownership or title of real
property at the rate of not more than 1. Taxation shall be uniform in each local
government unit;
- 1/2% in province/municipality and
- 3/4% in cities 2. Taxes, fees, charges and other impositions shall:
a. be equitable and based as far as practicable on
Based on whichever is higher between the taxpayer’s ability to pay;
- the total consideration involved in the acquisition b. be levied and collected only for public
of the property and purposes;
- the FMV in case the monetary consideration c. not be unjust, excessive, oppressive, or
involved in the transfer is not substantial. confiscatory;
Notes: d. not be contrary to law, public policy, national
economic policy, or in restraint of trade;
1. Not taxable - sale, transfer or other disposition of
real property pursuant to RA 6657 (CARL). 3. The collection of local taxes, fees, charges and
other impositions shall in no case be let to any
2. Register of Deeds shall, before registering a private person;
deed, require the presentation of the evidence of
payment of this tax. 4. The revenue collected shall inure solely to the
benefit of, and be subject to disposition by, the
3. The assessor shall make the same requirement local government unit levying the tax, fee, charge
before cancelling an old tax declaration and or other imposition unless otherwise specifically
issuing a new one in place thereof. provided; and
4. Seller, donor, transferor, executor or 5. Each local government unit shall, as far as
administrator shall be liable to pay this tax within practicable, evolve a progressive system of
60 days from the date of the execution of the taxation.
deed or from the date of the decedent’s death.
Collection of real property tax Common limitations on the taxing power of
1. Date of accrual of tax – The real property tax for local government units
any year shall accrue on the 1st day of January LGUS cannot collect the following taxes:
2. Payment of real property taxes in installment –the 1. Income tax, except when levied on banks and
owner of the real property or the person having other financial institutions;
legal interest therein may pay the basic real
2. Documentary stamp tax;
property tax and the additional tax for the Special
Education Fund (SEF) thereon without interest in 3. Estate tax;
four (4) equal installments as follows: 4. Customs duties, registration fees of vessel and
1st installment – on or before March 31 wharfage on wharves, tonnage dues, and all other
2nd installment – on or before June 30 kinds of customs fees, charges and dues except
3rd installment – on or before September 30 wharfage on wharves constructed and maintained
4th installment – on or before December 31 by the local government unit concerned;
3. Application of payment of real property taxes – 5. Taxes, fees or charges and other impositions upon
The payments shall first be applied to prior years’ goods carried into or out of, passing through, the
delinquencies, interests, and penalties, if any, and territorial jurisdiction of local government units in
only after said delinquencies are settled may tax the guise of charges for wharfage, tools for
payments be credited for the current period. bridges or otherwise, or other taxes, fees or
charges in any form whatsoever upon such goods
4. Tax discount for advanced prompt payment – If or merchandise;
the basic real property tax and the SEF are paid in
advance, a discount of not exceeding 20% of the 6. Taxes, fees or charges on agricultural and aquatic
annual tax due may be granted to the taxpayer. products when sold by marginal farmers or
fishermen;
5. Interests on unpaid real property tax –2% per
month on the unpaid amount or a fraction thereof, 7. Taxes on business enterprises certified to by the
until the delinquent tax (basic and special levies) Board of Investments (BOI) as pioneer or non-
shall have been fully paid, but not to exceed 36 pioneer for a period of six (6) and four (4) years,
months. respectively, from the date of registration;
Condonation or reduction of real property tax 8. Excise taxes on articles enumerated under the
and interest National Internal Revenue Code, as amended, and
Condonation or reduction of real property tax and taxes, fees or charges on petroleum products;
interest may be done either thru an ordinance, or by 9. Percentage or VAT on sales, barters or exchanges
the President of the Philippines. or similar transactions on goods or services except
a. Condonation/reduction thru an ordinance. as otherwise provided herein;
b. Condonation/reduction by the President. 10. Taxes on the gross receipts of transportation
Person or office tasked to collect the tax contractors and persons engaged in the
transportation of passengers or freight by for hire
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and common carriers by air, land or water, except from the beds of seas, lakes, rivers, streams,
as provided in this Code; creeks, and other public waters within its
11. Taxes on premiums paid by way of reinsurance or territorial jurisdiction.
retrocession; 5. Professional tax
12. Taxes, fees and charges for the registration of Subject: Each person engaged in the exercise or
motor vehicles and for the issuance of all kinds of practice of his profession requiring government
licenses or permits for the driving thereof, except examination.
tricycles; Place of payment: Province or city where he
13. Taxes, fees, or other charges on Philippine practices his profession or where he maintains his
products actually exported, except as otherwise principal office in case he practices his profession
provided herein; in several places.
Such person who has paid the corresponding
14. Taxes, fees, or charges on Countryside and
professional tax shall be entitled to practice his
Barangay Business Enterprises and cooperatives
profession in any part of the Philippines without
duly registered under R.A. No. 6810 and Republic
being subjected to any other national or local tax,
Act 9520 otherwise known as the “Cooperatives
license, or fee for the practice of such profession.
Code of the Philippines” respectively; and
Time of payment: Annually, on or before January
15. Taxes, fees or charges of any kind on the
31.
National Government, its agencies and
instrumentalities, and local government units. A line of profession does not become exempt even
if conducted with some other profession for which
Taxes imposable by the province the tax has been paid.
The following taxes may be imposed by the province:
Exemption: Professionals exclusively employed in
1. Transfer tax on transfer of real property the government.
ownership
Subject: Sale, donation, barter, or on any other 6. Amusement tax
mode of transferring ownership or title of real Subject: Proprietors, lessees, or operators of
property. Exemption: Sale, transfer or other theaters, cinemas, concert halls, circuses, boxing
disposition of real property pursuant to R.A. stadia, and other places of amusement.
6657(Comprehensive Agrarian Reform Law). Exempt: Holding of operas, concerts, dramas,
Time of payment: Seller, donor, transferor, recitals, painting and art exhibitions, flower
executor or administrator shall pay this tax within shows, musical programs, literary and oratorical
60 days from the date of the execution of the presentations, except pop, rock, or similar
deed or from the date of the decedent’s death. concerts.
7. Annual fixed tax for every delivery truck or
2. Tax on business of printing and publications
van of manufacturers or producers,
Subject: Persons engaged in the printing and/or
wholesalers of, dealers, or retailers in,
publication of books, cards, posters, leaflets,
certain products.
handbills, certificates, receipts, pamphlet, and
Subject: Every truck, van or any vehicle used by
other of similar nature. Exemption: Receipts from
manufacturers, producers, wholesalers, dealers or
the printing and/or publishing of books or other
retailers in the delivery or distribution of distilled
reading materials prescribed by the DepEd as
spirits, fermented liquors, soft drinks, cigars and
school references shall be exempt from this tax.
cigarettes, and other products as may be
3. Franchise tax determined by the Sangguniang Panlalawigan, to
Subject: Businesses enjoying a franchise. sales outlets, or consumers, whether directly or
4. Tax on sand, gravel and other quarry indirectly, within the province.
resources The manufacturers, producers, wholesalers,
Subject: Ordinary stones, sand, gravel, earth and dealers, and retailers referred to in the
other quarry resources, as defined under the immediately foregoing paragraph shall be exempt
NlRC, as amended, extracted from public lands or from the tax on peddlers.
Taxes imposable
Tax Base Tax Rate
by province
2. Tax on business of printing and Annual gross receipts for the Not more than ½%; on newly started
publication preceding calendar year business, not exceeding 1/20 of 1% of
capital investment
4. Sand and gravel tax FMV per cubic meter Not more than 10%
The municipality may impose taxes on the following Is the ordinance valid?
business:
The ordinance is not valid. Municipalities are not
1. On manufacturers, assemblers, repackers, authorized to levy taxes on transfers of real
processors, brewers, distillers, rectifiers, and properties. Such tax is allowed only on cities and
compounders or liquors, distilled spirits, and wines provinces.
or manufacturers of any article of commerce of
Taxes imposable by cities
whatever kind or nature;
The city may levy the taxes, fees, and charges which
2. On wholesalers, distributors, or dealers in any the province or municipality may impose.
article of commerce of whatever kind or nature; Provided, however, That the taxes, fees and charges
3. Exporters and/or manufacturers, millers, levied and collected by highly urbanized and
producers, wholesalers, distributors, dealers or independent component cities shall accrue to them
retailers of essential commodities such as: and distributed in accordance with the provisions of
this Code.
a. Rice and corn;
b. Wheat or cassava flour, meat, dairy products, The rates of taxes that the city may levy may exceed
locally manufactured, processed or preserved the maximum rates allowed for the province or
food, sugar, salt and other agricultural, marine, municipality by not more 50% except the rates of
and fresh water products, whether in their professional and amusement taxes.
original state or not; A city may impose a maximum transfer tax of ¾ of
c. Cooking oil and cooking gas; 1% (0.75%) of the selling price or fair market value
d. Laundry soap, detergents, and medicine; of the property sold.
e. Agricultural implements, equipment and post-
harvest facilities, fertilizers, pesticides, The barangays may levy taxes, fees and charges
insecticides, herbicides, and other farm inputs; which shall exclusively accrue to them:
f. Poultry feeds and other animal feeds 1. Taxes – On stores or retailers with fixed business
g. School supplies; and establishments with gross sales or receipts of the
h. Cement preceding calendar year of P50,000 or less, in the
case of cities and P30,000 or less, in the case of
4. Retailers
municipalities, at a rate of not exceeding 1% on
5. Contractors such gross sales or receipts.
6. Banks and other financial institutions 2. Service Fees or Charges – Barangays may
7. Peddlers in the sale of any merchandise or article collect reasonable fees or charges for services
or commerce rendered in connection with the regulation or the
8. Fees for sealing and licensing of weights and use of barangay-owned properties or service
measures. facilities such as palay, copra, or tobacco dryers.
9. Fishery rentals, fees and charges. 3. Barangay Clearance – No city or municipality
may issue any license or permit for any business
Payment of Business Taxes: The above taxes shall or activity unless a clearance is first obtained from
be payable for every separate or distinct the barangay where such business or activity is
establishment or place where the business subject located or conducted. For such clearance, the
to the tax is conducted and one line of business Sangguniang Barangay may impose a reasonable
does not become exempt by being conducted with fee. The application for clearance shall be acted
some other business for which such tax has been upon within seven (7) working days from the filing
paid. thereof.
If a person conducts or operates two or more In the event that the clearance is not issued within
businesses which are subject to - the said period, the city or municipality may issue
the said license or permit.
a. the same tax rate – tax shall be computed on the
combined total gross sales or gross receipts;
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4. Other Fees and Charges – The barangay may
levy reasonable fees and charges:
a. On commercial breeding of fighting cocks,
cockfights and cockpits;
b. On places of recreation which charge admission
fees; and
c. On billboards, signboards, neon signs, and
outdoor advertisements.