Part 4: LOCAL GOVERNMENT TAXATION AND
REAL PROPERTY TAXATION
I. LOCAL GOVERNMENT TAXATION
.A INTRODUCTION
.1Nature And Source Of Local Taxing Power
Sec. 5, Art. IX, 1987 Constitution
()a Grant of Local Taxing Power under the Local
Government Code (LGC)
Sec. 129, LGC
Art. 217, IRR
()b Authority to prescribe penalties for tax
violations
Sec. 168 & 169, LGC; Art. 256 – 257,
IRR
()c Authority to grant local tax exemptions
Sec. 192, LGC; Art. 282, IRR
()d Withdrawal of Exemptions
Sec. 193, LGC; Art. 283, IRR
()e Authority to Adjust local tax rates
Sec. 191, LGC; Art. 281, IRR
()f Residual Taxing Power of
Governments
Sec. 186, LGC; Art. 274, IRR)
()g Authority to issue local tax Ordinances
Sec. 132 in relation to Sec. 187, LGC
.2Scope Of Taxing Power
Sec. 128, LGC
Art. 217, IRR
.3Fundamental Principles
Sec. 130, LGC
Art. 219, IRR
Case(s):
Tan vs. del Rosario, Jr. (237 SCRA 324)
- Uniformity of Taxation, Defined.
Tolentino vs. Secretary of Finance (249
SCRA 628)
- Equality and Uniformity of Taxation, Defined.
Pepsi Cola Bottling Co., of the Philippines,
Inc. vs. Municipality of Tanauan, et. al. (69
SCRA 460)
- An increase in the tax alone would not support
the claim that the tax is oppressive, unjust and
confiscatory.
Ormoc Sugar Co., Inc. vs. Municipal Board
of Ormoc City, et. al. (20 SCRA 739)
- A general objection that a local tax imposition
is in restraint of trade will not nullify a taxing
ordinance which is otherwise valid.
Local
.4Local Taxing Authority
()a Power to Create Revenues exercised thru
local government units
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 Sec. 132, LGC; Art. 222 IRR) - A pipeline concessionaire transporting
via pipeline its petroleum products from
()b Procedure for Approval and Effectivity of
its refineries deemed to fall under the
Tax Ordinances
term “common carrier”.
Secs. 187 – 189, LGC
National Development Company vs.
Case(s): Cebu City (215 SCRA 382)
Magtajas v. Pryce Properties - To come within the exemption from the
Corporation, Inc. (234 SCRA 255) imposition of local taxes, it is important
to establish that property is owned by
Tatel v. Municipality of Virac (207 SCRA the Government or by its unincorporated
157) agency.
Petron Corporation vs. Tiangco, G.R.
.5Common Limitations On The Taxing Powers No. 158881, April 16, 2008
Of Local Government Units
.B SPECIFIC TAXING POWERS OF LGUS
Sec. 133, LGC
.1Taxing Powers of Provinces
Case(s):
Basco vs. PAGCOR, (197 SCRA 52) Sec. 134, LGC; Art. 223, IRR
- The power of local governments to ()a Tax on Transfer of Real Property Ownership
impose taxes and fees is always subject
to limitations which Congress may Sec. 135, LGC; Art. 224, IRR
provide by law.
Philippine Petroleum Corporation vs. ()b Tax on Business of Printing and Publication
Municipality of Pililla, et. al. (198 SCRA
82) Sec. 136, LGC; Art. 225, IRR

- The tax on business different from a tax ()c Franchise Tax

on the article itself. Sec. 137, LGC; Art. 226, IRR
First Philippine Industrial Corporation
Case(s):
vs. Court of Appeals, et. al. (300 SCRA
Quezon City, et al. v. ABS-CBN
661)
Broadcasting Corporation (567 SCRA
496)

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 PLDT vs. Province of Laguna (467 SCRA
93)
()d Tax on Sand, Gravel and Other Quarry
Services
Sec. 138, LGC; Art. 227, IRR
Case(s):
The Province of Bulacan, et. al., vs.
Court of Appeals, et. al. (299 SCRA 442)
- A province may levy and collect tax on
sand, gravel, etc. extracted only from
public lands.
()e Professional Tax
Sec. 139, LGC; Art. 228, IRR
()f Amusement Tax
Sec. 140, LGC; Art. 229, IRR
()g Tax on delivery truck/van
Sec. 141, LGC; Art. 230, IRR
.2Taxing Powers of Municipalities
Sec. 142, LGC; Art. 231, IRR
()a Tax on various types of businesses (Sec.
143, LGC; Art. 232, IRR)
()b Ceiling on business tax imposable on
municipalities within Metro Manila (Sec.
145, LGC; Art. 236, IRR)
()c Tax on Retirement of Business (Sec. 145,
LGC; Art. 241, IRR)
()d Rules on Payment of business tax (Sec.
146, LGC; Art. 242, IRR)
()e Fees and Charges for regulation & licensing
(Sec. 147 - 149, LGC; Art. 233 - 235,
IRR)
()f Situs of Tax collected under Sec. 143 (Sec.
150, LGC; Art. 243, IRR)
.3Taxing Powers of Cities (Sec. 151, LGC; Art.
237, IRR)
.4Taxing Powers of Barangays (Sec. 152, LGC;
Art. 240, IRR)
.5Common Revenue Raising Powers
()a Service Fees & Charges (Sec. 153, LGC;
Art. 244(a), IRR)
()b Public Utility Charges (Sec. 154, LGC; Art.
244(b), IRR)
()c Toll Fees or Charges (Sec. 155, LGC; Art.
244(c), IRR)
.6Community Tax
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 ()a Who may impose? cities and municipalities
(Sec. 156, LGC; Art. 245, IRR)
()b Persons liable
.i Individuals (Sec. 157, LGC; Arts.
246(a)(b), IRR)
.ii Juridical persons (Sec. 158, LGC; Arts.
246 (c)(1)(2), IRR)
()c Exemptions (Sec. 159, LGC)
()d Place of Payment (Sec. 160, LGC; Art.
246(e), IRR)
()e Time for Payment (Sec. 161, LGC; Art.
246(f), IRR)
()f Printing of Community Tax Certificates and
Distribution of Proceeds (Sec. 164, LGC;
Arts. 249 and 251, IRR)
.C COLLECTION OF BUSINESS TAXES
.1Tax Period and Manner of Payment (Sec.
165, LGC; Art. 253, IRR)
.2Accrual of Tax (Sec. 166, LGC; Art. 254,
IRR)
.3Time of Payment (Sec. 167, LGC; Art. 255,
IRR)
.4Penalties on Unpaid Taxes, Fees or Charges
()a Surcharges and Penalties (Sec. 168, LGC;
Art. 256, IRR)
()b Interests on Other Unpaid Revenues (Sec.
169, LGC; Art. 257, IRR)
.5Authority of Treasurer in Collection and
Inspection of Books
()a Collection of local revenues (Sec. 170,
LGC; Art. 258, IRR)
()b Examination of Books of Accounts and
Records (Sec. 171, LGC; Art. 259, IRR)
.D TAXPAYER’S REMEDIES
.1Periods of Assessment and Collection of
Local Taxes, Fees or Charges
(Sec. 194, LGC; Art. 284, IRR)
.2Protest of Assessment (Sec. 195, LGC; Art.
285, IRR)
.3Claim for Refund or Tax Credit for
erroneously or illegally collected tax, fee or
charge (Sec. 196, LGC; Art. 286, IRR)
.E CIVIL REMEDIES (BY THE LGU) FOR
COLLECTION OF REVENUES
.1Local Government’s Lien for Delinquent
taxes, fees or charges (Sec. 173, LGC; Art.
264, IRR)
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.2Civil Remedies, in General (Sec. 174, LGC; Sec. 194 LGC; Art. 284, IRR
Art. 262, IRR)

()a Administrative Action II. REAL PROPERTY TAXATION

()b Judicial Action .F Introduction

.3Procedure for Administrative Action .1Nature of real property tax – ad valorem tax

()a Distraint of Personal Property, Procedure .2Fundamental Principles

Sec. 175, LGC; Art. 263, IRR Sec. 198, LGC; Art. 289, IRR

()b Levy of Real Property, Procedure .G Imposition of Real Property Tax

Secs. 176, 178 – 182, LGC .1Power to Levy Real Property Tax (Sec. 232,
LGC; Art. 323, IRR)
Arts. 264, 266 – 270, IRR
.2Rates of Levy (Sec. 233, LGC; 324, IRR)
()c Further Distraint or Levy
.3Exemption from Real Property Tax (Sec. 234,
Sec. 184, LGC; Art. 272, IRR LGC; Art. 325, IRR)

()d Exemption of Personal Property from Case(s):

Distraint or Levy
Manila International Airport vs. Court of
Sec. 185, LGC; Art. 273, IRR Appeals (495 SCRA 591)

()e Penalty on Local Treasurer for Failure to Mactan Cebu International Airport
Issue and Execute Warrant of Distraint or Authority vs. City of Lapu-Lapu (757 SCRA
Levy 323)

Sec. 177, LGC; Art. 265, IRR Quezon City vs. Bayantel (484 SCRA 169)

.4Procedure for Judicial Action Digital Telecommunications Philippines,

Inc. vs. City Government of Batangas (573
Sec. 183, LGC; Art. 271, IRR SCRA 605)

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 GSIS vs. City Treasurer and City Assessor
of Manila (330 SCRA 609)
Fels Energy Inc. vs. Province of Batangas,
G.R. no. 168557 (186 SCRA 516)
.H Appraisal and Assessment of Real Property
Sec. 201 – 225, LGC; Art. 292 to 310, IRR
.1Rule on Appraisal of Real Property at Fair
Market Value (Sec. 201, LGC; Art. 292, IRR)
.2Declaration of Real Property (Sec. 202 - 204,
LGC; Art. 293 - 295, IRR)
.3Listing of Real Property in Assessment Rolls
(Sec. 205, LGC; Art. 296, IRR)
()a Proof of Exemption of Real Property to be
excluded from Assessment Rolls
(Sec. 206, LGC; Art. 297, IRR)
()b Real Property Identification System (Sec.
207, LGC; Art. 298, IRR)
.4Preparation of Schedule of Fair Market
Values (Sec. 212, LGC; Art. 303, IRR)
.I Collection of Real Property Tax
()a Authority of Assessor to take Evidence (Sec.
213, LGC; Art. 304, IRR)
()b Amendment of Schedule of Fair Market
Values (Sec. 214, LGC; Art. 305, IRR)
.5Classes of Real Property (Sec. 215 – 216, LGC)
.6Actual Use of Property as Basis of Assessment
(Sec. 217, LGC; Art. 308, IRR)
.7Assessment of Real Property
()a Assessment Levels (Sec. 218, LGC; Art.
309, IRR)
()b General Revisions of Assessments and
Property Classification (Sec. 219, LGC;
Art. 310 IRR)
()c Date of Effectivity of Assessment or
Reassessment (Sec. 221. LGC; Art. 312,
IRR)
()d Assessment of Property Subject to Back
Taxes (Sec. 222, LGC; Art. 313, IRR)
()e Notification of New or Revised Assessment
(Sec. 223, LGC; Art. 314, IRR)
()f Allied Banking Corp. vs. Quezon City (101
SCRA 472N)
.8Appraisal and Assessment of Machinery (Sec.
224, LGC; Art. 315, IRR)
.1Date of Accrual of RPT (Sec. 246, LGC; Art.
337,IRR)
.2Collection of Tax
()a Collecting Authority (Sec. 247, LGC; Art.
338, IRR)
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 ()b Duty of Assessor to Furnish Local Treasurer .i Administrative remedy through levy on
with Assessment Roll (Sec. 248, LGC; Art. real property (Sec. 258, LGC; Art. 349,
339, IRR) IRR)

()c Notice of Time for Collection of Tax (Sec. ()1 Issuance of Warrant (Sec. 258,
249, LGC; Art. 340, IRR) LGC; Art. 349, IRR)

.3Periods Within Which to Collect Real Property ()2 Advertisement and Sale (Sec.
Tax - Prescription (Sec. 270, LGC; Art. 361, 260, LGC; Art. 351, IRR)
IRR)
()3 Purchase by Government for
.4Special Rules on Payment Want of Bidder (Sec. 263, LGC; Art.
354, IRR)
()a Payment of RPT in installments (Sec. 250,
LGC; Art. 341, IRR) ()4 Redemption of Property Sold
(Sec. 261, LGC; Art. 352, IRR)
()b Discount for Advanced Prompt Payment
(Sec. 251, LGC; Art. 342, IRR) ()5 Issuance of Final Deed to
Purchaser for Failure to Redeem
()c Interests on Unpaid Real Property Tax (Sec. (Sec. 262, LGC; Art. 353, IRR)
255,LGC; Art. 346, IRR)
.ii Judicial action (Sec. 266, LGC; Art.
()d Condonation of Real Property Tax (Secs. 357, IRR)
276 – 277, LGC; Arts. 367-368, IRR)
()d Resale of Real Estate Taken for Taxes, Fees
.5Remedies Of Local Government Unit For or Charges (Sec. 264, LGC; Art. 355, IRR)
Collection Of Real Property Tax
()e Further Levy until full payment of amount
()a Issuance of Notice of Delinquency for RPT due (Sec. 265,LGC; Art. 356, IRR)
payment
()f Special rules on actions involving real
()b Local Government’s Lien (Sec. 257, LGC; property
Art. 348, IRR)
.i Deposit required for actions assailing
()c Remedies in General (Sec. 256, LGC; Art. validity of tax sale (Sec. 267, LGC; Art.
347, IRR) 358, IRR)

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 .ii Award of Property subject of court action
upon payment of delinquent taxes (Sec.
268, LGC; Art. 359, IRR)
.J Taxpayer’s Remedies
.1Contesting an Assessment of Value of Real
Property
.K Special Levies on Real Property
()a Appeal to the Local Board of Assessment
Appeals (LBAA) (Sec. 226, LGC; Art. 317,
IRR)
.i Action by LBAA (Sec. 229, LGC; Art.
320, IRR)
Case:
Callanta v. Office of the Ombudsman,
285 SCRA 648
()b Appeal to the Central Board of Assessment
Appeals (CBAA) (Sec. 230,LGC; Art. 321,
IRR)
()c Effect of Appeal on Payment of RPT (Sec.
231 LGC; Art. 322, IRR)
.2Payment of Real Property Under Protest (Sec.
252, LGC; Art. 343, IRR)
()a File protest with local treasurer
()b Appeal to the LBAA (Sec. 226, LGC; Art.
317, IRR)
()c Appeal to the CBAA (Sec. 230, LGC; Art.
321, IRR)
()d Appeal to the CTA (Republic Act No.
9282)
()e Appeal to the Supreme Court
.3Claim for Refund for Illegal or Erroneous Tax
Payment (Sec. 253, LGC; Art. 344, IRR)
.1Special Education Fund (Sec. 235, LGC; Art.
326, IRR)
.2Additional Ad Valorem Tax on Idle Lands (Sec.
236, LGC; Art. 327, IRR)
()a Coverage of Idle lands (Sec. 237, LGC;
Art. 328, IRR)
()b Exempt Idle lands (Sec. 238, LGC; Art.
329, IRR)
()c Listing of idle lands by the assessor (Sec.
239, LGC, Art. 330, IRR)
.3Special Levy (Sec. 240, LGC; Art. 331, IRR)
()a Ordinance/Publication of Ordinance
imposing special levy (Sec. 241-242, LGC;
Art. 332 – 333, IRR)
()b Fixing the Amount of Special Levy and
Sending out Notice (Sec. 243, LGC; Art.
334, IRR)
()c Taxpayer’s Remedies Against Special Levy
(Sec. 244, LGC; Art. 335, IRR)
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Accrual of Special Levy (Sec. 245, LGC,
Art. 336, IRR)