period without the Sec of Justice acting upon the appeal, the aggrieved party may file appropriate proceedings with a court of competent jurisdiction.
XI. Miscellaneous Provisions
A. Power to Levy Taxes, Fees or Charges GEN RULE: LGU may exercise the power to
levy taxes, fees or charges on ANY BASE OR SUBJECT not otherwise specifically enumerated in LGC or NIRC. EXCEPTION: It must NOT be unjust,
excessive, oppressive, confiscatory or contrary to declared national policy. B. Requirements for a Valid Tax Ordinance
1. the ordinance shall only be enacted if there is a prior public hearing conducted for the purpose
2. within 10 days after the approval of the ordinance, it must be published in full for 3 consecutive days in a newspaper of local circulation, or if no such newspaper, it must be posted in at least 2 conspicuous and publicly accessible places.
CASE LAW: The requirement of publication in full for 3 consecutive days is MANDATORY for a tax ordinance to be valid. The tax ordinance will be null and void if it fails to comply with such publication requirement. [COCA-COLA vs. CITY OF MANILA (June 27, 2006)]
C. Authority to Adjust Rates – LGU shall have the authority to adjust the tax rates prescribed in LGC NOT oftener than once every 5 years, but in no case shall such adjustment exceed 10% of the rates fixed.
D. Authority to Grant Exemption – LGU may, through ordinances, grant tax exemptions, incentives or reliefs under such terms and conditions as they may deem necessary.
XII.Problems
1. A municipality passed an ordinance imposing a tax of 1% on the consideration of all sales or other transfers of title of real property located within its boundaries. As a property owner affected by the tax, comment on its
legality or illegality, and if you disagree with it, what are your remedies, administrative and judicial?
Answer: (Domondon) The tax is illegal because only provinces and cities may impose a tax on transfer of real property ownership. My first administrative remedy would be to question the legality of the ordinance within thirty (30) days from effectivity by appealing to the Secretary of Justice. If the Secretary rejects my appeal, I have thirty (30) days from receipt of the denial within which to file appropriate proceedings before a competent court. If the Secretary of Justice does not act within sixty (60) days, I would have thirty (30) days from the lapse of the 60-day time period during which the Secretary of Justice has to decide the case, within which to file suit with the appropriate court.
2. What is the nature of local taxation?
Answer: Distinguished from the taxation power of the State, local taxation is not an inherent power – it is granted by the Constitution or statute. [Basco v. PAGCOR (1991)]
3. What is the preemption or exclusionary rule? Answer: It refers to the instance wherein the National Government elects to tax a particular area, impliedly withholding from the LGU the delegated power to tax the same field.
4. Do LGUs have the authority to grant tax exemptions?
Answer: Yes, through an ordinance, by express provision of law in Section 192, LGC (but only those taxes within its powers).
5. What are the limitations on the LGUs’ power to tax?
Answer:
1. LGUs cannot levy taxes that are unjust, excessive, oppressive, confiscatory or contrary to declared national policy. (Sec. 186, LGC) 2. The LGC enumerates those that
cannot be taxed by LGUs, as follows: Sec. 133 - Unless otherwise provided, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall NOT EXTEND to the levy of the following:
a. Income tax, except when levied on banks and other financial institutions;
b. Documentary stamp tax;
c. Taxes on estates, inheritance, gifts, legacies and other acquisitions mortis
causa, except as otherwise provided herein;
d. Customs duties, registration fees of vessel and wharfage on wharves, tonnage dues, and all other kinds of customs fees, charges and dues except wharfage on wharves constructed and maintained by the LGU concerned;
e. Taxes, fees, and charges and other impositions upon goods carried into or out of, or passing through, the territorial jurisdictions 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;
f. Taxes, fees or charges on agricultural and aquatic products when sold by marginal farmers or fishermen;
g. Taxes on business enterprises certified to by the Board of Investments as pioneer or non-pioneer for a period of six (6) and four (4) years, respectively from the date of registration;
h. Excise taxes on articles enumerated under the NIRC, as amended, and taxes, fees or charges on petroleum products; i. Percentage or VAT on sales, barters or
exchanges or similar transactions on goods or services except as otherwise provided herein;
j. Taxes 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 Code;
k. Taxes on premiums paid by way or reinsurance or retrocession;
l. Taxes, fees or charges for the registration of motor vehicles and for the issuance of all kinds of licenses or permits for the driving thereof, except tricycles; m. Taxes, fees, or other charges on
Philippine products actually exported, except as otherwise provided herein; n. Taxes, fees, or charges, on Countryside
and Barangay Business Enterprises and cooperatives duly registered under the "Cooperative Code of the Philippines"; and o. Taxes, fees or charges of any kind on
the National Government, its agencies and instrumentalities, and local government units.