Version Jan.

11, 2019

UNIVERSITY OF THE PHILIPPINES

COLLEGE OF LAW

SYLLABUS
TAX 2

2nd SEM, A.Y. 2018-2019

Prof. Dina D. Lucenario

References:

Lucenario, D., Taxation in the Philippines: Notes and Cases, Vol. 1 Part A and Vol. 2
Mamalateo, Reviewer in Taxation (latest ed.)
Local Government Code (Rep. Act No. 7160) and its Implementing Rules and
Regulations
CTA Law (Rep. Act No. 1125, as amended by Rep. Act No. 9282), and the Revised
Rules of the CTA

PART A: LOCAL TAXATION AND REAL PROPERTY TAXATION

I. LOCAL TAXATION

A. Taxing Powers of LGUs

1. Legal Basis
- Secs. 128-196, LGC
- Sec. 5, Art. X, 1987 Constitution
- Philippine Petroleum v. Municipality of Pililia, 198 SCRA 82
- Petron v. Tiangco, G.R. No. 158881, April 16, 2008
- City Treasurer of Batangas City v. Pilipinas Shell Petroleum
Corporation, G.R. No. 187631, July 8, 2015
2. Power to Create Sources of Fund
- Sec. 129, LGC
- Mandanas v. Ochoa, G.R. No. 199802, July 3, 2018
- MCIAA vs. Marcos, 261 SCRA 667
- NPC v. City of Cabanatuan, 401 SCRA 259
- City of San Pablo v. Reyes, 305 SCRA 353
- Iloilo Bottlers, Inc. v. City of Iloilo, 164 SCRA 607
3. Fundamental Principles
- Secs. 130 and 132, LGC
- Pepsi-Cola Bottling Co. vs. City of Cabanatuan, 24 SCRA 789
- City of Baguio v. De Leon, 25 SCRA 938
- Association of Customs Brokers v. Municipal Board, 93 Phil 107,
1053
- Ormoc Sugar Company v. Ormoc City, 22 SCRA 603
- Gaston v. Republic Planters Bank, 158 SCRA 626
- Progressive Development Corp. v. Quezon City, 172 SCRA 629
- Ancheta v. Sison, 130 SCRA 654
- Matalin Coconut Company v. Malabang, 143 SCRA 404
- Villanueva v. City of Iloilo, 26 SCRA 578
 2

- Ericsson Telecommunications v. City of Pasig, 538 SCRA 99

- Ormoc Sugar Company, Inc. v. Municipal Board of Ormoc, 20
SCRA 739
- Bagatsing v. Ramirez, 74 SCRA 306
- Asiatic Integrated Corporation v. Alikpala, 67 SCRA 60
- Smart Communications, Inc . v. Municipality of Malvar,
Batangas, G.R. No. 204429, February 18, 2014

4. Common Limitations
- Secs. 133, LGC
- Progressive Development Corporation vs. Quezon City, G.R. No.
36081, April 24, 1989 (172 SCRA 629)
- Ferrer v. Bautista, G.R. No. 210551, June 30, 2015
- Philippine Petroleum Corporation vs. Municipality of Pililia,
198 SCRA 82
- Pepsi-Cola Bottling Company vs. Municipality of Tanauan,
69 SCRA 460
- People vs. Nazario, 165 SCRA 186
- First Philippine Industrial Corporation vs. Court of Appeals,
300 SCRA 661
- Land Transportation Office vs. City of Butuan, 322 SCRA
805
- Mactan Cebu International Airport Authority vs. Marcos,
261 SCRA 667
- Manila International Airport Authority vs. Court of Appeals
and City of Paranaque, 495 SCRA 591
B. Levy of Tax; Tax Ordinance
- Secs. 186-193, LGC
1. Procedure for Approval
- Drilon v. Lim, GR 112497, August 4, 1994
- Reyes v. Court of Appeals, G.R. No. 118233, Dec. 10, 1999
- Aala v. Uy, G.R. No. 202781, January 10, 2017
2. Publication and Furnishing of Copies
- Figuerres vs. Court of Appeals, G.R. No. 119172, March 25, 1999
(305 SCRA 206)
B. Local Taxing Authorities and Scope of Taxing Power
1. Provinces
a. Real Property Transfer Tax
- Sec. 135, LGC
b. Tax on Printing and Publication
- Sec. 136, LGC
c. Franchise Tax
- Sec. 137, LGC
-Province of Misamis Oriental vs. Cagayan Electric Power
and Light Company, Inc., 181 SCRA 38
- National Power Corporation vs. City of Cabanatuan, 401
SCRA 259
- City Government of San Pablo, Laguna vs. Reyes, 305
SCRA 353
- Manila Electric Company vs. Province of Laguna, 306
SCRA 750
- PLDT vs. City of Davao, 363 SCRA 522
- Palma Devt v. Municipality of Malangas, GR 152492,
October 16, 2003
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- PLDT v. Province of Laguna, GR 151899, August 16, 2005

- Smart Communications v. City of Makati, October 13, 2004
- NPC v. Province of Isabela, GR 165827, June 16, 2006
- NGCP v. Oliva, G.R. No. 213157, August 10, 2016
d. Tax on Quarry Resources
- Sec. 138, LGC
e. Professional Tax
- Sec. 139, LGC
f. Amusement Tax
- Sec. 140, LGC
- Sec. 125, NIRC
- Philippine Basketball Association vs. Court of Appeals, 337
SCRA 358
- Pelizloy Realty Corporation v. Province of Benguet, G.R.
No. 183137, April 10, 2013
- Alta Vista Golf and Country Club v. City of Cebu, G.R. No.
180235, January 20, 2016
- Film Development Council of the Philippines v. Colon
Heritage Realty Corporation, G.R. No. 203754, June 16,
2015
g. Tax on Delivery Trucks
- Sec. 141, LGC
2. Municipalities
a. Taxes, fees and charges not otherwise levied by provinces
- Sec. 142, LGC
b. Local Business Taxes
- Secs. 143-146, LGC
- Luz Yamane v. BA Lepanto Condominium, GR 154993,
October 25, 2005
- Petron v. Mayor Tiangco, GR 158881, April 16, 2008
- Iloilo Bottlers, Inc. vs. Iloilo City, 164 SCRA 607
- Manila Trading & Supply Co. vs. City of Manila, 105 Phil
581
- Central Azucarera Don Pedro vs. City of Manila, 97 Phil
627
- Caltex Philippines, Inc. vs. City of Manila, 28 SCRA 840
- City of Manila vs. Manila Remnant Co., Inc., 100 Phil 796
- Ericsson Telecommunications, Inc. vs. City of Pasig, 538
SCRA 99
- Mindanao Shopping Destination Corporation v. Duterte,
G.R. No. 211093, June 6, 2017
c. Fees and Charges
- Sec. 147, LGC
d. Fees for sealing and licensing of weights and measures
- Sec. 148, LGC
e. Fishery rentals, fees and charges
- Sec. 149, LGC
f. Tax Situs
- Sec. 150, LGC
- Philippine Match Co. v. City of Cebu, 81 SCRA 99

3. Cities
a. Scope of taxing powers
- Sec. 151, LGC
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- Estanislao v. Costales, 196 SCRA 853

4. Barangays
a. scope of taxing powers
- Sec. 152, LGC
5. Common revenue-raising powers
- Secs. 153-155, LGC
a. service fees and charges
b. public utility charges
c. toll fees and charges
C. Community Tax
1. Persons Liable
- Secs. 157-158, LGC
2. Exemptions/Optional
- Secs. 159 and 162, LGC
3. Payment/Penalties/Certificate
- Secs. 160-161, 163, LGC
D. Tax Exemption Privileges
- Quezon City v. ABS-CBN, GR 166408, October 6, 2008
1. Grant
- PLDT vs. City of Davao, 363 SCRA 522
- NAPOCOR vs. City of Cabanatuan, 401 SCRA 259
- PLDT vs. Province of Laguna, 467 SCRA 93
2. Withdrawal
- Mactan Cebu International Airport Authority vs. Marcos, 261
SCRA 667
- City Government of San Pablo, Laguna vs. Reyes, 305 SCRA 353
- Manila Electric Company vs. Province of Laguna, 306 SCRA 750
- Smart Communications v. City of Davao, G.R. No. 155491, July 21,
2009
E. Collection of Local Taxes
1. Tax Period and Manner of Payment
2. Accrual
- Secs. 165-171, LGC
- Mobil Philippines v. City Treasurer of Makati, GR 154092, July 14,
2005
3. Collection of Local Taxes
- Secs. 172-185, LGC
a. Assessment
b. Payment
c. Reduction/Discount
4. Surcharges and Penalties
- NPC v. City of Cabanatuan, G.R. No. 177332, October 1, 2014
5. Interest
6. Examination of Books of Accounts
7. Government Remedies
- Secs. 172-185, LGC
- Secs. 254-270, LGC
a. Lien
- Hongkong & Shanghai Banking Corporation vs. Rafferty,
39 Phil 145

b. Administrative Actions; Distraint and Levy

- Spouses Federico Serfino vs. Court of Appeals, 154 SCRA
19
 5

- Estate of the Late Mercedes Jacob vs. Court of Appeals, 283

SCRA 474
c. Judicial Action
8. Taxpayer’s Remedies
- Secs. 194-196, LGC
a. Assessment
b. Collection
c. Interruption
d. Protest
- Manila Electric Company vs. Barlis, 433 SCRA 11)
- Yamane vs. BA Lepanto Condominium Corporation, 474
SCRA 258
- City of Manila v. Cosmos Bottling Corp., G.R. No. 196681,
June 27, 2018
- Lopez vs. City of Manila, 303 SCRA 448
c. Tax Refund and Tax Credit
- City of Manila v. Grecia-Cuerdo, G.R. No. 175723, February
4, 2014

II. REAL PROPERTY TAXATION

A. Definition and Nature

1. Tax on ownership; ad valorem tax
- Secs. 199, 224-225, 257, LGC
2. Real Property
- Meralco v. CBAA, 144 SCRA 273
- Meralco Securities v. CBAA, 114 SCRA 260
- Caltex v. CBAP, 114 SCRA 296
- Capitol Wireless v. Provincial Treasurer of Batangas, G.R. No.
180110, May 30, 2016
B. Power to Levy Real Property Tax
1. Taxing Authorities
- Sec. 232, LGC
a. Provinces
b. Cities
c. Municipalities in Metro Manila
2. Tax Rates
- Sec. 233, LGC
3. Special Education Fund
4. Idle Land Tax
- Sec. 235, LGC
5. Special Levy
- Sec. 240, LGC
C. Exempt Properties
- Sec. 234, LGC
- MIAA v. CA, GR 155650, July 20, 2006
- Bangko Sentral ng Pilipinas v. CBAA, CTA EB Case No. 1438, Oct. 1,
2018
- NPC v. CBAA, GR 171470, January 30, 2009
- NPC v. Province of Quezon, GR 171586, July 15, 2009
- Mactan Cebu International Airport Authority v. Marcos, GR 120082,
September 11, 1996
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- Mactan Cebu International Airport Authority v. City of Lapu-Lapu, G.R.

No. 181756, June 15, 2015
- Herarc Realty Corp. v. Provincial Treasurer of Batangas, G.R. No. 210736,
September 5, 2018
- Quimpo v. Mendoza, 107 SCRA 73
- Abra Valley v. Aquino, 162 SCRA 665
- BLGF Opinion dated June 20, 2012, addressed to Emmanuel Angeles
- CIR v. YMCA, 358 Phil. 562 (1998)
- Angeles University Foundation v. City of Angeles, G.R. No. 189999, June
27, 2012
- CIR v. St. Luke’s Medical Center, Inc. v. G.R. No. 203514, Feb. 13, 2017
- Lung Center of the Philippines, Quezon City, G.R. No. 144104, June 29,
2004
- CIR v. De La Salle University, G.R. No. 196896, Nov. 9, 2016
- NPC v. Presiding Judge, 190 SCRA 477
- City Government of Quezon City v. Bayan Telecommunications, GR
162015, March 6, 2006
- City of Davao v. RTC and GSIS, GR 127383, August 18, 2005
D. Tax Declaration
E. Appraisal; Assessment; Payment
- Secs. 198-231, LGC
1. Appraisal
- Reyes v. Almanzor, 196 SCRA 322
- Patalinhug v. CA, 229 SCRA 554
- Sesbreno v. CBAA, GR 106588, March 24, 1997
- Allied Banking Corporation v. Quezon City Government, GR
154126, October 11, 2005
2. Classification of Real Property
- Secs. 215-217, 199, LGC
3. Assessment
a. Assessment Levels
- Secs. 199 (e, f, g, h), 218-223, LGC
- Lopez v. City of Manila, GR 127139, February 19, 1999
- City Assessor of Cebu City v. Association of Benevola de
Cebu, G.R. No. 152904, June 8, 2007
4. Collection and Payment
- Secs. 246-251, LGC
a. Time of Payment
b. Discounts
- Salva v. Magpile, G.R. No. 220440, Nov. 8, 2017
F. Disposition of Proceeds
- Secs. 271-274, LGC
G. Government Remedies
- Secs. 254-270, LGC
1. Lien
2. Administrative Actions; Distraint and Levy
- City of Davao v. Intestate Estate of Amada Dalisay, G.R. No.
207791, July 15, 2015
- Onstott v. Upper Tagpos Neighborhood Association, G.R. No.
221047, September 14, 2016
- Gamilla v. Burgundy Realty Corporation, G.R. No. 212246, June
22, 2015
3. Judicial Action
H. Taxpayer’s Remedies
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1. Assessment
- Caltex v. CBAA, 114 SCRA 296
- Chavez v. Ongpin, 186 SCRA 331
2. Protest
- Secs. 246-252, 276-277, LGC
- NPC v. Provincial Treasurer of Benguet, G.R. No. 209303,
November 14, 2016
- Meralco v. City Assessor of Lucena City, G.R. No. 166102,
August 5, 2015
- NPC v. Municipal Government of Navotas, G.R. No. 192300,
November 24, 2014
3. Tax Refund and Tax Credit
I. Prescription
- Sec. 270, LGC
- DOJ Opinion No. 016, s. 2018 (June 14, 2018)