Local Government Taxation

Local Government Taxation
LOCAL GOVERNMENT TAXATION The Constitution: Each local government unit may create its own sources of revenue and levy taxes, fees and charges, consistent with the basic policy of local autonomy, which shall accrue to it. (copied under Section 12 of the !"#$ SE#. 1%2. !ocal &axing 'uthority. ( &he power to impose a tax, fee, or charge or to generate revenue under this #ode shall be exercised by the sanggunian of the local government unit concerned through an appropriate ordinance. SE#. 1%%. #ommon !imitations on the &axing )owers of !ocal "overnment *nits. ( *nless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: &his exercise of the taxing powers of the provinces, cities, municipalities and barangays are limited, that they shall not extend to levy the following: (+owever there is the proviso, unless otherwise provided herein$ (a$ (b$ (c$ (d$ (e$ ,ncome tax, except when levied on ban-s and other financial institutions. /ocumentary stamp tax. &axes on estates, inheritance, gifts, legacies and other ac0uisitions mortis causa, except as otherwise provided herein. #ustoms duties, registration fees of vessel and wharfage on wharves, tonnage dues, and all other -inds of customs fees, charges and dues except wharfage on wharves constructed and maintained by the local government unit concerned. &axes, fees, and charges and other impositions upon goods carried into or out of, or passing through, the territorial 1urisdictions of local government units in the guise of charges for wharfage, tolls for bridges or otherwise, or other taxes, fees, or charges in any form whatsoever upon such goods or merchandise. &axes, fees or charges on agricultural and a0uatic products when sold by marginal farmers or fishermen. &axes on business enterprises certified to by the 2oard of ,nvestments as pioneer or non3 pioneer for a period of six (4$ and four (5$ years, respectively from the date of registration. Excise taxes on articles enumerated under the national ,nternal 6evenue #ode, as amended, and taxes, fees or charges on petroleum products. )ercentage or value3added tax (7'&$ on sales, barters or exchanges or similar transactions on goods or services except as otherwise provided herein. &axes on the gross receipts of transportation contractors and persons engaged in the transportation of passengers or freight by hire and common carriers by air, land or water, except as provided in this #ode. &axes on premiums paid by way or reinsurance or retrocession. &axes, fees or charges for the registration of motor vehicles and for the issuance of all -inds of licenses or permits for the driving thereof, except tricycles. &axes, fees, or other charges on )hilippine products actually exported, except as otherwise provided herein. &axes, fees, or charges, on #ountryside and 2arangay 2usiness Enterprises and cooperatives duly registered under 6.'. 8o. 491: and 6epublic 'ct 8umbered Sixty3nine hundred thirty3eight (6.'. 8o. 4 %9$ otherwise -nown as the ;#ooperative #ode of the )hilippines; respectively. and &axes, fees or charges of any -ind on the 8ational "overnment, its agencies and instrumentalities, and local government units.
(f$ (g$ (h$ (i$ (1$ (-$ (l$ (m$ (n$ (o$
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CHAPTER II Specific Provisions on the Taxin an! Other Reven"e#Raisin Po$ers of Loca% Govern&ent 'nits ARTICLE I Provinces SE#&,<8 1%5. Scope of &axing )owers. ( Except as otherwise provided in this #ode, the province may levy only the taxes, fees, and charges as provided in this 'rticle. SE#&,<8 1%=. &ax on &ransfer of 6eal )roperty <wnership. (a$ &he province may impose a tax on the sa%e( !onation( )arter( or on an* other &o!e of transferrin o$nership or tit%e of rea% propert* at the rate of not &ore than fift* percent +,-./ of the one percent +0./ of the tota% consi!eration invo%ve! in the ac1"isition of the propert* or of the fair &ar2et va%"e in case the &onetar* consi!eration invo%ve! in the transfer is not s")stantia%( $hichever is hi her3 &he sale, transfer or other disposition of real property pursuant to 6.'. 8o. 44=> shall be exempt from this tax. (b$ ?or this purpose, the Re ister of 4ee!s of the province concerne! sha%%( )efore re isterin an* !ee!( re1"ire the presentation of the evi!ence of pa*&ent of this tax3 &he provincial assessor shall li-ewise ma-e the same re0uirement before canceling an old tax declaration and issuing a new one in place thereof, 8otaries public shall furnish the provincial treasurer with a copy of any deed transferring ownership or title to any real property within thirty (%:$ days from the date of notari@ation. ,t shall be the duty of the seller, donor, transferor, executor or administrator to pay the tax herein imposed within sixty (4:$ days from the date of the execution of the deed or from the date of the decedentAs death. SE#&,<8 1%4. &ax on 2usiness of )rinting and )ublication. ( &he province may impose a tax on the business of persons engaged in the printing andBor publication of boo-s, cards, posters, leaflets, handbills, certificates, receipts, pamphlets, and others of similar nature, at a rate not exceeding fifty percent (=:C$ of one percent (1C$ of the gross annual receipts for the preceding calendar year. ,n the case of a newly started business, the tax shall not exceed one3twentieth (1B2:$ of one percent (1C$ of the capital investment. ,n the succeeding calendar year, regardless of when the business started to operate, the tax shall be based on the gross receipts for the preceding calendar year, or any fraction thereof, as provided herein. If the capita% invest&ent is 0--(---3--( 0 percent is 0(---3-- an! 056- of the 0(---3-- is P,-( therefore the tax for the printin press an!5or p")%isher for the *ear )* the ti&e he starts his )"siness is on%* P,-3-&he receipts from the printing andBor publishing of boo-s or other reading materials prescribed by the /epartment of Education, #ulture and Sports as school texts or references sha%% )e exe&pt fro& the tax herein i&pose!. SE#&,<8 1%>. ?ranchise &ax. ( 8otwithstanding any exemption granted by any law or other special law, the province &a* i&pose a tax on )"sinesses en7o*in a franchise( at the rate not
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excee!in fift* percent +,-./ of one percent +0./ of the ross ann"a% receipts for the prece!in ca%en!ar *ear based on the incoming receipt, or reali@ed, within its territorial 1urisdiction. ,n the case of a newly started business, the tax shall not exceed one3twentieth (1B2:$ of one percent (1C$ of the capital investment. ,n the succeeding calendar year, regardless of when the business started to operate, the tax shall be based on the gross receipts for the preceding calendar year, or any fraction thereon, as provided herein. CIT8 GOVERNMENT O9 SAN PA:LO( LAG'NA( CIT8 TREAS'RER O9 SAN PA:LO( LAG'NA( an! THE SANG'NIANG PANGL'NSO4 O9 SAN PA:LO( LAG'NA( petitioners( vs3 HONORA:LE :IENVENI4O V3 RE8ES( in his capacit* as Presi!in ;"! e( Re iona% Tria% Co"rt( :ranch 6<( San Pa)%o Cit* an! the MANILA ELECTRIC COMPAN8( respon!ents3 =G3R3 No3 06>>-?3 March 6,( 0<<<3@ Taxation of franchise and related law &he pivotal issue is whether the #ity of San )ablo may impose a local franchise tax pursuant to the !"# upon the Danila Electric #ompany which pays a tax e0ual to two percent of its gross receipts in lieu of all taxes and assessments of whatever nature imposed by any national or local authority on savings or income. ,t is necessary to reproduce the pertinent provisions of the !"#. SE#&,<8 1%>. ?ranchise &ax. ( 8otwithstanding any exemption granted by any law or other special law, the province may impose a tax on business en1oying a franchise, at a rate not exceeding fifty percent =:C of one percent 1C of the gross annual receipts for the preceding calendar year based on the incoming receipts, or reali@ed, within its territorial 1urisdiction. . .; SE#&,<8 1=1. Scope of &axing )owers. ( Except as otherwise provided in this #ode, the city, may levy the taxes, fees, and charges which the province or municipality may impose: )rovided, however, &hat the taxes, fees and charges levied and collected by highly urbani@ed and independent component cities shall accrue to them and distributed in accordance with the provisions of this #ode. &he 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 (=:C$ except the rates of professional and amusement taxes. SE#&,<8 1 %. Eithdrawal of &ax Exemption )rivileges. ( *nless otherwise provided in this #ode, tax exemptions or incentives granted to, or presently en1oyed by all persons, whether natural or 1uridical, including government3owned or controlled corporations, except local water districts, cooperatives duly registered under 6.'. 4 %9, non3stoc- and non3profit hospitals and educational institutions, are hereby withdrawn upon the effectivity of this #ode. SE#&,<8 =%5 (f$. 6epealing #lause. ( 'll general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations, or part or parts thereof which are inconsistent with any of the provisions of this code are hereby repealed or modified accordingly.
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Section =%5 (f$, the repealing clause of the !"#, provides that all general and special laws, acts, city charters, decrees, executive orders, proclamations and administrative regulations or parts thereof which are inconsistent with any of the provisions of the #ode are hereby repealed or modified accordingly. &his clause parta-es of the nature of a general repealing clause. ,t is certainly not an express repealing clause because it fails to designate the specific act or acts identified by number or title, that are intended to be repealed. Eas there an implied repeal by 6epublic 'ct 8o. >14: of the DE6'!#< franchise insofar as the latter imposes a 2C tax ;in lieu of all taxes and assessments of whatever nature;F Ee rule affirmatively. Ee are mindful of the established rule that repeals by implication are not favored as laws are presumed to be passed with deliberation and full -nowledge of all laws existing on the sub1ect. ' general law cannot be construed to have repealed a special law by mere implication unless the intent to repeal or alter is manifest and it must be convincingly demonstrated that the two laws are so clearly repugnant and patently inconsistent that they cannot co3exist. ,t is our view that petitioners correctly rely on the provisions of Sections 1%> and 1 % of the !"# to support their position that DE6'!#<As tax exemption has been withdrawn. &he explicit language of Section 1%> which authori@es the province to impose franchise tax ;notwithstanding any exemption granted by any law or other special law; is all3encompassing and clear. &he franchise tax is imposable despite any exemption en1oyed under special laws. Section 1 % buttresses the withdrawal of extant tax exemption privileges. 2y stating that unless otherwise provided in this #ode, tax exemption or incentives granted to or presently en1oyed by all persons whether natural or 1uridical, including government3owned or controlled corporations except 1$ local water districts, 2$ cooperatives duly registered under 6.'. 4 %9, (%$ non3stocand non3profit hospitals and educational institutions, are withdrawn upon the effectivity of this code, the obvious import is to limit the exemptions to the three enumerated entities. ,t is a basic precept of statutory construction that the express mention of one person, thing, act, or conse0uence excludes all others as expressed in the familiar maxim expressio unius est exclusio alterius. 11 ,n the absence of any provision of the #ode to the contrary, and we find no other provision in point, any existing tax exemption or incentive en1oyed by DE6'!#< under existing law was clearly intended to be withdrawn. 6eading together Sections 1%> and 1 % of the !"#, we conclude that under the !"# the local government unit may now impose a local tax at a rate not exceeding =:C of 1C of the gross annual receipts for the preceding calendar year based on the incoming receipts reali@ed within its territorial 1urisdiction. &he legislative purpose to withdraw tax privileges en1oyed under existing law or charter is clearly manifested by the language used in Sections 1%> and 1 % categorically withdrawing such exemption sub1ect only to exceptions enumerated. Since it would be not only tedious and impractical to attempt to enumerate all the existing statutes providing for special tax exemptions or privileges, the !"# provided for an express, albeit general, withdrawal of such exemptions or privileges. 8o more une0uivocal language could have been used. ,t is true that the phrase ;in lieu of all taxes; found in special franchises has been held in several cases to exempt the franchise holder from payment of tax on its corporate franchise
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imposed by the ,nternal 6evenue #ode, as the charter is in the nature of a private contract and the exemption is part of the inducement for the acceptance of the franchise, and that the imposition of another franchise tax by the local authority would constitute an impairment of contract between the government and the corporation. 2ut these ;magic words; contained in the phrase ;shall be in lieu of all taxes; have to give way to the peremptory language of the !"# specifically providing for the withdrawal of such exemption privileges. 'ccordingly in Dactan #ebu ,nternational 'irport 'uthority vs. Darcos, this #ourt held that Section 1 % of the !"# prescribes the general rule, vi@., the tax exemptions or incentives granted to or presently en1oyed by natural or 1uridical persons are withdrawn upon the effectivity of the !"# except with respect to those entities expressly enumerated. ,n the same vein, Ee must hold that the express withdrawal upon effectivity of the !"# of all exemptions except only as provided therein, can no longer be invo-ed by Deralco to disclaim liability for the local tax. )rivate respondents further argue that the ;in lieu of; provision contained in )/ ==1, 'ct 8o. %459 and 6' 2%5: does not parta-e of the nature of an exemption, but is a ;commutative tax;. &his contention was raised but was not upheld in #agayan Electric )ower and !ight #o. ,nc. vs. #ommissioner of ,nternal 6evenue wherein the Supreme #ourt stated: ;. . . #ongress could impair petitionerAs legislative franchise by ma-ing it liable for income tax from which heretofore it was exempted by virtue of the exemption provided for in section % of its franchise . . .. . . 6epublic 'ct 8o. =5%1, in amending section 25 of the &ax #ode by sub1ecting to income tax all corporate taxpayers not expressly exempted therein and in section 2> of the #ode, had the effect of withdrawing petitionerAs exemption from income tax . . .; )rivate respondentAs invocation of the non3impairment clause of the #onstitution is accordingly unavailing. &he !"# was enacted in pursuance of the constitutional policy to ensure autonomy to local governments and to enable them to attain fullest development as self3reliant communities. &hus in Dactan #ebu ,nternational 'irport 'uthority vs. Darcos, supra, this #ourt pointed out, in upholding the withdrawal of the real estate tax exemption previously en1oyed by the Dactan #ebu ,nternational 'irport 'uthority, as follows: ;8ote that as reproduced in Section 2%5(a$ the phrase ;and any government3owned or controlled corporation so exempt by its charter; was excluded. &he 1ustification for this restricted exemption in Section 2%5(a$ seems obvious: to limit further tax exemption privileges, especially in light of the general provision on withdrawal of tax exemption privileges in Section 1 % and the special provision on withdrawal of exemption from payment of real property taxes in the last paragraph of Section 2%5. &hese policy considerations are consistent with the State policy to ensure autonomy to local governments and the ob1ective of the !"# that they en1oy genuine and meaningful local autonomy to enable them to attain their fullest development as self3reliant communities and ma-e them effective partners in the attainment of national goals. &he power to tax is the most effective instrument to raise needed revenues to finance and support myriad activities of local government units for the delivery of basic services essential to the promotion of the general welfare and the enhancement of peace, progress, and prosperity of the people. ,t may also be relevant to recall that the original reasons for the withdrawal of tax exemption privileges granted to government3owned or controlled corporations and all other units of government were that such privilege resulted in serious tax base erosion and distortions in the tax treatment of similarly situated enterprises, and there was a need for these entities to share in the re0uirements of
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development, fiscal or otherwise, by paying the taxes and other charges due from them.; &he #ourt therein concluded that: ;nothing can prevent #ongress from decreeing that even instrumentalities or agencies of the "overnment performing governmental functions may be sub1ect to tax. Ehere it is done precisely to fulfill a constitutional mandate and national policy, no one can doubt its wisdom; &he power to tax is primarily vested in #ongress. +owever, in our 1urisdiction, it may be exercised by local legislative bodies, no longer merely by virtue of a valid delegation as before, but pursuant to direct authority conferred by Section =, 'rticle G of the #onstitution. 2: &hus 'rticle G, Section = of the #onstitution reads: ;SE#&,<8 =. Each !ocal "overnment unit shall have the power to create its own sources of revenue and to levy taxes, fees and charges sub1ect to such guidelines and limitations as the #ongress may provide, consistent with the basic policy of local autonomy. Such taxes, fees and charges shall accrue exclusively to the !ocal "overnments.; &he important legal effect of Section = is that henceforth, in interpreting statutory provisions on municipal fiscal powers, doubts will have to be resolved in favor of municipal corporations. &here is further basis for the conclusion that the non3impairment of contract clause cannot be invo-ed to uphold DeralcoAs exemption from the local tax. Escudero Electric #o. was originally given the legislative franchise under 'ct %459 to operate an electric light and power system in the #ity of San )ablo and nearby municipalities. &he term of the franchise under 'ct 8o. %459 is a period of fifty years from the 'ctAs approval in 1 2 . The said law provided that the franchise is granted upon the condition that it shall be subject to amendment or repeal b! the "ongress of the #nited $tates . Under the 1935, the 19 3 and the 19! Constitutions, no franchise or right shall be granted except under the condition that it shall be sub"ect to amendment, alteration or repeal by the #ational $ssembly when the public interest so re%uires . Eith or without the reservation clause, franchises are sub1ect to alterations through a reasonable exercise of the police power. they are also sub1ect to alteration by the power to tax, which li-e police power cannot be contracted away. ?inally, while the matter is not of controlling significance, the #ourt notes that whereas the original Escudero franchise exempted the franchise holder from all taxes levied or collected ;now or in the future; this phrase is noticeably omitted in the counterpart provision of )./. ==1. that said omission is intended not to foreclose future taxes may reasonably be deduced by statutory construction. E+E6E?<6E, the instant petition is "6'8&E/. &he decision of the 6egional &rial #ourt of San )ablo #ity appealed from is hereby reversed and set aside, and the complaint of DE6'!#< is hereby /,SD,SSE/. 8o pronouncement as to costs.
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S< <6/E6E/. SECTION 0A?3 Tax on San!( Grave% an! Other B"arr* Reso"rces3 ( &he province may levy and collect not more than ten percent (1:C$ of fair mar-et value in the locality per cubic meter of ordinary stones, sand, gravel, earth, and other 0uarry resources, as defined under the 8ational ,nternal 6evenue #ode, as amended, extracted from public lands or from the beds of seas, la-es, rivers, streams, cree-s, and other public waters within its territorial 1urisdiction. &he permit to extract sand, gravel and other 0uarry resources shall be issued exclusively by the provincial governor, pursuant to the ordinance of the sangguniang panlalawigan. &he proceeds of the tax on sand, gravel and other 0uarry resources shall be distributed as follows: (1$ (2$ (%$ )rovince ( &hirty percent (%:C$. #omponent #ity or Dunicipality where the sand, gravel, and other 0uarry resources are extracted ( &hirty percent (%:C$. and 2arangay where the sand, gravel, and other 0uarry resources are extracted ( ?orty percent (5:C$. Professiona% Tax3 C
SECTION 0A<3
&he province may levy an annual professional tax on each person engaged in the exercise or practice of his profession re0uiring government examination at such amount and reasonable classification as the sangguniang panlalawigan may determine but shall in no case exceed &hree hundred pesos ()%::.::$. (b$ Every person legally authori@ed to practice his profession shall pay the professional tax to the province where he practices his profession or where he maintains his principal office in case he practices his profession in several places: )rovided, however, &hat such person who has paid the corresponding professional tax shall be entitled to practice his profession in any part of the )hilippines without being sub1ected to any other national or local tax, license, or fee for the practice of such profession. 'ny individual or corporation employing a person sub1ect to professional tax shall re0uire payment by that person of the tax on his profession before employment and annually thereafter. &he professional tax shall be payable annually, on or before the thirty3first (%1st$ day of Hanuary. 'ny person first beginning to practice a profession after the month of Hanuary must, however, pay the full tax before engaging therein. ' line of profession does not become exempt even if conducted with some other profession for which the tax has been paid. )rofessionals exclusively employed in the government shall be exempt from the payment of this tax. 'ny person sub1ect to the professional tax shall write in deeds, receipts, prescriptions, reports, boo-s of account, plans and designs, surveys and maps, as the case may be, the number of the official receipt issued to him.
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(e$
SECTION 0D-3 A&"se&ent Tax3 ( (a$ &he province may levy an amusement tax to be collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement at a rate of not more than thirty percent (%:C$ of the gross receipts from admission fees.
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(b$
(c$ (d$ (e$
,n the case of theaters or cinemas, the tax shall first be deducted and withheld by their proprietors, lessees, or operators and paid to the provincial treasurer before the gross receipts are divided between said proprietors, lessees, or operators and the distributors of the cinematographic films. &he holding of operas, concerts, dramas, recitals, painting and art exhibitions, flower shows, musical programs, literary and oratorical presentations, except pop, roc-, or similar concerts shall be exempt from the payment of the tax hereon imposed. &he sangguniang panlalawigan may prescribe the time, manner, terms and conditions for the payment of tax. ,n case of fraud or failure to pay the tax, the sangguniang panlalawigan may impose such surcharges, interest and penalties as it may deem appropriate. &he proceeds from the amusement tax shall be shared e0ually by the province and the municipality where such amusement places are located.
&he proceeds from the amusement tax =:C goes to the province =:C goes to the municipality where such amusement places are located PHILIPPINE :ASEET:ALL ASSOCIATION( petitioner( vs3 CO'RT O9 APPEALS( CO'RT O9 TAX APPEALS( AN4 COMMISSIONER O9 INTERNAL REVEN'E( respon!ents3 =G3R3 No3 00<0663 A" "st ?( 6---3@ $musement tax & 'as(etball )ames of *'$ &he issues for resolution in this case may be simplified as follows: 1. ,s the amusement tax on admission tic-ets to )2' games a national or local taxF <therwise put, who between the national government and local government should petitioner pay amusement taxesF 2. ,s the cession of advertising and streamer spaces to 7intage Enterprises, ,nc. (7E,$ sub1ect to the payment of amusement taxF %. ,f ever petitioner is liable for the payment of deficiency amusement tax, is it liable to pay a seventy3five percent (>=C$ surcharge on the deficiency amount dueF )etitioner contends that )/ 2%1, otherwise -nown as the !ocal &ax #ode of 1 >%, transferred the power and authority to levy and collect amusement taxes from the sale of admission tic-ets to places of amusement from the national government to the local governments. )etitioner cited 2,6 Demorandum #ircular 8o. 5 3>% providing that the power to levy and collect amusement tax on admission tic-ets was transferred to the local governments by virtue of the !ocal &ax #ode. and 2,6 6uling 8o. 2%1394 which held that ;the 1urisdiction to levy amusement tax on gross receipts from admission tic-ets to places of amusement was transferred to local governments under )./. 8o. 2%1, as amended.; ?urther, petitioner opined that even assuming arguendo that respondent #ommissioner revo-ed 2,6 6uling 8o. 2%1394, the reversal, modification or revocation cannot be given retroactive effect since even as late as 1 99 (2,6 Demorandum #ircular 8o. 9399$, respondent #ommissioner still recogni@ed the 1urisdiction of local governments to collect amusement taxes. &he #ourt is not persuaded by petitionerAs asseverations.
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&he laws on the matter are succinct and clear and need no elaborate dis0uisition. Section 1% of the !ocal &ax #ode provides: ;SE#&,<8 1%. 'musement tax on admission. ( &he province shall impose a tax on admission to be collected from the proprietors, lessees, or operators of theaters, cinematographs, concert halls, circuses and other places of amusement . . .; &he foregoing provision of law in point indicates that the province can only impose a tax on admission from the proprietors, lessees, or operators of theaters, cinematographs, concert halls, circuses and other places of amusement. &he authority to tax professional bas-etball games is not therein included, as the same is expressly embraced in )/ 1 = , which amended )/ 15=4 thus: ;SE#&,<8 55. Section 249 of this #ode, as amended, is hereby further amended to read as follows: ASec. 249. 'musement taxes. ( &here shall be collected from the proprietor, lessee or operator of coc-pits, cabarets, night or day clubs, boxing exhibitions, professional bas-etball games, Hai3'lai, race trac-s and bowling alleys, a tax e0uivalent to: A1. Eighteen per centum in the case of coc-pits. A2. Eighteen per centum in the case of cabarets, night or day clubs. A%. ?ifteen per centum in the case of boxing exhibitions. A5. ?ifteen per centum in the case of professional bas-etball games as envisioned in )residential /ecree 8o. 9>1. )rovided, however. &hat the tax herein shall be in lieu of all other percentage taxes of whatever nature and description. A=. &hirty per centum in the case of Hai3'lai and race trac-s. and A4. ?ifteen per centum in the case of bowling alleys of their gross receipts, irrespective of whether or not any amount is charged or paid for admission. ?or the purpose of the amusement tax, the term gross receiptsA embraces all the receipts of the proprietor, lessee or operator of the amusement place. Said gross receipts also include income from television, radio and motion picture rights, if any. (' person or entity or association conducting any activity sub1ect to the tax herein imposed shall be similarly liable for said tax with respect to such portion of the receipts derived by him or it.$ A&he taxes imposed herein shall be payable at the end of each 0uarter and it shall be the duty of the proprietor, lessee, or operator concerned, as well as any party liable, within twenty days after the end of each 0uarter, to ma-e a true and complete return of the amount of the gross receipts derived during the preceding 0uarter and pay the tax due thereon. ,f the tax is not paid within the time prescribed above, the amount of the tax shall be increased by twenty3five per centum, the increment to be part of the tax. A,n case of willful neglect to file the return within the period prescribed herein, or in case a false or fraudulent return is willfully made, there shall be added to the tax or to the deficiency tax, in case any payment has been made on the basis of the return before the discovery of the falsity or fraud, a surcharge of fifty per centum of its amount. &he amount so added to any tax shall be collected at the same time and in the same manner and as part of the tax unless the tax has been paid before the discovery of the falsity or fraud, in which case, the amount so assessed shall be collected in the same manner as the tax.; (emphasis ours$
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?rom the foregoing it is clear that the ;proprietor, lessee or operator of . . . professional bas-etball games; is re0uired to pay an amusement tax e0uivalent to fifteen per centum (1=C$ of their gross receipts to the 2ureau of ,nternal 6evenue, which payment is a national tax. &he said payment of amusement tax is in lieu of all other percentage taxes of whatever nature and description. Ehile Section 1% of the !ocal &ax #ode mentions ;other places of amusement;, professional bas(etball games are definitely not within its scope . *nder the principle of e1usdem generis, where general words follow an enumeration of persons or things, by words of a particular and specific meaning, such general words are not to be construed in their widest extent, but are to be held as applying only to persons or things of the same -ind or class as those specifically mentioned. Thus, in determining the meaning of the phrase +other places of amusement+, one must refer to the prior enumeration of theaters, cinematographs, concert halls and circuses with artistic expression as their common characteristic. )rofessional bas-etball games do not fall under the same category as theaters, cinematographs, concert halls and circuses as the latter basically belong to artistic forms of entertainment while the former caters to sports and gaming. ' historical analysis of pertinent laws does reveal the legislative intent to place professional bas-etball games within the ambit of a national tax. &he !ocal &ax #ode, which became effective on Hune 29, 1 >%, allowed the province to collect a tax on admission from the proprietors, lessees, or operators of theaters, cinematographs, concert halls, circuses and other places of amusement. <n Hanuary 4, 1 >4, the operation of petitioner was placed under the supervision and regulation of the "ames and 'musement 2oard by virtue of )/ 9>1, with the proviso (Section 9$ that ;. . . all professional bas-etball games conducted by the )hilippine 2as-etball 'ssociation shall only be sub1ect to amusement tax of five per cent of the gross receipts from the sale of admission tic-ets.; &hen, on Hune 11, 1 >9, )/ 15=4 came into effect, increasing the amusement tax to ten per cent, with a categorical referral to )/ 9>1, to wit, ;ItJen per centum in the case of professional bas-etball games as envisioned in )residential /ecree 8o. 9>1 . . .; !ater in 1 95, )/ 1 = increased the rate of amusement tax to fifteen percent by ma-ing reference also to )/ 9>1. Eith the reference to )/ 9>1 by )/ 15=4 and )/ 1 = , there is a recognition under the laws of this country that the amusement tax on professional bas-etball games is a national, and not a local, tax. Even up to the present, the category of amusement taxes on professional bas-etball games as a national tax remains the same. &his is so provided under Section 12= 1: of the 1 > 8ational ,nternal 6evenue #ode. Section 15: 11 of the !ocal "overnment #ode of 1 2 (6epublic 'ct >14:$, meanwhile, retained the areas (theaters, cinematographs, concert halls, circuses and other places of amusement$ where the province may levy an amusement tax without including therein professional bas-etball games. !i-ewise erroneous is the stance of petitioner that respondent #ommissionerAs issuance of 2,6 6uling 8o. 2%1394 12 and 2,6 6evenue Demorandum #ircular 8o. 9399 1% ( both upholding the authority of the local government to collect amusement taxes ( should bind the government or that, if there is any revocation or modification of said rule, the same should operate prospectively. ,t bears stressing that the government can never be in estoppel, particularly in matters involving taxes. ,t is a well3-nown rule that erroneous application and enforcement of
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the law by public officers do not preclude subse0uent correct application of the statute, and that the "overnment is never estopped by mista-e or error on the part of its agents. *ntenable is the contention that income from the cession of streamer and advertising spaces to 7E, is not sub1ect to amusement tax. &he 0uestioned proviso may be found in Section 1 of )/ 15=4 which states: ;SE#&,<8 1. Section 249 of the 8ational ,nternal 6evenue #ode of 1 >>, as amended, is hereby further amended to read as follows: +No$ Section 06, of the NIRC of 0<<>/ ASec. 249. 'musement taxes. ( &here shall be collected from the proprietor, lessee or operator of coc-pits, cabarets, night or day clubs, boxing exhibitions, professional bas-etball games, Hai3'lai, race trac-s and bowling alleys, a tax e0uivalent to: xxx xxx xxx
of their gross receipts, irrespective of whether or not any amount is charged or paid for admission. ?or the purpose of the amusement tax, the term gross receiptsA embraces all the receipts of the proprietor, lessee or operator of the amusement place. Said gross receipts also include income from television, radio and motion picture rights, if any. (' person, or entity or association conducting any activity sub1ect to the tax herein imposed shall be similarly liable for said tax with respect to such portion of the receipts derived by him or it.$; (emphasis ours$ &he foregoing definition of gross receipts is broad enough to embrace the cession of advertising and streamer spaces as the same embraces all the receipts of the proprietor, lessee or operator of the amusement place. &he law being clear, there is no need for an extended interpretation. &he last issue for resolution concerns the liability of petitioner for the payment of surcharge and interest on the deficiency amount due. )etitioner contends that it is not liable, as it acted in good faith, having relied upon the issuances of the respondent #ommissioner. &his issue must necessarily fail as the same has never been posed as an issue before the respondent court. ,ssues not raised in the court a 0uo cannot be raised for the first time on appeal. 'll things studiedly considered, the #ourt rules that the petitioner is liable to pay amusement tax to the national government, and not to the local government, in accordance with the rates prescribed by )/ 1 = . E+E6E?<6E, the )etition is /E8,E/, and the /ecisions of the #ourt of 'ppeals and #ourt of &ax 'ppeals dated 8ovember 21, 1 5 and /ecember 25, 1 %, respectively '??,6DE/. 8o pronouncement as to costs. SE#&,<8 151. 'nnual ?ixed &ax ?or Every /elivery &ruc- or 7an of Danufacturers or )roducers, Eholesalers of, /ealers, or 6etailers in, #ertain )roducts. ( (a$ &he province may levy an annual fixed tax for every truc-, van or any vehicle used by manufacturers, producers, wholesalers, dealers or retailers in the delivery or distribution of distilled spirits, fermented li0uors, soft drin-s, cigars and cigarettes, and other products as may be determined by the sangguniang panlalawigan, to sales
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outlets, or consumers, whether directly or indirectly, within the province in an amount not exceeding ?ive hundred pesos ()=::.::$. (b$ &he manufacturers, producers, wholesalers, dealers and retailers referred to in the immediately foregoing paragraph shall be exempt from the tax on peddlers prescribed elsewhere in this #ode. ARTICLE II M"nicipa%ities SE#&,<8 152. Scope of &axing )owers. ( Except as otherwise provided in this #ode, municipalities may levy taxes, fees, and charges not otherwise levied by provinces. =G3R3 No3 L#A00,F3 9e)r"ar* 6>( 0<>F3@ PEPSI#COLA :OTTLING COMPAN8 O9 THE PHILIPPINES( INC3( p%aintiff# appe%%ant( vs3 M'NICIPALIT8 O9 TANA'AN( LE8TE( THE M'NICIPAL MA8OR( ET AL3( !efen!ants#appe%%ees3 ,-#.*,/, )epsi3#ola 2ottling #ompany of the )hilippines, ,nc., filed a complaint with preliminary in1unction before the #ourt of ?irst ,nstance of !eyte to declare Section 2 of 6.'. 8o. 2245, (-nown as the !ocal 'utonomy 'ct$ unconstitutional as an undue delegation of the taxing authority and declare null and void Dunicipal <rdinance 8o. 2%, which levies and collects from soft drin(s producers and manufactures a tax of 1011 of a centavo for every bottle of soft drin(s cor(ed, and 2unicipal .rdinance #o3 4 which levies and collects on soft drin(s produced or manufactured within the territorial "urisdiction a tax of one centavo on each gallon of volume capacity. &he trial court dismissed the complaint and upheld the constitutionality of Sec. 2 of 6.'. 8o. 2245 and declared Dunicipal <rdinances 8os. 2> valid and constitutional. 'ppealed to the #ourt of 'ppeals, the case was certified to the Supreme #ourt as involving pure 0uestion of law. &he Supreme #ourt upheld the validity of the delegation to Dunicipal #orporation or authority to tax and li-ewise the validity of Dunicipal <rdinance 8o. 2>, which repealed Dunicipal <rdinance 8o. 2%. ,/.. ,/.. ,/.. ,8S&'8& #'SE. ( Ehere, as in the case at bar, the municipality of &anauan enacted <rdinance 8o. 2> imposing a tax of one centavo on each gallon of volume capacity while in the previous <rdinance 8o. 2%, it was 1B14 of a centavo for every bottle cor-ed, it is clear that the intention of the municipal council was to substitute <rdinance 8o. 2> to that of <rdinance 8o. 2%, repealing the latter. ,/.. &'G !E7,E/ <8 )6</*#E, 8<& )E6#E8&'"E &'G. ( &he imposition of ;a tax of one centavo ():.:1$ on each gallon (129 fluid ounces, *.S.$ of volume capacity; on all soft drin-s produced or manufactured under <rdinance 8o. 2> does not parta(e of a nature of a percentage tax on sales, or other taxes in any form based thereon. The ta( is levied on the produce )whether sold or not* and not on the sales . &he volume capacity of the taxpayerAs production of soft drin-s is considered solely for
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purposes of determining the tax rate on the products, but there is no set ratio between the volume of sales and the amount of tax. ,/.. ,/.. ,/.. D*8,#,)'!,&K '!!<EE/ &< ,8#6E'SE &'G 'S !<8" 'S 'D<*8& ,S 6E'S<8'2!E. ( &he tax of one centavo ():.:1$ on each gallon (129 fluid ounces, *.S.$ of volume capacity of all soft drin-s, produced or manufactured or an e0uivalent of 131B2 centavos per case, cannot be considered un1ust and unfair. 'n increase in the tax alone would not support the claim that the tax is oppressive, un1ust and confiscatory. Dunicipal corporations are allowed much discretion in determining the rates of impossible taxes. &his is in line with the constitutional policy of according the widest possible autonomy to local government in matters of taxation, an aspect that is given expression in the !ocal &ax #ode ()/ 8o. 2%1, Huly 1, 1 >%$. SE#&,<8 15%. &ax on 2usiness. ( &he municipality may impose taxes on the following businesses: (a$ <n manufacturers, assemblers, repac-ers, processors, brewers, distillers, rectifiers, and compounders of li0uors, distilled spirits, and wines or manufacturers of any article of commerce of whatever -ind or nature, in accordance with the following schedule: (b$ <n wholesalers, distributors, or dealers in any article of commerce of whatever -ind or nature in accordance with the following schedule: (see text$ CALTEX +PHILIPPINES/( INC3( p%aintiff#appe%%ee( vs3 THE CIT8 O9 MANILA an! MAN'EL C'4IAMAT( in his capacit* as Cit* Treas"rer( !efen!ants#appe%%ants3 =G3R3 No3 L#66>FD3 ;"%* 6?( 0<F<3@ /ssues5 6ealers tax is applicable to whom7 ' /E'!E6 33 &he 1urisprudence in the *nited States cited in that decision has defined the term ;dealer; as a ;person who ma+es a business of bu!ing and selling goods, especially as distinguished from a manufacturer . . . a middleman between the producer and the consumer . . . one who buys to sell again . . . (who$ stands between the producer and consumer, and depends for his profit not on the labor he bestows on his commodities, but on the s(ill and foresight with which he watches the mar(ets.; /E'!E6AS &'G. D'8*?'#&*6E6 &+'& SE!!S ,&S )6</*#&S <8!K ,8 D',8 <??,#E ,S 8<& S*2HE#& &< /E'!E6AS &'G. ( 8here the products which a manufacturer manufactures are sold only at his main office , said manufacturer is not a dealer and is not liable for the ,uarterl! ta( on wholesale dealers in general merchandise imposed by <rdinance 8o. %52:, as amended, of the #ity of Danila. Such manufacturer did not become a dealer simply because it sells the products it manufactures, since the right to manufacture implies the right to sell the manufactured products. EG#E)&,<8. ( &he exception recogni@ed by this #ourt in the #entral '@ucarera /on )edro vs. #ity of Danila, > )hil. 42> case regarding the non3liability of the manufacturer for dealerAs tax on the products it manufactures and sells is if the manufacturer +carries on the business of selling goods or his products manufactured by him at a store or warehouse apart from his own shop or manufactory.;
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/E!,7E6K <? "<</S &< #*S&<DE6S '& E'6E+<*SE, ,DD'&E6,'!. ( &he fact that delivery to customers of the manufactured goods must necessarily be made at the warehouse is immaterial to the 0uestion of whether or not the manufacturer should be considered as a dealer. There is an appreciable difference between a situation in which the warehouse situated apart from the manufactor! is utili-ed at the same time as a business store where sales are actuall! made to whoever ma! come to bu! , and a situation where the sales transactions are entered into in the main office and the warehouse is used only as a convenient site where to ma-e the corresponding deliveries. (c$ <n exporters, and on manufacturers, millers, producers, wholesalers, distributors, dealers or retailers of essential commodities enumerated hereunder at a rate not exceeding one3half (L$ of the rates prescribed under subsection (a$, (b$ and (d$ of this Section: (1$ (2$ (%$ (5$ (=$ (4$ (>$ (9$ (d$ 6ice and corn. Eheat or cassava flour, meat, dairy products, locally manufactured, processed or preserved food, sugar, salt and other agricultural, marine, and fresh water products, whether in their original state or not. #oo-ing oil and coo-ing gas. !aundry soap, detergents, and medicine. 'gricultural implements. e0uipment and post3harvest facilities, fertili@ers, pesticides, insecticides, herbicides and other farm inputs. )oultry feeds and other animal feeds. School supplies. and #ement. <n retailers.
)rovided, however, &hat barangays shall have the exclusive power to levy taxes, as provided under Section 1=2 hereof, on gross sales or receipts of the preceding calendar year of ?ifty thousand pesos ()=:,:::.::$ or less, in the case of cities, and &hirty thousand pesos ()%:,:::.::$ or less, in the case of municipalities. (f$ (g$ <n contractors and other independent contractors, in accordance with the following schedule: (see text$ <n ban-s and other financial institutions, at a rate not exceeding fifty percent (=:C$ of one percent (1C$ on the gross receipts of the preceding calendar year derived from interest, commissions and discounts from lending activities, income from financial leasing, dividends, rentals on property and profit from exchange or sale of property, insurance premium. <n peddlers engaged in the sale of any merchandise or article of commerce, at a rate not exceeding ?ifty pesos ()=:.::$ per peddler annually. <n any business, not otherwise specified in the preceding paragraphs, which the sanggunian concerned may deem proper to tax: )rovided, &hat on any business sub1ect to the excise, value3added or percentage tax under the 8ational ,nternal 6evenue #ode, as amended, the rate of tax shall not exceed two percent (2C$ of gross sales or receipts of the preceding calendar year. &he sanggunian concerned may prescribe a schedule of graduated tax rates but in no case to exceed the rates prescribed herein.
(h$ (i$
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SECTION 0DD3 Rates of Tax $ithin the Metropo%itan Mani%a Area3 ( &he municipalities within the Detropolitan Danila 'rea may levy taxes at rates which shall not exceed by fifty percent (=:C$ the maximum rates prescribed in the preceding Section. SECTION 0D,3 Retire&ent of :"siness3 ( ' business sub1ect to tax pursuant to the preceding sections shall, upon termination thereof, submit a sworn statement of its gross sales or receipts for the current year. ,f the tax paid during the year be less than the tax due on said gross sales or receipts of the current year, the difference shall be paid before the business is considered officially retired. SECTION 0DF3 Pa*&ent of :"siness Taxes3 ( (a$ &he taxes imposed under Section 15% shall be payable for every separate or distinct establishment or place where business sub1ect to the tax is conducted and one line of business does not become exempt by being conducted with some other business for which such tax has been paid. &he tax on a business must be paid by the person conducting the same. (b$ ,n cases where a person conducts or operates two (2$ or more of the businesses mentioned in Section 15% of this #ode which are sub1ect to the same rate of tax, the tax shall be computed on the combined total gross sales or receipts of the said two (2$ or more related businesses. ,n cases where a person conducts or operates two (2$ or more businesses mentioned in Section 15% of this #ode which are sub1ect to different rates of tax, the gross sales or receipts of each business shall be separately reported for the purpose of computing the tax due from each business.
(c$
SECTION 0D>3 9ees an! Char es3 ( &he municipality may impose and collect such reasonable fees and charges on business and occupation and, except as reserved to the province in Section 1% of this #ode, on the practice of any profession or calling, commensurate with the cost of regulation, inspection and licensing before any person may engage in such business or occupation, or practice such profession or calling. SECTION 0D?3 9ees for Sea%in an! Licensin of Gei hts an! Meas"res3 ( (a$ &he municipality may levy fees for the sealing and licensing of weights and measures at such reasonable rates as shall be prescribed by the sangguniang bayan. (b$ &he sangguniang bayan shall prescribe the necessary regulations for the use of such weights and measures, sub1ect to such guidelines as shall be prescribed by the /epartment of Science and &echnology. &he sanggunian concerned shall, by appropriate ordinance, penali@e fraudulent practices and unlawful possession or use of instruments of weights and measures and prescribe the criminal penalty therefor in accordance with the provisions of this #ode. )rovided, however, &hat the sanggunian concerned may authori@e the municipal treasurer to settle an offense not involving the commission of fraud before a case therefor is filed in court, upon payment of a compromise penalty of not less than &wo hundred pesos ()2::.::$. SECTION 0D<3 9isher* Renta%s( 9ees an! Char es3 ( (a$ Dunicipalities shall have the exclusive authority to grant fishery privileges in the municipal waters and impose rentals, fees or charges therefor in accordance with the provisions of this Section. (b$ (1$ &he sangguniang bayan may: "rant fishery privileges to erect fish corrals, oysters, mussels or other a0uatic beds or bangus fry areas, within a definite @one of the municipal waters, as determined by it: )rovided, however, &hat duly registered organi@ations and cooperatives of marginal fishermen shall have the
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preferential right to such fishery privileges: )rovided, further, &hat the sangguniang bayan may re0uire a public bidding in conformity with and pursuant to an ordinance for the grant of such privileges: )rovided, finally, &hat in the absence of such organi@ations and cooperatives or their failure to exercise their preferential right, other parties may participate in the public bidding in conformity with the above cited procedure. (2$ "rant the privilege to gather, ta-e or catch bangus fry, prawn fry or -awag3-awag or fry of other species and fish from the municipal waters by nets, traps or other fishing gears to marginal fishermen free of any rental, fee, charge or any other imposition whatsoever. ,ssue licenses for the operation of fishing vessels of three (%$ tons or less for which purpose the sangguniang bayan shall promulgate rules and regulations regarding the issuances of such licenses to 0ualified applicants under existing laws. )rovided, however, &hat the sanggunian concerned shall, by appropriate ordinance, penali@e the use of explosives, noxious or poisonous substances, electricity, muro3ami, and other deleterious methods of fishing and prescribe a criminal penalty therefor in accordance with the provisions of this #ode: )rovided, finally, &hat the sanggunian concerned shall have the authority to prosecute any violation of the provisions of applicable fishery laws. SECTION 0,-3 Sit"s of the Tax3 ( (a$ ?or purposes of collection of the taxes under Section 15% of this #ode, manufacturers, assemblers, repac-ers, brewers, distillers, rectifiers and compounders of li0uor, distilled spirits and wines, millers, producers, exporters, wholesalers, distributors, dealers, contractors, ban-s and other financial institutions, and other businesses, maintaining or operating branch or sales outlet elsewhere shall record the sale in the branch or sales outlet ma-ing the sale or transaction, and the tax thereon shall accrue and shall be paid to the municipality where such branch or sales outlet is located. ,n cases where there is no such branch or sales outlet in the city or municipality where the sale or transaction is made , the sale shall be duly recorded in the principal office and the taxes due shall accrue and shall be paid to such city or municipality. Situs of &axation : ALLIE4 THREA4 CO3( INC3( an! EER H COMPAN8( LT43( petitioners( vs3 HON3 CIT8 MA8OR O9 MANILA( HON3 CIT8 TREAS'RER O9 MANILA( HON3 LORENIO RELOVA( in his capacit* as Presi!in ;"! e( :ranch II( C9I of Mani%a( respon!ents3 =G3R3 No3 L#D-6<F3 Nove&)er 60( 0<?D3@ ?inally, petitioner 'llied &hread #o., ,nc. claims exclusion from <rdinance 8o. >=1= as amended on the ground that it does not maintain an office or branch office in the #ity of Danila, where the sub1ect <rdinance only applies. &his contention is devoid of merit. 'llied &hread #o., ,nc. admits that it does business in the #ity of Danila through a bro-er or agent, Mer N #ompany, !td. /oing business in the #ity of Danila is all that is re0uired to fall within the coverage of the <rdinance. ,t should be noted that <rdinance 8o. >=14 as amended imposes a business tax on manufacturers, importers or producers doing business in the #ity of Danila. &he tax imposition here is upon the performance of an act, en1oyment of a privilege, or the engaging in an occupation, and hence is in the nature of an excise tax. &he power to levy an excise upon the performance of an act or the engaging in an occupation does not depend upon the domicile of the person sub1ect to the excise, nor upon the physical location of the property and in connection with the act or occupation
(%$
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taxed, but depends upon the place in which the act is performed or occupation engaged in. &hus, the gauge for taxability under the said <rdinance 8o. >=14 as amended does not depend on the location of the office, but attaches upon the place where the respective sale transaction(s$ is perfected and consummated. (See Moppel ()hil$ vs. Katco, >> )hil. 5 4 I1 54J.$ Since 'llied &hread #o., ,nc. sells its products in the #ity of Danila through its bro-er, Mer N #ompany, !td., it cannot escape the tax liability imposed by <rdinance 8o. >=14 as amended. CIT8 O9 :ACOLO4( represente! )* MIG'EL RE8NAL4O( in his capacit* as Cit* Treas"rer( petitioner( vs3 E4'AR4O 43 ENRIB'EI( ;"! e of the Thir! :ranch of the Co"rt of 9irst Instance of Ne ros Occi!enta%( an! MON9ORT MOTOR CENTER CORPORATION( represente! )* 9ERNAN4O V3 MON9ORT( in his capacit* as Mana er( respon!ents3 =G3R3 No3 L#6>D-?3 ;"%* 6,( 0<>,3@ &o collect the sum of )1=,1=>.9: representing 1C sales tax, the #ity of 2acolod sued private respondent, a business establishment engaged in the business of #ar Exchange, #ommission 'gents, 6epair Shop and Spare )arts /ealer with offices at 2acolod #ity. )rivate respondent moved to dismiss the complaint on the ground that as a mere sales agent of the #olumbian Dotors, it was not the real party in interest liable for the payment of the sales tax imposed by <rdinance 8o. 21%, Series of 1 45 the #ity of 2acolod. &he #ourt a 0uo issued an order of dismissal, hence petitioner filed the instant action for certiorari and mandamus to nullify the 0uestioned order. &he Supreme #ourt ruled that private respondents, doing business as agent and earning income on the sales it ma-es in the city is liable to pay the sales tax, to wit: Ehere the establishment does business as an agent, ma-ing sales, earning income therefrom, the fact that it did so for its principal is of no account as far as the liability for taxes is concerned. ?or precisely the enterprise it was engaged in was that of an agency. ,ts place of operations was in a city authori@ed by its charter to impose taxes for revenue. ,t is by virtue of the protection accorded it by such governmental unit that it was enabled to pursue its line of endeavor. Erits granted. <rder of dismissal of respondent Hudge nullified and set aside. =G3R3 No3 L#A->D,3 ;an"ar* 0?( 0<>?3@ PHILIPPINE MATCH CO3( LT43( p%aintiff#appe%%ant( vs3 THE CIT8 O9 CE:' an! ;ES'S E3 IA:ATE( Actin Cit* Treas"rer( !efen!ants#appe%%ees3 ,-#.*,/, 'ppellant assailed the legality of the sales tax which the city treasurer of #ebu collected on out3of3town deliveries of matches, to wit: (1$ sales of matches boo-ed and paid for in
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#ebu #ity but shipped directly to customers outside of the city. (2$ transfers of matches to salesman assigned to different agencies outside of the city. and (%$ shipments of matches to provincial customers pursuant to salesmenAs instructions. 'ppellant paid under protest the sales tax on those three categories of out3of3town deliveries. &he trial court sustained the tax imposed on the first transaction, and invalidated the tax in the other two. ,t characteri@ed the tax on the other two transactions as a ;storage tax;, not a sales tax, since the sales were consummated outside of the city, and hence, beyond the cityAs taxing power. &he city did not appeal from the decision. 2ut the appellant appealed from that portion of the decision sustaining the tax on sales of matches to customers outside of the city, which sales were boc-ed and paid for in #ebu #ity and also from the dismissal of its claim for damages against the city treasurer. ,n affirming the appealed decisions, the Supreme #ourt held that the municipal board of #ebu #ity is empowered ;to provide for the levy and collection of taxes for general and special purposes in accordance with law.; The prohibition against the imposition of percentage taxes refers to municipalities and municipal districts but not to chartered cities. The fact that the matches were delivered to customers outside of the cit! did not place the sales be!ond the cit!.s ta(ing power/ The sales formed part of the merchandising business being carried on b! the appellant in the cit!. 's the city treasurer acted within the scope of his authority and in consonance with his bona fide interpretation of the tax ordinance, though not sustained completely by the court, his action did not render him liable for damages. (b$ &he following sales allocation shall apply to manufacturers, assemblers, contractors, producers, and exporters with factories, pro1ect offices, plants, and plantations in the pursuit of their business: (1$ (2$ (c$ &hirty percent (%:C$ of all sales recorded in the principal office shall be taxable by the city or municipality where the principal office is located. and Seventy percent (>:C$ of all sales recorded in the principal office shall be taxable by the city or municipality where the factory, pro1ect office, plant, or plantation is located.
,n case of a plantation located at a place other than the place where the factory is located, said seventy percent (>:C$ mentioned in subparagraph (b$ of subsection (2$ above shall be divided as follows: (1$ (2$ Sixty percent (4:C$ to the city or municipality where the factory is located. and ?orty percent (5:C$ to the city or municipality where the plantation is located.J
(d$
,n cases where a manufacturer, assembler, producer, exporter or contractor has two (2$ or more factories, pro1ect offices, plants, or plantations located in different localities, the seventy percent (>:C$ sales allocation mentioned in subparagraph (b$ of subsection (2$ above shall be prorated among the localities where the factories, pro1ect offices, plants, and plantations are located in proportion to their respective volumes of production during the period for which the tax is due. &he foregoing sales allocation shall be applied irrespective of whether or not sales are made in the locality where the factory, pro1ect office, plant, or plantation is located.
(e$
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ARTICLE III Cities SECTION 0,03 Scope of Taxin Po$ers3 ( Except as otherwise provided in this #ode, the city, may levy the taxes, fees, and charges which the province or municipality may impose: )rovided, however, &hat the taxes, fees and charges levied and collected by highly urbani@ed and independent component cities shall accrue to them and distributed in accordance with the provisions of this #ode. &he rates of taxes that the city may levy may exceed the maximum rates allowed for the province or municipality by not more than fifty percent (=:C$ except the rates of professional and amusement taxes. CIT8 O9 CE:' an!5or CIT8 CO'NCIL O9 THE CIT8 O9 CE:'( co&pose! of Hon3 9LORENCIO S3 'ROT( RA8M'N4O A3 CR8STAL( :IENVENI4O :3 T'4T'4( ;OSE V3 C'ENCO( PA:LO '3 A:ELLA( GEORGE M3 :ALA4;A8( ART'RO L3 A:ELLANA( ;ES'S S3 GA:'8A( an! MARIO R3 VELOSO( petitioners( vs3 HON3 INTERME4IATE APPELLATE CO'RT( HON3 CESAR VIRATA an! HON3 PE4RO M3 ALMANIOR( in their capacities as Secretar* an! Actin Secretar*( respective%*( 4epart&ent of 9inance( respon!ents3 =G3R3 No3 >-F?D3 Octo)er 0-( 0<?F3@ )ursuant to )residential /ecree 8o. 2%1, as amended, otherwise -nown as the !ocal &ax #ode, the #ity #ouncil of #ebu passed <rdinances , and ,, which were approved by the Dayor on Hune 1=, 1 >5, to ta-e effect on Huly 1, 1 >5. &he aforementioned ordinances were submitted to the respondents Secretary and 'cting Secretary of ?inance for review. 'fter review, said respondents ordered the suspension of the following provisions with the corresponding reasons: '. &ax <rdinance 8o. ,
Section => ( Social 'melioration &ax (provided for an additional social amelioration tax of ):.:= on ownerBpromoter of boxing exhibitions, or athletic games or exhibitions held for fund raising purposes$. Section 4= ( ?ixed &ax on 2usiness, in general (tax on amusement places wherein customers actively participate without ma-ing bets or wagers$. 9eason for suspension5 of *363 #o3 4313 ?irst assignment of error: &he lower court ruled that section => and section 4= ("$, item 15 of #ebu &ax <rdinance 8o. 1 imposing an amusement tax (on top of the amusement tax the city is admittedly authori@ed to impose under section 2% of the !ocal &ax #ode$ violate Sec. 1% of the !ocal &ax #ode in relation to section 2% of the same #ode which mandates that the ta(es imposed 0shall be uniform for the cit! and the province/0 :iolative of uniformity of taxation re%uired by sec3 13
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)etitioners argue that since all establishments of amusement within #ebu #ity are sub1ect to the same rate of taxes imposed by sections => and 4= ("$, the rule on uniformity of taxation is not violated. &his contention is erroneous. Section 2%, second paragraph of the !ocal &ax #ode states: ;&he rates of the taxes, fees, or other impositions that the city shall fix may exceed the maximum rates allowed for the province or municipality b! not more than fift! percent e(cept the rates of the ta(es and fees provided in $ection 12 13 14 1512 and 1& )215* in "hapter 33 of this "ode which shall be uniform for the city and the province or municipality as the case maybe/; (Emphasis supplied$ *nder Section 1% of the !ocal &ax #ode, the province is authori@ed to impose an amusement tax of 2:C or %:C depending on the amount paid for admission. 2ut under secs. => and 4= ("$ of its &ax <rdinance 8o. 1 now in 0uestion, petitioner #ebu #ity is authori-ed to impose an additional P'/'5 amusement ta( )on top of the amusement ta( the cit! is admittedl! authori-ed to impose under section 23 of the 4ocal Ta( "ode*. /n effect, Cebu City will have a higher rate of amusement tax than Cebu province3 This disparity in rates is precisely what is proscribed by the second paragraph of section 43 earlier %uoted3 &he said section spea-s of ;uniform for the city and the province or municipality.; ;ence, what is re%uired is uniformity of amusement taxes between the province and the city. not uniformit! of the rates on the same subject. =G3R3 No3 L#0?,AD3 4ece&)er 6D( 0<FD3@ GOL4EN RI::ON L'M:ER COMPAN8( INC3( p%aintiff#appe%%ee( vs3 THE CIT8 O9 :'T'AN an! 9RANCISCO MAGNO( in his capacit* as Cit* Treas"rer of the Cit* of :"t"an( !efen!ants#appe%%ants3 The principa% iss"e to )e reso%ve! is $hether Or!inance No3 ,( as ori ina%%* approve! or as %ater a&en!e! the pertinent part of $hich rea!s as fo%%o$sJ ;'8 <6/,8'8#E ,D)<S,8" ' &'G <8 !*D2E6 D,!!S; ;SE#&,<8 1. ( Every person, association or corporation operating a lumber mill andBor lumber yard within the territory of the #ity of 2utuan shall pay to the city a tax of two3fifths ().::5$ centavo for very board foot of lumber sawn, manufactured andBor produced (regardless of group$. &he tax shall be paid within the first twenty (2:$ days of the following month. ,f the tax is not paid within the time herein prescribed, there shall be added to the unpaid amount a surcharge of ten per centum (1:C$ every month or fractional part thereof, but in no case shall the total surcharge exceed twenty3five per centum (2=C$.; ;SE#&,<8 2. ( ,t shall be the duty of every person, association or corporation operating a lumber mill to submit to the #ity &reasurer within the first fifteen (1=$ days of
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every month a sworn statement of the number of board feet sawn, manufactured or produced by it during the preceding month.; falls within the provisions of paragraph =, Section 1= of 6epublic 'ct 8o. =2%, which empowers the municipal board of the #ity of 2utuan: ;To tax, fix the license fee for, regulate the business and fix the location of , match factories, blac-smith shops, foundries, steam boilers, lumber mills and lumber yards, shipyards, the storage and sale of gunpowder, tar pitch, resin, coal oil, gasoline, ben@ine turpentine, hemp, cotton, nitroglycerine, petroleum, or any of the products thereof, and of all other highly combustible or explosive materials, and other establishments li-ely to endanger the public safety or give rise to conflagrations or explosions, and sub1ect to the rules and regulations issued by the /irector of +ealth in accordance with law, tanneries, renderies, tallow chandeleries, embalmers, and funeral parlors, bone factories, and soap factories.; 'ppellee contends that the ,uestioned ordinance imposes a ta( not on lumber mills and lumber !ards but on the sawn manufactured and5or produced lumber which are forest products and not found among the ta(able items enumerated in the law above ,uoted this rendering said ordinance null and void. ,t argues further that, even under the latest amendment ( <rdinance 8o. 5 , series of 1 =5, which purports to impose the tax not on lumber sold but on lumber sawn, manufactured andBor produced ( the ordinance is ultra vires because par. (p$ Section 1= of the #harter of the #ity of 2utuan (0uoted above$, authori@es a tax only on lumber mills and lumber yards, which obviously does not include the power to impose a tax on sawn, manufactured or produced lumber. *pon the other hand, appellants maintain that the tax in 0uestion is a license or privilege tax on the business of lumber mill or lumberyards imposed by appellant city in the exercise of its police power under Section 1= of its #harter. &he title given to the original ordinance in 0uestion was ;an ordinance imposing a tax on the sales of lumber;. Section 1 thereof made the tax collectible on ;every board foot of lumber sold; by every person, association or corporation operating a lumber mill within the territory of the #ity of 2utuan, while Section 5 expressly exempted lumber mills from the payment of the 0uarterly sales tax provided for in Section %, 'rticle 11 of <rdinance 8o. 5>, Series of 1 5 . &he above would seem to be sufficient to show that the tax imposed is and was really intended to be on lumber sold and not in tax on, or license fee for the privilege of operating a lumber mill andBor a lumber yard. &he amendatory ordinances did not change the nature of the tax imposed by the original. <rdinance 8o. simply changed the title of the latter so as to ma-e it read as an ordinance imposing a tax on the ;produce of lumber millsA. <rdinance 8o. 1:, while entitled as one imposing a tax on lumber mills made the tax collectible on ;every board foot of lumber, regardless of group, sawn, manufactured or produced, etc.;. <rdinance 8o. 5>, in turn, made the tax collectible on ;every board foot of lumber sold andBor shipped;. <rdinance 8o. 5 , while changing again the title of the original ordinance so as to ma-e it read as ;'n ordinance imposing a tax on lumber mills;, also re0uired the
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tax to be paid ;for every board foot of lumber sawn, manufactured andBor produced, etc.; &he clear implication from the original as well as the amendatory ordinances is that the tax imposed is one on lumber sold, manufactured, sawn, or produced by parties duly licensed to engage in said trade or business. 's the lower court said ( and this we 0uote with approval ( ;&he intent of <rdinance 8o. = to tax the sale of lumber is clear and unmista-able. &he subse0uent <rdinances 8os. , 1:, 5> and 5 , Exhs. 2. #. /. and E, respectively, being all amendatory naturally did not alter the essence or spirit of the basic ordinance. &his is evident, if we consider that Section 5 of the original ordinance which exempts lumber mills from the payment of 0uarterly sales tax, as provided in an earlier ordinance, was never repealed and instead was carried over and continued to be in force until the latest amendment.; Doreover, the tax thus levied is virtually one on ;forest products;, since manufactured or sawn lumber is so considered under the provisions of Section 24%, 8ational ,nternal 6evenue #ode, which is embraced in #hapter 7 thereof entitled ;#harges on ?orest )roducts;, as construed by Section 7,, 6egulation 8o. 9=, /epartment of ?inance Dunicipal corporations are prohibited from imposing charges or taxes of such nature (#ommonwealth 'ct 8o. 5>2, Section %, 6epublic 'ct 8o. 2245$. 'ppellantAs claim that the 0uestioned tax is one on business or a privilege tax for the operation of a lumber mill or a lumber yard is without merit. &he character or nature of a tax is determined not by the title of the act or ordinance imposing it but by its operation, practical results and incidents (/awson vs. /istilleries, etc., 2== *.S. 299, 4= !. Ed. 4%9. 'ssociation of #ustoms 2ro-ers, ,nc. et al., vs. &he Dunicipal 2oard et al., ". 6. 8o. !35%>4, Day 22, 1 =%$. 8either the original ordinance in 0uestion nor the amendatory ones show that the tax provided for therein is imposed by reason of the en1oyment of the privilege to engage in a particular trade or business. 8either do they provide that payment thereof is a condition precedent to the en1oyment of such privilege or that its non3payment would result in the cancellation of any previous license granted. &he only conse0uence of its non3payment appears to be the imposition of a surcharge or liability to suffer the penal sanctions prescribed in Section % of the original ordinance. &hese circumstances lead *s to the conclusion that the 0uestioned tax cannot be considered as one imposed upon a party for engaging in the business of operating a lumber mill or a lumber yard. Ee li-ewise find to be unmeritorious appellantsA contention that the power of the #ity of 2utuan to tax lumber mills and lumber yards includes the power to tax the sale, production, sawing andBor manufacture of lumber by them. The rule is well<settled that municipal corporations, unli(e sovereign states, are clothed with no inherent power of taxation= that its charter or a statute must clearly show an intent to confer that power or the municipal corporation cannot assume and exercise it, and that any such power granted must be construed strictly, any doubt or ambiguity arising out from the terms of the grant to be resolved against the municipality3 (#u *n1ieng vs. )atstone, 52 )hil. 919 7ega et al., vs. Dunicipal 2oard, etc., =: <.". 8o. 4, p. 25=4$.
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ARTICLE IV :aran a*s SECTION 0,63 Scope of Taxin Po$ers3 ( &he barangays may levy taxes, fees, and charges, as provided in this 'rticle, which shall exclusively accrue to them: (a$ &axes ( <n stores or retailers with fixed business establishments with gross sales of receipts of the preceding calendar year of ?ifty thousand pesos ()=:,:::.::$ or less, in the case of cities and &hirty thousand pesos ()%:,:::.::$ or less, in the case of municipalities, at a rate not exceeding one percent (1C$ on such gross sales or receipts. Service ?ees or #harges. ( 2arangays may collect reasonable fees or charges for services rendered in connection with the regulations or the use of barangay3owned properties or service facilities such as palay, copra, or tobacco dryers. 2arangay #learance. ( 8o city or municipality may issue any license or permit for any business or activity unless a clearance is first obtained from the barangay where such business or activity is located or conducted. ?or such clearance, the sangguniang barangay may impose a reasonable fee. &he application for clearance shall be acted upon within seven (>$ wor-ing days from the filing thereof. ,n the event that the clearance is not issued within the said period, the city or municipality may issue the said license or permit. <ther fees and #harges. ( &he barangay may levy reasonable fees and charges: (1$ (2$ (%$ <n commercial breeding of fighting coc-s, coc-fights and coc-pits. <n places of recreation which charge admission fees. and <n billboards, signboards, neon signs, and outdoor advertisements. ARTICLE V Co&&on Reven"e#Raisin Po$ers SECTION 0,A3 Service 9ees an! Char es3 ( !ocal government units may impose and collect such reasonable fees and charges for services rendered. SECTION 0,D3 P")%ic 'ti%it* Char es3 ( !ocal government units may fix the rates for the operation of public utilities owned, operated and maintained by them within their 1urisdiction. SECTION 0,,3 To%% 9ees or Char es3 ( &he sanggunian concerned may prescribe the terms and conditions and fix the rates for the imposition of toll fees or charges for the use of any public road, pier, or wharf, waterway, bridge, ferry or telecommunication system funded and constructed by the local government unit concerned: )rovided, &hat no such toll fees or charges shall be collected from officers and enlisted men of the 'rmed ?orces of the )hilippines and members of the )hilippine 8ational )olice on mission, post office personnel delivering mail, physically3handicapped, and disabled citi@ens who are sixty3five (4=$ years or older. Ehen public safety and welfare so re0uires, the sanggunian concerned may discontinue the collection of the tolls, and thereafter the said facility shall be free and open for public use.
(b$
(c$
(d$
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=G3R3 No3 L#0D6FD3 Apri% A-( 0<FA3@ RA8M'N4O :3 TAN( ;OSE ESG'ERRA( ROMAN A:ASTILLAS( ANTONIO B'E:RA4O( ROMAN AGNES( ELISEO AMAN48( NICOLAS SOTOMA8OR( INESTORIO TORREN'EVA an! 9ELIPE TIOSAN( p%aintiffs#appe%%ees( vs3 THE M'NICIPALIT8 O9 PAG:ILAO( ELIAS PORNO:I( as M"nicipa% Ma*or of Pa )i%ao an! CE9ERINO CAPARROS as M"nicipa% Treas"rer of Pa )i%ao( !efen!ants# appe%%ants3 6>C/,/.# )'6E/ES, H p: /efendant municipal corporation was the owner and operator of a wharf (Exhs. E N ?$. <n Day %1, 1 =4, the municipal council of defendant municipality enacted <rdinance 8o. 11, Series of 1 =4, imposing certain charges and0or fees on articles or merchandises landed upon, or loaded from the said wharf and on the strip of shoreline ad"acent thereto, measuring 3?? meters. &he plaintiffs, who were fishermen, merchants and proprietors of )adre 2urgos, Oue@on, had to pass Pagbilao in order to bring their goods consisting of fish charcoal copra firewood and other merchandise to 4ucena/ The merchandise were transported in bancas or motor boats from Padre 6urgos and unloaded on the Pagbilao wharf or on the shoreline from where the! were brought to 4ucena b! truc+s. )ursuant to the <rdinance, defendant municipality re0uired plaintiffs to pay the charges and fees, which they did under protest. <n Hanuary >, 1 =>, alleging that the <rdinance was ultra vires, in that the fees prescribed therein, parta-e of the nature of import or export taxes, in the guise of wharfage or rental fees, the plaintiffs instituted an action, with the #?, of Oue@on )rovince, praying: (1$ &hat the said Dunicipal <rdinance be declared null and void and of no legal effect. and. (2$ <rdering the defendants, 1ointly and severally, to pay the plaintiffs the sum of )1,9::.:: for fees collected and paid under protest. /efendants answering the complaint, interposed the following special defenses: 1$ that the fees collected at the wharf are intended for and actually being exclusively utili@ed in the repair, improvement, and maintenance of the same. 2$ that the municipality has made material and additional constructions to date, and if the revenues raised from these fees are sufficient, the wharf is intended to be lengthened along the %:: meters distance by the river. %$ the presence, day and night, of a municipal employee or of a policeman at the wharf, has resulted in the prevailing peace, order, and security of cargoes, vessels, and of the operators therein. 5$ the municipality also maintains a %:: candle3power -erosene lantern at the wharf.
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's counterclaim, defendants as-ed the payment of )4.::, for twelve truc-loads of full3 length bamboos, loaded on a vessel at the wharf for which no payment had been made, in spite of repeated demands. &he court a 0uo rendered the following 1udgment: xxx xxx xxx
+/n the light of the foregoing, the Court is therefore of the opinion that .rdinance #o3 11, ,eries of 1951, of defendant 2unicipality of *agbilao, @ueAon, is null and void for having been enacted without lawful authority 3 3 3 3 xxx xxx xxx
E+E6E?<6E, 1udgment is hereby rendered ordering defendant municipality of )agbilao, Oue@on, to pay to plaintiff 6aymundo 2. &an the amount of )>>5.2=, with legal interest thereon from the filing of the complaint, that is, from 5 ?ebruary 1 =>, and dismissing defendantsA counterclaim against plaintiffs, with the parties bearing their own costs.; &he above 1udgment is now before *s on appeal by the defendants, urging a reversal thereof on seven counts, which converge on the following legal issues: 1$ whether the defendant municipality can validly enact the ordinance in 0uestion and collect the charges contained therein. and. 2$ whether plaintiff &an is entitled to a refund of the fees paid to the defendant municipality. 'ppellants contend that aside from the general powers of the council to enact ordinances and ma-e regulations (Sec. 22%9 of the 'dministrative #ode$, certain provisions of said #ode authori@es a municipality to establish a wharf and collect wharfage fees, as compensation for its use, to wit ( ;SE#. 2252. #ertain legislative powers of mandatory character. ( ,t shall be the duty of the municipal council, conformably with law: xxx xxx xxx
(c$ &o regulate the construction, care, and use of streets, sidewal-s, canals, wharves and piers of the municipality, and prevent and remove obstacles and encroachment on the same. SE#. 2%19. Dunicipal ferries, wharves, mar-ets, etc. ( ' municipal council shall have authority to ac0uire or establish municipal ferries, wharves, mar-ets, slaughterhouses, pounds, and cemeteries. )ublic utilities thus owned by the municipality may be conducted by the municipal authorities upon stipulated return to private parties. SE#. 2%2:. Establishment of certain public utilities by private parties under license. ( Ehere provision is not made by a municipal council, pursuant to the provisions of the next two preceding sections, hereof, for maintaining or conducting ferries, wharves, mar-ets, or slaughterhouses re0uisite for the needs of the municipality, the council shall have authority, in its discretion, to let the privilege of establishing and maintaining such
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utilities to private parties by license granted upon such terms as shall be fixed by the council. . . .; 'side from the above provisions, Executive <rder 8o. 2==, dated 'pril 1, 1 5:, states: ;(4$ #ollection of berthing fees at municipal ports. ( Dunicipalities may collect berthing fees at municipal ports, pursuant to the provisions of section two thousand three hundred eighteen (2%19$ of the 6evised 'dministrative #ode, not to exceed those specified in paragraph (%$ hereof, provided that such collection shall be credited to a special fund and used only for the maintenance and improvement of the port at which the collections are made.; 'ppellants further contended that the wharfage fees which Section %(t$, of #ommonwealth 'ct. 8o. 5>2, prohibits a municipality from collecting, are customs charges levied in connection with the exportation or importation of goods abroad, through ports of entry as contemplated in the &ariff and #ustoms #ode, but not the ordinary wharfage rentals which a municipality may collect for the use of its wharf, in relation to local trade and local products. <n the other hand, the appellees maintain that the appellant municipality was devoid of right to pass the ordinance in 0uestion, since the 6evised 'dministrative #ode also prohibits the imposition of tax on any goods or merchandise carried into or out of the municipality. Section 229> thereof, provides ( ;SE#. 229>. ?undamental principles governing municipal taxation. ( . . . ,t shall not be in the power of the council to impose a tax in any form whatever upon goods and merchandise carried into the municipality, or out of the same, and any attempt to impose an import or export tax upon such goods in the guise of an unreasonable charge for wharfage, use of bridges or otherwise shall be void.; Doreover, any power granted by the 'dministrative #ode to municipalities had been impliedly repealed or withdrawn by #ommonwealth 'ct 8o. 5>2, the pertinent portions of which read. ( ;SE#. %. ,t shall be beyond the power of the municipal council and municipal district council to impose the following taxes, charges and fees: xxx xxx xxx #ustoms duties, registration, wharfage, tonnage and other -inds of customs fees, charges and duties.; ,n the light of the legal provisions applicable, Ee are of the opinion that the ordinance in 0uestion, is ultra vires, and hence, null and void. &he ordinance calls for a specific tax. ,t charges a specific sum, ranging from one centavo and up, by the head or number, and re0uires no assessment beyond a listing and classification of the ob1ects to be charged. ;' tax which imposes a specific sum by the head or number, or some standard weight or measurement, and which re0uires no assessment beyond a listing and classification of the ob1ects to be taxed is specific tax.; (Ee Ea Ku vs. #ity of !ipa, ".6. 8o. !3 14>, Sept. 2>, 1 =4$.
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'side from being a specific tax, its nature as wharfage fee is also clear from the import of the ordinance, specifically paragraph 1, which recites ( ;)'8"M'& 1. ( 'ng lahat ng may3ari o tagapangasiwa ng mga sasa-yan sa pantalang bayan, ay dapat magbigay3alam sa -inauu-ulang -atiwala ng pamahalaan, upang maisaayos ang pagdaung, pagbaba at pagsa-ay ng mga -argamentos at iba pa.; &he phraseology of the above paragraph points to the fact that the charges collected pursuant thereto, correspond to the words ;berthing, unloading and loading of cargoes or merchandise; which fall under the category of wharfage fees. &he change or the designation of the said fees as ;rental of municipal property; did not change their basic character as ;wharfage fees;. 2eing a specific tax, the municipality has no right to impose the same, for taxation in an attribute of sovereignty which municipal corporation do not en1oy (Santo !umber #o., et al. vs. #ity of #ebu, et al., !31:1 4, Han. 22, 1 =9. =5 <.". =%2>. SaldaPa vs. #ity of ,loilo, !31:5>:, Hune 24, 1 =9$. ,t shall not be in the power of the council to impose a tax in any form whatever upon goods and merchandise carried into the municipality or out of the same, and any attempt to impose such tax in the guise of wharfage fee or charge is void (Sec. 229>, 6ev. 'dm. #ode$. 'nd being wharfage fee ()hil. Sugar #entral vs. #oll. of #ustoms, =1 )hil. 1%1$, it is li-ewise beyond the power of the municipal council and municipal district council to impose (Sec. %, #omm. 'ct 8o. 5>2, supra$. ,n the case at bar, aside from the fact that the right of the municipality to collect wharfage fees is doubtful for, at most, its claim is based merely by inference, implications and deductions, which have no place in the interpretation of the power to tax of a municipal corporation (,card vs. #ity #ouncil of 2aguio, et al., 54 <ff. "a@. Suppl. 8o. 11, p. %2:. Dedina, et al. vs. #ity of 2aguio, 59 <ff. "a@., 11, p. 5>2 $ no less than two Secretaries of the /epartment of Hustice, (Secretaries Hose 'bad Santos and 2eng@on$ expressed the opinion that, ;in view of Section %, paragraph (t$, #ommonwealth 'ct 8o. 5>2, which expressly forbids municipalities from imposing wharfage fees, a municipal ordinance levying wharfage or berthing fees is illegal and void, . . . (<pinion 8o. %>%, series of 1 5: and 8o. 14=, series of 1 =1$. <pinions and rulings of officials of the government called upon to execute or implement administrative laws, command such respect and weight (6egalado vs. Kulo, 41 )hil. 1>%. "rapilon vs. Dun. #ouncil of #arigara, !312%5>, Day %:, 1 41$. ,t should be noted that previous to the ordinance in 0uestion (8o. 11$, <rdinance 8o. was enacted by the same municipal council, providing for ;wharfage fees; for goods and merchandise only. 2ut because the )rovincial 2oard ruled the same to be null and void, because the prescribed fees were unreasonable and were obviously export or import taxes in the guise of wharfage fees which are contrary to the provisions of Section 229> of the 'dministrative #ode, the municipal council of )agbilao enacted <rdinance 8o. 11, providing for the wharfage of boats and vessels and of goods and merchandise. and while it fixed the fees or charges for loading and unloading goods and merchandise, it did not state the berthing fees for boats and vessels carrying the goods all of which go to show that the council wanted only to impose specific tax on the goods and merchandise, which was the same ob1ective it had, when annulled <rdinance 8o. was promulgated.
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&he 0uestion as to whether or not the charges paid should be returned, must be answered in the affirmative. 8ot only were the payments made under protest, but they were also collected under an invalid ordinance. ,n a number of cases, Ee have ruled that monies collected under invalid acts or tax laws are refundable, even if the payments were voluntary (East 'siatic #o. !td. vs. #ity of /avao, !3 142=%, 'ug. 21, 1 42$. ,t is insinuated that invalidating the ordinance would leave the municipality with no means to defray the expenses for operation, repair and maintenance of the wharf in 0uestion. ,t would seem, however, that the municipality will not be absolutely helpless and hopeless, for there is always some remedy somewhere, and those indicated in Sections 2%19 and 2%2: of the 'dm. #ode, (supra$ may be availed of. ,8 7,EE <? '!! &+E ?<6E"<,8", we find that the decision appealed from is in conformity with the law and 1urisprudence on the matter. &he same should be, as it is hereby affirmed, in all respects. 8o costs. ARTICLE VI Co&&"nit* Tax SECTION 0,F3 Co&&"nit* Tax3 ( #ities or municipalities may levy a community tax in accordance with the provisions of this 'rticle. SECTION 0,>3 In!ivi!"a%s Lia)%e to Co&&"nit* Tax3 ( Every inhabitant of the )hilippines eighteen (19$ years of age or over who has been regularly employed on a wage or salary basis for at least thirty (%:$ consecutive wor-ing days during any calendar year, or who is engaged in business or occupation, or who owns real property with an aggregate assessed value of <ne thousand pesos ()1,:::.::$ or more, or who is re0uired by law to file an income tax return shall pay an annual additional tax of ?ive pesos ()=.::$ and an annual additional tax of <ne peso ()1.::$ for every <ne thousand pesos ()1,:::.::$ of income regardless of whether from business, exercise of profession or from property which in no case shall exceed ?ive thousand pesos ()=,:::.::$. ,n the case of husband and wife, the additional tax herein imposed shall be based upon the total property owned by them and the total gross receipts or earnings derived by them. SECTION 0,?3 ;"ri!ica% Persons Lia)%e to Co&&"nit* Tax3 ( Every corporation no matter how created or organi@ed, whether domestic or resident foreign, engaged in or doing business in the )hilippines shall pay an annual community tax of ?ive hundred pesos ()=::.::$ and an annual additional tax, which, in no case, shall exceed &en thousand pesos ()1:,:::.::$ in accordance with the following schedule: (1$ ?or every ?ive thousand pesos ()=,:::.::$ worth of real property in the )hilippines owned by it during the preceding year based on the valuation used for the payment of real property tax under existing laws, found in the assessment rolls of the city or municipality where the real property is situated ( &wo pesos ()2.::$. and ?or every ?ive thousand pesos ()=,:::.::$ of gross receipts or earnings derived by it from its business in the )hilippines during the preceding year ( &wo pesos ()2.::$.
(2$
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The !ivi!en!s receive! )* a corporation fro& another corporation ho$ever sha%%( for the p"rpose of the a!!itiona% tax( )e consi!ere! as part of the ross receipts or earnin s of sai! corporation. SECTION 0,<3 +0/ +6/ Exe&ptions3 ( &he following are exempt from the community tax:
4ip%o&atic an! cons"%ar representativesK an! Transient visitors $hen their sta* in the Phi%ippines !oes not excee! three +A/ &onths3
SECTION 0F-3 P%ace of Pa*&ent3 ( &he community tax shall be paid in the place of residence of the individual, or in the place where the principal office of the 1uridical entity is located. SECTION 0F03 Ti&e for Pa*&entK Pena%ties for 4e%in1"enc*3 ( (a$ &he community tax shall accrue on the first (1st$ day of Hanuary of each year which shall be paid not later than the last day of ?ebruary of each year. ,f a person reaches the age of eighteen (19$ years or otherwise loses the benefit of exemption on or before the last day of Hune, he shall be liable for the community tax on the day he reaches such age or upon the day the exemption ends. +owever, if a person reaches the age of eighteen (19$ years or loses the benefit of exemption on or before the last day of Darch, he shall have twenty (2:$ days to pay the community tax without becoming delin0uent. )ersons who come to reside in the )hilippines or reach the age of eighteen (19$ years on or after the first (1st$ day of Huly of any year, or who cease to belong to an exempt class or after the same date, shall not be sub1ect to the community tax for that year. (b$ #orporations established and organi@ed on or before the last day of Hune shall be liable for the community tax for that year. 2ut corporations established and organi@ed on or before the last day of Darch shall have twenty (2:$ days within which to pay the community tax without becoming delin0uent. #orporations established and organi@ed on or after the first day of Huly shall not be sub1ect to the community tax for that year. ,f the tax is not paid within the time prescribed above, there shall be added to the unpaid amount an interest of twenty3four percent (25C$ per annum from the due date until it is paid. SECTION 0F63 Co&&"nit* Tax Certificate3 C A co&&"nit* tax certificate sha%% )e iss"e! to ever* person or corporation "pon pa*&ent of the co&&"nit* tax3 A co&&"nit* tax certificate &a* a%so )e iss"e! to an* person or corporation not s")7ect to the co&&"nit* tax "pon pa*&ent of One peso +P03--/3 SECTION 0FA3 Presentation of Co&&"nit* Tax Certificate On Certain Occasions3 ( (a$ Ehen an individual sub1ect to the community tax ac-nowledges any document before a notary public, ta-es the oath of office upon election or appointment to any position in the government service. receives any license, certificate. or permit from any public authority. pays any tax or free. receives any money from any public fund. transacts other official business. or receives any salary or wage from any person or corporation with whom such transaction is made or business done or from whom any salary or wage is received to re0uire such individual to exhibit the community tax certificate. cdtai &he presentation of community tax certificate shall not be re0uired in connection with the registration of a voter.
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(b$ Ehen, through its authori@ed officers, any corporation sub1ect to the community tax receives any license, certificate, or permit from any public authority, pays any tax or fee, receives money from public funds, or transacts other official business, it shall be the duty of the public official with whom such transaction is made or business done, to re0uire such corporation to exhibit the community tax certificate. (c$ &he community tax certificate re0uired in the two preceding paragraphs shall be the one issued for the current year, except for the period from Hanuary until the fifteenth (1=th$ of 'pril each year, in which case, the certificate issued for the preceding year shall suffice. acd SECTION 0FD3 Printin of Co&&"nit* Tax Certificates an! 4istri)"tion of Procee!s3 ( (a$ &he 2ureau of ,nternal 6evenue shall cause the printing of community tax certificates and distribute the same to the cities and municipalities through the city and municipal treasurers in accordance with prescribed regulations. &he proceeds of the tax shall accrue to the general funds of the cities, municipalities and barangays except a portion thereof which shall accrue to the general fund of the national government to cover the actual cost of printing and distribution of the forms and other related expenses. &he city or municipal treasurer concerned shall remit to the national treasurer the said share of the national government in the proceeds of the tax within ten (1:$ days after the end of each 0uarter. (b$ &he city or municipal treasurer shall deputi@e the barangay treasurer to collect the community tax in their respective 1urisdictions: )rovided, however, &hat said barangay treasurer shall be bonded in accordance with existing laws. (c$ &he 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. +owever, proceeds of the community tax collected through the barangay treasurers shall be apportioned as follows: (1$ (2$ ?ifty percent (=:C$ shall accrue to the general fund of the city or municipality concerned. and ?ifty percent (=:C$ shall accrue to the barangay where the tax is collected.
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CHAPTER III Co%%ection of Taxes SECTION 0F,3 Tax Perio! an! Manner of Pa*&ent3 ( *nless otherwise provided in this #ode, the tax perio! of a%% %oca% taxes( fees an! char es sha%% )e the ca%en!ar *ear . Such taxes, fees and charges may be paid in 0uarterly installments. SECTION 0FF3 Accr"a% of Tax3 ( *nless otherwise provided in this #ode, all local taxes, fees, and charges shall accrue on the first (1st$ day of Hanuary of each year. +owever, new taxes, fees or charges, or changes in the rates thereof, shall accrue on the first (1st$ day of the 0uarter next following the effectivity of the ordinance imposing such new levies or rates. SECTION 0F>3 Ti&e of Pa*&ent3 ( *nless otherwise provided in this #ode, all local taxes, fees, and charges shall be paid within the first twenty (2:$ days of Hanuary or of each subse0uent 0uarter, as the case may be. The san "nian concerne! &a*( for a 7"stifia)%e reason or ca"se( exten! the ti&e for pa*&ent of s"ch taxes( fees( or char es $itho"t s"rchar es or pena%ties( )"t on%* for a perio! not excee!in six +F/ &onths. SECTION 0F?3 S"rchar es an! Pena%ties on 'npai! Taxes( 9ees( or Char es3 ( &he sanggunian may impose a surcharge not exceeding twenty3five (2=C$ of the amount of taxes, fees or charges not paid on time and an interest at the rate not exceeding two percent (2C$ per month of the unpaid taxes, fees or charges including surcharges, until such amount is fully paid but in no case shall the total thirty3six (%4C$ months. SECTION 0F<3 Interests on Other 'npai! Reven"es3 ( Ehere the amount of any other revenue due a local government unit, 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 (2C$ 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 thirty3six (%4$ months. SECTION 0>-3 Co%%ection of Loca% Reven"e )* Treas"rer3 ( 'll local taxes, fees, and charges shall be collected by the provincial, city, municipal, or barangay treasurer, or their duly authori@ed deputies. &he provincial, city or municipal treasurer may designate the barangay treasurer as his deputy to collect local taxes, fees, or charges. ,n case a bond is re0uired for the purpose, the provincial, city or municipal government shall pay the premiums thereon in addition to the premiums of bond that may be re0uired under this #ode. SECTION 0>03 Exa&ination of :oo2s of Acco"nts an! Pertinent Recor!s of :"siness&en )* Loca% Treas"rer3 ( &he provincial, city, municipal or barangay treasurer may, by himself or through any of his deputies duly authori@ed in writing, examine the boo-s, accounts, and other pertinent records of any person, partnership, corporation, or association sub1ect to local taxes, fees and charges in order to ascertain, assess, and collect the correct amount of the tax, fee, or charge. Such examination shall be made during regular business hours, only once for every tax period, and shall be certified to by the examining official. Such certificate shall be made of record in the boo-s of accounts of the taxpayer examined.
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,n case the examination herein authori@ed is made by a duly authori@ed deputy of the local treasurer, the written authority of the deputy concerned shall specifically state the name, address, and business of the taxpayer whose boo-s, accounts, and pertinent records are to be examined, the date and place of such examination and the procedure to be followed in conducting the same. ?or this purpose, the records of the revenue district office of the 2ureau of ,nternal 6evenue shall be made available to the local treasurer, his deputy or duly authori@ed representative.
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CHAPTER IV Civi% Re&e!ies for Co%%ection of Reven"es SECTION 0>63 App%ication of Chapter3 ( &he provisions of this #hapter and the remedies provided hereon may be availed of for the collection of any delin0uent local tax, fee, charge, or other revenue. SECTION 0>A3 Loca% Govern&entLs Lien3 ( !ocal taxes, fees, charges and other revenues constitute a lien, superior to all liens, charges or encumbrances in favor of any person, enforceable by appropriate administrative or 1udicial action, not only upon any property or rights therein which may be sub1ect to the lien but also upon property used in business, occupation, practice of profession or calling, or exercise of privilege with respect to which the lien is imposed. &he lien may only be extinguished upon full payment of the delin0uent local taxes fees and charges including related surcharges and interest. SECTION 0>D3 Civi% Re&e!ies3 ( &he civil remedies for the collection of local taxes, fees, or charges, and related surcharges and interest resulting from delin0uency shall be: (a$ :* a!&inistrative action thru distraint of goods, chattels, or effects, and other personal property of whatever character, including stoc-s and other securities, debts, credits, ban- accounts, and interest in and rights to personal property, and by levy upon real property and interest in or rights to real property. and thru distraint of goods by levy upon property and interest in or right to real property (b$ :* 7"!icia% action.
Either of these re&e!ies or a%% &a* )e p"rs"e! conc"rrent%* or si&"%taneo"s%* at the !iscretion of the %oca% overn&ent "nit concerne!. SECTION 0>,3 follows: (a$ 4istraint of Persona% Propert*3 ( &he remedy by distraint shall proceed as
SeiM"re ( *pon failure of the person owing any local tax, fee, or charge to pay the same at the time re0uired, the %oca% treas"rer or his !ep"t* &a*( "pon $ritten notice( seiMe or confiscate any personal property belonging to that person or any personal property sub1ect to the lien in sufficient 0uantity to satisfy the tax, fee, or charge in 0uestion, together with any increment thereto incident to delin0uency and the expenses of sei@ure. ,n such case, the local treasurer or his deputy shall issue a duly authenticated certificate based upon the records of his office showing the fact of delin0uency and the amounts of the tax, fee, or charge and penalty due. Such certificate shall serve as sufficient warrant for the distraint of personal property aforementioned, sub1ect to the taxpayerAs right to claim exemption under the provisions of existing laws. /istrained personal property shall be sold at public auction in the manner hereon provided for. Acco"ntin of !istraine! oo!s. ( &he officer executing the distraint shall ma-e or cause to be made an account of the goods, chattels or effects distrained, a copy of which signed by himself shall be left either with the owner or person from whose possession the goods, chattels or effects are ta-en, or at the dwelling or place or business of that person and with someone of
(b$
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suitable age and discretion, to which list shall be added a statement of the sum demanded and a note of the time and place of sale. (c$ P")%ication ( &he officer shall forthwith cause a notification to be exhibited in not less than three (%$ public and conspicuous places in the territory of the local government unit where the distraint is made, specifying the time and place of sale, and the articles distrained. &he time of sale shall not be less than twenty (2:$ days after the notice to the owner or possessor of the property as above specified and the publication or posting of the notice. <ne place for the posting of the notice shall be at the office of the chief executive of the local government unit in which the property is distrained. Re%ease of !istraine! propert* "pon pa*&ent prior to sa%e ( ,f at any time prior to the consummation of the sale, all the proper charges are paid to the officer conducting the sale, the goods or effects distrained shall be restored to the owner. Proce!"re of sa%e ( 't the time and place fixed in the notice, the officer conducting the sale shall sell the goods or effects so distrained at public auction to the highest bidder for cash. Eithin five (=$ days after the sale, the local treasurer shall ma-e a report of the proceedings in writing to the local chief executive concerned. Should the property distrained be not disposed of within one hundred and twenty (12:$ days from the date of distraint, the same shall be considered as sold to the local government unit concerned for the amount of the assessment made thereon by the #ommittee on 'ppraisal and to the extent of the same amount, the tax delin0uencies shall be cancelled. Said #ommittee on 'ppraisal shall be composed of the city or municipal treasurer as chairman, with a representative of the #ommission on 'udit and the city or municipal assessor as members. (f$ 4isposition of procee!s ( &he proceeds of the sale shall be applied to satisfy the tax, including the surcharges, interest, and other penalties incident to delin0uency, and the expenses of the distraint and sale. &he balance over and above what is re0uired to pay the entire claim shall be returned to the owner of the property sold. &he expenses chargeable upon the sei@ure and sale shall embrace only the actual expenses of sei@ure and preservation of the property pending the sale, and no charge shall be imposed for the services of the local officer or his deputy. Ehere the proceeds of the sale are insufficient to satisfy the claim, other property may, in li-e manner, be distrained until the full amount due, including all expenses, is collected.
(d$
(e$
SECTION 0>F3 Lev* on Rea% Propert*. ( 'fter the expiration of the time re0uired to pay the delin0uent tax, fee, or charge, real property may be levied on before, simultaneously, or after the distraint of personal property belonging to the delin0uent taxpayer. &o this end, the provincial, city or municipal treasurer, as the case may be, shall prepare a duly authenticated certificate showing the name of the taxpayer and the amount of the tax, fee, or charge, and penalty due from him. Said certificate shall operate with the force of a legal execution throughout the )hilippines. !evy shall be effected by writing upon said certificate the description of the property upon which levy is made. 't the same time, written notice of the levy shall be mailed to or served upon the assessor and the 6egister of /eeds of the province or city where the property is located who shall annotate the levy on the tax declaration and certificate of title of the property, respectively, and the delin0uent taxpayer or, if he be absent from the )hilippines, to his agent or the manager of the business in respect to which the liability arose, or if there be none, to the occupant of the property in 0uestion.
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,n case the levy on real property is not issued before or simultaneously with the warrant of distraint on personal property, and the personal property of the taxpayer is not sufficient to satisfy his delin0uency, the provincial, city or municipal treasurer, as the case may be, shall within thirty (%:$ days after execution of the distraint, proceed with the levy on the taxpayerAs real property. ' report on any levy shall, within ten (1:$ days after receipt of the warrant, be submitted by the levying officer to the sanggunian concerned. SECTION 0>>3 Pena%t* for 9ai%"re to Iss"e an! Exec"te Garrant3 ( Eithout pre1udice to criminal prosecution under the 6evised )enal #ode and other applicable laws, any local treasurer who fails to issue or execute the warrant of distraint or levy after the expiration of the time prescribed, or who is found guilty of abusing the exercise thereof by competent authority shall be automatically dismissed from the service after due notice and hearing. SECTION 0>?3 A!vertise&ent an! Sa%e. ( Eithin thirty (%:$ days after the levy, the local treasurer shall proceed to publicly advertise for sale or auction the property or a usable portion thereof as may be necessary to satisfy the claim and cost of sale. and such advertisement shall cover a period of at least thirty (%:$ days. ,t shall be effected by posting a notice at the main entrance of the municipal building or city hall, and in a public and conspicuous place in the barangay where the real property is located, and by publication once a wee- for three (%$ wee-s in a newspaper of general circulation in the province, city or municipality where the property is located. &he advertisement shall contain the amount of taxes, fees or charges, and penalties due thereon, and the time and place of sale, the name of the taxpayer against whom the taxes, fees, or charges are levied, and a short description of the property to be sold. 't any time before the date fixed for the sale, the taxpayer may stay they proceedings by paying the taxes, fees, charges, penalties and interests. ,f he fails to do so, the sale shall proceed and shall be held either at the main entrance of the provincial, city or municipal building, or on the property to be sold, or at any other place as determined by the local treasurer conducting the sale and specified in the notice of sale. Eithin thirty (%:$ days after the sale, the local treasurer or his deputy shall ma-e a report of the sale to the sanggunian concerned, and which shall form part of his records. 'fter consultation with the sanggunian, the local treasurer shall ma-e and deliver to the purchaser a certificate of sale, showing the proceeding of the sale, describing the property sold, stating the name of the purchaser and setting out the exact amount of all taxes, fees, charges, and related surcharges, interests, or penalties: )rovided, however, &hat any excess in the proceeds of the sale over the claim and cost of sales shall be turned over to the owner of the property. &he local treasurer may, by ordinance duly approved, advance an amount sufficient to defray the costs of collection by means of the remedies provided for in this &itle, including the preservation or transportation in case of personal property, and the advertisement and subse0uent sale, in cases of personal and real property including improvements thereon. SECTION 0><3 Re!e&ption of Propert* So%!. ( Eithin one (1$ year from the date of sale, the delin0uent taxpayer or his representative shall have the right to redeem the property upon payment to the local treasurer of the total amount of taxes, fees, or charges, and related surcharges, interests or penalties from the date of delin0uency to the date of sale, plus interest of not more than two percent (2C$ per month on the purchase price from the date of purchase to the date of redemption. Such payment shall invalidate the certificate of sale issued to the purchaser and the owner shall be entitled to a certificate of redemption from the provincial, city or municipal treasurer or his deputy.
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&he provincial, city or municipal treasurer or his deputy, upon surrender by the purchaser of the certificate of sale previously issued to him, shall forthwith return to the latter the entire purchase price paid by him plus the interest of not more than two percent (2C$ per month herein provided for, the portion of the cost of sale and other legitimate expenses incurred by him, and said property thereafter shall be free from the lien of such taxes, fees, or charges, related surcharges, interests, and penalties. &he owner shall not, however, be deprived of the possession of said property and shall be entitled to the rentals and other income thereof until the expiration of the time allowed for its redemption. SECTION 0?-3 9ina% 4ee! to P"rchaser3 ( ,n case the taxpayer fails to redeem the property as provided herein, the local treasurer shall execute a deed conveying to the purchaser so much of the property as has been sold, free from liens of any taxes, fees, charges, related surcharges, interests, and penalties. &he deed shall succinctly recite all the proceedings upon which the validity of the sale depends. SECTION 0?03 P"rchase of Propert* :* the Loca% Govern&ent 'nits for Gant of :i!!er3 ( ,n case there is no bidder for the real property advertised for sale as provided herein, or if the highest bid is for an amount insufficient to pay the taxes, fees, or charges, related surcharges, interests, penalties and costs, the local treasurer conducting the sale shall purchase the property in behalf of the local government unit concerned to satisfy the claim and within two (2$ days thereafter shall ma-e a report of his proceedings which shall be reflected upon the records of his office. ,t shall be the duty of the 6egistrar of /eeds concerned upon registration with his office of any such declaration of forfeiture to transfer the title of the forfeited property to the local government unit concerned without the necessity of an order from a competent court. Eithin one (1$ year from the date of such forfeiture, the taxpayer or any of his representative, may redeem the property by paying to the local treasurer the full amount of the taxes, fees, charges, and related surcharges, interests, or penalties, and the costs of sale. ,f the property is not redeemed as provided herein, the ownership thereof shall be fully vested on the local government unit concerned. SECTION 0?63 Resa%e of Rea% Estate Ta2en for Taxes( 9ees( or Char es3 ( &he sanggunian concerned may, by ordinance duly approved, and upon notice of not less than twenty (2:$ days, sell and dispose of the real property ac0uired under the preceding section at public auction. &he proceeds of the sale shall accrue to the general fund of the local government unit concerned. SECTION 0?A3 Co%%ection of 4e%in1"ent Taxes( 9ees( Char es or other Reven"es thro" h ;"!icia% Action3 ( &he local government unit concerned may enforce the collection of delin0uent taxes, fees, charges or other revenues by civil action in any court of competent 1urisdiction. &he civil action shall be filed by the local treasurer within the period prescribed in Section 1 5 of this #ode. SECTION 0?D3 9"rther 4istraint or Lev*3 ( &he remedies by distraint and levy may be repeated if necessary until the full amount due, including all expenses, is collected. SECTION 0?,3 Persona% Propert* Exe&pt fro& 4istraint or Lev* . ( &he following property shall be exempt from distraint and the levy, attachment or execution thereof for delin0uency in the payment of any local tax, fee or charge, including the related surcharge and interest: (a$ &ools and implements necessarily used by the delin0uent taxpayer in his trade or employment. (b$ <ne (1$ horse, cow, carabao, or other beast of burden, such as the delin0uent taxpayer may select, and necessarily used by him in his ordinary occupation. (c$ +is necessary clothing, and that of all his family.
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(d$ +ousehold furniture and utensils necessary for house-eeping and used for that purpose by the delin0uent taxpayer, such as he may select, of a value not exceeding &en thousand pesos ()1:,:::.::$. (e$ )rovisions, including crops, actually provided for individual or family use sufficient for four (5$ months. (f$ &he professional libraries of doctors, engineers, lawyers and 1udges. (g$ <ne fishing boat and net, not exceeding the total value of &en thousand pesos ()1:,:::.::$, by the lawful use of which a fisherman earns his livelihood. and (h$ 'ny material or article forming part of a house or improvement of any real property.
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CHAPTER V Misce%%aneo"s Provisions SECTION 0?F3 Po$er To Lev* Other Taxes( 9ees or Char es3 ( !ocal government units may exercise the power to levy taxes, fees or charges on any base or sub1ect not otherwise specifically enumerated herein or taxed under the provisions of the 8ational ,nternal 6evenue #ode, as amended, or other applicable laws: )rovided, &hat the taxes, fees, or charges shall not be un1ust, excessive, oppressive, confiscatory or contrary to declared national policy: )rovided, further, &hat the ordinance levying such taxes, fees or charges shall not be enacted without any prior public hearing conducted for the purpose. CIT8 O9 CE:' an!5or CIT8 CO'NCIL O9 THE CIT8 O9 CE:'( co&pose! of Hon3 9LORENCIO S3 'ROT( RA8M'N4O A3 CR8STAL( :IENVENI4O :3 T'4T'4( ;OSE V3 C'ENCO( PA:LO '3 A:ELLA( GEORGE M3 :ALA4;A8( ART'RO L3 A:ELLANA( ;ES'S S3 GA:'8A( an! MARIO R3 VELOSO( petitioners( vs3 HON3 INTERME4IATE APPELLATE CO'RT( HON3 CESAR VIRATA an! HON3 PE4RO M3 ALMANIOR( in their capacities as Secretar* an! Actin Secretar*( respective%*( 4epart&ent of 9inance( respon!ents3 =G3R3 No3 >-F?D3 Octo)er 0-( 0<?F3@ )ursuant to )residential /ecree 8o. 2%1, as amended, otherwise -nown as the !ocal &ax #ode, the #ity #ouncil of #ebu passed <rdinances , and ,, which were approved by the Dayor on Hune 1=, 1 >5, to ta-e effect on Huly 1, 1 >5. &he aforementioned ordinances were submitted to the respondents Secretary and 'cting Secretary of ?inance for review. 'fter review, said respondents ordered the suspension of the following provisions with the corresponding reasons: GGG GGG GGG 2. &ax <rdinance 8o. ,,
Section 1. ,mposed a city tax of ):.%: for every case of beer (25 bottles$ or ten (1:$ cans sold in the #ity of #ebu. 9eason for suspension5 This tax was withdrawn by *363 #o3 B413
?rom the aforesaid order of suspension, petitioners filed a petition for review andBor appeal in the #ourt of ?irst ,nstance of #ebu. &he petition was doc-eted as #ivil #ase 8o. 631552: and assigned to 2ranch ,7 of said court. GGG GGG GGG /ecision: =. 6e: ?ifth assignment of error:
&he lower court held that #ity &ax <rdinance 8o. 11 imposing a tax on the sale of beer is not within the taxing power of #ebu #ity.
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&his ruling according to petitioners is erroneous because the #ity of #ebu is empowered by Sec. 25 of the !ocal &ax #ode, as amended to impose this -ind of tax. 'gain, the said contention of petitioners is not tenable. &rue, under the original provisions of Section 25 of the !ocal &ax #ode, a city could levy taxes on articles already sub1ect to specific tax under the provisions of the 8ational ,nternal 6evenue #ode provided the rate imposed by the #ity did not exceed 2=C of the rates provided by the 8ational ,nternal 6evenue #ode. 2ut Section 25 was subse0uently amended by )/ 524 to read as follows ( ;SE#. 25. 'dditional taxing powers. ( &he city may levy any tax, fee or other imposition not specifically enumerated or otherwise provided for in this #ode, sub1ect to the provisions of sections 5 and =: of this #ode as herein amended.; &his power to tax articles sub1ect to specific tax which was expressly granted to cities by the original provisions of section 25, was deleted in the amendment. The said section 4B, as it now reads, merely grants the city the power to +levy any tax, fee or other imposition not specifically enumerated or otherwise provided for+ in the Cocal Tax Code. &he amendment evinces the intent of the lawma-er to remove such taxing authority (on articles already sub1ect to the national specific tax$ from the cities li-e #ebu #ity. SECTION 0?>3 Proce!"re for Approva% an! Effectivit* of Tax( Or!inances an! Reven"e Meas"resK Man!ator* P")%ic Hearin s3 ( &he procedure for approval of local tax ordinances and revenue measures shall be in accordance with the provisions of this #ode: )rovided, That p")%ic hearin s sha%% )e con!"cte! for the p"rpose prior to the enact&ent thereofJ Provi!e!( f"rther( That an* 1"estion on the constit"tiona%it* or %e a%it* of tax or!inances or reven"e &eas"res &a* )e raise! on appea% $ithin thirt* +A-/ !a*s fro& the effectivit* thereof to the Secretar* of ;"stice $ho sha%% ren!er a !ecision $ithin sixt* +F-/ !a*s fro& the !ate of receipt of the appea%J Provi!e!( ho$ever( That s"ch appea% sha%% not have the effect of s"spen!in the effectivit* of the or!inance an! the accr"a% an! pa*&ent of the tax( fee( or char e %evie! thereinJ Provi!e!( fina%%*( That $ithin thirt* +A-/ !a*s after receipt of the !ecision or the %apse of the sixt*#!a* perio! $itho"t the Secretar* of ;"stice actin "pon the appea%( the a rieve! part* &a* fi%e appropriate procee!in s $ith a co"rt of co&petent 7"ris!iction. SE#&,<8 199. )ublication of &ax <rdinances and 6evenue Deasures. ( Githin ten +0-/ !a*s after their approva%( certifie! tr"e copies of a%% provincia%( cit*( an! &"nicipa% tax or!inances or reven"e &eas"res sha%% )e p")%ishe! in f"%% for three +A/ consec"tive !a*s in a ne$spaper of %oca% circ"%ationJ Provi!e!( ho$ever( That in provinces( cities an! &"nicipa%ities $here there are no ne$spapers of %oca% circ"%ation( the sa&e &a* )e poste! in at %east t$o +6/ conspic"o"s an! p")%ic%* accessi)%e p%aces. (Day no longer be applicable$ )ublications: ALLIE4 THREA4 CO3( INC3( an! EER H COMPAN8( LT43( petitioners( vs3 HON3 CIT8 MA8OR O9 MANILA( HON3 CIT8 TREAS'RER O9 MANILA( HON3 LORENIO RELOVA( in his capacit* as Presi!in ;"! e( :ranch II( C9I of Mani%a( respon!ents3 =G3R3 No3 L#D-6<F3 Nove&)er 60( 0<?D3@ )etitioners complain that they were not fully apprised of the enactment of <rdinance 8o. >=14 for the same was not duly published in a newspaper of general circulation.
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6espondents argue however, that copies of <rdinance 8o. >=14 and its amendments were posted in public buildings, government offices, and public places in lieu of publication in newspaper of general circulation. Ee are persuaded that there was substantial compliance of the law on publication. Section 5% of the !ocal &ax #ode provides two modes of apprising the public of a new ordinance, either, (a$ by means of publication in a newspaper of general circulation or, (b$ by means of posting of copies thereof in the local legislative hall or premises and two other conspicuous places within the territorial 1urisdiction of the local government. 6espondents, having complied with the second mode of notice, Ee are of the opinion that there is no legal infirmity to the validity of <rdinance 8o. >=14 as amended. SE#&,<8 19 . ?urnishing of #opies of &ax <rdinances and 6evenue Deasures. ( #opies of all provincial, city, and municipal and barangay tax ordinances and revenue measures shall be furnished the respective local treasurers for public dissemination. SE#&,<8 1 :. 'ttempt to Enforce 7oid or Suspended &ax <rdinances and revenue measures. ( &he enforcement of any tax ordinance or revenue measure after due notice of the disapproval or suspension thereof shall be sufficient ground for administrative disciplinary action against the local officials and employees responsible therefor. SE#&,<8 1 1. 'uthority of !ocal "overnment *nits to 'd1ust 6ates of &ax <rdinances. ( !ocal government units shall have the authority to ad1ust the tax rates as prescribed herein not oftener than once every five (=$ years, but in no case shall such ad1ustment exceed ten percent (1:C$ of the rates fixed under this #ode. SE#&,<8 1 2. 'uthority to "rant &ax Exemption )rivileges. ( !ocal government units may, through ordinances duly approved, grant tax exemptions, incentives or reliefs under such terms and conditions as they may deem necessary. SE#&,<8 1 %. Eithdrawal of &ax Exemption )rivileges. ( *nless otherwise provided in this #ode, tax exemptions or incentives granted to, or presently en1oyed by all persons, whether natural or 1uridical, including government3owned or controlled corporations, except local water districts, cooperatives duly registered under 6.'. 8o. 4 %9, non3stoc- and non3profit hospitals and educational institutions, are hereby withdrawn upon the effectivity of this #ode.
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CHAPTER VI Taxpa*erLs Re&e!ies SE#&,<8 1 5. )eriods of 'ssessment and #ollection. ( (a$ Loca% taxes( fees( or char es sha%% )e assesse! $ithin five +,/ *ears fro& the !ate the* )eca&e !"e . 8o action for the collection of such taxes, fees, or charges, whether administrative or 1udicial, shall be instituted after the expiration of such period: )rovided, &hat. taxes, fees or charges which have accrued before the effectivity of this #ode may be assessed within a period of three (%$ years from the date they became due. 'ssessment shall be done within five years from the date they become due. &his is made in order to count the period from which the time for the action for the collection of taxes shall begin. &his means that the right of the local government unit to institute an action will only be after the five3year period set forth. &he proviso however declares that taxes which have accrued before this 1 too- effect the period is only three years. (b$ 1 local government code
,n case of fraud or intent to evade the payment of taxes, fees, or charges, the same may be assessed $ithin ten +0-/ *ears fro& !iscover* of the fra"! or intent to eva!e pa*&ent .
,n the case of fraud or intent to evade the payment of taxes Q the period of assessment is ten years form the time of the discovery of the fraud or intent to evade the payment of taxes. (c$ Loca% taxes( fees( or char es &a* )e co%%ecte! $ithin five +,/ *ears fro& the !ate of assess&ent )* a!&inistrative or 7"!icia% action3 No s"ch action sha%% )e instit"te! after the expiration of sai! perio!: )rovided, however, &hat, taxes, fees or charges assessed before the effectivity of this #ode may be collected within a period of three (%$ years from the date of assessment.
's to the 0uestion of what action shall be ta-en by the local government unit, the answer is that it shall be by a either an administrative action or 1udicial action. 'fter that period the right to institute an action by the local government unit is deemed to have prescribed()rescription period$. (d$ &he running of the periods of prescription provided in the preceding paragraphs shall be suspended for the time during which: (1$ (2$ (%$ &he treasurer is legally prevented from ma-ing the assessment of collection. &he taxpayer re0uests for a reinvestigation and executes a waiver in writing before expiration of the period within which to assess or collect. and &he taxpayer is out of the country or otherwise cannot be located.
&he case of suspension of the periods of prescription: ,n the case where the treasurer is legally prevented from ma-ing the assessment of collection. &he taxpayer re0uests for a reinvestigation and executes a waiver in writing before the expiration of the period within which to assess or collect.
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&he taxpayer is out of the country or otherwise cannot be located. SECTION 0<,3 Protest of Assess&ent3 ( Ehen the local treasurer or his duly authori@ed representative finds that correct taxes, fees, or charges have not been paid, he shall issue a notice of assessment stating the nature of the tax, fee, or charge, the amount of deficiency, the surcharges, interests and penalties. Githin sixt* +F-/ !a*s fro& the receipt of the notice of assess&ent( the taxpa*er &a* fi%e a $ritten protest $ith the %oca% treas"rer contestin the assess&ent . otherwise, the assessment shall become final and executory. &he local treasurer shall decide the protest within sixty (4:$ days from the time of its filing. ,f the local treasurer finds the protest to be wholly or partly meritorious, he shall issue a notice cancelling wholly or partially the assessment. +owever, if the local treasurer finds the assessment to be wholly or partly correct, he shall deny the protest wholly or partly with notice to the taxpayer. The taxpa*er sha%% have thirt* +A-/ !a*s fro& the receipt of the !enia% of the protest or fro& the %apse of the sixt* +F-/ !a* perio! prescri)e! herein $ithin $hich to appea% $ith the co"rt of co&petent 7"ris!iction other$ise the assess&ent )eco&es conc%"sive an! "nappea%a)%e. Ehen correct taxes are not paid the treasurer shall issue notice of assessment stating the following: &he nature of the tax &he amount or deficiency &he surcharges ,nterests and penalties &he period of protest for a local government tax assessment is 4: days within which to file the protest. &he protest shall be given to the local government treasurer concerned. &he period for him to decide is also 4: days. &he decision may be in whole or in aprt cancellation of the assesssment. <r deny wholly or partly the protest with notice to the taxpayer. ?rom this time wherein a denial of the protest either in whole or in part and within the period of %: days from notice, the taxpayer can then resort to the courts of competent 1urisdiction. <r it may be from the lapse of the 4: day period for the treasurer to decide. ?ailure to exercise this privilege would mean that the assessment becomes conclusive and unappealable. SE#&,<8 1 4. #laim for 6efund of &ax #redit. ( 8o case or proceeding shall be maintained in any court for the recovery of any tax, fee, or charge erroneously or illegally collected until a written claim for refund or credit has been filed with the local treasurer. No case or procee!in sha%% )e entertaine! in an* co"rt after the expiration of t$o +6/ *ears fro& the !ate of the pa*&ent of s"ch tax( fee( or char e( or fro& the !ate the taxpa*er is entit%e! to a ref"n! or cre!it. ,n this section the institution of the action comes from the taxpayer due to taxes already collected. &his action is for the recovery of erroneous and illegal charge of tax. ' prere0uisite before the filing of the action is to file a written claim for refund or credit in the office of local treasurer. &he claim for refund or credit can only be underta-en within a period of two years from the time payment of the erroneous or illegal charge is made or from the date the taxpayer is entitled to a refund.
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TITLE II3 Rea% Propert* Taxation CHAPTER I Genera% Provisions SE#&,<8 1 >. Scope. ( &his &itle shall govern the administration, appraisal, assessment, levy and collection of real property tax. 'diministration 'ppraisal 'ssessment !evy #ollection <f real property tax SE#&,<8 1 9. ?undamental )rinciples. ( &he appraisal, assessment, levy and collection of real property tax shall be guided by the following fundamental principles: (a$ 6eal property shall be appraised at its current and fair mar-et value. (b$ 6eal property shall be classified for assessment purposes on the basis of its actual use. (c$ 6eal property shall be assessed on the basis of a uniform classification within each local government unit. (d$ &he appraisal, assessment, levy and collection of real property tax shall not be left to any private person. and (e$ &he appraisal and assessment of real property shall be e0uitable. &he appraisal shall be at its current and fair mar-et value #lassification for 'ssessment purposes Q shall be based on its actual use <n the basis of a *niform classification &he appraisal and levy shall not be left to any private person Shall also be e0uitable. SE#&,<8 1 . /efinitions. ( Ehen used in this &itle:
(a$ ;'c0uisition #ost; for newly3ac0uired machinery not yet depreciated and appraised within the year of its purchase, refers to the actual cost of the machinery to its present owner, plus the cost of transportation, handling, and installation at the present site. (b$ ;'ctual *se; refers to the purpose for which the property is principally or predominantly utili@ed by the person in possession thereof. (c$ ;'d 7alorem &ax; is a levy on real property determined on the basis of a fixed proportion of the value of the property. (d$ ;'gricultural !and; is land devoted principally to the planting of trees, raising of crops, livestocand poultry, dairying, salt ma-ing, inland fishing and similar a0uacultural activities, and other agricultural activities, and is not classified as mineral, timber, residential, commercial or industrial land. (e$ ;'ppraisal; is the act or process of determining the value of property as of a specified date for a specific purpose. (f$ ;'ssessment; is the act or process of determining the value of a property, or proportion thereof sub1ect to tax, including the discovery, listing, classification, and appraisal of properties. (g$ ;'ssessment !evel; is the percentage applied to the fair mar-et value to determine the taxable value of the property.
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(h$ ;'ssessed 7alue; is the fair mar-et value of the real property multiplied by the assessment level. ,t is synonymous to taxable value. (i$ ;#ommercial !and; is land devoted principally for the ob1ect of profit and is not classified as agricultural, industrial, mineral, timber, or residential land. (1$ ;/epreciated 7alue; is the value remaining after deducting depreciation from the ac0uisition cost. (-$ ;Economic !ife; is the estimated period over which it is anticipated that a machinery or e0uipment may be profitably utili@ed. (l$ ;?air Dar-et 7alue; is the price at which a property may be sold by a seller who is not compelled to sell and bought by a buyer who is not compelled to buy. (m$ ;,mprovement; is a valuable addition made to a property or an amelioration in its condition, amounting to more than a mere repair or replacement of parts involving capital expenditures and labor, which is intended to enhance its value, beauty or utility or to adapt it for new or further purposes. (n$ ;,ndustrial !and; is land devoted principally to industrial activity as capital investment and is not classified as agricultural, commercial, timber, mineral or residential land. (o$ ;Dachinery; embraces machines, e0uipment, mechanical contrivances, instruments, appliances or apparatus which may or may not be attached, permanently or temporarily, to the real property. ,t includes the physical facilities for production, the installations and appurtenant service facilities, those which are mobile, self3powered or self3propelled, and those not permanently attached to the real property which are actually, directly, and exclusively used to meet the needs of the particular industry, business or activity and which by their very nature and purpose are designed for, or necessary to its manufacturing, mining, logging, commercial, industrial or agricultural purposes. (p$ ;Dineral !ands; are lands in which minerals, metallic or non3metallic, exist in sufficient 0uantity or grade to 1ustify the necessary expenditures to extract and utili@e such materials. (0$ ;6eassessment; is the assigning of new assessed values to property, particularly real estate, as the result of a general, partial, or individual reappraisal of the property. (r$ ;6emaining Economic !ife; is the period of time expressed in years from the date of appraisal to the date when the machinery becomes valueless. (s$ ;6emaining 7alue; is the value corresponding to the remaining useful life of the machinery. (t$ ;6eplacement or 6eproduction #ost; is the cost that would be incurred on the basis of current prices, in ac0uiring an e0ually desirable substitute property, or the cost of reproducing a new replica of the property on the basis of current prices with the same or closely similar material. and (u$ ;6esidential !and; is land principally devoted to habitation. SE#&,<8 2::. 'dministration of the 6eal )roperty &ax. ( &he provinces and cities, including the municipalities within the Detropolitan Danila 'rea, shall be primarily responsible for the proper, efficient and effective administration of the real property tax.
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CHAPTER II Appraisa% an! Assess&ent of Rea% Propert* SE#&,<8 2:1. 'ppraisal of 6eal )roperty. ( 'll real property, whether taxable or exempt, shall be appraised at the current and fair mar-et value prevailing in the locality where the property is situated. &he /epartment of ?inance shall promulgate the necessary rules and regulations for the classification, appraisal, and assessment of real property pursuant to the provisions of this #ode. 'ppraisal shall be at its current and fair mar-et value prevailing in the locality where it is situated. Still local taxation is sub1ect to rules and regulations promulgated by the /epartment of ?inance. SE#&,<8 2:2. /eclaration of real )roperty by the <wner or 'dministrator. ( ,t shall be the duty of all persons, natural or 1uridical, owning or administering real property, including the improvements therein, within a city or municipality, or their duly authori@ed representative, to prepare, or cause to be prepared, and file with the provincial, city or municipal assessor, a sworn statement declaring the true value of their property, whether previously declared or undeclared, taxable or exempt, which shall be the current and fair mar-et value of the property, as determined by the declarant. Such declaration shall contain a description of the property sufficient in detail to enable the assessor or his deputy to identify the same for assessment purposes. &he sworn declaration of real property herein referred to shall be filed with the assessor concerned once every three (%$ years during the period from Hanuary first (1st$ to Hune thirtieth (%:th$ commencing with the calendar year 1 2. /uty of all persons owning or administering real property to prepare or cause to be prepared and file with the local assessor, a sworn statement declaring the true value of the property, which shall be the current and fair mar-et value of the property, as determined by the declarant. &he declaration shall contain the following: ' description of the property sufficient in detail to enable the assessor to identify the same for assessment purposes. ,t shall be filed once every three year, from Hanuary to Hune. SECTION 6-A3 4"t* of Person Ac1"irin Rea% Propert* or Ma2in I&prove&ent Thereon3 ( ,t shall also be the duty of any person, or his authori@ed representative, ac0uiring at any time real property in any municipality or city or ma-ing any improvement on real property, to prepare, or cause to be prepared, and file with the provincial, city or municipal assessor, a sworn statement declaring the true value of sub1ect property, within sixty (4:$ days after the ac0uisition of such property or upon completion or occupancy of the improvement, whichever comes earlier. SECTION 6-D3 4ec%aration of Rea% Propert* )* the Assessor3 ( Ehen any person, natural or 1uridical, by whom real property is re0uired to be declared under Section 2:2 hereof, refuses or fails for any reason to ma-e such declaration within the time prescribed, the provincial, city or municipal assessor shall himself declare the property in the name of the defaulting owner, if -nown, or against an un-nown owner, as the case may be, and shall assess the property for taxation in accordance with the provision of this &itle. 8o oath shall be re0uired of a declaration thus made by the provincial, city or municipal assessor. SECTION 6-,3 Listin of Rea% Propert* in the Assess&ent Ro%%s3 ( (a$ ,n every province and city, including the municipalities within the Detropolitan Danila 'rea, there shall be prepared and maintained by the provincial, city or municipal assessor an assessment roll wherein shall be listed all
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real property, whether taxable or exempt, located within the territorial 1urisdiction of the local government unit concerned. 6eal property shall be listed, valued and assessed in the name of the owner or administrator, or anyone having legal interest in the property. (b$ &he undivided real property of a deceased person may be listed, valued and assessed in the name of the estate or of the heirs and devisees without designating them individually. and undivided real property other than that owned by a deceased may be listed, valued and assessed in the name of one or more co3owners: )rovided, however, &hat such heir, devisee, or co3owner shall be liable severally and proportionately for all obligations imposed by this &itle and the payment of the real property tax with respect to the undivided property. &he real property of a corporation, partnership, or association shall be listed, valued and assessed in the same manner as that of an individual. 6eal property owned by the 6epublic of the )hilippines, its instrumentalities and political subdivisions, the beneficial use of which has been granted, for consideration or otherwise, to a taxable person, shall be listed, valued and assessed in the name of the possessor, grantee or of the public entity if such property has been ac0uired or held for resale or lease.
(c$ (d$
SECTION 6-F3 Proof of Exe&ption of Rea% Propert* fro& Taxation3 ( Every person by or for whom real property is declared, who shall claim tax exemption for such property under this &itle shall file with the provincial, city or municipal assessor within thirty (%:$ days from the date of the declaration of real property sufficient documentary evidence in support of such claim including corporate charters, title of ownership, articles of incorporation, by3laws, contracts, affidavits, certifications and mortgage deeds, and similar documents. ,f the re0uired evidence is not submitted within the period herein prescribed, the property shall be listed as taxable in the assessment roll. +owever, if the property shall be proven to be tax exempt, the same shall be dropped from the assessment roll. SECTION 6->3 Rea% Propert* I!entification S*ste&3 ( 'll declarations of real property made under the provisions of this &itle shall be -ept and filed under a uniform classification system to be established by the provincial, city or municipal assessor. SECTION 6-?3 Notification of Transfer of Rea% Propert* O$nership3 ( 'ny person who shall transfer real property ownership to another shall notify the provincial, city or municipal assessor concerned within sixty (4:$ days from the date of such transfer. &he notification shall include the mode of transfer, the description of the property alienated, the name and address of the transferee. SECTION 6-<3 4"t* of Re istrar of 4ee!s to Appraise Assessor of Rea% Propert* Liste! in Re istr*3 ( (a$ &o ascertain whether or not any real property entered in the 6egistry of )roperty has escaped discovery and listing for the purpose of taxation, the 6egistrar of /eeds shall prepare and submit to the provincial, city or municipal assessor, within six (4$ months from the date of effectivity of this #ode and every year thereafter, an abstract of his registry, which shall include brief but sufficient description of the real properties entered therein, their present owners, and the dates of their most recent transfer or alienation accompanied by copies of corresponding deeds of sale, donation, or partition or other forms of alienation. (b$ ,t shall also be the duty of the 6egistrar of /eeds to re0uire every person who shall present for registration a document of transfer, alienation, or encumbrance of real property to accompany the same with a certificate to the effect that the real property sub1ect of the transfer, alienation, or encumbrance,
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as the case may be, has been fully paid of all real property taxes due thereon. ?ailure to provide such certificate shall be a valid cause for the 6egistrar of /eeds to refuse the registration of the document. SECTION 60-3 4"t* of Officia% Iss"in :"i%!in Per&it or Certificate of Re istration of Machiner* to Trans&it Cop* to Assessor3 ( 'ny public official or employee who may now or hereafter be re0uired by law or regulation to issue to any person a permit for the construction, addition, repair, or renovation of a building, or permanent improvement on land, or a certificate of registration for any machinery, including machines, mechanical contrivances, and apparatus attached or affixed on land or to another real property, shall transmit a copy of such permit or certificate within thirty (%:$ days of its issuance, to the assessor of the province, city or municipality where the property is situated. SECTION 6003 4"t* of Geo!etic En ineers to 9"rnish Cop* of P%ans to Assessor3 ( ,t shall be the duty of all geodetic engineers, public or private, to furnish free of charge to the assessor of the province, city or municipality where the land is located with a white or blue print copy of each of all approved original or subdivision plans or maps of surveys executed by them within thirty (%:$ days from receipt of such plans from the !ands Danagement 2ureau, the !and 6egistration 'uthority, or the +ousing and !and *se 6egulatory 2oard, as the case may be. SECTION 6063 Preparation of Sche!"%e of 9air Mar2et Va%"es3 ( 2efore any general revision of property assessment is made pursuant to the provisions of this &itle, there shall be prepared a schedule of fair mar-et values by the provincial, city and municipal assessor of the municipalities within the Detropolitan Danila 'rea for the different classes of real property situated in their respective local government units for enactment by ordinance of the sanggunian concerned. &he schedule of fair mar-et values shall be published in a newspaper of general circulation in the province, city or municipality concerned or in the absence thereof, shall be posted in the provincial capitol, city or municipal hall and in two other conspicuous public places therein. SECTION 60A3 A"thorit* of Assessor to Ta2e Evi!ence3 ( ?or the purpose of obtaining information on which to base the mar-et value of any real property, the assessor of the province, city or municipality or his deputy may summon the owners of the properties to be affected or persons having legal interest therein and witnesses, administer oaths, and ta-e deposition concerning the property, its ownership, amount, nature, and value. SECTION 60D3 A&en!&ent of Sche!"%e of 9air Mar2et Va%"es3 ( &he provincial, city or municipal assessor may recommend to the sanggunian concerned amendments to correct errors in valuation in the schedule of fair mar-et values. &he sanggunian concerned shall, by ordinance, act upon the recommendation within ninety ( :$ days from receipt thereof. SECTION 60,3 C%asses of Rea% Propert* for Assess&ent P"rposes3 ( ?or purposes of assessment, real property shall be classified as residential, agricultural, commercial, industrial, mineral, timberland or special. &he city or municipality within the Detropolitan Danila 'rea, through their respective sanggunian, shall have the power to classify lands as residential, agricultural, commercial, industrial, mineral, timberland, or special in accordance with their @oning ordinances. SECTION 60F3 Specia% C%asses of Rea% Propert*3 ( 'll lands, buildings, and other improvements thereon actually, directly and exclusively used for hospitals, cultural, or scientific purposes, and those owned and used by local water districts, and government3owned or controlled corporations rendering essential public services in the supply and distribution of water andBor generation and transmission of electric power shall be classified as special.
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SECTION 60>3 Act"a% 'se of Rea% Propert* as :asis for Assess&ent3 ( 6eal property shall be classified, valued and assessed on the basis of its actual use regardless of where located, whoever owns it, and whoever uses it. SECTION 60?3 Assess&ent Leve%s3 ( &he assessment levels to be applied to the fair mar-et value of real property to determine its assessed value shall be fixed by ordinances of the sangguniang panlalawigan, sangguniang panlungsod or sangguniang bayan of a municipality within the Detropolitan Danila 'rea, at the rates not exceeding the following: (See text$ SECTION 66-3 Va%"ation of Rea% Propert*3 ( ,n cases where (a$ real property is declared and listed for taxation purposes for the first time. (b$ there is an ongoing general revision of property classification and assessment. or (c$ a re0uest is made by the person in whose name the property is declared, the provincial, city or municipal assessor or his duly authori@ed deputy shall, in accordance with the provisions of this #hapter, ma-e a classification, appraisal and assessment or taxpayerAs valuation thereon: )rovided, however, &hat the assessment of real property shall not be increased oftener than once every three (%$ years except in case of new improvements substantially increasing the value of said property or of any change in its actual use. SECTION 6603 4ate of Effectivit* of Assess&ent or Reassess&ent3 ( 'll assessments or reassessments made after the first (1st$ day of Hanuary of any year shall ta-e effect on the first (1st$ day of Hanuary of the succeeding year: )rovided, however, &hat the reassessment of real property due to its partial or total destruction, or to a ma1or change in its actual use, or to any great and sudden inflation or deflation of real property values, or to the gross illegality of the assessment when made or to any other abnormal cause, shall be made within ninety ( :$ days from the date any such cause or causes occurred, and shall ta-e effect at the beginning of the 0uarter next following the reassessment. SECTION 6663 Assess&ent of Propert* S")7ect to :ac2 Taxes3 ( 6eal property declared for the first time shall be assessed for taxes for the period during which it would have been liable but in no case of more than ten (1:$ years prior to the date of initial assessment: )rovided, however, &hat such taxes shall be computed on the basis of the applicable schedule of values in force during the corresponding period. ,f such taxes are paid on or before the end of the 0uarter following the date the notice of assessment was received by the owner or his representative, no interest for delin0uency shall be imposed thereon. otherwise, such taxes shall be sub1ect to an interest at the rate of two percent (2C$ per month or a fraction thereof from the date of the receipt of the assessment until such taxes are fully paid. SECTION 66A3 Notification of Ne$ or Revise! Assess&ent3 ( Ehen real property is assessed for the first time or when an existing assessment is increased or decreased, the provincial, city or municipal assessor shall within thirty (%:$ days give written notice of such new or revised assessment to the person in whose name the property is declared. &he notice may be delivered personally or by registered mail or through the assistance of the punong barangay to the last -nown address of the person to be served. SECTION 66D3 Appraisa% an! Assess&ent of Machiner*3 ( (a$ &he fair mar-et value of a brand3new machinery shall be the ac0uisition cost. ,n all other cases, the fair mar-et value shall be determined by dividing the remaining economic life of the machinery by its estimated economic life and multiplied by the replacement or reproduction cost.
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(b$ ,f the machinery is imported, the ac0uisition cost includes freight, insurance, ban- and other charges, bro-erage, arrastre and handling, duties and taxes, plus charges at the present site. &he cost in foreign currency of imported machinery shall be converted to peso cost on the basis of foreign currency exchange rates as fixed by the #entral 2an-. SE#&,<8 22=. /epreciation 'llowance for Dachinery. ( ?or purposes of assessment, a depreciation allowance shall be made for machinery at a rate not exceeding five percent (=C$ of its original cost or its replacement or reproduction cost, as the case may be, for each year of use: )rovided, however, &hat the remaining value for all -inds of machinery shall be fixed at not less than twenty percent (2:C$ of such original, replacement, or reproduction cost for so long as the machinery is useful and in operation.
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CHAPTER III Assess&ent Appea%s SECTION 66F3 Loca% :oar! of Assess&ent Appea%s3 ( 'ny owner or person having legal interest in the property who is not satisfied with the action of the provincial, city or municipal assessor in the assessment of his property may, $ithin sixt* +F-/ !a*s fro& the !ate of receipt of the $ritten notice of assess&ent( appea% to the :oar! of Assess&ent Appea%s of the provincia% or cit* by filing a petition "n!er oath in the for& prescri)e! for the p"rpose , together with copies of the tax declarations and such affidavits or documents submitted in support of the appeal. SECTION 66>3 Or aniMation( Po$ers( 4"ties( an! 9"nctions of the Loca% :oar! of Assess&ent Appea%s3 ( (a$ &he 2oard of 'ssessment 'ppeals of the province or city shall be composed of the 6egistrar of /eeds, as #hairman, the provincial or city prosecutor and the provincial, or city engineer as members, who shall serve as such in an ex officio capacity without additional compensation. (b$ &he chairman of the 2oard shall have the power to designate any employee of the province or city to serve as secretary to the 2oard also without additional compensation.
(c$ &he chairman and members of the 2oard of 'ssessment 'ppeals of the province or city shall assume their respective positions without need of further appointment or special designations immediately upon effectivity of this #ode. &hey shall ta-e oath or affirmation of office in the prescribed form. (d$ ,n provinces and cities without a provincial or city engineer, the district engineer shall serve as member of the 2oard. ,n the absence of the 6egistrar of /eeds, or the provincial or city prosecutor, or the provincial or city engineer, or the district engineer, the persons performing their duties, whether in an acting capacity or as a duly designated officer3in3charge, shall automatically become the chairman or member, respectively, of the said 2oard, as the case may be. acd SECTION 66?3 Meetin s an! Expenses of the Loca% :oar! of Assess&ent Appea%s3 ( (a$ &he 2oard of 'ssessment 'ppeals of the province or city shall meet once a month and as often as may be necessary for the prompt disposition of appealed cases. 8o member of the 2oard shall be entitled to per diems or traveling expenses for his attendance in 2oard meetings, except when conducting an ocular inspection in connection with a case under appeal. (b$ 'll expenses of the 2oard shall be charged against the general fund of the province or city, as the case may be. &he sanggunian concerned shall appropriate the necessary funds to enable the 2oard in their respective localities to operate effectively. SE#&,<8 22 . Action )* the Loca% :oar! of Assess&ent Appea%s . ( (a$ &he :oar! sha%% !eci!e the appea% $ithin one h"n!re! t$ent* +06-/ !a*s fro& the !ate of receipt of s"ch appea% . &he 2oard, after hearing, shall render its decision based on substantial evidence or such relevant evidence on record as a reasonable mind might accept as ade0uate to support the conclusion. (b$ ,n the exercise of its appellate 1urisdiction, the 2oard shall have the power to summon witnesses, administer oaths, conduct ocular inspection, ta-e depositions, and issue subpoena and subpoena duces tecum. &he proceedings of the 2oard shall be conducted solely for the purpose of ascertaining the facts without necessarily adhering to technical rules applicable in 1udicial proceedings.
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(c$
&he secretary of the 2oard shall furnish the owner of the property or the person having legal interest therein and the provincial or city assessor with a copy of the decision of the 2oard. ,n case the provincial or city assessor concurs in the revision or the assessment, it shall be his duty to notify the owner of the property or the person having legal interest therein of such fact using the form prescribed for the purpose. &he owner of the property or the person having legal interest therein or the assessor who is not satisfied with the decision of the 2oard, may, within thirty (%:$ days after receipt of the decision of said 2oard, appea% to the Centra% :oar! of Assess&ent Appea%s( as herein provi!e!. &he decision of the #entral 2oard shall be final and executory.
SECTION 6A-3 Centra% :oar! of Assess&ent Appea%s . ( &he #entral 2oard of 'ssessment 'ppeals shall be composed of a chairman, and two (2$ members to be appointed by the )resident, who shall serve for a term of seven (>$ years, without reappointment. <f those first appointed, the chairman shall hold office for seven (>$ years, one member for five (=$ years, and the other member for three (%$ years. 'ppointment to any vacancy shall be only for the unexpired portion of the term of the predecessor. ,n no case shall any member be appointed or designated in a temporary or acting capacity. &he chairman and the members of the 2oard shall be ?ilipino citi@ens, at least forty (5:$ years old at the time of their appointment, and members of the 2ar or #ertified )ublic 'ccountants for at least ten (1:$ years immediately preceding their appointment. &he chairman of the 2oard of 'ssessment 'ppeals shall have the salary grade e0uivalent to the ran- of /irector ,,, under the Salary Standardi@ation !aw exclusive of allowances and other emoluments. &he members of the 2oard shall have the salary grade e0uivalent to the ran- of /irector ,, under the Salary Standardi@ation !aw exclusive of allowances and other emoluments. &he 2oard shall have appellate 1urisdiction over all assessment cases decided by the !ocal 2oard of 'ssessment 'ppeals. &here shall be +earing <fficers to be appointed by the #entral 2oard of 'ssessment 'ppeals pursuant to civil service laws, rules and regulations, one each for !u@on, 7isayas and Dindanao, who shall hold office in Danila, #ebu #ity and #agayan de <ro #ity, respectively, and who shall serve for a term of six (4$ years, without reappointment until their successors have been appointed and 0ualified. &he +earing <fficers shall have the same 0ualifications as that of the Hudges of the Dunicipal &rial #ourts. &he #entral 2oard 'ssessment 'ppeals, in the performance of its powers and duties, may establish and organi@e staffs, offices, units, prescribe the titles, functions and duties of their members and adopt its own rules and regulations. *nless otherwise provided by law, the annual appropriations for the #entral 2oard of 'ssessment 'ppeals shall be included in the budget of the /epartment of ?inance in the corresponding "eneral 'ppropriations 'ct. SE#&,<8 2%1. Effect of Appea% on the Pa*&ent of Rea% Propert* Tax . ( 'ppeal on assessments of real property made under the provisions of this #ode shall, in no case, suspend the collection of the corresponding realty taxes on the property involved as assessed by the provincial or city assessor, without pre1udice to subse0uent ad1ustment depending upon the final outcome of the appeal.
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CHAPTER IV I&position of Rea% Propert* Tax SECTION 6A63 Po$er to Lev* Rea% Propert* Tax3 ( ' province or city or a municipality within the Detropolitan Danila 'rea my levy an annual ad valorem tax on real property such as land, building, machinery, and other improvement not hereinafter specifically exempted. SECTION 6AA3 Rates of Lev*3 ( ' province or city or a municipality within the Detropolitan Danila 'rea shall fix a uniform rate of basic real property tax applicable to their respective localities as follows: ,n the case of a province, at the rate not exceeding one percent (1C$ of the assessed value of real property. and ,n the case of a city or a municipality within the Detropolitan Danila 'rea, at the rate not exceeding two percent (2C$ of the assessed value of real property. SECTION 6AD3 Exe&ptions fro& Rea% Propert* Tax3 ( &he following are exempted from payment of the real property tax: (a$ 6eal property owned by the 6epublic of the )hilippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person. (b$ #haritable institutions, churches, parsonages or convents appurtenant thereto, mos0ues, non3 profit or religious cemeteries and all lands, buildings, and improvements actually, directly, and exclusively used for religious, charitable or educational purposes. (c$ 'll machineries and e0uipment that are actually, directly and exclusively used by local water districts and government owned or controlled corporations engaged in the supply and distribution of water andBor generation and transmission of electric power. (d$ 'll real property owned by duly registered cooperatives as provided for under 6.'. 8o. 4 %9. and (e$ Dachinery and e0uipment used for pollution control and environmental protection. Except as provided herein, any exemption from payment of real property tax previously granted to, or presently en1oyed by, all persons, whether natural or 1uridical, including all government3owned or controlled corporations are hereby withdrawn upon the effectivity of this #ode.
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CHAPTER V Specia% Levies on Rea% Propert* SECTION 6A,3 A!!itiona% Lev* on Rea% Propert* for the Specia% E!"cation 9"n!3 ( ' province or city, or a municipality within the Detropolitan Danila 'rea, may levy and collect an annual tax of one percent (1C$ on the assessed value of real property which shall be in addition to the basic real property tax. &he proceeds thereof shall exclusively accrue to the Special Education ?und (SE?$. SECTION 6AF3 A!!itiona% A! Va%ore& Tax on I!%e Lan!s3 ( ' province or city, or a municipality within the Detropolitan Danila 'rea, may levy an annual tax on idle lands at the rate not exceeding five percent (=C$ of the assessed value of the property which shall be in addition to the basic real property tax. SECTION 6A>3 I!%e Lan!s( Covera e3 ( ?or purposes of real property taxation, idle lands shall include the following: (a$ 'gricultural lands, more than one (1$ hectare in area, suitable for cultivation, dairying, inland fishery, and other agricultural uses, one3half (1B2$ of which remain uncultivated or unimproved by the owner of the property or person having legal interest therein. 'gricultural lands planted to permanent or perennial crops with at least fifty (=:$ trees to a hectare shall not be considered idle lands. !ands actually used for gra@ing purposes shall li-ewise not be considered idle lands. (b$ !ands, other than agricultural, located in a city or municipality, more than one thousand (1,:::$ s0uare meters in area one3half (1B2$ of which remain unutili@ed or unimproved by the owner of the property or person having legal interest therein. 6egardless of land area, this Section shall li-ewise apply to residential lots in subdivisions duly approved by proper authorities, the ownership of which has been transferred to individual owners, who shall be liable for the additional tax: )rovided, however, &hat individual lots of such subdivisions, the ownership of which has not been transferred to the buyer shall be considered as part of the subdivision, and shall be sub1ect to the additional tax payable by subdivision owner or operator. SECTION 6A?3 I!%e Lan!s Exe&pt fro& Tax3 ( ' province or city or a municipality within the Detropolitan Danila 'rea may exempt idle lands from the additional levy by reason of force ma1eure, civil disturbance, natural calamity or any cause or circumstance which physically or legally prevents the owner of the property or person having legal interest therein from improving, utili@ing or cultivating the same. SECTION 6A<3 Listin of I!%e Lan!s )* the Assessor3 ( &he provincial, city or municipal assessor shall ma-e and -eep an updated record of all idle lands located within his area of 1urisdiction. ?or purposes of collection, the provincial, city or municipal assessor shall furnish a copy thereof to the provincial or city treasurer who shall notify, on the basis of such record, the owner of the property or person having legal interest therein of the imposition of the additional tax. SECTION 6D-3 Specia% Lev* )* Loca% Govern&ent 'nits3 ( ' province, city or municipality may impose a special levy on the lands comprised within its territorial 1urisdiction specially benefited by public wor-s pro1ects or improvements funded by the local government unit concerned: )rovided, however, &hat the special levy shall not exceed sixty percent (4:C$ of the actual cost of such pro1ects and improvements, including the costs of ac0uiring land and such other real property in connection therewith: )rovided, further, &hat the special levy shall not apply to lands exempt from basic real property tax and the remainder of the land portions of which have been donated to the local government unit concerned for the construction of such pro1ects or improvements.
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SECTION 6D03 Or!inance I&posin a Specia% Lev*3 ( ' tax ordinance imposing a special levy shall describe with reasonable accuracy the nature, extent, and location of the public wor-s pro1ects or improvements to be underta-en, state the estimated cost thereof, specify the metes and bounds by monuments and lines and the number of annual installments for the payment of the special levy which in no case shall be less than five (=$ nor more than ten (1:$ years. &he sanggunian concerned shall not be obliged, in the apportionment and computation of the special levy, to establish a uniform percentage of all lands sub1ect to the payment of the tax for the entire district, but it may fix different rates for different parts or sections thereof, depending on whether such land is more or less benefited by proposed wor-. SECTION 6D63 P")%ication of Propose! Or!inance I&posin a Specia% Lev*3 ( 2efore the enactment of an ordinance imposing a special levy, the sanggunian concerned shall conduct a public hearing thereon. notify in writing the owners of the real property to be affected or the persons having legal interest therein as to the date and place thereof and afford the latter the opportunity to express their positions or ob1ections relative to the proposed ordinance. SECTION 6DA3 9ixin the A&o"nt of Specia% Lev*3 ( &he special levy authori@ed herein shall be apportioned, computed, and assessed according to the assessed valuation of the lands affected as shown by the boo-s of the assessor concerned, or its current assessed value as fixed by said assessor if the property does not appear of record in his boo-s. *pon the effectivity of the ordinance imposing special levy, the assessor concerned shall forthwith proceed to determine the annual amount of special levy assessed against each parcel of land comprised within the area especially benefited and shall send to each landowner a written notice thereof by mail, personal service or publication in appropriate cases. SECTION 6DD3 Taxpa*erLs Re&e!ies A ainst Specia% Lev*3 ( 'ny owner of real property affected by a special levy or any person having a legal interest therein may, upon receipt of the written notice of assessment of the special levy, avail of the remedies provided for in #hapter %, &itle &wo, 2oo- ,, of this #ode. SECTION 6D,3 Accr"a% of Specia% Lev*3 ( &he special levy shall accrue on the first day of the 0uarter next following the effectivity of the ordinance imposing such levy.
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CHAPTER VI Co%%ection of Rea% Propert* Tax SECTION 6DF3 4ate of Accr"a% of Tax3 ( &he real property tax for any year shall accrue on the first day of Hanuary and from that date it shall constitute a lien on the property which shall be superior to any other lien, mortgage, or encumbrance of any -ind whatsoever, and shall be extinguished only upon the payment of the delin0uent tax. SECTION 6D>3 Co%%ection of Tax3 ( &he collection of the real property tax with interest thereon and related expenses, and the enforcement of the remedies provided for in this &itle or any applicable laws, shall be the responsibility of the city or municipal treasurer concerned. &he city or municipal treasurer may deputi@e the barangay treasurer to collect all taxes on real property located in the barangay: )rovided, &hat the barangay treasurer is properly bonded for the purpose: )rovided, further, &hat the premium on the bond shall be paid by the city or municipal government concerned. SECTION 6D?3 Assessor to 9"rnish Loca% Treas"rer $ith Assess&ent Ro%%3 ( &he provincial, city or municipal assessor shall prepare and submit to the treasurer of the local government unit, on or before the thirty3first (%1st$ day of /ecember 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. SECTION 6D<3 Notice of Ti&e for Co%%ection of Tax3 ( &he city or municipal treasurer shall, on or before the thirty3first (%1st$ day of Hanuary each year, in the case of the basic real property tax and the additional tax for the Special Education ?und (SE?$ or any other date to be prescribed by the sanggunian concerned in the case of any other tax levied under this title, post the notice of the 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 li-ewise be published in a newspaper of general circulation in the locality once a wee- for two (2$ consecutive wee-s. SECTION 6,-3 Pa*&ent of Rea% Propert* Taxes in Insta%%&ents3 ( &he owner of the real property or the person having legal interest therein may pay the basic real property tax and the additional tax for Special Education ?und (SE?$ due thereon without interest in four (5$ e0ual installments. the first installment to be due and payable on or before Darch &hirty3first (%1st$. the second installment, on or before Hune &hirty (%:$. the third installment, on or before September &hirty (%:$. and the last installment on or before /ecember &hirty3first (%1st$, except the special levy the payment of which shall be governed by ordinance of the sanggunian concerned. &he date for the payment of any other tax imposed under this &itle without interest shall be prescribed by the sanggunian concerned. )ayments of real property taxes shall first be applied to prior years delin0uencies, interests, and penalties, if any, and only after said delin0uencies are settled may tax payments be credited for the current period. cdasia SECTION 6,03 Tax 4isco"nt for A!vance! Pro&pt Pa*&ent3 ( ,f the basic real property tax and the additional tax accruing to the Special Education ?und (SE?$ are paid in advance in accordance with the prescribed schedule of payment as provided under Section 2=:, the sanggunian concerned may grant a discount not exceeding twenty percent (2:C$ of the annual tax due.
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SECTION 6,63 Pa*&ent 'n!er Protest3 ( (a$ 8o protest shall be entertained unless the taxpayer first pays the tax. &here shall be annotated on the tax receipts the words ;paid under protest;. &he protest in writing must be filed within thirty (%:$ days from payment of the tax to the provincial, city treasurer or municipal treasurer, in the case of a municipality within Detropolitan Danila 'rea, who shall decide the protest within sixty (4:$ days from receipt. (b$ &he tax or a portion thereof paid under protest, shall be held in trust by the treasurer concerned.
(c$ ,n the event that the protest is finally decided in favor of the taxpayer, the amount or portion of the tax protested shall be refunded to the protestant, or applied as tax credit against his existing or future tax liability. (d$ ,n the event that the protest is denied or upon the lapse of the sixty day period prescribed in subparagraph (a$, the taxpayer may avail of the remedies as provided for in #hapter %, &itle ,,, 2oo- ,, of this #ode. SECTION 6,A3 Repa*&ent of Excessive Co%%ections3 ( Ehen an assessment of basic real property tax, or any other tax levied under this &itle, is found to be illegal or erroneous and the tax is accordingly reduced or ad1usted, the taxpayer may file a written claim for refund or credit for taxes and interests with the provincial or city treasurer within two (2$ years from the date the taxpayer is entitled to such reduction or ad1ustment. &he provincial or city treasurer shall decide the claim for tax refund or credit within sixty (4:$ days from receipt thereof. ,n case the claim for tax refund or credit is denied, the taxpayer may avail of the remedies as provided in #hapter %, &itle ,,, 2oo- ,, of this #ode. SECTION 6,D3 Notice of 4e%in1"enc* in the Pa*&ent of the Rea% Propert* Tax3 ( (a$ Ehen the real property tax or any other tax imposed under this &itle becomes delin0uent, the provincial, city or municipal treasurer shall immediately cause a notice of the delin0uency to be posted at the main hall and in a publicly accessible and conspicuous place in each barangay of the local government unit concerned. &he notice of delin0uency shall also be published once a wee- for two (2$ consecutive wee-s, in a newspaper of general circulation in the province, city, or municipality. (b$ Such notice shall specify the date upon which the tax became delin0uent and shall state that personal property may be distrained to effect payment. ,t shall li-ewise state that any time before the distraint of personal property, payment of the tax with surcharges, interests and penalties may be made in accordance with the next following Section, and unless the tax, surcharges and penalties are paid before the expiration of the year for which the tax is due except when the notice of assessment or special levy is contested administratively or 1udicially pursuant to the provisions of #hapter %, &itle ,,, 2oo- ,, of this #ode, the delin0uent real property will be sold at public auction, and the title to the property will be vested in the purchaser, sub1ect, however, to the right of the delin0uent owner of the property or any person having legal interest therein to redeem the property within one (1$ year from the date of sale. SECTION 6,,3 Interests on 'npai! Rea% Propert* Tax3 ( ,n case of failure to pay the basic real property tax or any other tax levied under this &itle upon the expiration of the periods as provided in Section 2=:, or when due, as the case may be, shall sub1ect the taxpayer to the payment of interest at the rate of two percent (2C$ per month on the unpaid amount or a fraction thereof, until the delin0uent tax shall have been fully paid: )rovided, however, &hat in no case shall the total interest on the unpaid tax or portion thereof exceed thirty3six (%4$ months.
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SECTION 6,F3 Re&e!ies 9or The Co%%ection Of Rea% Propert* Tax3 ( ?or the collection of the basic real property tax and any other tax levied under this &itle, the local government unit concerned may avail of the remedies by administrative action thru levy on real property or by 1udicial action. SECTION 6,>3 Loca% Govern&ents Lien3 ( &he basic real property tax and any other tax levied under this &itle constitutes a lien on the property sub1ect to tax, superior to all liens, charges or encumbrances in favor of any person, irrespective of the owner or possessor thereof, enforceable by administrative or 1udicial action, and may only be extinguished upon payment of the tax and the related interests and expenses. SECTION 6,?3 Lev* on Rea% Propert*3 ( 'fter the expiration of the time re0uired to pay the basic real property tax or any other tax levied under this &itle, real property sub1ect to such tax may be levied upon through the issuance of a warrant on or before, or simultaneously with, the institution of the civil action for the collection of the delin0uent tax. &he provincial or city treasurer, or a treasurer of a municipality within the Detropolitan Danila 'rea, as the case may be, when issuing a warrant of levy shall prepare a duly authenticated certificate showing the name of the delin0uent owner of the property or person having legal interest therein, the description of the property, the amount of the tax due and the interest thereon. &he warrant shall operate with the force of a legal execution throughout the province, city or a municipality, within the Detropolitan Danila 'rea. &he warrant shall be mailed to or served upon the delin0uent owner of the real property or person having legal interest therein, or in case he is out of the country or cannot be located, the administrator or occupant of the property. 't the same time, written notice of the levy with the attached warrant shall be mailed to or served upon the assessor and the 6egistrar of /eeds of the province, city or municipality within the Detropolitan Danila 'rea where the property is located, who shall annotate the levy on the tax declaration and certificate of title of the property, respectively. &he levying officer shall submit a report on the levy to the sanggunian concerned within ten (1:$ days after receipt of the warrant by the owner of the property or person having legal interest therein. SECTION 6,<3 Pena%t* for 9ai%"re to Iss"e an! Exec"te Garrant3 ( Eithout pre1udice to criminal prosecution under the 6evised )enal #ode and other applicable laws, any local treasurer or his deputy who fails to issue or execute the warrant of levy within one (1$ year from the time the tax becomes delin0uent or within thirty (%:$ days from the date of the issuance thereof, or who is found guilty of abusing the exercise thereof in an administrative or 1udicial proceeding shall be dismissed from the service. SECTION 6F-3 A!vertise&ent an! Sa%e3 ( Eithin thirty (%:$ days after service of the warrant of levy, the local treasurer shall proceed to publicly advertise for sale or auction the property or a usable portion thereof as may be necessary to satisfy the tax delin0uency and expenses of sale. &he advertisement shall be effected by posting a notice at the main entrance of the provincial, city or municipal building, and in a publicly accessible and conspicuous place in the barangay where the real property is located, and by publication once a wee- for two (2$ wee-s in a newspaper of general circulation in the province, city or municipality where the property is located. &he advertisement shall specify the amount of the delin0uent tax, the interest due thereon and expenses of sale, the date and place of sale, the name of the owner of the real property or person having legal interest therein, and a description of the property to be sold. 't any time before the date fixed for the sale, the owner of the real property or person having legal interest therein may stay the proceedings by paying the delin0uent tax, the interest due thereon and the expenses of sale. &he sale shall be held either at the main
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entrance of the provincial, city or municipal building, or on the property to be sold, or at any other place as specified in the notice of the sale. Eithin thirty (%:$ days after the sale, the local treasurer or his deputy shall ma-e a report of the sale to the sanggunian concerned, and which shall form part of his records. &he local treasurer shall li-ewise prepare and deliver to the purchaser a certificate of sale which shall contain the name of the purchaser, a description of the property sold, the amount of the delin0uent tax, the interest due thereon, the expenses of sale and a brief description of the proceedings: )rovided, however, &hat proceeds of the sale in excess of the delin0uent tax, the interest due thereon, and the expenses of sale shall be remitted to the owner of the real property or person having legal interest therein. &he local treasurer may, by ordinance duly approved, advance an amount sufficient to defray the costs of collection thru the remedies provided for in this &itle, including the expenses of advertisement and sale. SECTION 6F03 Re!e&ption of Propert* So%!3 ( Eithin one (1$ year from the date of sale, the owner of the delin0uent real property or person having legal interest therein, or his representative, shall have the right to redeem the property upon payment to the local treasurer of the amount of the delin0uent tax, including the interest due thereon, and the expenses of sale from the date of delin0uency to the date of sale, plus interest of not more than two percent (2C$ per month on the purchase price from the date of sale to the date of redemption. Such payment shall invalidate the certificate of sale issued to the purchaser and the owner of the delin0uent real property or person having legal interest therein shall be entitled to a certificate of redemption which shall be issued by the local treasurer or his deputy. ?rom the date of sale until the expiration of the period of redemption, the delin0uent real property shall remain in possession of the owner or person having legal interest therein who shall be entitled to the income and other fruits thereof. &he local treasurer or his deputy, upon receipt from the purchaser of the certificate of sale, shall forthwith return to the latter the entire amount paid by him plus interest of not more than two percent (2C$ per month. &hereafter, the property shall be free from lien of such delin0uent tax, interest due thereon and expenses of sale. SECTION 6F63 9ina% 4ee! to P"rchaser. ( ,n case the owner or person having legal interest fails to redeem the delin0uent property as provided herein, the local treasurer shall execute a deed conveying to the purchaser said property, free from lien of the delin0uent tax, interest due thereon and expenses of sale. &he deed shall briefly state the proceedings upon which the validity of the sale rests. SECTION 6FA3 P"rchase of Propert* :* the Loca% Govern&ent 'nits for Gant of :i!!er3 ( ,n case there is no bidder for the real property advertised for sale as provided herein, the real property tax and the related interest and costs of sale the local treasurer conducting the sale shall purchase the property in behalf of the local government unit concerned to satisfy the claim and within two (2$ days thereafter shall ma-e a report of his proceedings which shall be reflected upon the records of his office. ,t shall be the duty of the 6egistrar of /eeds concerned upon registration with his office of any such declaration of forfeiture to transfer the title of the forfeited property to the local government unit concerned without the necessity of an order from a competent court. Eithin one (1$ year from the date of such forfeiture, the taxpayer or any of his representative, may redeem the property by paying to the local treasurer the full amount of the real property tax and the
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related interest and the costs of sale. ,f the property is not redeemed as provided herein, the ownership thereof shall be vested on the local government unit concerned. SECTION 6FD3 Resa%e of Rea% Estate Ta2en for Taxes( 9ees( or Char es3 ( &he sanggunian concerned may, by ordinance duly approved, and upon notice of not less than twenty (2:$ days, sell and dispose of the real property ac0uired under the preceding section at public auction. &he proceeds of the sale shall accrue to the general fund of the local government unit concerned. SECTION 6F,3 9"rther 4istraint or Lev*3 ( !evy may be repeated if necessary until the full amount due, including all expenses, is collected. SECTION 6FF3 Co%%ection of Rea% Propert* Tax Thro" h the Co"rts3 ( &he local government unit concerned may enforce the collection of the basic real property tax or any other tax levied under this &itle by civil action in any court of competent 1urisdiction. &he civil action shall be filed by the local treasurer within the period prescribed in Section 2>: of this #ode. SECTION 6F>3 Action Assai%in Va%i!it* of Tax Sa%e3 ( 8o court shall entertain any action assailing the validity or any sale at public auction of real property or rights therein under this &itle until the taxpayer shall have deposited with the court the amount for which the real property was sold, together with interest of two percent (2C$ per month from the date of sale to the time of the institution of the action. &he 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. 8either shall any court declare a sale at public auction invalid by reason or irregularities or informalities in the proceedings unless the substantive rights of the delin0uent owner of the real property or the person having legal interest therein have been impaired. SECTION 6F?3 Pa*&ent of 4e%in1"ent Taxes on Propert* S")7ect of Controvers*3 ( ,n 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 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, sub1ect to the final outcome of the action. SECTION 6F<3 Treas"rer to Certif* 4e%in1"encies Re&ainin 'nco%%ecte!. ( &he provincial, city or municipal treasurer or their deputies shall prepare a certified list of all real property tax delin0uencies which remained uncollected or unpaid for at least one (1$ year in his 1urisdiction, and a statement of the reason or reasons for such non3collection or non3payment, and shall submit the same to the sanggunian concerned on or before /ecember thirty3first (%1st$ of the year immediately succeeding the year in which the delin0uencies were incurred, with a re0uest for assistance in the enforcement of the remedies for collection provided herein. SECTION 6>-3 Perio!s Githin Ghich To Co%%ect Rea% Propert* Taxes3 ( &he basic real property tax and any other tax levied under this &itle shall be collected within five (=$ years from the date they become due. 8o action for the collection of the tax, whether administrative or 1udicial, shall be instituted after the expiration of such period. ,n case of fraud or intent to evade payment of the tax, such action may be instituted for the collection of the same within ten (1:$ years from the discovery of such fraud or intent to evade payment. &he period of prescription within which to collect shall be suspended for the time during which:
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&he local treasurer is legally prevented from collecting the tax. &he owner of the property or the person having legal interest therein re0uests for reinvestigation and executes a waiver in writing before the expiration of the period within which to collect. and &he owner of the property or the person having legal interest therein is out of the country or otherwise cannot be located.
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CHAPTER VII 4isposition of Procee!s SECTION 6>03 4istri)"tion of Procee!s3 ( &he proceeds of the basic real property tax, including interest thereon, and proceeds from the use, lease or disposition, sale or redemption of property ac0uired at a public auction in accordance with the provisions of this &itle by the province or city or a municipality within the Detropolitan Danila 'rea shall be distributed as follows: (a$ ,n the case of provinces: (1$ )rovince ( &hirty3five percent (%=C$ shall accrue to the general fund. (2$ Dunicipality ( ?orty percent (5:C$ to the general fund of the municipality where the property is located. and (%$ 2arangay ( &wenty3five percent (2=C$ shall accrue to the barangay where the property is located. (b$ ,n the case of cities: (1$ #ity ( Seventy percent (>:C$ shall accrue to the general fund of the city. and (2$ &hirty percent (%:C$ shall be distributed among the component barangays of the cities where the property is located in the following manner: casia (i$ ?ifty percent (=:C$ shall accrue to the barangay where the property is located. (ii$ ?ifty percent (=:C$ shall accrue e0ually to all component barangays of the city. and (c$ ,n the case of a municipality within the Detropolitan Danila 'rea: (1$ Detropolitan Danila 'uthority ( &hirty3five percent (%=C$ shall accrue to the general fund of the authority. (2$ Dunicipality ( &hirty3five percent (%=C shall accrue to the general fund of the municipality where the property is located. cd i (%$ 2arangays ( &hirty percent (%:C$ shall be distributed among the component barangays of the municipality where the property is located in the following manner: (i$ ?ifty percent (=:C$ shall accrue to the barangay where the property is located. (ii$ ?ifty percent (=:C$ shall accrue e0ually to all component barangays of the municipality. (d$ &he share of each barangay shall be released, without need of any further action, directly to the barangay treasurer on a 0uarterly basis within five (=$ days after the end of each 0uarter and shall not be sub1ect to any lien or holdbac- for whatever purpose. SECTION 6>63 App%ication of Procee!s of the A!!itiona% One Percent SE9 Tax3 ( &he proceeds from the additional one percent (1C$ tax on real property accruing to the Special Education ?und (SE?$ shall be automatically released to the local school boards: )rovided, &hat, in case of provinces, the proceeds shall be divided e0ually between the provincial and municipal school boards: )rovided, however, &hat the proceeds shall be allocated for the operation and maintenance of public schools, construction and repair of school buildings, facilities and e0uipment, educational research, purchase of boo-s and periodicals, and sports development as determined and approved by the !ocal School 2oard. SECTION 6>A3 Procee!s of the Tax on I!%e Lan!s3 ( &he proceeds of the additional real property tax on idle lands shall accrue to the respective general fund of the province or city where the land is located. ,n the case of a municipality within the Detropolitan Danila 'rea, the proceeds shall accrue e0ually to the Detropolitan Danila 'uthority and the municipality where the land is located. SECTION 6>D3 Procee!s of the Specia% Lev*3 ( &he proceeds of the special levy on lands benefited by public wor-s, pro1ects and other improvements shall accrue to the general fund of the local government unit which financed such public wor-s, pro1ects or other improvements.
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CHAPTER VIII Specia% Provisions SECTION 6>,3 Genera% Assess&ent RevisionK Expenses Inci!ent Thereto3 ( &he sanggunian of provinces, cities and municipalities within the Detropolitan Danila 'rea shall provide the necessary appropriations to defray the expenses incident to the general revision of real property assessment. 'll expenses incident to a general revision of real property assessment shall, by ordinance of the sangguniang panlalawigan, be apportioned between the province and the municipality on the basis of the taxable area of the municipality concerned. SECTION 6>F3 Con!onation or Re!"ction of Rea% Propert* Tax an! Interest3 ( ,n case of a general failure of crops or substantial decrease in the price of agricultural or agribased products, or calamity in any province, city or municipality, the sanggunian concerned, by ordinance passed prior to the first (1st$ day of Hanuary of any year and upon recommendation of the !ocal /isaster #oordinating #ouncil, 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. SECTION 6>>3 Con!onation or Re!"ction of Tax )* the Presi!ent of the Phi%ippines3 ( &he )resident of the )hilippines may, when public interest so re0uires, condone or reduce the real property tax and interest for any year in any province or city or a municipality within the Detropolitan Danila 'rea. SECTION 6>?3 4"t* of Re istrar of 4ee!s an! Notaries P")%ic to Assist the Provincia%( Cit* or M"nicipa% Assessor3 ( ,t shall be the duty of the 6egistrar of /eeds and notaries public to furnish the provincial, city or municipal assessor with copies of all contracts selling, transferring, or otherwise conveying, leasing, or mortgaging real property received by, or ac-nowledged before them. SECTION 6><3 Ins"rance Co&panies to 9"rnish Infor&ation3 ( ,nsurance companies are hereby re0uired to furnish the provincial, city or municipal assessor copies of any contract or policy insurance on buildings, structures, and improvements insured by them or such other documents which may be necessary for the proper assessment thereof. ,cS'/# SECTION 6?-3 9ees in Co"rt Actions3 ( 'll court actions, criminal or civil, instituted at the instance of the provincial, city or municipal treasurer or assessor under the provisions of this #ode, shall be exempt from the payment of court and sheriffAs fees.
SECTION 6?03 9ees in Re istration of Papers or 4oc"&ents on Sa%e of 4e%in1"ent Rea% Propert* to Province( Cit* or M"nicipa%it*3 ( 'll certificates, documents, and papers covering the sale of delin0uent property to the province, city or municipality, if registered in the 6egistry of )roperty, shall be exempt from the documentary stamp tax and registration fees. SECTION 6?63 Rea% Propert* Assess&ent Notices or O$nerLs Copies of Tax 4ec%arations to )e Exe&pt fro& Posta% Char es or 9ees3 ( 'll real property assessment notices or ownerAs copies of tax declaration sent through the mails by the assessor shall be exempt from the payment of postal charges or fees. SECTION 6?A3 Sa%e an! 9orfeit"re :efore Effectivit* of Co!e3 ( &ax delin0uencies incurred, and sales and forfeitures of delin0uent real property effected, before the effectivity of this #ode shall be governed by the provisions of applicable laws then in force.
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TITLE III3 Shares of Loca% Govern&ent 'nits in the Procee!s of Nationa% Taxes CHAPTER I A%%ot&ent of Interna% Reven"e SECTION 6?D3 A%%ot&ent of Interna% Reven"e Taxes3 ( !ocal government units shall have a share in the national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year as follows: (a$ <n the first year of the effectivity of this #ode, thirty percent (%:C$. (b$ <n the second year, thirty3five percent (%=C$. and (c$ <n the third year and thereafter, forty percent (5:C$. )rovided, &hat in the event that the national government incurs an unmanageable public sector deficit, the )resident of the )hilippines is hereby authori@ed, upon the recommendation of Secretary of ?inance, Secretary of ,nterior and !ocal "overnment and Secretary of 2udget and Danagement, and sub1ect to consultation with the presiding officers of both +ouses of #ongress and the presidents of the ;liga;, to ma-e the necessary ad1ustments in the internal revenue allotment of local government units but in no case shall the allotment be less than thirty percent (%:C$ of the collection of national internal revenue taxes of the third fiscal year preceding the current fiscal year: )rovided, further, &hat in the first year of the effectivity of this #ode, the local government units shall, in addition to the thirty percent (%:C$ internal revenue allotment which shall include the cost of devolved functions for essential public services, be entitled to receive the amount e0uivalent to the cost of devolved personal services. SECTION 6?,3 A%%ocation to Loca% Govern&ent 'nits3 ( &he share of local government units in the internal revenue allotment shall be collected in the following manner: casia (a$ )rovinces ( &wenty3three percent (2%C$. (b$ #ities ( &wenty3three percent (2%C$. (c$ Dunicipalities ( &hirty3four percent (%5C$. and (d$ 2arangays ( &wenty percent (2:C$ )rovided, however, &hat the share of each province, city, and municipality shall be determined on the basis of the following formula: aisa dc (a$ )opulation ( ?ifty percent (=:C$. (b$ !and 'rea ( &wenty3five percent (2=C$. and (c$ E0ual sharing ( &wenty3five percent (2=C$ )rovided, further, &hat the share of each barangay with a population of not less than one hundred (1::$ inhabitants shall not be less than Eighty thousand ()9:,:::.::$ per annum chargeable against the twenty percent (2:C$ share of the barangay from the internal revenue allotment, and the balance to be allocated on the basis of the following formula: (a$ <n the first year of the effectivity of this #ode: (1$ )opulation ( ?orty percent (5:C$. and (2$ E0ual sharing ( Sixty percent (4:C$ (b$ <n the second year: (1$ )opulation ( ?ifty percent (=:C$. and (2$ E0ual sharing ( ?ifty percent (=:C$ (c$ <n the third year and thereafter: (1$ )opulation ( Sixty percent (4:C$. and (2$ E0ual sharing ( ?orty percent (5:C$.
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)rovided, finally, &hat the financial re0uirements of barangays created by local government units after the effectivity of this #ode shall be the responsibility of the local government unit concerned. SECTION 6?F3 A"to&atic Re%ease of Shares3 ( (a$ &he share of each local government unit shall be released, without need of any further action, directly to the provincial, city, municipal or barangay treasurer, as the case may be, on a 0uarterly basis within five (=$ days after the end of each 0uarter, and which shall not be sub1ect to any lien or holdbac- that may be imposed by the national government for whatever purpose. (b$ 8othing in this #hapter shall be understood to diminish the share of local government units under existing laws. SECTION 6?>3 Loca% 4eve%op&ent Pro7ects3 ( Each local government unit shall appropriate in its annual budget no less than twenty percent (2:C$ of its annual internal revenue allotment for development pro1ects. #opies of the development plans of local government units shall be furnished the /epartment of ,nterior and !ocal "overnment. SECTION 6??3 R"%es an! Re "%ations3 ( &he Secretary of ?inance, in consultation with the Secretary of 2udget and Danagement, shall promulgate the necessary rules and regulations for a simplified disbursement scheme designed for the speedy and effective enforcement of the provisions of this #hapter.
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CHAPTER II Share of Loca% Govern&ent 'nits in the Nationa% Gea%th SECTION 6?<3 Share in the Procee!s fro& the 4eve%op&ent an! 'ti%iMation of the Nationa% Gea%th3 ( !ocal government units shall have an e0uitable share in the proceeds derived from the utili@ation and development of the national wealth within their respective areas, including sharing the same with the inhabitants by way of direct benefits. SECTION 6<-3 A&o"nt of Share of Loca% Govern&ent 'nits3 ( !ocal government units shall, in addition to the internal revenue allotment, have a share of forty percent (5:C$ of the gross collection derived by the national government from the preceding fiscal year from mining taxes, royalties, forestry and fishery charges, and such other taxes, fees, or charges, including related surcharges, interests, or fines, and from its share in any co3production, 1oint venture or production sharing agreement in the utili@ation and development of the national wealth within their territorial 1urisdiction. SECTION 6<03 Share of the Loca% Govern&ents fro& an* Govern&ent A enc* or O$ne! or Contro%%e! Corporation3 ( !ocal government units shall have a share based on the preceding fiscal year from the proceeds derived by any government agency or government3owned or controlled corporation engaged in the utili@ation and development of the national wealth based on the following formula whichever will produce a higher share for the local government unit: acd (a$ <ne percent (1C$ of the gross sales or receipts of the preceding calendar year. or (b$ ?orty percent (5:C$ of the mining taxes, royalties, forestry and fishery charges and such other taxes, fees or charges, including related surcharges, interests, or fines the government agency or government owned or controlled corporation would have paid if it were not otherwise exempt. SECTION 6<63 A%%ocation of Shares3 ( &he share in the preceding Section shall be distributed in the following manner: (a$ Ehere the natural resources are located in the province: (1$ )rovince ( &wenty percent (2:C$. (2$ #omponent #ityBDunicipality ( ?orty3five percent (5=C$. and (%$ 2arangay ( &hirty3five percent (%=C$ )rovided, however, &hat where the natural resources are located in two (2$ or more provinces, or in two (2$ or more component cities or municipalities or in two (2$ or more barangays, their respective shares shall be computed on the basis of: (1$ )opulation ( Seventy percent (>:C$. and (2$ !and area ( &hirty percent (%:C$ (b$ Ehere the natural resources are located in a highly urbani@ed or independent component city: (1$ #ity ( Sixty3five percent (4=C$. and (2$ 2arangay ( &hirty3five percent (%=C$ )rovided, however, &hat where the natural resources are located in such two (2$ or more cities, the allocation of shares shall be based on the formula on population and land area as specified in paragraph (a$ of this Section. SECTION 6<A3 Re&ittance of the Share of Loca% Govern&ent 'nits3 ( &he share of local government units from the utili@ation and development of national wealth shall be remitted in accordance with Section 294 of this #ode: )rovided, however, &hat in the case of any government agency or government3owned or controlled corporation engaged in the utili@ation and development of
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the national wealth, such share shall be directly remitted to the provincial, city, municipal or barangay treasurer concerned within five (=$ days after the end of each 0uarter. SECTION 6<D3 4eve%op&ent an! Live%ihoo! Pro7ects3 ( &he proceeds from the share of local government units pursuant to this chapter shall be appropriated by their respective sanggunian to finance local government and livelihood pro1ects: )rovided, however, &hat at least eighty percent (9:C$ of the proceeds derived from the development and utili@ation of hydrothermal. geothermal, and other sources of energy shall be applied solely to lower the cost of electricity in the local government unit where such a source of energy is located.
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