LTOM Final Book 2

UPDATED
LOCAL TREASURY
OPERATIONSMANUAL(LTOM)
BOOK 2
Receipts and Collection of Income,

Revenues and Other Fund Sources
Updated Local Treasury Operations Manual (LTOM)
Bureau of Local Government Finance
Department of Finance
Copyright © Bureau of Local Government Finance, 2016

Telefax: (+632) - 522 - 8770 or 71
Wed: www.blgf.gov.ph
E-mail: blgf@blgf.gov.ph
Published by:
Bureau of Local Government Finance

Department of Finance
8th Floor, EDPC Bldg., BSP Complex
Roxas Blvd., Metro Manila
Philippines 1004
First Printing, 2008.

PHALTRA
2016 Revised Edition
All rights reserved.
No part of this book may be reproduced in any form or by any means without express permission
of the copyright owner and the publisher.
ISBN: 978-971-94098-8-5
Printed in the Philippines
Updated Local Treasury Operations Manual (LTOM) 2

ACRONYMS
ACR - Abstract of Collection Report

ADB - Asian Development Bank
ADP - Authority for Debit Payment
AGDB - Authorized Government Depository Bank
AJE - Adjusting Journal Entry
AO - Accountable Officer
AOM - Audit Observation Memorandum
APP - Annual Procurement Plan
ARMM - Autonomous Region in Muslim Mindanao
ARO - Allotment Release Order
BAC - Bids and Awards Committee
BEI - Board of Election Inspectors
BIR - Bureau of Internal Revenue
BLGF - Bureau of Local Government Finance
BLT - Build-Lease-and Transfer
BMBE - Barangay Micro Business Enterprises
BOO - Build-Own-and Operate
BOT - Build-Operate-and Transfer
BRK - Barangay Record Keeper
BSP - Bangko Sentral ng Pilipinas
BT - Barangay Treasurer
BT - Build-and Transfer
BTO - Build-Transfer-and Operate
BTr - Bureau of the Treasury
CA - Certificate of Authority
CAO - Contract-Add-and Operate
CAMELS - Capital Adequacy, Asset Quality, Management, Earnings,
Liquidity and Sensitivity
CDF - Cash Disbursement Forecast
CFA - Cash Flow Analysis
CFF - Cash Flow Forecast
CHBReg - Cash On Hand and in Bank Register
CM - Credit Memo
CN - Credit Notice
CO - Capital Outlay
COA - Commission on Audit
COE - Current Operating Expenses
COMELEC - Commission on Elections
CRAAF - Consolidated Report of Accountability for Accountable Forms
CRDReg - Cash Receipts and Deposits Register
CRF - Cash Receipts Forecast
CSB - Certificate of Settlement and Balances
CSC - Civil Service Commission
CT - Community Tax
CTC - Community Tax Certificate
DBC - Deputized Barangay Collector
DBM - Department of Budget and Management
DBP - Development Bank of the Philippines
DepEd - Department of Education
DM - Debit Memo

DOF - Department of Finance
DOH - Department of Health
DOJ - Department of Justice
DOST - Department of Science and Technology
DOTC - Department of Transportation and Communication
DV - Disbursement Voucher
EO - Executive Order
EU - European Union
eOR - Electronic Official Receipt
FE - Financial Expenses
GAAM - Government Accounting and Auditing Manual
GAO - General Auditing Office
GDF - Gender and Development Fund
GF - General Fund
GOCC - Government Owned and Controlled Corporation
GSIS - Government Service Insurance System
HLURB - Housing and Land Use Regulatory Board
ICO - In-Charge of Office
ICS - Inventory Custodian Slip
IRA - Internal Revenue Allotment
IRR - Implementing Rules and Regulations
IT - Itinerary of Travel
IUEEU - Irregular, Unnecessary, Excessive, Extravagant or
Unconscionable
JEV - Journal Entry Voucher
JMC - Joint Memorandum Circular
LBM - Local Budget Matrix
LBP - Land Bank of the Philippines
LCE - Local Chief Executive
LDP - Local Development Plan
LDRRMF - Local Disaster Risk Reduction and Management Fund
LFC - Local Finance Committee
LGC - Local Government Code
LGU - Local Government Unit
LMB - Land Management Bureau
LO - Liquidating Officer
LOA - Letter of Authority
LR - Liquidation Report
LTO - Local Treasury Operations
MB - Monetary Board
MC - Memorandum Circular
MDF - Municipal Development Office
MDFO - Municipal Development Fund Office
MMA - Metro Manila Area
MMDA - Metro Manila Development Authority
MOA - Memorandum of Agreement
MOOE - Maintenance and Other Operating Expenses
MOU - Memorandum of Understanding
MRPAAO - Manual on Real Property Appraisal and Assessment Operations
MTOP - Motorized Tricycle Operators Permit
NC - Notice of Charge
NCA - Notice of Cash Allocation
ND - Notice of Disallowance

NEDA - National Economic and Development Authority
NGAS - New Government Accounting System
NIRC - National Internal Revenue Code
NPC - National Power Corporation
NPO - National Printing Officer
NPV - Net Present Value
NS - Notice of Suspension
NSO - National Statistics Office
ObR - Obligation Request
ODA - Official Development Assistance
OIC - Officer-In-Charge
OR - Official Receipt
PAR - Property Acknowledgement Receipt
PB - Punong Barangay
PCF - Petty Cash Fund
PCFReg - Petty Cash Fund Register
PCV - Petty Cash Voucher
PD - Presidential Decree
PDAF - Priority Development Assistance Fund
PI - Public Infrastructure
PNB - Philippine National Bank
PO - Purchase Order
PPE - Plant, Property and Equipment
PPSAS - Philippine Public Sector Accounting Standard
PS - Personal Services
RA - Republic Act
RAAF - Report of Accountability for Accountable Forms
RAAO - Register of Appropriation, Allotments and Obligations
RAC - Registry of Appropriation and Commitments
RATA - Representation and Transportation Allowance
RCD - Report of Collections and Deposits
RCI - Report of Checks Issued
RIS - Requisition and Issue Slip
RMIT - Revised Manual of Instructions to Treasurers
ROO - Rehabilitate-Own-and Operate
ROT - Rehabilitate-Operate-and Transfer
RPT - Real Property Tax
RPTAR- Real Property Tax Register
RPTOP- Real Property Tax Order of Payment
RRACCS - Revised Rules on Administrative Cases in the Civil Service
SAM - State Audit Manual
SB - Sangguniang Barangay
SCD - Summary of Collections and Deposits
SCkI - Summary of Checks Issued
SCP - Summary of Cash Payments
SCR - Summary of Collections and Remittance
SEF - Special Education Fund
SIE - Statement of Income and Expenditures
SKF - Sangguniang Kabataan Fund
SOE - Statement of Expenditures
SPL - Special Leave Privilege
SPPCV - Summary of Paid Petty Cash Vouchers
SRE - Statement of Receipts and Expenditures

SRS - Statement of Receipt Sources
TDAF - Tax Data and Assessment Form
TO - Travel Order
UBOM - Updated Budget Operations Manual
VAT - Value Added Tax
VDS - Validated Deposit Slip
WB - World Bank

Table of Contents
Introduction
Section 33. Definition of Terms...................................................................................................10

Chapter 1: INCOME FROM LOCAL SOURCES..........................................................................10
Section 34. Power to Create Sources of Revenue. –.................................................................10
Section 35. Fundamental Principles: The following fundamental principles shall govern the
exercise of the taxing and other revenue-raising powers of the local government
units. –.......................................................................................................................11
Section 36. Valid Revenue Ordinance. –....................................................................................13
Section 37. Fundamental Principles in the Collection of Local Taxes, Fees, Charges and Other
Receipts.....................................................................................................................13
Section 38. Taxing Powers of Provinces....................................................................................14
Section 39. Taxing Powers of Cities...........................................................................................14
Section 40. Taxing Powers of Municipalities..............................................................................15
Section 41. Power to Levy Other Taxes, Fees, or Charges.......................................................16
Section 42. Taxing Powers of Barangays...................................................................................16
Section 43. Common Limitations on the Taxing Powers of Local Government Units................16
Section 44. Non-Tax Revenues..................................................................................................17
Section 45. Regulatory Fees and Other Service Fees and Charges.........................................18
Section 46. Receipts from Economic Enterprise Operations. –.................................................19
Section 47. Other Receipts.........................................................................................................19
Chapter 2. INCOME FROM EXTERNAL SOURCES...................................................................19
Section 48. Internal Revenue Allotment (IRA)............................................................................19
Section 49. Share in the Proceeds of the Tobacco Excise Tax..................................................22
Section 50. Share in the Proceeds from the Development and Utilization of the National
Wealth........................................................................................................................22
Section 51. Other Special Shares of Local Government Units from National Taxes.................24
Section 52. Extraordinary Receipts from External Sources. –...................................................25
Chapter 3. COLLECTION PROCEDURES..................................................................................26
Section 53. General Control on Collection.................................................................................26
Section 54. Control and Accountability for Official Receipts and Other Accountable Forms. – 30
Section 55. Handling of Dishonored Checks Received in Payment of Taxes and Other
Indebtedness to the Government..............................................................................40
Section 56. Daily Turnover and Verification of Collections.........................................................43
Section 57. Designation of Liquidating Officers for Collections..................................................44
Section 58. Procedures and Controls on Deposit of Collections with Authorized Depository
Banks.........................................................................................................................45
Section 59. Maintenance and Use of the Cashbook by Local Treasurers, Cashiers, Liquidating
Officers, Disbursing Officers, Collectors and Other Accountable Officers................48

Section 60. Forms and Reports Used by Local Treasury Officials. –.........................................50
Chapter 4. EXAMINATION OF BOOKS OF ACCOUNTS AND PERTINENT RECORDS OF
BUSINESSES BY THE LOCAL TREASURER............................................................................51
Section 61. General Provisions..................................................................................................51
Section 62. Guidelines in the Conduct of the Examination of Book of Accounts.......................52
FORMS AND ANNEXES..............................................................................................................58
Annex 1: Procedural Requirements for a Valid Ordinance.........................................................58
Annex 2: Policies, Rules and Procedures on Barangay Collections, Remittances and Deposits
...................................................................................................................................61
Annex 3: Direct Remittance to Barangay Bank Account............................................................63
Annex 4: Recording of Receipt, Deposits and Remittances of Barangay Collections...............63
Annex 5: Requirements of a Valid Ordinance. –........................................................................66
Annex 6: Local Revenue Tool Kit for Philippine LGUs. –...........................................................68
Annex 7: Tax Collection through Mobile.....................................................................................73
LTO Form 5 – Cash Book (Cash in Vault)..................................................................................80
LTO Form 6 – Cash Book (Cash in Bank)..................................................................................81
LTO Form 7 – Cash Book (Cash Advances)..............................................................................82
LTO Form 8 – Cash Book (Liquidating Officer)..........................................................................83
LTO Form 9 – Cash Book (Teller/Collector)................................................................................84
LTO Form 10 - Report of Accountability for Accountable Forms (RAAF)...................................88
LTO Form 11 - Consolidated Report of Accountability for Accountable Forms (CRAAF)..........90
LTO Form 12 - Report of Collections and Deposits (RCD)........................................................93
LTO Annex 13 – Process Flow on LGU Receipts, Collections and Deposits.............................94
LTO Form 15 - Cash Receipts and Deposits Register.............................................................101
LTO Form 16 - Cash On Hand and In Bank Register...............................................................103
LTO Form 17 - Report On Accountability for Accountable Forms............................................105
LTO Form 18 – Consolidated Report of Accountability For Accountable Forms......................107
LTO Form 19 – Summary of Collections and Deposits............................................................109
LTO Form 20 – Summary of Collections and Remittances-BT.................................................110
LTO Form 21 – Summary of Collections and Remittances-DBC..............................................112
LTO Annex 22 - Process Flow on the Receipt and Recording of Collections by Barangay
Treasurer.................................................................................................................113
LTO Annex 23 – Process Flow on the Receipt and Recording of Collections by Deputized
Barangay Collectors................................................................................................115
LTO Annex 24 – Process Flow on the Receipt and Recording of Collections by Barangay
Treasurer as Deputized by the City/Municipal Treasurer........................................118
LTO Form 25 – Process Flow on the Receipt and Recording of Bank Debit/Credit Memo and
Bank Statement.......................................................................................................120
LTO Annex 26 – Letter of Authority/Appointment.....................................................................122
LTO Form 27 – Tax Data Sheet................................................................................................124

LTO Form 28 – Tax data and Assessment Form......................................................................125
LTO Form 29 – Letter of Assessment (1st Notice)....................................................................126
LTO Form 30 – 2nd Notice.........................................................................................................127
LTO Form 31 - Final Notice......................................................................................................128
LTO Form 32 – Final Notice before Issuance of Warrant of Distraint and Levy.......................129
LTO Form 33 – Non-presentation of Documents NPS.............................................................130
LTO Form 35 – Letter of Confirmation......................................................................................131
LTO Form 36 – Certificate of Confirmation...............................................................................132
LTO Form 37 – Certificate of Examination...............................................................................133
LTO Form 38 – Assessment Notice (Initial)..............................................................................134
LTO Form 39 – Final Demand..................................................................................................135
LTO Annex 41 – Obligation Request (ObR).............................................................................137

Section 33. Definition of Terms: When used in this Chapter, the term: (Sec. 306, LGC of
1991)
a) Collection– pertains to the receipt of payment from all local taxes, fees, charges and
other impositions due to local government units in accordance with the approved local
revenue code/approved supplemental ordinances including grants, loans, aids, donation
in the form of cash, check and credit memo.
b) Current Operating Expenditures – refers to appropriations for the purchase of goods

and services for the conduct of normal local government operations within the fiscal
year, including goods and services that will be used or consumed during the budget
year. (Sec. 306 (f), LGC)
c) eOR – refers to a proof of payment generated/issued through an Electronic Payment

and Collection System (EPCS with unique or sequential reference numbers that can be
validated using the same system. More specifically, the eOR refers to an evidence of
payment for collection received by the agency from clients generated through the
agency’s electronic collection system. (2.5, COA Circular 2013-007 dated September
18, 2015)
d) Income – covers all revenues and receipts collected or received, forming the gross
accretions of funds of the government.(Sec. 306(i), LGC)
e) Payor or Originator – refers to a person or entity by whom, or on whose behalf, the

electronic data message or electronic document has been created, generated and/or
sent. The term does not include a person acting as an intermediary with respect to that
electronic data message or electronic documents. (2.8, COA Circular 2013-007 dated
September 18, 2015)
f) “Receipts” refers to income realized for operations and activities of the government or
are received by the government in the exercise of its corporate functions consisting of
charges for services rendered or for conveniences furnished, or the price of commodity
sold, as well as authorized contributions or aids from other entities except provisional
advances for budgetary purposes. Loans for specific projects or activities shall be
considered as “receipts”.(Sec. 306 (l) LGC)
g) “Revenues” refers to income derived from the regular system of taxation enforced
under authority of law or ordinance, and, as such, accrue more or less regularly every
year. (Sec. 306(m), LGC)
Chapter 1:INCOME FROM LOCAL SOURCES
Section 34.Power to Create Sources of Revenue. –
a) Each local government unit shall have the power to create its own sources of revenues
and to levy taxes, fees and charges subject to such guidelines and limitations as the
congress may provide, consistent with the basic policy of local autonomy. Such taxes,
fees and charges shall accrue exclusively to the local governments. (Art. X, Sec 5,
1987 Phil. Constitution)
b) Each local government unit shall exercise its power to create its own sources of
revenues and to levy taxes, fees and charges subject to the provisions of the Local
Government Code of 1991, consistent with the basic policy of local autonomy. Such
taxes, fees and charges shall accrue exclusively to the local government units. (Sec.
129, LGC)

c) The power to impose a tax, fee or charge or to generate revenue under the Local
Government Code of 1991 shall be exercised by the sanggunian of the local
government unit concerned through an appropriate ordinance. (Sec. 132, LGC)
Section 35. Fundamental Principles: The following fundamental principles shall

govern the exercise of the taxing and other revenue-raising powers of the local
government units. –
a) Taxation shall be uniform in each local government unit -(Sec. 130(a), LGC)
1. Equality and uniformity in local taxation means that all taxable articles or kinds of
property of the same class shall be taxed at the same rate within the territorial
jurisdiction of the taxing authority or local government unit and not necessarily in
comparison with other units although belonging to the same political subdivision. In
fine, uniformity is required only within the geographical limitation of the taxing
authority1 (p. 416, Tax Law and Jurisprudence, Second Edition, Vitug and Acosta).
Thus, if the tax is a municipal tax, it must be uniform throughout the municipality
(Notes on Sec. 130, LGC, p. 18, Philippine Law on Local Government Taxation,
Annotated, 2000 Edition, Ursal). The uniformity required is only within the territorial
jurisdiction of a province, a city, a municipality or a barangay (Art. 219(a), IRR,
implementing Sec. 130(a), LGC).
2. A tax is considered uniform when it operates with the same force and effect in
every place where the subject may be found. Where the statute or ordinance
applies equally to all persons, firms and corporations placed in similar situations,
there is no infringement of the rule on equality. Inequalities which result from the
singling out of one particular class, in respect to other classes, for taxation and
exemption infringe no constitutional limitation (p. 416, Tax Law and Jurisprudence,
Second Edition, Vitug and Acosta).
3. Uniformity is not equivalent to equality in taxation (p. 18, Phil. Law on Local
Government Taxation, Annotated, 2000 Edition, Ursal). The Supreme Court ruled,
“It is true that the uniformity essential to the valid exercise of the power of taxation
does not require identity or equality under all circumstances, or negate the authority
to classify the object of taxation. The classification made in the exercise of this
authority, to be valid, must, however, be reasonable and this requirement is not
deemed satisfied unless:
3.1 It is based upon substantial distinctions which make the real differences;
3.2 These are germane to the purpose of the legislation or ordinance;
3.3 The classification applies, not only to present conditions, but, also, to future
conditions substantially identical to those of the present; and
3.4 The classification applies equally to all those who belong to the same class.
Illustrative Case Box 1:
These conditions are not fully met by the ordinance in question. Indeed, if its purpose
were merely to levy a burden upon the sale of soft drinks or carbonated beverages, there
is no reason why sales thereof by dealers other than agents or consignees of producers or
merchants established outside the City of Butuan should be exempt from the tax. (p. 417,
Tax Law and Jurisprudence, Second Edition, Vitug and Acosta)
1Punzalan vs. City of Manila, 95 Phil. 46

b) Taxes, fees, charges and other impositions shall(Sec. 130(b), LGC):
1. Be equitable and based as far as practicable on the taxpayer’s ability to pay

(Sec. 130 (b) (1), LGC).
Equitability is characterized by equity. It means being fair to all concerned and that it is
without prejudice, favor or vigor entailing undue hardship. It is the word fairness that best
describes equitable. If the tax is excessive, it is not fair. When the tax discriminates, aside
from violating the rule of uniformity, it is not fair. If the tax is in restraint of trade (that is,
discourages investors), it is not fair. (p. 209, Local Government Code, Annotated, Nolledo)
The taxpayer’s ability to pay must be considered. It cannot be absolute or it cannot be

based on a hard and fast rule. Ability to pay is more equated with the progressive system
of taxation, that is, the more you earn, the more tax you pay. Taxation must be based, as
far as practicable, on ability to pay. (p. 209, Local Government Code, Annotated, Nolledo)
The question as to when a tax is said to be “equitable”, is related to the distribution of the
tax burden itself. Thus, the most equitable tax system is that which is most closely in
conformity with the standards of equity in the distribution of real income. (p. 19, Philippine
Law on Local Government Taxation, Annotated, 2000 Edition, Ursal).
2. Be levied and collected only for public purposes (Sec.130(b)(2), LGC).

Public purpose requires that the proceeds of taxation are used to support the existence of
the local government or the pursuit of its governmental objectives (p. 419, Tax Law and
Jurisprudence, Second Edition, Vitug and Acosta). The tax should be designed to support
the services of the government and the recognized public needs. The tax must affect the
area as a community rather than as individual (LGC Annotated by Nolledo)
3. Not be unjust, excessive, oppressive, or confiscatory (Sec. 130, (b) (3),

LGC).
The tax must be reasonable in order not to be unjust or oppressive (LGC Annotated by
Nolledo).
4. Not be contrary to law, public policy, national economic policy, or in

restraint of trade (Sec. 130(b) (4), LGC).
A tax is contrary to law if it is a tax beyond the authority of an LGU to impose (LGC
Annotated by Nolledo). Thus, a local ordinance, to be valid, must not contravene the
Constitution or any statute; not to be unfair or oppressive; not be partial or discriminatory;
not prohibit but may regulate trade; be general and consistent with public policy; and not
unreasonable (US vs. Abendan, 24 Phil. 165).

A tax must not be in restraint of trade in that it must not deter the free flow of commerce in
the country, and cause considerable increase in the price of commodities, to the prejudice
of the consuming public (Sec. 133 (e), Annotated, Local Government Taxation, Ursal).
c) The collection of local taxes, fees, charges and other impositions shall in no case be
let to any private person. (Sec. 130(c), LGC)
The Supreme Court has said that entrusting the collection of the fees to a private person
does not destroy the public purpose of the ordinance, stating that so long as the purpose is
public, it does not matter whether the agency through which the money is dispensed is
public or private. (Bagatsing vs. Ramirez, L-41631, Dec. 17, 1976)
d) The revenue collected pursuant to the provisions of this Code shall inure solely to the
benefit of, and besubject to the disposition by, the local government unit levying the tax,
fee, charge or other imposition unlessotherwise specifically provided herein. (Sec. 130
(d), LGC). In no case can the National Government share in local taxes even if
provided by law. The Constitution provides that local taxes, fees and charges shall
accrue exclusively to the local governments. (Sec. 5, Art. X, 1987 Constitution)
e) Each local government unit shall, as far as practicable, evolve a progressive system of
taxation (Sec. 130 (e), LGC). A progressive tax is one where the tax rate increases as
the tax base increases. In the case of tax on business, manufacturerspay more taxes
per annum as their gross sales or receipts for the preceding year increases.(Sec.
130(h), Annotated, Local Government Taxation, Ursal)
Section 36. Valid Revenue Ordinance. –
a) For any revenue ordinance to be valid, it must conform with the provisions of Chapter 5,
Title I, Book II of R.A. 7160 or the Local Government Code of 1991, which define both
substantive and procedural requirements therefor.
b) As in all revenue measures, it is up to the particular local government to enact the

necessary revenue ordinance that would enable it to avail of its power to impose a given
tax, fees, charges and other impositions.
c) The local treasurer shall secure copies of the enacted/approved tax ordinances and
revenue measures for public dissemination and implementation.(Sec. 189, LGC)
Section 37. Fundamental Principles in the Collection of Local Taxes, Fees, Charges and
Other Receipts. – The following fundamental principles shall be applied in the collection of local
taxes, fees and charges and other impositions:
a) Local revenue is generated only from sources expressly authorized by law or ordinance,
and the collection thereof shall at all times be acknowledged properly. (Sec. 305(c),
LGC);

b) However, COA Circular No. 2013-007 dated September 18, 2013-Guidelines for the
Use of Electronic Official Receipts to Acknowledge Collection of Income and other
Receipts of Government, provides that in view of the pervasiveness and the growing
adoption of electronic transactions like electronic credit card payments, e-payments and
collection systems such as, but not limited to the electronic income tax return filing
system of the BIR, the Phil-GEPs and the GEPCS, there is a need for guidelines on
what may be considered as electronic forms of evidence of payment for collection of
income and other government receipts. The electronic form of evidence of receipt of
collection is acceptable, on the basis of Sec. 7 of Republic Act (R.A.) No. 8792,
otherwise known as the "Electronic Commerce Act of 2000.”
c) All monies officially received by a local government officer in any capacity or on any
occasion shall be accounted for as local funds, unless otherwise provided by law (Sec.
305(d), LGC);
d) The revenue collected pursuant to the pertinent provisions of the Local Government
Code of 1991, shall inure solely to the benefit of, and be subject to disposition by, the
local government unit levying the tax, fee, charge or other imposition unless otherwise
specifically provided therein (Sec. 130(d), LGC); and
e) Every officer of the local government unit whose duties permit or require the possession
or custody of local funds shall be properly bonded, and such officer shall be accountable
and responsible for said funds and for the safekeeping thereof in conformity with the
provisions of law.(Sec. 305(f), LGC)
Section 38. Taxing Powers of Provinces 2. – Except as otherwise provided in R. A. No. 7160
or the Local Government Code of 1991, the province may imposeonly taxes, fees and charges
specifically reserved to provinces, as follows: (Sec. 134, LGC)
a) Tax on Transfer of Real Property Ownership (Sec. 135, LGC);

b) Tax on Business of Printing and Publication (Sec. 136, LGC);
c) Franchise Tax (Sec. 137, LGC);
d) Tax on Sand, Gravel and Other Quarry Resources (Sec. 138, LGC);
e) Professional Tax (with required government examination) (Sec. 139, LGC);
f) Amusement Tax (Sec. 140, LGC);
g) Annual Fixed Tax for Every Delivery Truck or Van of Manufacturers or Producers,
Wholesalers of, Dealers, or Retailers in, Certain Products (Sec. 141, LGC);
h) Real Property Tax (Sec. 232, LGC);
i) Additional Levy on Real Property for the Special Education Fund (SEF) (Sec. 235,
LGC);
j) Additional Ad Valorem Tax on Idle Lands (Sec. 236, LGC);
k) Special Levy on Lands Benefited by Public Works, Projects or Improvements Funded by
LGU concerned (Sec. 240, LGC);
l) Service Fees and Charges (Sec. 153, LGC);
m) Public Utility Charges (Sec. 154, LGC); and
n) Toll Fees or Charges (Sec. 155, LGC).
Section 39. Taxing Powers of Cities. –
a) The City shall collect any of the taxes, fees, charges and other impositions that the
province and the municipality may impose. The rates of taxes that the city shall collect
may exceed the maximum rates allowed for the province or municipality by not more
than fifty percent (50%) except the rates of professional and amusement taxes. (Art 237
Book II, IRR of LGC)
2The full discussion on the different taxes, fees and charges, and other impositions by provinces is found in Book
4, LTOM

b) Cities may levy the following taxes, fees and charges:
1. Tax on Transfer of Real Property Ownership (Sec. 135, LGC);

2. Tax on Business of Printing and Publication (Sec. 136, LGC);
3. Franchise Tax (Sec. 137, LGC);
4. Tax on Sand, Gravel and Other Quarry Resources (excluding component cities)
(Sec. 138, LGC);
5. Professional Tax (Sec. 139, LGC);
6. Amusement Tax (Sec. 140, LGC);
7. Annual Fixed Tax for Every Delivery Truck or Van of Manufacturers or
Producers;Wholesalers of, Dealers, or Retailers in, Certain Products (Sec. 141,
LGC);
8. Tax on Business (Sec. 143, LGC);
9. Community Tax (Sec. 156, LGC);
10. Real Property Tax (Sec. 232, LGC);
11. Additional Levy on Real Property for the Special Education Fund (Sec. 235,
LGC);
12. Additional Ad Valorem Tax on Idle Lands (Sec. 236, LGC);
13. Special Levy on Lands Specially Benefited by Public Works, Projects or
Improvements (Sec. 240, LGC);
14. Socialized Housing (RA 7279 & LFC 1-97)
15. Fees and Charges on Business and Occupation (Sec. 147, LGC);
16. Fees for Sealing and Licensing of Weights and Measures (Sec. 148, LGC);
17. Fishery Rentals, Fees and Charges (Sec. 149, LGC);
18. Service Fees and Charges (Sec. 153, LGC);
19. Public utility charges (Sec. 154, LGC); and
20. Toll Fees or Charges (Sec. 155, LGC).
Section 40. Taxing Powers of Municipalities.–
a) Except as otherwise provided in the Local Government Code of 1991, municipalities

may levy taxes, fees and charges not otherwise levied by provinces(Sec. 142, LGC), as
follows:
1. Tax on Business (Sec. 143, LGC);

2. Community Tax (Sec. 156, LGC);
3. Real Property Tax (municipality within Metropolitan Manila Area) (Sec. 232,
LGC);
4. Additional Levy on Real Property for the Special Education Fund (SEF)
(municipality within Metropolitan Manila Area)(Sec. 235, LGC);
5. Additional Ad Valorem Tax on Idle Lands (municipality within Metropolitan Manila
Area) (Sec. 236, LGC);
6. Special Levy on Lands Specially Benefited by Public Works, Projects or
Improvements (Sec. 240, LGC);
7. Fees and Charges on Business and Occupation (Sec. 147, LGC);
8. Fees for Sealing and Licensing of Weights and Measures (Sec. 148, LGC);
9. Fishery Rentals, Fees and Charges (Sec. 149, LGC);
10. Service Fees and Charges (Sec. 153, LGC);
11. Public Utility Charges (Sec. 154, LGC); and
12. Toll Fees or Charges (Sec. 155, LGC).3
b) Rates of Tax within the Metro Manila Area.–The municipalities within the Metropolitan
Manila Area may levy taxes at rates which shall not exceed by fifty percent (50%) the
maximum rates prescribed for tax on business. (Sec. 144, LGC)
3 The full discussion of the different taxes, fees and charges, and other impositions is found in Book IV of LTOM

c) In the case of the basic real property tax, the municipality within the Metropolitan Manila
Area may fix a uniform rate not exceeding two percent (2%) of the assessed value of
real property. (Sec. 233 (b), LGC)
Section 41. Power to Levy Other Taxes, Fees, or Charges. – Local government units may
exercise the power to levy taxes, fees, and charges on any base or subject not otherwise
specifically enumerated herein or taxed under the provisions of the National Internal Revenue
Code, as amended, or other applicable laws: Provided, That the taxes, fees, or charges shall
not be unjust, excessive, oppressive, confiscatory or contrary to declared national policy:
Provided, further, That the ordinance levying such taxes, fees and charges shall not be enacted
without any prior public hearing conducted for the purpose. (Sec. 186, LGC)
Section 42. Taxing Powers of Barangays. –
a) The barangays may levy taxes, fees, and charges, as provided in Article 4, Chapter 2,
Title 1, Book Il of R. A. No. 7160 or the Local Government Code of 1991, which shall
exclusively accrue to them.
b) Taxes–On stores or retailers with fixed business establishments with gross sales or
receipts of the preceding calendar year of Fifty Thousand Pesos ( ₱50,000.00) or less, in
the case of cities and Thirty Thousand Pesos (₱30,000.00) or less, in the case of
municipalities, at a rate not exceeding one percent (1%) on such gross sales or receipts;
c) Service Fees or Charges–Barangays may collect reasonable fees or charges for

services rendered in connection with the regulation or the use of barangay- owned
properties or service facilities such as palay, copra or tobacco dryers;
d) Barangay Clearance–No 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 is located or conducted. For such clearance, the sangguniang barangay may
impose a reasonable fee. The application for clearance shall be acted upon within seven
(7) working days from the filing thereof. In the event that the clearance is not issued
within the said period, the city or municipality may issue the said license or permit
e) Other Fees and Charges–The barangay may levy reasonable fees and charges:
1. On commercial breeding of fighting cocks, cockfights and cockpits;
2. On places of recreation which charge admission fees; and
3. On billboards, signboards, neon signs, and outdoor advertisements. (Sec. 152,

LGC)
Section 43. Common Limitations on the Taxing Powers of Local Government Units.–
Unless otherwise provided in the Local Government Code of 1991, 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 in the Local Government Code of 1991;

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 local government unit concerned;
e) Taxes, fees and charges and other impositions upon goods carried into or out of,
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 National Internal Revenue Code, as
amended, and taxes, fees, or charges on petroleum products;
i) Percentage or value-added tax (VAT) on sales, barters or exchanges or similar

transactions on goods or services except as otherwise provided in the Local
Government Code of 1991;
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 the Local Government Code of 19914;
k) Taxes on premiums paid by way of 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 charges on Philippine products actually exported, except as otherwise

provided in the Local Government Code of 1991;
n) Taxes, fees, or charges on Countryside and Barangay Business Enterprises and

Cooperatives duly registered under R.A. No. 6810 5 and R.A. No. 69386 as amended by
R.A.9520; and
o) Taxes, fees or charges of any kind on the National Government, its agencies and
instrumentalities, and local government units. (Sec. 133, LGC)
Section 44. Non-Tax Revenues. –Aside from revenues that may be generated through their
power of taxation, local government units shall have access to non-tax revenues from the
following sources:
a) Proceeds from fees and charges that local government units may impose in the exercise
of their regulatory and proprietary powers; and
b) Shares of local government units from revenues of the national government, including
shares in the utilization and development of national wealth or resources within their
territorial jurisdiction and other sources defined by law.
4City of Manila et al vs. Hon. Angel Valera Colet, et al G.R. No. 120051 dated December 10, 2014
5KALAKALAN Bilang 20
6 Cooperative Code of the Philippines

Section 45. Regulatory Fees and Other Service Fees and Charges.–
a) Local government units may impose and collect fees and user charges for any service
rendered in an amount reasonably commensurate to the cost of issuing the license or
permit and the cost incurred in the conduct of the necessary inspection or
surveillance.Provided, however, that no fees and charges shall be based on capital
investments or gross sales or receipts of the person or business liable therefor. (Art. 233
& 244, IRR, implementing Sec. 147 & 153, LGC). Further, such regulatory fees or
service charges shall not be based on the amount of taxes paid by the person liable
therefor.
b) In the same manner as local taxes, it is the sanggunian that is empowered to impose
local fees and charges through appropriate ordinance or revenue measure.
c) Fees.–
1. Basis of Fees–Fees are collected by a local government unit in the exercise of its
police power. They are imposed in relation to the services rendered in regulating
business and other activities within its jurisdiction, such as the privilege to operate
an establishment or the practice of a profession. The imposition of a fee must be
accompanied by the performance of corresponding regulatory function, if not, the
fee is unjustified.
2. Amounts that May Be Imposed–Fees should be imposed at rates that are

considered reasonable. The reasonableness of a fee is commonly understood to
mean that which should be more or less equated to the cost of issuing the permit or
license and the cost of surveillance and services rendered in relation to the business
or activity regulated. It is therefore important for local government units to prepare
cost-computation schedules to support the rates of fees established. Business gross
sales or receipts and capitalization are not allowed as bases for determining the
amount of fees, since they are unrelated to the cost of regulation.
3. Beneficiaries of Regulatory Services. –There are two general categories of

regulatory services delivered by local government units:
3.1 Those whose beneficiaries are in mass, whose pricing therefor cannot be
allocated to individuals (such as traffic enforcement); and
3.2 Those whose beneficiaries can be readily identified. The rates under this
category can be more easily determined and, thus, set at reasonable levels.
Local government units must be judicious, however, in selecting and
identifying the proper subjects for service fees.
d) Charges–Local government units can also impose charges for the use of their facilities.
Many local government units own ferries, markets, slaughterhouses, hospitals, utilities,
toll roads and bridges. While many such facilities and services have been assumed by
the private sector, some local government units prefer to continue to operate them
directly for two reasons:
1. It is strategically beneficial to the community as a whole, and/or
2. The private sector has not taken interest and prefers that these responsibilities
continue to be performed by the local government units.

e) The administration and implementation of local taxes, fees and charges shall be in
accordance with the provisions of the LGC of 1991 as implemented under a duly
enacted local revenue code / ordinance.
Section 46. Receipts from Economic Enterprise Operations.–Profits or income derived from
the operation of public utilities and other economic enterprises, after deduction for the cost of
improvement, repair and other related expenses of the public utility or economic enterprise
concerned, shall first be applied for the return of the advances or loans made therefor. Any
excess shall form part of the General Fund of the local government unit concerned. (Sec. 313,
LGC)(Sec. 3.2, Local Budget Circular 100)
Section 47. Other Receipts.– Common sources of LGU revenues outside taxation, fees and
charges, and shares in national taxes and wealth are the following:
a) Sale of Property Plant and Equipment - pertains to the proceeds from the sale of
properties like buildings, equipment, machineries, lands and tangible assets.
b) Contributions - include contributions in cash from any source.
c) Sale of Waste Materials - includes the proceeds from sale of waste materials such as
office records and equipment authorized to be disposed and other waste materials.
d) Interest Income pertains to interests earned by LGUs from bank deposits, and loans
receivable and interest-bearing investments.
e) Extraordinary receipts such as disposal of assets and other non-recurring income.
Chapter 2.INCOME FROM EXTERNAL SOURCES
Section 48. Internal Revenue Allotment (IRA). –
a) Allotment of Internal Revenue Taxes–(a) Local 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:
1. On the first year of the effectivity of the Local Government Code of 1991, Thirty
Percent (30%)
2. On the second year, Thirty-Five Percent (35%) and
3. On the third year and thereafter, Forty Percent (40%)(Sec. 284, LGC)
b) In the event that an unmanageable public sector deficit is incurred by the national
government, the Secretary of Finance, the Secretary of the Interior and Local
Government and the Secretary of Budget and Management shall submit to the
President of the Philippines, a joint recommendation that will institute necessary
adjustments in the IRA of LGUs.
c) Upon receipt of the joint recommendation of the Secretary of Finance, the Secretary of
the Interior and Local Government and the Secretary of Budget and Management and
subject to consultation with the presiding offices of both Houses of Congress and the
presidents of the leagues of LGUs, the President of the Philippines shall authorize the
necessary adjustments of the total IRA to be distributed among the LGUs for the given
year, provided that in no case shall the adjusted amount be less than thirty percent
(30%) of the national internal revenue tax collections of the third fiscal year preceding
the current fiscal year during which the reduction is to be made.

d) Adjustments to the IRA share of LGUs shall be made only after affecting a
corresponding reduction of the national government expenditures including cash and
non-cash budgetary aids to government-owned or controlled corporations (GOCCs),
government financial institutions (GFIs) and Bangko Sentral ng Pilipinas. (Art. 379, IRR
implementing the 2nd and 3rd paragraphs of Sec. 284, LGC)
e) The term "budget deficit" means a shortfall of revenues against disbursements; while
"public sector" refers to the national government itself, plus the fourteen (14) major
government corporations, the government financial institutions, all the local government
units, the Bangko Sentral ng Pilipinas, and the social security institutions. Hence, the
sum of the deficits of all these different units within the public sector is what is referred to
as the "public sector deficit". (p. 404 Philippine Law on Local Government Taxation
Annotated 2000 Edition, Ursal).
f) Public sector deficit means the shortfall of revenues against disbursements of the
national government, the fourteen (14) major government corporations, the government
financial institutions, all the LGUs, the Bangko Sentral ng Pilipinas, and the social
security institutions.
g) Allocation to Local Government Units. –The total annual IRA due the LGUs shall be
allocated among provinces, cities, municipalities and barangays as follows:
1. General Allocation. –
1.1 Share of All Provinces -Twenty-Three Percent (23%)
1.2 Share of All Cities - Twenty-Three Percent (23%)
1.3 Share of All Municipalities - Thirty-Four Percent (34%)
1.4 Share of All Barangays - Twenty Percent (20%)
2. Share of Each Province, City and Municipality.– The share of each province,
city, and municipality shall be determined on the basis of the following
distribution formula:
2.1 Population - Fifty Percent (50%)
2.2 Land Area - Twenty-Five Percent (25%)
2.3 Equal Sharing -Twenty-Five Percent (25%)
3. Share of Each Barangay. –
3.1 Every barangay with a population of not less than one hundred (100)
inhabitants shall be entitled to an IRA of not less than Eighty Thousand
Pesos (₱80,000.00) per annum chargeable against the twenty percent
(20%) share of the barangay from the total IRA.
3.2 After deducting the aggregate sum of the individual barangay share of
₱80,000.00 each from the total twenty percent (20%) allocation for all
barangays, the remaining balance of said twenty percent (20%) allocation
shall be further distributed to the barangays on the basis of the following
formula:

3.2.1 On the first year of the effectivity of the Local Government Code
of 1991 (CY 1992):
i. Population - Forty Percent (40%) and
ii. Equal Sharing - Sixty Percent (60%)
3.2.2 On the second year:
i. Population - Fifty Percent (50%)
ii. Equal Sharing - Fifty Percent (50%)
3.2.3 On the third year and thereafter:
i. Population - Sixty Percent (60%)

ii. Equal Sharing Forty Percent (40%)
4. Newly created barangays.–Financial requirements of barangays created by

LGUs after the effectivity of the Local Government Code of 1991 shall be the
responsibility of the LGU concerned. (Art. 382, IRR implementing Sec.285,
LGC)
5. Automatic Release of IRA Shares. – The IRA shall be released directly by the
BTr to the LGU beneficiaries only through authorized government servicing
banks. (GAA, FY 2016)
5.1 The individual shares in IRA of each LGU shall be automatically released,
without the need of any further action, direct to the provincial, city,
municipal, or barangay treasurer, as the case may be, on a monthly basis
but not beyond five (5) days after the end of each month.
e.1.1 Compute the specific shares of the LGUs based on the Joint
Certifications issued by the collecting agencies and the BTr;
e.1.2 Issue to the BTr the pertinent budget release documents, including
the list of the specific shares of LGUs, as bases for the transfer of
funds to the LGUs through the AGSBs.
5.2 The BTr shall be the recipient of the Special Allotment Release (SARO) and
Advice of Notice of Cash Allocation Issued (ANCAI) while the corresponding
Notice of Cash Allocation (NCA) shall be issued to the AGSBs. The BTr shall
issue the disbursement document, i.e. Authority to Debit Account (ADA), so as
to effect the transfer of IRA and other funds to the LGUs from BTr’s MDS sub-
account to the depository account of the LGUs, and issue the corresponding
Notice of ADA Issued to advise the LGUs accordingly.(DOF-DBM Joint Circular
No. 2016-1, dated January 4, 2016)
6. Exemption to the Lien or Holdback of the IRA Shares. –The IRA share of
LGUs shall not be subject to any lien or holdback that may be imposed by the
national government for whatever purpose unless otherwise provided in the
Local Government Code of 1991 or other existing laws and loan contracts or
project agreements arising from foreign loans and international commitments,
such as the premium contributions of LGUs to the Government Service
Insurance System and loans contracted by LGUs under foreign-assisted
projects. (Article 383 (c), IRR implementing Sec. 286, LGC)

7. Mandatory Appropriation for Local Development Projects. –It shall be
mandatory for each LGU to set aside in its annual budgets amounts no less than
twenty percent (20%) of its IRA for the year as appropriation for local
development projects that are embodied or contained in the local development
plans. Copies of the development plans of LGUs shall be furnished the DILG.
(Art. 384, IRR implementing Sec 287, LGC)
Section 49. Share in the Proceeds of the Tobacco Excise Tax(R. A. No. 7171)7. –
a) The national government shall extend special support to the farmers of the Virginia
tobacco-producing provinces in terms of financial assistance for developmental projects
to be implemented by the local governments of the provinces concerned.
b) The special support to the Virginia tobacco-producing provinces shall be utilized to

advance the self-reliance of the tobacco farmers through:
1. Cooperative projects that will enhance better quality of products, increase

productivity, guarantee the market and as a whole increase farmers' income;
2. Livelihood projects particularly the development of alternative farming systems to

enhance farmers' income;
3. Agro industrial projects that will enable tobacco farmers in the Virginia tobacco-
producing provinces to be involved in the management and subsequent ownership
of these projects such as post-harvest and secondary processing like cigarette
manufacturing and by-product utilization; and
4. Infrastructure projects such as farm-to-market roads.
c) The financial support given by the national government for the beneficiary provinces
shall be constituted and collected from the proceeds of fifteen percent (15%) of the
excise taxes on locally manufactured Virginia-type of cigarettes.
d) The funds allotted shall be divided among the beneficiary provinces pro rata according
to the volume of Virginia tobacco production.
e) Provinces producing Virginia tobacco shall be the beneficiary provinces: Provided,

however, That, to qualify as beneficiary, a province must have an average annual
production of Virginia leaf tobacco in an amount not less than one million kilos:
Provided, further, That the Department of Budget and Management shall each year
determine the beneficiary provinces and their computed share of the funds, referring to
the National Tobacco Administration (NTA) records of tobacco acceptances, at the
tobacco trading centers for the immediate past year.
Section50. Share in the Proceeds from the Development and Utilization of the National
Wealth.–
a) Local government units shall have an equitable share in the proceeds derived from the
utilization and development of the national wealth within their respective areas, including
sharing the same with the inhabitants by way of direct benefits. (Sec. 289, LGC)
b) The term national wealth shall mean all natural resources situated within the Philippine
territorial jurisdiction including lands of public domain, waters, minerals, coal, petroleum,
mineral oils, potential energy forces, gas and oil deposits, forest products, wildlife, flora
7R.A. 7171 “An Act To Promote The Development Of The Farmer In The Virginia Tobacco Producing Provinces

and fauna, fishery and aquatic resources and all quarry products. (Art. 386, IRR
implementing Sec. 289, LGC)
c) Amount of Share of Local Government Units. –LGUs shall, in addition to the IRA,
have a share of forty percent (40%) of the gross collection derived by the national
government from the preceding fiscal year from the following:
1. Mining taxes, royalties, forestry and fishery charges, and such other taxes, fees, or
charges, including related surcharges, interests, or fine, and from its share in any
co-production, joint venture or production sharing agreement in the utilization and
development of the national wealth within their territorial jurisdiction.
2. Administrative charges enumerated herein accruing to the National Government

whether collected by the National Government collecting agencies or, in certain
cases, by LGUs.
3. Proceeds from the development and utilization of national wealth where the local
government actually collects and automatically retains its share of at least forty
percent (40%) of such proceeds shall not form part of the revenue base in the
computation of the forty percent (40%) share.
(Art. 387, IRR implementing Sec. 290, LGC)
d) Share of Local Government Units from any Government Agency or Government-

Owned or Controlled Corporation. –Local government units shall have a share based
on the preceding fiscal year from the proceeds derived by any government agency or
government-owned or controlled-corporation engaged in the utilization and development
of the national wealth based on the following formula whichever will produce a higher
share for the local government unit:
1. One percent (1%) of the gross sales or receipts of the preceding calendar year; or
2. Forty percent (40%) 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. (Sec. 291, LGC)
e) Allocation of Shares. –The share in the of local government units from any
government agency or government-owned or controlled-corporations shall be distributed
in the following manner:
1. Where the natural resources are located in the province:
1.1 Province - Twenty Percent (20%)

1.2 Component City/Municipality - Forty-Five Percent (45%); and
1.3 Barangay - Thirty-Five Percent (35%)
2. Provided, however, That 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:
2.1 Population - Seventy Percent (70%); and

2.2 Land Area - Thirty Percent (30%)
3. Where the natural resources are located in a highly urbanized or independent

component city:

3.1 City - Sixty-Five Percent (65%); and
3.2 Barangay Thirty-Five Percent (35%)
4. Provided, however, That 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 (e) (1) of this section. (Sec
292, LGC)
f) Computation and Remittance of Shares of Local Government Units in the

Utilization and Development of National Wealth. –The computation and remittance of
the shares of LGUs from the utilization and development of national wealth shall be in
accordance with the following procedures:
1. The computation of the forty percent (40%) share of each LGU in the proceeds from
the development and utilization of the national wealth from the preceding year,
indicating the corresponding share of each province, city, municipality and barangay
where the national wealth is being developed and/or utilized, shall be submitted by
the revenue collecting agencies to the DBM not later than March 15 of each ensuing
year.
2. The allotment representing the share of each LGU 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 quarterly basis within five (5) days after the end of each
quarter, and which shall not be subject to any lien or holdback that may be imposed
by the national government. (Art. 390 (a) and (h), IRR implementing Sec. 293, LGC)
g) Remittance of the Share of Local Government Units from Government Agencies

and Government-Owned or Controlled Corporations. –Share of LGUs from the
proceeds derived by any government agency or GOCC engaged in the utilization and
development of national wealth shall be directly remitted by such corporations to the
provincial, city, municipal or barangay treasurer concerned within five (5) days after the
end of each quarter. Within three (3) days from the date of remittance, the agency or
GOCC concerned shall furnish the Treasurer of the Philippines with a copy of the
remittance advice. (Art. 390 (c), IRR implementing Sec. 293, LGC)
h) Mandatory Appropriation for Local Development and Livelihood Projects. –The

proceeds from the share of local government units from the national wealth shall be
appropriated by their respective sanggunian to finance local development and livelihood
projects: Provided, however, That at least eighty percent (80%) of the proceeds derived
from the development and utilization of hydrothermal, geothermal, and other sources of
energy shall be applied solely to lower the cost of electricity in the local government
where such a source of energy is located. (Sec. 294, LGC)
Section 51. Other Special Shares of Local Government Units from National Taxes. –
a) Share in Special Economic Zones. –Businesses and enterprises in Special Economic

Zones' shall pay gross income tax of five percent (5%) in lieu of all national and local
taxes. The equivalent of three percent (3%) shall accrue to the national government and
one percent (1%) to the host local government unit. The remaining equivalent of one
percent (1%) is to be distributed to the areas contiguous to the economic zone. (R.A.
No. 7227)
b) Share from Excess Collection in Value Added Tax (VAT).–(a) In addition to the
Internal Revenue Allotment, fifty percent (50%) of the national taxes collected by the
Bureau ofInternal Revenue (BIR) under Sections 106 and 108 of the National Internal
Revenue Code (NIRC) of 1997 (formerly Sections 100, 101 and 102 of the NIRC of

1977) in excess of the increase in collection for the immediately preceding year shall be
distributed as follows:
a) Twenty percent (20%) shall accrue to the city or municipality where such taxes are
collected and shall be allocated in accordance with Section 150 of R. A. No. 7160 or
the Local Government Code of 1991; and
b) Eighty percent (80%) shall accrue to the national government.
c) Local Government Units' share in the Incremental Collection from VAT pursuant to R. A.
No. 7643, shall be allocated among local government units entitled to such share in
accordance with Section 150 of the Local Government Code of 1991, to wit:
1. If VAT is paid by manufacturers, producers without branch or sales outlets:One

hundred percent (100%) to the city or municipality where the business is located;
2. If VAT is paid by manufacturers, producers, with factories, project offices,

plantations and plants:
2.1 Thirty percent (30%) to the city or municipality where the principal office is
located;
2.2 Seventy percent (70%) to the city or municipality where the factory, project
offices, plant or plantation is located.
3. If VAT is paid by manufacturers, producers, exporters where the plantation is

located at a place other than the place where the factory is located:
located;
3.2 Forty two percent (42%) the city or municipality where the factory is
located;
3.3 Twenty eight percent (28%) to the city or municipality where the plantation
is located.
4. If VAT is paid by the manufacturers, producers, exporters and has two (2) or
more factories, plants, and plantations:
located;
4.2 Seventy percent {70%) shall be prorated among the localities where the
factories, project offices, plants, and plantations are located.
d) The LGUs' share shall be released directly to the LGUs concerned subject to the
approval of special budget pursuant to Section 35, Chapter 5, Book VI of E. O. No. 292
duly supported by the certification of actual VAT collections and remittances under
Sections 106 and 108 of the NIRC of 1997 by the BIR. (Sec. 2, R. A. No. 7643,
implemented by DBM-DOF-DILG Joint Circular No. 1-02, February 6, 2002)
Section 52. Extraordinary Receipts from External Sources. –
a) Collections derived from the repayment of loans and advances made by the government
as well as from other non-recurring sources.

b) Income which does not regularly accrue to the government, the collection for which is
indefinite or does not depend entirely on the authority of the government.
c) Foreign and domestic aid or grant provided for the LGU in the form of money and/or
materials
d) Extraordinary Receipts such as donations, grants, aids, loans and borrowings.
Chapter 3.COLLECTION PROCEDURES
Section 53. General Control on Collection. –
a) Separation of Personal Money from the Public Funds. –
1. Local Treasurers and other accountable officers shall keep personal monies
separate and distinct from local public funds in their custody and shall not make
profit out of public money or otherwise apply the same to any use not authorized
by law or ordinance. (Sec. 312, LGC)
2. Collections shall be deposited daily and intact with the authorized depository
bank. Collections remitted after banking hours shall be kept in the official vault of
the LGU.All collections after the preparation of the daily Report of Collections
and Deposits (RCD), subject to the cut-off period adopted by the LGU, shall be
remitted to the Liquidating Officers /Cashier. Such collections shall form part of
the RCD of the following day. (COA Circular 92-382)
3. Local Treasurers/Cashiers are prohibited from holding positions as treasurers or

cashiers of savings and loan association or any other association or
organization. (Sec. 67, Book II, Vol. I, GAAM)
b) Acknowledgement of Collections/Issuance of Official Receipts.–
1. No payment of any nature shall be received by a collecting officer without

immediately issuing an official receipt in acknowledgement thereof. The receipt
may be in the form of cash tickets and the like, or officially numbered receipts
subject to proper custody, accountability, and audit. (COA Cir. 92-382).
2. Where mechanical devices are used to acknowledge cash receipts, the

Commission on Audit may approve, upon receipt, exemption from the use of
accountable forms. (Sec. 68, P.D. No. 14458; Sec. 44, Title I (B), Book V, E.O.
No. 292)
c) Acknowledgement of collections/issuance of eOR. – (COA Circular No. 2013-007

dated September 18, 2013)
1. All collections shall be acknowledged by the government agency concerned

through the issuance of official receipts to establish that these have been
received.
2. Receipt of collections/revenue through electronic means shall be acknowledged

by an eOR. Collections through electronic system shall be accounted for in the
8Government Auditing Code of the Philippines

books of the government agency concerned in accordance with existing rules and
regulation for receipts and collections.
3. To ensure that transaction can be individually and safely processed using online
collection system, the Local Government Unit concerned shall comply with the
provisions of the Joint Department of Finance andthe Department of Trade and
Industry Administrative Order No. 2s 2006, on the “Guidelines Implementing R.A.
No. 87929 on EOCS in Government” or any subsequent amendments thereto.
4. The Local Government Unit shall provide read/view and print access rights to the
COA Auditor in the computerized system where online collections are being
processed as may be authorized.
d) Prohibition Against the Use of Temporary/Provisional Receipts. – At no instance

shall temporary receipts be issued to acknowledge the receipt of public funds. (Sec. 72,
Book II, Vol. I, GAAM)
e) Collections Received Through Mail and Procedures for Handling. – Collections

received through mail shall be acknowledged, and remitted or deposited, and recorded
just like other collections. Basic controls, shall, however, be maintained:
1. Incoming mail shall be opened by or under the supervision of a responsible

officer of the Records Section of the LGU. (Sec. 75 (a), Book II, Vol. I, GAAM)
2. In addition to the usual records maintained for incoming mail, a list shall be
prepared by the Records Section of all checks, money orders, warrants, or
currency received, listed individually and totaled. The list shall contain spaces for
information on the acknowledgement of receipt of the collection as well as its
subsequent remittance or deposit with authorized depositories. The list shall be
certified correctly by the Chief of the Records Section. (Sec. 75 (b), Book II, Vol.
I, GAAM)
3. After accomplishing the list, the Records Section shall immediately deliver the
duplicate copy direct to the COA Auditor. The three (3) other copies and the
collections and covering letters shall be delivered direct to the Collecting Officer
who shall verify the correctness of the list, sign the acknowledgement portion on
all three (3) copies, and return the last copy to the Records Section. (Sec. 75
(c), Book II, Vol. I, GAAM)
4. The Collecting Officer shall immediately issue an official receipt for each and
every collection in the list. The official receipt number and the date of issued
shall be recorded on the appropriate spaces of the original and triplicate copies
of the list. (Sec. 75 (d), Book II, Vol. I, GAAM)
5. Collections arising therefrom shall also be included in the Report of Collections

and Deposits together with the other collections for the day. The prescribed
procedures in the turn-over of collections and accomplishments of the forms
shall likewise be observed.
6. The Treasurer shall insure that the official receipt is correctly and properly
recorded in the list. The payor’s copy of the official receipt shall be forwarded to
the Records Section which shall mail it to the payor with a covering letter. The
Treasurer, shall, however, forward to the Records Section for mailing, only the
official receipts of cleared checks. In case of dishonored checks, the procedures
dishonored checks in this Manual shall be followed.
9E-Commerce Law

f) Acceptance of Checks in Payment for Taxes or Other Indebtedness to the
Government. – Local Treasurers and other officers charged with the collection of
revenue or the receiving of monies payable to the government shall accept payment for
taxes, dues or other indebtedness to the government in the form of checks and warrants
issued in payment of government obligations, upon proper endorsement and
identification of the payee or endorsee. Checks drawn in favor of the government in
payment of any such indebtedness shall likewise be accepted by the officer concerned.
(Sec. 67(l), P.D. 1445)
g) Drawing of Check Payable to the Local Government Unit. – Checks in payment of

taxes and other indebtedness to the government must be drawn by the payor
himself/herself and made payable to the LGU. (Examples: “Provincial Treasurer of
Ilocos Norte; City Government of Makati”) Under no circumstance shall the following
checks be accepted:
1. Checks drawn payable to the name of the head of the LGU or any of its officers;
2. Checks drawn payable to “Cash”;
3. Indorsed checks;
4. Post-dated checks; and
5. Stale checks. (Sec. 77, Book II, Vol. I, GAAM)
h) Issuance of Official Receipts for Payment by Checks. – (Sec. 78, Book II, Vol. I,
GAAM):
1. Before issuing an official receipt, the Collecting Officer shall carefully scrutinize
the check presented to him/her and make sure that it is complete and correct
particularly as to date, signature or countersignature, and amount in words and
figures appearing on the face of the check.
2. The treasurer shall regularly maintain a list of taxpayers with history of returned
checks. The collecting officer shall advise the concerned taxpayer to pay in cash
or manager’s/cashier’s check.
3. The collecting officer shall in all cases, indicate on the official receipt, the drawee
bank, the number, date and amount of check as well as the complete name and
address of the payor to facilitate communication with him/her, if necessary.
4. For purposes of cross reference, the number and the date of the official receipt
shall also be indicated at the back of the check.
i) Non-Acceptance of check with Erasure, Alteration and/or Deficiency.– (CHOM No.

15-460 as amended by CHOM No. 15-460.A, dated September 2, 2015)
1. Any check that shows or indicates on its face any erasure or alteration of the
following:
i. date;
ii. name of the payee (whether indicated as “Cash” or “Bearer” or “Holder” or a
specific name or any other word or phrase of identification;
iii. amount in figures;
iv. signature/s of the Drawer/s or the Drawer’s signatory/ies;
v. account name;
vi. account number;
vii. check number; or
viii. MICR characters

regardless of any signature or initials that appear to indicate authorization of
the alteration or erasure
OR
2. Any check that does not indicate the following:
i. date;
ii.payee
iii.
amount payable in figures;
iv.amount payable in words, except for checks issued by banks (Manager’s or
Cashier’s Checks, Demand Drafts) using a check writer; or
v. signature of the Drawer/s
shall no longer be eligible or acceptable for clearing.
j) Issuance of a Separate Official Receipt in Case Amount Due is Less than the Face
Value of the Check. – No change shall be given to the payor in the event that the
amount of the taxes or dues is less than the face value of the check in payment thereof.
The difference shall be receipted for by the issuance of a separate general receipt and
shall be counted for simultaneously with the collection as miscellaneous trust liabilities
(deferred income). (Sec. 81, Book II, Vol. I, GAAM)
k) Payment by Private Check for Goods Delivered and Services Rendered by

Government Agencies. – When payment of goods or services is made by private
check, no such service shall be rendered or goods delivered by the local government
unit concerned unless the check in payment thereof has been honored by the drawee
bank. (Sec. 82, Book II, Vol. I, GAAM)
l) Prohibition Against the Encashment of Private Checks with Public Funds. – At no

instance should money in the hands of the Collecting Officer be utilized for the purpose
of encashing private checks(Sec. 67(3), P.D. 1445). A private check is a check drawn by
a natural or juridical person other than a government agency. (Sec. 105, Book II, vol. I,
GAAM)
m) Transfer of Government Funds from One Accountable Officer to Another. –
1. Transfer of government funds from one accountable officer to another shall, except
as allowed by law or regulation, be made only upon prior direction or authorization
of the Commission on Audit or its representative. (Sec. 75, P.D. 1445)
2. When government funds are transferred from one accountable officer to another, or
from an outgoing officer to his successor, it shall be done upon properly itemized
invoice and receipt which shall invariably support the clearance to be issued to the
relieved or outgoing officer subject to regulations of the Commission on Audit. (Sec.
77, P.D. No. 1445)
n) Notification to the Auditor: Application for Relief from Accountability for

Government Funds. – When loss of government funds occur while they are in transit or
the loss is caused by fire, theft, or other casualty or force majeure, the officer
accountable therefor or having custody thereof shall immediately notify the Commission
on Audit or the auditor concerned, and within thirty (30) days or such longer period as
the Commission or auditor may, in the particular case, allow, shall present his
application for relief, with the available supporting evidence. Whenever warranted by the
evidence, credit for the loss shall be allowed. An officer who fails to comply with this

requirement shall not be relieved of liability or allowed credit for such loss in the
settlement of his accounts. (Sec. 73, P.D. No. 1445)10
Section 54. Control and Accountability for Official Receipts and Other Accountable
Forms. –
a) Custodianship of accountable forms. – The local treasurer shall be the custodian of all
accountable forms requisitioned by the local government unit. He/She shall maintain a
complete record of the receipt, issue and transfer of accountable forms.(Section 24, COA
Cir. 92-382)
b) Revenue Collection and the Use of Accountable Forms. – The Provincial, City,
Municipal and Barangay Treasurers shall be responsible for the use of all accountable
forms invoiced to them and receipted by them in person or entrusted by them to their
designated collectors for care, custody and use. A Local Treasurer’s accountability for
accountable forms of all kinds is determined in connection with the audit and examination
of his accounts which show that each receipt is properly accounted for:
1. By taking up in the accounts the amount shown to have been collected

therefrom;
2. By presenting the unissued and cancelled official receipts; and
3. By producing satisfactory evidence that they are in the hands of authorized

personnel.
c) Types of Accountable Forms. – Accountable forms for acknowledging collections are

of two classes: accountable forms with money value, and accountable forms without
money value. (Sec. 493, Vol. II, GAAM)
d) Additional Accountable Forms. –
1. The Accountable Forms with money value consist of the following:
Type of Form Utilization

(1) Cash Tickets, Accountable Forms No. For the temporary use of market spaces,
55 (55A-F) parking areas and other income generating
activities where the issuance of a regular
receipt is not practicable.
(2) Certificate of Transfer of Large Cattle, Evidence of transfer of large cattle, when
Accountable Form No. 52 issued, it supersedes the original certificate of
ownership
(3) Certificate of Ownership of Large Cattle, Evidence of original ownership of large cattle
Accountable Form No. 53
(4) Marriage License Certificate, Issued to contract marriage

Accountable Form No. 54
10The procedure to be observed and the requirements in the application for relief from the accountability are discussed under Section 119, Book
3, LTOM.

2. The Accountable Forms without specific money value printed on the face of each
form consist of the following:
Type of Form Utilization

(1) Official Receipt, Accountable Form No. To acknowledge payment of taxes, licenses
51 and other dues or fees to the government for
which no special accountable forms have been
authorized
(2) Real Property Tax Receipt, Accountable To acknowledge payment of real property
Form No. 56 taxes
(3) Slaughter Permit Fee Receipt,

Accountable Form No. 57 Serves as permit and official receipt for
slaughtering of large cattle
(4) City/Municipal Burial Permit Fee
Receipt, Accountable Form No. 58 Serves as funeral permit and official receipt for
fees collected
(5) Checks
Serially numbered forms purchased from the

servicing bank for use in disbursement
(6) Community Tax Certificate, BIR Form charged against the account with the bank
Nos. 0016 and 0017
For the use of individual taxpayers and
corporate entities, respectively
e) Issuance of Cash Tickets. –
1. Local government units shall devise their own system in the issuance of cash tickets
to ensure proper control, accounting and audit. Control measures include but not
limited to the following:
1.1 Serial numbers may be assigned or the name or logo of the city or municipality
may be stamped at the back of the cash tickets before they are issued to
collectors assigned in public markets, parking areas or those tasked to accept
collections not acknowledged by the regular receipt or other accountable
forms;
1.2 The collector shall affix his initial and state the date of issuance in the cash
tickets before issuance;
1.3 The market inspector shall ensure the tearing off of cash tickets to avoid
possible re-issuance; and
1.4 Surprise inspection on the proper issuance of cash tickets shall be conducted
by the market administrator or his authorized representative.
2. Cash tickets issued to transient vendors in the public market to acknowledge market
fees shall pertain only to the vendor buying the same and shall be good only for the
space or spaces of the market premises to which he is assigned. If the vendor
disposes of his merchandise by wholesale to another vendor, the latter shall
purchase new tickets if he desires to sell the merchandise, even if done in the same
place occupied by the previous vendor(Sec. 74, Book II, Vol. I, GAAM). The

City/Municipal treasurer’s office should adopt a systematic appropriate numbering of
cash tickets for internal control purposes.
f) Issuance of Real Property Tax Receipts. – Official receipt shall be issued to cover the
payment of basic and additional tax accruing to the Special Education Fund.
g) Name of Agency on the Face of Official Receipt. – Forsafety andcontrol purposes, all
official receipts shall bear the name of the local government unit printed or stamped on
the face thereof. (Sec. 96, Book II, Vol. I, GAAM)
h) Preparation of Official Receipts. – Pre-numbered official receipts shall be issued in

strict numerical sequence.
1. In preparing official receipts, all copies of each receipt shall be exact copies or
carbon reproductions in all respects of the original.
2. If payment has been tendered in money order or check, the official receipt shall be
prepared with the date, number, and the amount of such money order, or check
together with the purpose for which the payment has been received. The address of
the payor shall also be indicated on the official receipt to facilitate communication
with him/her, if necessary. (Sec. 73, Book II, Vol. I, GAAM)
3. General Guidelines on the issuance of eOR: (COA Circular No. 2013-007 dated
September 18, 2013)
3.1. Receipt of collections through electronic means shall be acknowledged by an

eOR.
3.2. The eOR shall have the following minimum data content:
i. Name of the agency issuing the receipt (Department/Agency/Regional

Office/Operating or Field Unit)
ii. Location and location code (place where the collection is made and its
assigned code)
iii. Name of Payor (person/entity making the payments)
iv. Date and time of receipt (date and time of the collection and issuance of
eOR)
v. Nature of collection (such as business tax, fees and assessments,

licenses etc.
vi. Amount received, detailed as to the nature of collection coded as to their

subsidiary ledger revenue classification
vii. eOR Number ( a unique and sequential number generated by the system
for every eOR issued)
viii. Transaction Number (number generated for every transaction accepted

by the system which does not necessarily pertain to the generated eOR.
It may include cancellation of eOR, inquiry, etc.)
ix. Mode of payment (credit card/electronic fund transfer/ATM/G-Cash, etc.)
x. Order of Payment Slip Number or Assessment Number

3.3. All collections shall be acknowledged by the local government unit concerned
through the issuance of official receipts to establish that such collections have
been received.
3.4. Collections of national government agencies shall be deposited to the

account of the treasurer of the Philippines. Collections of local government
units and of Government Owned (GOCC) and control corporations shall be
deposited to their respective accounts in designated AGDB.
3.5. Collections through electronic system shall be accounted for in the books of
the government agency concerned in accordance with existing rules and
regulation for receipts and collections.
3.6. To ensure that transaction can be individually and safely processed using
online collection system, the government agency concerned shall comply with
the provisions of the Joint Department Administrative Order No. 2s 2006
issued by the Department of Finance and the Department of Trade and
Industry on the “Guidelines Implementing R.A. No. 8792 on EOCS in
Government” or any subsequent amendments thereto.
3.7. The government agency shall provide read/view and print access rights to the
COA Auditor in the computerized system where online collections are being
processed.
i) Accountability of Official Receipts. – An official receipt is an accountable form held in

trust by the Local Treasurer or other person duly authorized to possess or have custody
thereof. He shall be responsible for its safekeeping, the proper and authorized use or
application thereof and the reporting of its use and condition, and shall be liable for loss,
damage or deterioration occasioned by negligence in the keeping or use thereof. (Sec.
91, Book II, Vol. I. GAAM)
j) Guidelines on the Procurement of Printing Service. –
1. Pursuant to Section 29 of Republic Act (RA) 9970 (General Appropriations Act of

2010), procuring entities have the option to engage the services of private printers
for their printing and publication expenditures, subject to public bidding in
accordance with RA 9184 and pertinent accounting and auditing rules and
regulations;
2. However, printing of accountable forms and sensitive high quality/volume printing

requirements shall only be undertaken by recognized government printers, namely
Bangko Sentral ng Pilipinas, National Printing Office and APO Production Unit.
(Resolution No. 05-2010, GPPB)
k) Inspection of Accountable Forms Received from the National Printing Office or

Accredited Printers. –
1. Upon receipt of the accountable forms from the National Printing Office or accredited
printers, the Local Treasurer shall carefully examine each book or pad. He shall
segregate any book or pad found to contain defects, such as incorrect series of
numbers, or missing leaves or sheets, etc., and submit the same to the Commission
on Audit (COA) together with a statement of the defects and deficiencies.
2. COA shall examine the book or pad of accountable forms submitted. If found that
the defects are due to error in binding and printing, COA shall make proper notations
on the book or pad or on the defective sheet itself. COA shall also furnish
immediately the Local Treasurer concerned with two (2) copies of the certification

covering its action. The Local Treasurer shall use this certification in support of a
credit to his account for the missing or defective form thus noted by COA. The Local
Treasurer, through COA,shall send two (2) copies of the certification to the head of
the National Printing Office. These copies shall contain the initials or numbers that
are written on the respective card covers of the defective books or pads, or on a slip
covering such information for the guidance of the National Printing Office in locating
employees responsible for the errors or deficiency. (Sec. 94, Book II, Vol. I, GAAM)
l) Use of Computer-Generated Official Receipts and Other Accountable Forms. –

The use by local government units of computer-generated official receipts and other
accountable forms in lieu of the printed forms by the National Printing Office or
accredited printers shall require the prior approval of the Commission on Audit(Sec.
68(2), P.D. No. 1445).This is to ensure that all the pertinent information and control
features are substantially included on the face of the computer-generated forms.
m) Custodianship of Accountable Forms. – The Local Treasurer shall be the custodian

of all accountable forms requisitioned by the local government unit. A complete record of
the receipt, issue, and transfer of accountable forms shall be maintained. (Sec. 24, COA
Circular No. 92-382)
n) Permanent Record Book for Accountable Forms.–
1. Local Treasurers accountable for receipts, stamps and other accountable forms in
their possession or in the hand of deputies and other employees entrusted
therewith, shall keep adequate permanent record books which should show, among
other things, the whereabouts of the accountable forms with which they are charged,
the name and title of the officer or employee to whom such forms have been given,
the evidence of the receipt and subsequent sale and issuance of the same. The
record books shall contain the following column headings:
1.1 Booklet Number/Quantity (in case of official receipt without money value)
1.2 Serial Number/Total Value (in case of official receipt with money value)
1.3 Name (in print) of Accountable Officer to whom issued
1.4 Signature of Accountable Officer
1.5 Date Received by Accountable Officer
1.6 Date reported totally used, sold, issued
2. These columns shall be utilized for recording consecutively all accountable forms in
the order they are received by the Accountable Officer. (Sec. 95, Book II, Vol. I,
GAAM)
o) Recording of Receipts of Accountable Forms in the Permanent Record Book. –

When accountable forms are received in the Office of the Local Treasurer, these will be
entered immediately after verification in the record book. The recording of each batch of
accountable forms received shall be headed by data on the invoice number and date,
the date the accountable forms were received, the quantity, and the inclusive serial
numbers and/or total value of the accountable forms. (Sec. 95, Book II, Vol. I, GAAM)
p) Recording of Issues of Accountable Forms in the Permanent Record Book. –
1. In the city and municipal treasuries where accountable forms are issued directly to
Barangay Treasurers, collectors/teller or other accountable officers, it is advisable

that only one unit of accountable form per denomination be recorded per line the
record book. In other words, books of real property tax or other official receipts,
cattle registration certificates, burial permit receipts, etc. that are bound as such, will
be recorded in the record book one line per book per stub; and unnumbered and
unbound stock, as cash tickets, per quantity to each line in the record book as in the
opinion of the Local Treasurer will be sufficient to meet the daily or weekly
requirements of the particular Barangay Treasurers, collector/teller or other
accountable officers, but with the total value per line. Recording in the provincial
treasuries will be in larger quantities per line per denomination, since issues will be
mostly to Municipal Treasurers for their stock and the provincial collecting officers for
their use.
2. When the column provided for ‘Date reported totally used, sold, issued’ of the record
book is not yet filled up, this indicates that the accountable forms are still in the stock
and the Local Treasurer concerned, or the officer in charge of the same, has the
said forms in his possession and is responsible for their safekeeping. When a book
or stub of receipts or sheet of cash ticket or any other quantitative unit of other
accountable forms in the hands of collector/teller or other accountable officers has
been partly issued and the balance is returned for any reason whatsoever, the last
column of the record book, ‘Date reported totally used, sold, issued’ should be filled
out, and the remaining unissued accountable forms returned will again be entered in
a new line in the record book as a new entry, in the same way would it be entered if
it were a new requisition.
q) Daily Issues of Accountable Forms. - All accountable forms beginning balances,

received, issued and on hand shall be reported in Box C of the Report of Collections
and Deposit. The collectors/tellers should submit to the Provincial, City and Municipal
Treasurer concerned, the stubs of the official receipts in their hands for verification. The
Provincial, City, and Municipal Treasurer or his/her duly authorized representative shall
indicate his verification by affixing the signature at the back of the triplicate copy of the
last official receipt issued with the following notation:
“Verified here: (Signature and Date) “
r) Requisition of Accountable Forms by Collectors/Tellers. – Collectors/Tellers shall

file requisitions of accountable forms for their use with the Local Treasurer through a
Requisition and Issue Slip. They shall be accountable for all accountable forms issued to
them. There shall be no transfer or borrowing of accountable forms between
collectors/tellers. (Sec.25, COA Circular No. 92-382)
s) Issuance of Accountable Forms to Accountable Officer. – Accountable forms shall

be issued to bonded officers only in sufficient quantities based on their actual needs but
not to exceed three (3) month’s use. (Sec. 97, Book II, Vol. I, GAAM)
t) The Local Treasurer’s Report of Accountability for Accountable Forms. –
1. Collectors/Tellers and other accountable officers shall render their report of

accountability for accountable forms in the Report of Accountability for Accountable
Forms at least once a month. Such report shall also be prepared in the case of
transfer of office or accountability by the accountable officer. The Local Treasurer
shall summarize/consolidate these reports in the Consolidated Report of
Accountability for Accountable Forms, and submit the consolidated report
accompanied by the individual reports to the Unit Auditor concerned not later than
the fifth day of the ensuing month. (Sec. 37, COA Circular No. 92-382)
2. The Barangay Treasurer shall report on his/her accountability for accountable forms
using the Barangay Report of Accountability for Accountable Forms. The report

shall be prepared at the end of each month and upon transfer of accountability of
the Barangay Treasurer. All accountable forms handled by him/her shall be
reported in the form, including under a separate caption, accountable forms issued
to him/her for his/her use as a deputized Treasurer and distributed in the manner
prescribed in the Barangay Accounting Manual.
u) Procedures on the receipt and issuance of accountable forms to accountable

officers. –
1. Upon receipt of accountable forms from the National Printing Office or accredited
printers, the Local Treasurershall:
1.1 Furnish the COA Unit Auditor and the General Services Officer a copy of the
purchase order and delivery receipt of accountable forms.
1.2 Designate an accountable form officer/ custodian to examine carefully each book
or pad and segregate any book or pad found to contain defects, such as incorrect
series of numbers, or missing leaves or sheets, etc. Thereafter, submit the book
or pad containing defects to the COA Unit Auditor thru the local treasurer together
with the statement of the defects or deficiencies.
2. Upon acceptance by the local treasurer of accountable forms, the designated

Inspection Officer/ Committee of the LGU shall conduct an inspection of the
accountable forms and prepare an acceptance report.
3. The local treasurer shall add the accepted accountable forms into the existing
inventory of accountable forms. In the issuance of the accountable forms to the
collectors, the First-in First-out (FIFO) method shall be observed.
4. The COA Unit Auditor shall;
4.1. Examine the book or pad of accountable forms and if the defects due to error in
binding or printing are found, proper notations on the book or on the defective
sheet itself shall be made;
4.2. Immediately furnish the Accountable Forms Custodian with two copies of the
certificate covering such action;
5. The Accountable Forms Custodian shall use the aforementioned certificate in support
of a credit to his/her account for the missing or defective forms noted by the COA Unit
Auditor;
6. The Local Treasurer shall send two (2) copies of the certificate to the National
Printing Office. These certificates shall contain the initials or numbers that were
written on the respective card covers of the defective books or pads, or on a slip
covering such information for the guidance of the National Printing Office in locating
employees responsible for the error of deficiency. (Sec. 94, Volume 1 GAAM)
7. The Local Treasurer, in the recordingofaccountable forms in the record book or stock
cards, shall:
7.1 Maintain a complete record of the receipt, issue, and transfer of accountable
forms. (Sec. 24, COA Circular 92-382); and

7.2 Ensure that theheading of the record of each batch of accountable forms
received shallcontain the invoice number and date, the accountable forms
received, and the quantity and inclusive serial numbers and/or total value of the
accountable forms. (Sec. 95, Volume 1, GAAM)
v) Procedures in the Requisition of Accountable Forms. –
1. Accountable forms shall be issued to bonded accountable officers only, in sufficient

quantities or the average daily use. (Sec. 97, Volume 1 GAAM)
2. Collectors shall file requisitions of accountable forms for their use with the Local
Treasurer by way of a Requisition and Issue Slip (RIS). (Sec. 25, COA Circular 92-
382)
3. LGUs with automated system, the accountable form custodian shall encode the
respective serial numbers of accountable forms issued to collectors.
4. The accountable forms custodian and the collectors shall be directly accountable for
all accountable forms issued to them; (Sec. 25, COA Circular 92-382).
5. There shall be no transfer of accountable forms between and among collectors(Sec.

25, COA Circular 92-382). The unused balance of accountable forms shall be
surrendered by the collector, for reason of absence in the office, in any manner, or
has resigned or retired or has been re-assigned to another office, and other related
cases to the local treasurer or accountable forms custodian. The unused balance of
accountable forms surrendered can be reissued to other bonded collectors.
6. The Accountable Forms Custodian shall keep an adequate permanent record book or
individual record card of collectors showing among otherthings, the whereabouts of
the accountable forms with which they are charged. (Sec. 95, Volume 1, GAAM).
7. The individual record card shall contain the following information:
7.1 Name (in print), position, official station, and number /amount/effectivity of
bondof the accountable officer to whom the accountable forms are issued;
7.2 Date when the accountable forms were requisitioned;
7.3 Booklet number/quantity/serial number of accountable forms requisitioned;
7.4 Date received by accountable officer;
7.5 Signature of accountable officer acknowledging receipt of accountable forms

requisitioned.(Sec. 95, Volume 1, GAAM)
w) Report of Collections and Deposits (RCD)11. –
1. All collectors shall accomplish theRCD at the close of each business day. All
accountable forms’ beginning balances, received, issued, and on hand shall be
reported in Box C of the RCD; (Sec. 29, COA Circular No 2002-003, NGAS)
11LTO Form 12

2. All issued and non-issued accountable formsin the possession of collectors should be
included in the report of daily collections.
3. The RCD shall be accomplished in five (5) copies.
4. The Local Treasurer or Liquidating Officeror the designated verifier shall verify the
RCD, check the statement of accountable forms as to initial balances on-hand,
receipts, issues, and the ending balances on hand; and shall:
4.1 Make a physical count of the accountable forms remaining in the custody of the
collector and check the same against the new balances at the “on-hand”
column;
4.2 The verifier shall affix his/her signature at the back of the triplicate copy of the
last official receipt or accountable form used for the day. (Sec. 30, COA Circular
2002-003, NGAS)
4.3 Any officer who has been issued accountable forms shall prepareindividual
Report of Accountability for Accountable Forms (RAAF) 12 at the end of each
month accomplished in three (3) copies to be distributed as follows:
Original - Local Treasurer

2nd Copy –Property Custodian of Accountable Forms
3rdCopy – Collector/Accountable Officer’s file
4.4 The Accountable Form Custodian shall consolidate the individual RAAF in the
Consolidated Report of Accountability for Accountable Forms (CRAAF) 13 at the
end of every month accomplished in two (2) copies, the same to besubmitted
not later than the fifth (5 th) day of the ensuing month. The CRAAF shall also be
accomplished in two (2) copies in case of transfer of office or accountability of
the Accountable Form Custodian:
Original – Unit Auditor

2nd Copy –Custodian of Accountable Forms
5. Accountable Forms reported/indicated in the daily RCD should reconcile with the
monthly RAAFof Individual Collectors/Accountable Officer;
6. The RAAF should reconcile with the individual record card of Collectors/Accountable
Officer in the custody of Accountable Forms Custodian.
7. The CRAAF should reconcile with the record book/stock cards of accountable forms
in the custody of Accountable Forms Custodian.
8. All accountable formsissued to the accountable officer shall be duly acknowledged.
x) Immediate Issuance of Notice of Loss of Accountable Forms. –
12RAAF, LTO Form 10, Annexes and Forms

13CRAAF, LTO Form 11, Annexes and Forms

1. Any loss of accountable forms in the custody of Accountable Forms Custodian shall
immediately be reported in writing to the Local Treasurer andshall specify the kind,
quantity, and inclusive serial numbers of the lost accountable forms and the place or
places where, and approximate dates, when the same were lost.
2. Upon receipt of the report, the Local Treasurer shall at once issue a circular or
notice of loss for the information and guidance of all concerned and immediately
notify COA to prevent the possible fraudulent use of such accountable forms. The
notice to be issued shall specify the kind, quantity, and inclusive serial numbers of
the lost accountable forms and the place or places where, and approximate dates,
when the same were lost.
3. The notice of loss shall be posted in the official website of the LGU and any
conspicuous place within the LGU.
4. The Local Treasurer is not precluded from undertaking other measures which may
prevent the fraudulent use of the lost accountable forms, like the publication of such
loss in newspapers of general circulation or send notice of loss to all LGUs for
posting.
5. Compliance with the foregoing provisions shall be one of the requirements in the
request for relief from accountability for the loss of accountable forms. (Sec. 100,
6. An accountable officer found to have caused the issuance of official receipts

reported by him/her to have been lost in the performance of his duties, and for which
the money value of the official receipts in question was not remitted, shall be liable
therefor without prejudice to the filing of administrative and criminal charges against
him/her in accordance with the provisions of civil service rules and regulations and
penal laws.
y) Submission to COA Auditor of Obsolete, Spoiled, and Cancelled Accountable

Forms. –
1. Accountable officers shall submit to the Unit Auditor all obsolete, spoiled, and
cancelled official receipts and other accountable forms for inspection and
destruction. Under no circumstances shall accountable officers destroy on their own,
accountable forms of any description, then be relieved from any accountability.
2. In the case of obsolete accountable forms with or without fixed money value, the
accountable officer shall submit to the Unit Auditor an inventory in four (4) copies.
3. In the case of spoiled or damaged accountable forms which have fixed value, the
accountable officer shall submit an affidavit in four (4) copies stating:
3.1 The denomination and the total value of the forms; and
3.2 The reason for the damage and the circumstance surrounding the cause of
such damage or the reason for cancelling the form, and the name of the officer
or employee responsible.
4. The COA Unit Auditor or his authorized representative shall promptly inspect and
destroy the accountable forms, and make a certificate on such actions below the
affidavit or inventory. The destruction shall be witnessed and certified to by the
accountable officer or Local Treasurer. The auditor shall return the affidavit or
inventory, with his certificate of destruction, to the accountable officer who will drop

the accountable forms destroyed from his Monthly Report of Accountability. The
accountable officer shall attach one (1) copy of the certified affidavit or inventory to
the Monthly Report of Accountability and retain the other copy for file. The COA Unit
Auditor shall retain the original copy.
5. In the case of spoiled or cancelled accountable forms which do not bear fixed
money value, such as printed official receipts, Gen. Form No. 51, etc. the
accountable officer shall submit the cancelled original and duplicate copies with the
Report of Collections with such cancellation properly noted on the record or abstract
of collection concerned.
6. Where the damage or cancellation of accountable forms is due to negligence or lack

of proper care, appropriate proceedings will be instituted against those responsible
as the facts in each case may warrant. (Sec. 99, Book II, Vol. I, GAAM)
Section 55.Handling of Dishonored Checks Received in Payment of Taxes and Other

Indebtedness to the Government. –
a) Dishonored Checks. – A check is considered to be dishonored by non-payment when,

upon being presented for payment, such payment is refused or cannot be obtained for
the following reasons:(R.A. No. 2031)
1. Lack or insufficiency of funds
2. Formal defects, such as, lack of countersignature, amount in words not the
same as amount in figures, etc. (GAO Circular 110)
b) Non-Acceptance of Checks. – When a check drawn in favor of the LGU is not

accepted by the drawee bank for any reason, the drawer-payor shall continue to be
liable for the sum due including all penalties as a resultof delayed payment. (Sec. 67(2),
P.D. 1445)
c) Cancellation of Official Receipts due to Dishonored Checks. –
1. In case a check received as payment of taxes or dues is dishonored, the official

receipt covering the dishonored check shall be immediately cancelled by the
collecting officer and the fact of cancellation noted by him/her on the duplicate (if
no longer in his possession, by the accountant or auditor, as the case may be)
and the triplicate copies of the receipt, in the following manner:
“Cancelled, (date of notice of dishonor)

Check dishonored per Bank/Treasury Debit Voucher/
Memo No. ______ dated ________:
2. The cancellation shall also be noted on all subsidiary records pertaining to the
transaction. The payor shall be immediately notified by the agency head or
treasurer concerned of the cancellation and dishonor by means of a “Notice of
Dishonor” as required in the succeeding sections. (Sec. 84, Book II, Vol. I,
GAAM)
3. For LGUs with automated system, the local treasurer shall, upon receipt of debit
advice on dishonored checks, cancel payment from the system and record any
adjustment in the abstract of collection.
d) Notice of Dishonor. – When a check has been dishonored by non-acceptance or

nonpayment, notice of dishonor must be given to the drawer and to each endorser, and

any drawer or endorser to whom such notice is not given is discharged (Sec. 89, R.A.
No. 2031)14. It is therefore, indispensable that the notice of dishonor be given to the
drawer (or to the endorser-payor of the government check) to protect the interest of the
government. The collecting officer or Local Treasurer neglecting or failing to give the
required notice of dishonor to the drawer (or to the endorser-payor of the government
check) who, as a result thereof is discharged from liability, shall be personally
answerable for the resulting loss suffered by the government. (Sec. 85, Book II, Vol. I,
GAAM)
e) Form of Notice of Dishonored Check. –
1. The dishonored check is returned by the depository bank to the Local Treasurer
who has deposited it, together with the original of the debit memo. Upon receipt
of the dishonored check and debit memo, the Local Treasurer shall, within three
(3) days, accomplish the “Notice of Dishonor” and sign it on behalf of the Local
Chief Executive.
2. The Notice of Dishonor shall be prepared in five (5) copies to be distributed as

follows:
2.1 Original – Drawer, delivered either personally or by registered mail with

return card on the same day of issuance of the Notice of Dishonor.
2.2 Duplicate – Local Chief Executive
2.3 Triplicate – Local Accountant for the preparation of the required

Adjustment Journal Entry (AJE)
2.4 Quadruplicate – COA Auditor
2.5 Quintuplicate – Local Treasurer’s File
(Sec. 86, Book II, Vol. I, GAAM)
f) Action on Dishonored Checks. –
1. In the event that the drawer of the dishonored check failed to settle his/her
account or deposit the amount sufficient to cover the obligation within five (5)
days from receipt of the Notice of Dishonor, the Local Chief Executive upon the
recommendation of the Local Treasurer, shall immediately transmit the certified
copies of the dishonored check, debit memo from the bank and Notice of
Dishonor to the city or provincial prosecutor for the institution of the necessary
criminal or civil action as the circumstances may warrant. This provision applies
only to cases where the check has been dishonored for lack or insufficiency of
funds.
2. Where the check has been dishonored by reason of formal defects, such as lack
of counter-signature, the Local Chief Executive through the Local Treasurer shall
nevertheless take immediate steps to collect the taxes or dues previously paid
under the dishonored check, for which the official receipt covering the check has
been subsequently cancelled and, if warranted, initiate the institution of the
corresponding civil action for the collection of the amount involved. (Sec. 87,
g) Recording and Reporting of Dishonored Check by the Local Treasurer. –
14Negotiable Instruments Law

1. Upon receipt of the debit memo and the dishonored check/s from the bank, the
Local Treasurer shall cause the photocopying of the dishonored checks and
immediate recording in the cashbook. He/she shall record the dishonor of a
check by a credit in the appropriate Cash in Bank cashbook with the following
explanation:
“To take up the Journal Entry Voucher No. _____, dated ________, covering
dishonored Check(s) No. ______ for ₱__________, acknowledged by O.R.
No. _______ dated ________.”
2. The dishonored checks shall be retained by the Local Treasurer for safekeeping.
3. The Local Treasurer shall forward the debit memo and the photocopy of the
dishonored check/s to the Local Accountant for the preparation of the Journal
Entry Voucher (JEV) in three (3) copies. The Local Accountant shall furnish the
Local Treasurer with a copy of the duly approved JEV for the latter’s recording of
the “JEV No.” in the entries previously made in the appropriate Cash in Bank
cashbook. The original copy of the JEV taking up the dishonored check/s and
the supporting documents shall be submitted to the Auditor concerned and the
duplicate copy shall be retained by the Local Accountant.
4. The dishonored check/s and the corresponding cancelled official receipt shall
also be reflected in the individual taxpayer’s records/index cards and other
records of collections maintained by the Office of the Local Treasurer. At the end
of each month the Local Treasurer shall prepare a report of dishonored check/s
in four (4) copies to be distributed as follows:
Original – Local Chief Executive

Duplicate – COA Auditor
Triplicate – Local Accountant
Quadruplicate – Local Treasurer’s file
(Sec. 88, Book II, Vol. I, GAAM)
h) Redemption of Dishonored Checks.- The following rules shall be observed when a

dishonored check is redeemed:
1. A dishonored check shall be redeemed by tendering payment by way of cash or

manager’s/cashier’s check to the Local Treasurer or collecting officer concerned.
No other mode of payment shall be accepted. (Sec. 89 (a), Book II, Vol. I,
GAAM)
2. Upon receipt of the cash or manager’s/cashier check, the collecting officer or

Local Treasurer shall issue an official receipt for the amount received. The
nature of the payment to be indicated shall be the same as that in the previous
official receipt cancelled, with the following notation on the receipt:
“Previous payment acknowledged by O.R. No. _____, dated ____, cancelled on

(date of notice of dishonor).” Accordingly, the redemption of the dishonored
check shall be recorded in the cashbook together with other collections.
(Sec. 89 (b), Book II, Vol. I, GAAM)
3. If the payor is liable for the payment of fine or penalty arising from delayed
payment, the amount corresponding to the fine or penalty shall also be imposed
and collected in addition to the principal tax or dues paid by him/her. (Sec. 89
(c), Book II, Vol. I, GAAM). The fine or penalty to be imposed shall be in

pursuance to the duly approved ordinance of the local government unit
concerned.
4. Upon redemption of the dishonored check in the manner herein prescribed, the
collecting officer or Local Treasurer shall not return the check to the payor
concerned unless the latter first surrenders the previous official receipt issued
therefor, provided that no action or case has as yet been filed. If the previous
receipt is no longer available, a sworn statement to the effect that it has been
lost or misplaced should be submitted by the payor tothe collecting officer or
Local Treasurer whoshall forthwith cancel the surrendered official receipt and
forward it (or the affidavit) to the accounting office to be attached to the
corresponding JEV where the cancellation was recorded. (Sec. 89 (e), Book II,
Vol. I, GAAM)
5. In the Report of Collections, an asterisk shall be placed opposite the line on

which the official receipt is indicated and a corresponding footnote shall be
placed on the last page of the report just below the totals as follows:
“Redemption of dishonored check previously acknowledged by O.R. No. ____

dated _____, which was cancelled on (date of Notice of Dishonor). This
footnote, together with a copy of the previous official receipt (or affidavit) shall be
the bases of the accounting unit for making the reversing entry in the proper
journal.
(Sec. 89 (f), Book II, Vol. I, GAAM)
i) Custody of Dishonored Checks. – Pending their redemption, dishonored checks shall

remain in the custody of the Local Treasurer, unless the court shall direct otherwise, in
which case appropriate receipts should be secured from the officer authorized to take
custody of the checks. The Local Treasurer shall immediately advise the auditor
concerned of the transfer of custody of the checks. (Sec. 90, Book II, Vol. I, GAAM)
j) Payors with Previously Dishonored Checks. –
1. Whenever a payor has a record of a previously dishonored private check drawn

by him/her in payment of taxes and dues, even if such check has already been
settled, any private check presented by him/her shall no longer be accepted. In
such case, the payor may be required to pay only in cash or certified check.
2. The Local Treasurer shall make a list of payors whose checks have been
dishonored and shall circularize the list to all collecting officers under his
jurisdiction.
(Sec. 80, Volume 1, GAAM)
Section 56. Daily Turnover and Verification of Collections. –
a) Daily Turnover of Collections. –
1. At the close of the business day, Collectors shall turn over all their collections intact
to the Local Treasurer or Liquidating Officer. They shall accomplish the Report of
Collections and Deposits (RCD) in five (5) copies. The original and three (3) copies
together with the duplicates of official receipts issued and the cash collected shall
be submitted to the Auditor, Local Accountant,Local Treasurer and Liquidating
Officer. The fifth copy of the RCD shall be retained by the collector
concerned.Barangay Treasurers deputized to collect taxes imposed by provinces,

cities, and municipalities shall follow the same procedure in the remittance of their
collections to the Local Treasurer or Liquidating Officer concerned.
2. In the case of collectors assigned to the field, where travel time from their places of
assignment to the Local Treasury Office is more than one (1) day, theturnover of
collections shall be made at least once a week or as soon as the collections reach
Five Thousand Pesos (₱5,000.00). (Sec. 29, NGAs).
Collections by field collectors shall be remitted to the Cashier or designated
liquidating officer of the field office of the LGU. When the distance of the field office
to the local treasury may expose government fund to the risk of loss while in transit,
the cashier or designated liquidating officer, upon authorization by the Treasurer,
may deposit the collections in the authorized depository bank near the field office of
the LGU. The procedures in reporting collections and deposits prescribed in this
Chapter shall be observed. (Sec. 33, NGAs)
3. Require the Accountable Officer to provide denomination of cash collection and list
of checks received upon remittance of daily collections.
(Sec. 26, COA Circular No. 92-382)
b) Verification of Collections and Accountable Forms. – The Local Treasurer or

Liquidating Officer shall verify the RCD as to initial balances on hand, receipts, sales
and issues, and the new balances on hand; make a physical count of the accountable
forms remaining in the custody of the Collectors; and check the same to the new
balances on hand column. The Local Treasurer or Liquidating Officer shall indicate
his/her verification by affixing his/her signature at the back of the triplicate copy of the
last official receipt issued. He/she shall count the money turned over to him/her and sign
the certification and receipt portion of all copies of the RCD. (Sec. 27, COA Circular No.
92-382)
Section 57. Designation of Liquidating Officers for Collections. –
a) The Local Treasurer may designate Liquidating Officersfrom among the collectors
whenever necessary. (Sec. 31,NGAS)
b) In LGUs with more than one liquidating officer, each Liquidating Officer shall prepare
consolidated RCD to be submitted to the supervising Liquidating Officer, who shall
prepare another consolidated RCD.
c) Collectors shall turn over their collections to their designated Liquidating Officer, in
accordance with the procedures prescribed in Section 60 (Daily Turnover and
Verification of Collection) of this Manual. The Report of Collections and Deposits shall
however be prepared in five (5) copies, four (4) copies to be submitted to the Liquidating
Officer, the fifth copy to be retained by the Collector. (Sec. 31 (a), NGAS)
d) The Liquidating Officer shall perform the procedures for the receipt and verification of
collections turned over to him/her, as in Section 62 (Daily Turnover and Verification of
Collection) of this Manual. He shall also accomplish the RCD in five (5) copies to
summarize the collections turned over to him/her by the Collectors as well as his own
collections. (Sec. 31 (b), NGAS)
e) The Liquidating Officer shall turn over intact the cash collections to the Local Treasurer
together with the original and two (2) copies of the RCD of Collectors and the duplicates
of the official receipts issued. The Local Treasurer shall acknowledge receipt of the cash
and all accompanying documents by signing all copies of the RCD of the Liquidating
Officer on the certification and receipt portion of the form. The fourth copy of the RCD of
the Liquidating Officer and the RCD of Collectors shall be retained by the Liquidating

Officer for safekeeping(Sec. 31 (c), NGAS). For LGUs withdesignated Liquidating
Officersby authority of the Local Treasurer to deposit daily all collections to authorized
depository bank, the Liquidating Officer shall attach the validated deposit slipfor both
checks and cash collections to the Consolidated RCD submitted to the Local Treasurer.
f) The Local Treasurer or Liquidating Officer shall deposit all collections and prepare the
Consolidated RCDfor recording in the cashbook and submission to the Local
Accountant, accompanied by all supporting documents. (Sec. 34, COA Circular No. 92-
382)
Section 58.Procedures and Controls on Deposit of Collections with Authorized

Depository Banks. –
a) Depository Accounts of Local Government Units. - Local Treasurers shall maintain

depository accounts in the name of their respective local government units with banks,
preferably government owned, located in or nearest to their respective areas of
jurisdiction. Earnings of each depository accounts shall accrue exclusively thereto. (Sec.
311, LGC)
b) Opening of Depository Accounts. –
1. Local Treasurers shall open and maintain, in the name of their respective LGUs,
separate depository accounts for each fund in his custody. (Sec. 310, LGC)
2. In the opening of LGU depository accounts the following guidelines shall be

followed:
2.1. Local government units must have deposit accounts only with Government
Financial Institutions (GFIs) that have a universal bank license and a
CAMELS (Capital Adequacy, Asset Quality, Management, Earnings,
Liquidity and Sensitivity to Market Risks) rating of at least “3”.
2.2. Local government units may engage the payment and collection services
of a bank thru a transaction fee-based arrangement, without the need for
prior approval from the BLGF, provided that all collections shall be
transferred to any of the GFIs referred hereof on the next banking day
counted from the collection date.
3. Bank accounts with banks other than GFIs referred hereof, may be allowed for
the LGU under the following circumstances:
3.1 Where the GFIs cannot provide the necessary banking products and
services;
3.2 Where there are no accessible (within the twenty (20) kilometer radius)
GFIs, the LGU shall furnish the BLGF a copy of the vicinity map showing
the location and distance between the LGU, the GFIs and the (proposed)
bank; and,
3.3 Where security and safety are the reasons for opening and maintaining an
account in a (proposed) bank, the LGU shall furnish the BLGF an
Independent Report or Certification from the Philippine National Police
Provincial Office confirming the existence of the security risks.
4. A maintaining balance may be allowed for operating expenses of up to three (3)

months, after having performed a cost-benefit analysis, or up to the maximum
deposit insurance coverage of the Philippine Deposit Insurance Corporation

(PDIC) of ₱500,000.00, whichever is lower. All funds deposited shall be limited
to operating funds and no other deposits shall be maintained for special projects
or investment purposes. Any amount in excess of the aforementioned authorized
cash balance shall be transferred to any of the GFIs referred hereof.
5. Where the LGU cannot meet all of the conditions set under items (1) (2) and (3)
hereof, it shall request for prior approval from the BLGF to open and maintain an
account in the (proposed) upon compliance with the following requirements:
5.1 Letter from the Local Chief Executive or his duly designated officer
requesting approval from the BLGF citing the terms of the deposit,
purpose for opening and maintaining an account with the (proposed) bank
and specific reasons and circumstances for not meeting the conditions;
5.2 Certification from the (proposed) bank that no elective or appointive local
government official of the LGU concerned is a director, officer or
stockholder of the bank, unless certified that it is the only bank operating in
the territorial jurisdiction of the LGU;
5.3 Resolution of the local sanggunian concerned authorizing the LGU to

deposit funds with the (proposed) bank with the approval of the Local
Chief Executive;
5.4 Certification from the Department of Interior and Local Government (DILG)
on the practice of accountability and transparency (Good Financial
Housekeeping);
5.5 Certification or Independent Report from the Philippine National Police

Provincial Office confirming the existence of the security risk, in cases
where security and safety are the reasons for opening and maintaining an
account in a (proposed) bank;
5.6 The (proposed) bank’s latest CAMELS rating issued by the BSP;
5.7 Vicinity map showing the location and distance between the LGU, the GFIs
referred hereof and the (proposed) bank;
5.8 Other information that the BLGF may require in the course of its
evaluation.
6. In cases where the GFIs referred hereof establish or operate a branch within the
territorial jurisdiction of the LGU or where the circumstances under item (3)
hereof no longer prevail, the LGU shall transfer all funds and cash balances to
the GFIs within three (3) banking days from the time the exceptional
circumstances no longer prevail, whichever comes first.
(Department of Finance (DOF) Circular No. 001-2015, dated June 1, 2015)
c) Daily Deposit of Collections with the Banks. –
1. The Local Treasurer or Cashier shall deposit intact all collections, as well as all
collections turned over by the Collectors with the authorized depository bank
daily or not later than the next banking day. All deposits shall be recorded in the
Cashbook – Cash in Vault and Cashbook – Cash in Bank.
2. Collections of field collectors shall be remitted to the Cashier/designated

Liquidating Officer of the field office of the local government unit. When travel

distance from the field office to the local treasury may expose government funds
to risk such as loss in transit, the Cashier/designated Liquidating Officer, upon
authorization by the Local Treasurer, may deposit the collections in the
authorized depository bank near the field office of the local government unit.
(Sec. 26, COA Circular No. 92-382)
d) TimeDeposit Account –
1. Provinces, cities, municipalities and barangays may deposit with duly authorized
government depository banks, idle funds in the General Fund under time deposit
accounts, upon prior authority of the sanggunian and approval of the Local Chief
Executive in accordance with the aforecited procedures in the opening of
depository accounts with the bank under DOF 001-2015 dated June 1, 2015. (Sec.
21, COA Circular No. 92-382 dated July 3, 1992)
2. Idle Funds refers to cash which the local government unit can freely invest in
government securities and/or fixed term deposits with authorized government
depository banks, after considering provisions for the coverage of regular and
recurring operating expenses like salaries, wages, repairs and maintenance,
inventories and supplies, debt servicing, etc., as well as programmed
disbursements for capital outlays and other non-recurring expenses, within the
context of the cash operating cycle of the local government unit. Unremitted
collections for, and funds set aside for the payment of obligations to, other entities,
government, and private, shall not form part of the idle funds.(Sec. 22 of COA
Circular No. 93-382-A dated July 3, 1992)
e) Bank Statement or Snapshots –
1. Bank statementsand/or snapshots of bank transactions transmitted to the Local

Treasurer by the depository bank shall be forwarded to the Local Accountant who
shall be responsible for the preparation of the bank reconciliation statement. If the
bank statements are sent by the bank directly to the Local Accountant, a copy
thereof should be furnished to the Local Treasurer.
2. In case the bank statements are not readily available, a snapshot of the LGU
transactions may be obtained by the Local Treasurer from the bank as basis for the
updating/recording of entries in the Local Treasurer’s Cashbook and for
reconciliation purposes.
f) Remittance of Collection to Other Government Units and National Government

Agencies – Collections made by Provincial, City, or Municipal Treasurers for other
LGUs shall be promptly remitted to the LGU concerned. At least once a week, the Local
Accountant shall prepare the disbursement voucher covering such remittances and the
supporting statements containing the complete descriptions of the collections being
remitted. The disbursement vouchers and their supporting documents, duly certified to
by the Local Accountant shall be transmitted to the Local Treasurer for certification as to
availability of funds, and forwarded to the Local Chief Executive or the duly authorized
official for approval. The disbursement vouchers and statements shall then be returned
to the Local Treasurer for the preparation of the checks to cover the remittances. The
check duly approved or signed, each accompanied by a copy of the corresponding
statements, shall be transmitted to the LGUsor National Government concerned
immediately but not beyond the prescribed period. The recipient LGUs/national
agencies/financial institutions or their duly authorized collecting agents shall
acknowledge the remittances by the issuance of official receipts. (Sec. 36, COA Circular
No. 92-382)

g) Remittances of Collections to Other LGUs through Inter-Bank Transfers. – Aside
from check remittances, collections made by LGUs intended for other LGUs, such as
the share of the municipality or province from the collections of real property taxes, may
be remitted to the concerned LGU by means of bank-to-bank transfer. This method
facilitates the transfer and receipt of the LGUs corresponding shares in real property
taxes and other taxes. The procedure for inter-bank transfers shall be the same as in
remittances through checks. This is as follows:
1. Preparation of disbursement voucher with supporting documents by the Local

Accountant at least once a week;
2. Certification as to the availability of funds by the Local Treasurer in the disbursement

voucher;
3. Approval of the disbursement voucher by the Local Chief Executive or LGU

Administrator;
4. Preparation by the Cashier/Treasurer of the advice for Bank Transfer, duly approved
by the Local Chief Executive, authorizing the transfer of funds from the bank
account of the province/city/ municipality for credit to the bank account of the
province/municipality/barangay.
5. Acknowledgement by the recipient LGU of the receipt of the fund transfer by

furnishing the remitting LGU a copy of the bank credit advice/memo.
Section 59. Maintenance and Use of the Cashbook by Local Treasurers, Cashiers,
Liquidating Officers, Disbursing Officers, Collectors and Other Accountable Officers. –
a) The treasurer/cashier shall record in theircashbook all collections received by him/her.

He shall provide in his cashbook columnsfor the accounts Cash-in-Vault and Cash in
Bank. The Cash-in-Vault account shall be debited with the collections received, and
credited with the collections deposited with the authorized depository bank. The Cash in
Bank account shall be debited with the deposits of collections with the bank, and credited
with the withdrawals from the depository account. (Sec. 29, COA Circular 92-382)
b) The Treasurer’s Cashbooks. – The Local Treasurer shall maintain the following
cashbooks:
1. Cashbook-Cash in Vault. – The Cashbook for Cash in Vault shall be used by the
Local Treasurer to record the daily collections (Debit Column) and deposits to the
bank (Credit Column) based on the Report of Collections and Deposits. The
cashbook shall be maintained by fund and shall be updated and balanced daily.
(Sec. 26, NGAS for LGUs)
2. Cashbook-Cash in Bank. – The Cashbook for Cash in Bank shall be used by the
Local Treasurer to record all deposits of collections (Debit Column) and withdrawals
thru checks issued from the banks (Credit Column) for the day. Separate cashbook
shall be maintained for each depository bank account and by fund, and shall be
updated and balanced daily. (Sec. 27, NGAS for LGUs)
3. Cashbook-Cash Advances. – The Cashbook for Cash Advances shall be used by

the Local Treasurer to record cash advances received (Debit Column) and
payments, refunds and adjustments (Credit Column), and the balance (Balance
Column). (Sec. 28, NGAS for LGUs)
c) The Liquidating Officer’s Cashbook. – The Liquidating Officer’s Cashbook shall be

used by the designated Liquidating Officer to record all collections turned over to

him/her byall designated revenue collectors (Debit Column), and remittances to the
Local Treasurer or Liquidating Officer (Credit Column). Separate cashbooks shall be
maintained for each fund and shall be updated and balanced daily.
d) The Collector’s Cashbook. – The Collector’s Cashbook shall be maintained by all

designated collecting officers including field collector’s receiving collections for the local
government office.Record all daily collections received at the Debit Column and all daily
remittances to the designated Liquidating Officer at the Credit Column.
e) Daily Recording in the Cashbook. – At the end of the day, all transactions shall be
entered in the appropriate cashbook. For Cashbook-Cash in Vault, Cashbook-Cash in
Bank and Cashbook-Cash Advances, the balances obtained at the end of the day shall
be reconciled with the cash on hand. At the end of the month or when required to do so
by competent authority, the month’s account and transactions shall be closed, ruled, and
the accountable officers will accomplish the certificate of transactions in the respective
cashbooks.
f) Accountable Officer’s Certificate of Transactions in the Cashbook. – Local

Treasurers or Cashiers entrusted by reason of their duties with collections, custody
and/or disbursement of local funds shall at the end of the month, or when required to do
so by proper competent authority, accomplish the following certificate:
“I HEREBY CERTIFY that the foregoing is a correct and complete record of all my
cash and depository transactions had by me in my capacity as (designation) of
(Name of the LGU) , during the period from ___________, 20__ to
______________, 20___, inclusive, as indicated in the corresponding columns.
________________________
(Signature Over Printed Name)
________________________
Title
__________________. 20___”
g) Reconciliation of Cashbook Balances. – All accountable officers required to maintain

a cashbook shall reconcile their cashbook balances every end of the month or as the
need arises with the subsidiary accounting records. A certification of balances as
appearing in the subsidiary accounting records shall be obtained from the Local
Accountant at the end of the month or as required by competent authority.
h) Safeguarding of Cashbook. - At the close of office either for the noon break or at the
end of the day, all cashbooks shall be locked up in fire-proof vaults or safes. This duty
devolves upon the officer entrusted by law to keep such cashbooks irrespective of
whether he is or not the one personally making the entries of the cash transactions
which are to be recorded therein.
Section 60. Forms and Reports Used by Local Treasury Officials. –
a) Report of Collection and Deposits (RCDs) 15(Sec. 31, (a-c), NGAs). The RCD shall be
prepared daily by the following:
1. Collectors. –
15RCD, LTO Form 12, Annexes and Forms

1.1 RCDs of Collectors shall reflect collections, remittancesand duplicate
copies of the Official Receipt issued turned-over to their designated
Liquidating Officer/Local Treasurer.
1.2 It shall also contain report of accountability for accountable forms used
showing the name of the forms and number, beginning balance, received,
issued and ending balance.
1.3 RCDs shall be prepared in five (5) copies, four (4) copies to be submitted
to the Liquidating Officer (LO), the fifth (5th) copy to be retained by the
collector.
The Report of Collections and Deposits shall be distributed, as follows:
Original - Auditor thru the Local Accountant

Duplicate - Local Accountant
Triplicate - Local Treasurer
Quadruplicate - Liquidating Officer (in case one is so
designated)
Fifth Copy - Collector
2. Liquidating Officers. –
2.1. Liquidating Officers shall prepare consolidated RCDs which shall reflect
the summary of breakdown of collections as to cash and details of checks
including the total collections remittances/deposits turned over by the
tellers/collectors.
2.2. Consolidated RCDs shall be accomplished in four (4) copies for

submission to the Local Treasurer supported with the RCDs of each
collector with the fourth (4th) copy to be retained by the Liquidating Officer.
3. Local Treasurer. –
3.1 The Local Treasurershall verify and acknowledgethe submitted

consolidated RCD and shall deposit “intact” all collections turned-over by
the Liquidating Officer to the authorized depository banks.
3.2 For Real Property Tax payments, separate RCD shall be prepared for the
collections pertaining to the Basic Tax and additional tax accruing to the
Special Education Fund (SEF). In case of Real Property Tax payments in
municipal treasuries, additional copies of RCD for the Basic Tax and SEF
shall be prepared for submission to the Office of the Provincial Treasurer
for reference in the computation of the provincial share therefrom. The
procedures to be followed in filling-up the form shall be the same.
4. Submission of Collection Reports.– Collecting Officers/Treasurers shall

submit daily records of receipts, together with the supporting documents, to the
Chief Accountant. The official assigned to the daily recording of transaction in
the books of accounts shall turn-over the receipts and supporting documents to
the Auditor within ten (10) days after receipt of such records and documents.
The Auditor concerned shall conduct the necessary examination and audit
within thirty (30) days from receipt thereof. (Sec. 68, GAAM Vol.1)
b) Report of Accountability for Accountable Forms (RAAF)16. –

16RAAF, LTO Form 10, Annexes and Forms

1. RAAF shall be used to report the quantity of accountable forms received, issued
or cancelled by the Accountable Officer as of the end of the month. Collectors
and other Accountable Officers shall render the RAAF at the end of the month
for consolidation by the Local Treasurer.
2. Such report shall also be prepared in case of transfer of office or accountability

by the Accountable Officer. (Sec. 397, NGAS for LGUs).
The RAAF shall be prepared in two (2) copies to be distributed as follows: as

follows:
Original - Local Treasurer

Duplicate - Accountable Officer’s File
c) Consolidated Report of Accountability for Accountable Forms (CRAAF) 17. – The

CRAAF shall be prepared by the Local Treasurer to consolidate the RAAF of all
Accountable Officers. The consolidated report accompanied by the individual reports
shall be submitted to the Unit Auditor concerned not later than the fifth (5 th) day of the
ensuing month for verification. (Sec. 398, NGAS for LGUs)
The CRAAF shall be prepared in two (2) copies to be distributed as follows: as

follows:
Original - COA thru the Local Accountant

Duplicate - Local Treasurer File
Chapter 4.EXAMINATION OF BOOKS OF ACCOUNTS AND PERTINENT RECORDS OF

BUSINESSES BY THE LOCAL TREASURER
Section 61. General Provisions.– The following shall govern the examination by the Local
Treasurer of books of accounts and pertinent records of businessmen:
a) Examination of Books of Accounts and Pertinent Records of Businessmen by

Local Treasurer.–
1. Only the Local Treasurer, or his duly authorized representative, of the LGU imposing
the tax, fee or charge, may examine the books of accounts and pertinent records of
business in order to ascertain, assess and collect the correct amount of tax, fee or
charge. (Art. 259(2), IRR, Implementing Sec. 171, LGC). Consequently, no
personnel from the Office of the Local Chief Executive and other departments within
the LGU may inspect records of businessmen unless duly deputized in writing by the
Local Treasurer concerned.
2. The examination of the books of accounts and pertinent records of business is an

inherent function of the Local Treasurers and may be performed or enforced without
need of an executive order from the Local Chief Executive or an implementing
ordinance of the sanggunian. (BLGF 1st Indorsement to the City Treasurer of
Santiago City, May 13, 1996)
b) Authority to Conduct Examination. –
17CRAAF, LTO Form 11, Annexes and Forms

1. The Provincial, City and Municipal Treasurer may, by himself/herself or through any
of his deputies duly authorized in writing, conduct the examination of the books,
accounts, and other pertinent records of any person, partnership, corporation, or
association subject to local taxes, fees and charges (Art. 256(b), IRR, Implementing
Sec. 171, LGC) in order to ascertain, assess, and collect the correct amount of the
tax, fee, or charge.
2. The Local Government Code has not specified the rank of the officials who may be
deputized to examine books of accounts of business establishments. It is, however,
proposed that only personnel occupying plantilla of permanent positions shall be
deputized in writing by the treasurer concerned to examine the books of accounts of
business establishments in their respective jurisdiction. Accordingly, a City Treasurer
may not deputize the Administrative Officer of the Sangguniang Panlungsod to
examine the books of accounts of business establishments, provided that he is
occupying a permanent position.
c) Written Authority to Conduct Examination. – In case the examination is made by a

duly authorized deputy of the Local Treasurer, the written authority of the deputy
concerned shall specifically state the name, address, and business of the taxpayer
whose books, 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. (Art.
259(d), IRR Implementing Sec. 171, LGC)
d) Time, Frequency and Certification. –
1. The examination of the books of accounts and pertinent records of the business of
the taxpayer shall be made during regular business hours not oftener than once a
year for every tax period, which shall be the year immediately preceding the
examination, and shall be certified to by the examining official. Such certification
shall be made of record in the books of accounts of the taxpayer examined. (Art.
259 (C), IRR Implementing Sec. 171, LGC)
2. However in case fraud or intent to evade the payment of taxes, fees and charges is
established, the examination may be conducted for a period of not exceeding five
years (5). (Sec. 194, LGC)(BLGF letter dated August 3, 1998 addressed to SGV &
Co.)
e) Access to the Bureau of Internal Revenue Records. – The records of the Revenue
District Office of the Bureau of Internal Revenue shall be made available to the Local
Treasurer, his deputy or duly authorized representative. (Art. 259(e), IRR Implementing
Sec. 171, LGC; Executive Order 646 of the Office of the President as implemented
under DOF Department Order No. 9-08 dated March 26, 2008; and Memorandum of
Understanding between DILG, DOF, BIR and different leagues of LGUs including “Liga
ng mga Barangay sa Pilipinas”)
Section 62. Guidelines in the Conduct of the Examinationof Book of Accounts. –
a) Administrative Preparation by the Local Treasurer/Head of the Local Treasury

Office – Prior to the conduct of any examination of the books of accounts of a business
establishment, the Local Treasurer or Head of the Local Treasury Office concerned shall
undertake the following steps:
1. From the list of business taxpayers, the Local Treasurer shall select/identify the
business entities that shall be verified and examined based on, but not limited to
the following:
1.1 Complexity of the business

1.2 Materiality and volume of prior years’ gross sales
1.3 Number of sales/distribution outlets
1.4 Delinquency in payment of business taxes; and
1.5 Other relevant factors.
2. The Local Treasurer shall create the Examination Team (if personnel
complement permits) to be composed of staff from the Local Treasury Office
and/or deputized staff from other offices of the local government unit concerned.
The Team shall be headed preferably by a Certified Public Accountant (CPA) or
a degree holder of Bachelor of Science in Accountancy.
2.1 Ideally, a pair of deputized Examiners shall conduct the examination of the
accounts of business establishments. However, in order to cover more
establishments, the examination may be done by a lone deputy.
2.2 No deputized Examiner shall be assigned to the same business

establishment he had examined the previous year.
3. The Local Treasurer shall prepare and issue the Office Order constituting the
examination team. The Office Order shall be approved by the Local Chief
Executive.
4. The Local Treasurer shall prepare the Letter of Appointment, addressed to the
business taxpayer indicating the exact date of the examination visit, documents
to be examined, year(s) covered by the examination, and the names and
signatures of the Members of the Examining Team. A formal reply from the
business taxpayer should not be required before the examination date will be
scheduled.
5. The Letter of Authority18 shall be signed by the Local Treasurer and shall
sufficiently serve as the authority of the Examining Team to conduct the
examination of the business taxpayer’s books of accounts and other pertinent
records. The Letter of Authority shall be served to the business taxpayer
immediately after receipt thereof by the deputized Examiners.
6. In case the Letter of Authority cannot be served, the deputized Examiner

concerned shall report the matter to the Team Leader/Immediate Supervisor (if
applicable), citing the reason(s) for the inability to serve the Letter of Authority. If
the reason/cause is meritorious, the Team Leader/Immediate Supervisor shall
request for another business establishment to examine. All unserved Letters of
Authority shall be returned within ten (10) working days after the end of the
examination period.
b) Responsibilities of the Examination Team –
1. The Examination Team shall prepare the schedule of activity to be performed

during the conduct of the examination of books of accounts, detailing the
objectives and procedures,based on the Guidelines issued by the local treasurer
concerned.
2. The designated Team Leader shall exercise close supervision over the members
of the team in the conduct of the examination and shall ensure that they conduct
themselves at all times with proper decorum.
18LOA, LTO Form 26

3. Deputized Examiners shall wear their respective uniforms, if any, when
conducting the examination. They shall properly identify themselves to the
owner or manager of the business establishment by presenting their office
Identification Card in serving the Letter of Authority together with the Letter of
Appointment.
4. In case the books of accounts and other records are not available on the first
visit, another appointment with the business owner/representative should be
made not later than three (3) days after serving the Letter of Authority.
5. The books of accounts and pertinent records shall be handled with care.
Deputized Examiners shall avoid making any tick marks or writings on the same,
except for the certification that said books of accounts have been examined,
date examined, and the signature of the Deputized Examiner after the last entry.
6. Where the examination of the books of accounts and other records could not be
accomplished in one (1) day, the deputized Examiner shall indicate on the Tax
Data and Assessment Form, the date and time when the examination started
and when terminated.
7. If at the time of the examination of a business entity, the owner or representative

cannot be contacted or could not produce the pertinent records and books of
accounts needed for the examination, this fact must be noted by the
Examination Team in the Tax Data and Assessment Form. In case similar
circumstances occur during the second and third visits, the same facts should be
noted in the Tax Data and Assessment Form, indicating the time and date of
each visit. The notation shall also be made in the original copy of the Letter of
Authority.
8. The deputized Examiners shall perform the following activities:
8.1 Review pertinent records of the business establishment to be examined

such as Articles of Incorporation and By-Laws, SEC/DTI Registration,
minutes of board meetings, etc.;
8.2 Review of the working papers, if any, of the business establishment if

previously examined;
8.3 Submission of the Letter of Authority to the Owner/President of the

business establishment; and
8.4 Acceptance of the following books of accounts and documents for

verification/examination:
i. Mayor’s Permit for current year;

ii. Business License Receipts for current year;
iii. Books of Accounts such as Sales Journals/Registers, Purchase
Journals/ Registers, Cash Receipts/Disbursement Journals/Registers,
General Ledgers, Subsidiary Ledgers;
iv. Audited or Unaudited Financial Statements (Income Statement,
Balance Sheet and Cash Flow Statement);
v. Privilege Tax Receipt (PTR);
vi. Community Tax Receipt;
vii. Official Receipts, Cash/Charge Sales Receipts/Invoices, Order Slips,
Delivery Receipts, Debit/Credit Memos, Sales Returns;
viii. Purchase Receipts/Invoices;
ix. Articles of Incorporation;

x. Quarterly non-VAT returns;
xi. Monthly VAT receipts;
xii. Other such as Beginning and Ending Merchandise Inventory Reports,
Stock Cards, and such other reports relevant to the business
taxpayer’s operations
c) Detailed Examination Activities –
1. For Sales Accounts –
1.1. Compare/Validate the amount of Gross Sales/Receipts account on the

Income Statement with the sales account in the General Ledger;
1.2. Check posting to the General Ledger from Sales Journals/Cash Receipts
Journals and other books where sales or service income are reflected;
1.3. Confirm the income/revenue from the customer’s Records of

Sales/Receipts (at random); and
1.4. Compute the correct Gross Receipts/Sales based on the sales records
examined.
2. For Purchase Accounts –
2.1. Verify the amount of purchases reflected in the Income Statement from the
General Ledger;
2.2. Check posting to the General Ledger from Purchases/Cash Payments

Journals; and
2.3. Verify entries in Purchases/Cash Receipts Journals with purchase

documents (at random);
3. For Inventory –
3.1 Check beginning and ending inventory on Financial Statement with

General Ledger balance;
3.2 Verify computation of the ending balance of the Inventory Account by

comparing it with the last physical inventory count conducted;
3.3 If warranted, inspect at random material items in the inventory and check
against the physical inventory count; and
3.4 Observe the volume of customers, sales activities and deliveries of the
business entity to have a sense of daily sales volume.
4. Other Examination Activities –
4.1 Maintain files of the necessary examination working papers;
4.2 Secure a copy of the Schedule of Account Receivables/Payables for

succeeding examination of the books of accounts of the business entity;
and
4.3 Verify the amount shown on the Schedule of Account

Receivables/Payables from the Individual Subsidiary Ledgers.

d) Preparation of Working Papers and Tax Data and Assessment Form –
1. Tax Data Working Papers or Tax Data Sheet. – This working paper shows the
comparison between the gross receipts/sales declared per business permit
application and the gross receipts/sales as appearing in the sales documents
examined. The amount of the understatement or overstatement in gross
receipts/sales is likewise presented in the working papers.
2. Tax Data and Assessment Form. – This shall be accomplished in triplicate and
submitted by the deputies to their immediate supervisor for every examination
and inspection conducted. It contains all the pertinent information on the
business concerned and the detailed findings of the deputies. This form shows
the detailed computation of the additional assessment for business tax based on
the computed understatement of sales/receipts declared in the business permit
application, the amount of surcharges and penalties, the interest on the
deficiency tax assessed, as well as the signatures of the Examination Team and
the Local Treasurer. The Tax Data and Assessment Form shall be attached to
the Letter of Authority and shall be submitted to their immediate supervisor for
review before submission to the Local Treasurer for approval. The original copy
of the Tax Data and Assessment Form shall be given to the business taxpayer
concerned.
3. Issuance of the Letter of Assessment/Assessment Notice (1 st Notice) signed

by the Local Treasurer to the business taxpayer, showing the amount of tax
deficiency inclusive of penalties, surcharges and interest resulting from the
conduct of the examination. A Second Assessment Notice may be sent to the
taxpayer in case he fails to respond to the first notice. A Third Assessment
Notice (a maximum of three (3) notices) may be sent before a Final Demand
for Payment and possible foreclosure proceedings may be issued to the
taxpayer. In accordance with Section 195 of the Local Government Code of
1991, the taxpayer, within sixty (60) days from receipt of the Letter of
Assessment, may file a written protest with the Local Treasurer contesting the
assessment; otherwise the assessment shall become final and executor.
4. Issuance of the Letter of Confirmation / Certificate of Confirmation /

Certificate of Examination to the business taxpayer signed by the Local
Treasurer to signify the completion of the examination conducted. The original
copy of the Letter of Confirmation / Certification of Examination shall be issued
to the taxpayer concerned and the duplicate copy shall be attached to the Tax
Data and Assessment Form for file at the Local Treasury Office.
5. Submission to the Local Chief Executive by the Local Treasurer of the list of final
demand letters sent to business taxpayers for possible foreclosure proceedings.

FORMS
AND
ANNEXES
FormsandAnnexes
Annex 1:Procedural Requirements for a Valid Ordinance
1) Written Notices to Interested or Affected Parties. – In addition to the foregoing

requirement on publication or posting, the sanggunian concerned shall cause the
sending of written notices of the proposed ordinance, enclosing a copy thereof, to the

interested or affected parties operating or doing business within the territorial jurisdiction
of the LGU concerned. (Art. 276 (b) (2), IRR, implementing Sec. 188, LGC)
Information must reach those that shall be directly affected by the imposition. For
example, when the measure is on the business tax, the LGU may invite the business
community in the public hearing. To ensure compliance with the requirement, sending of
written notices is necessary.
The notice or notices shall specify the date or dates and venue of the public hearing or
hearings. (Art. 276 (b) (3), IRR, implementing Sec. 188, LGC)
2) Public Hearing. –
(a) The initial public hearing shall be held not earlier than ten (10) days from the
sending out of notice or notices, or last day of publication, or date of posting
thereof, whichever is later. (Art. 276 (b) (3), IRR, implementing Sec. 188, LGC)
(b) Public hearing shall be conducted prior to the enactment of the tax ordinance or
revenue measure. (Sec. 187, LGC)
(c) At the public hearing or hearings, all affected or interested parties shall be accorded
an opportunity to appear and present or express their views, comments and
recommendations, and such public hearings shall continue until all issues have
been a presented and fully deliberated upon and/or a consensus is obtained,
whether for or against the enactment of the purposed tax ordinance or revenue
measure. (Art. 276 (b) (4), IRR, implementing Sec. 188, LGC)
(d) The deliberations at the public hearing or hearings shall serve as inputs to the
members of the sanggunian. After the sanggunian members have considered the
views and comments, they may modify, pass or suspend judgment on the issue.
(e) No tax ordinance or revenue measure shall be enacted or approved in the absence
of a public hearing duly conducted in the manner herein prescribed. (Art. 276 (c),
IRR, implementing Sec. 188, LGC)
3) Preparation of Minutes. – The secretary of the sanggunian concerned shall prepare the
minutes of such public hearing and shall attach the minutes the position papers,
memoranda, and the like submitted by those who participated. (Art 276, (b) (5), IRR,
implementing Sec. 188, LGC)
The proceedings must be properly documented, so that, the sanggunian can readily
access information on the people’s reaction on the proposal.
4) Approval. –
(a) Every ordinance enacted by the sangguniang panlalawigan, sangguniang

panlungsod, or sangguniang bayan, shall be presented to the provincial governor or
city or municipal mayor, as the case may be. If the local chief executive concerned
approves the same, he shall affix his signature on each and every page thereof.
(Sec. 54 (a), LGC)

(b) The Local chief executive may veto any ordinance of the sangguniang panlalawigan,
sangguniang panlungsod, or sangguniang bayan on the ground that it is ultra vires
or prejudicial to the public welfare, stating his reasons therefor in writing (Sec. 55
(a), LGC), and return the same to the sanggunian.(Sec. 54 (a), LGC)
(c) The veto shall be communicated by the local chief executive concerned to the
sanggunian within fifteen (15) days in the case of a province , and ten (10) days in
the case of a city or municipality; otherwise, the ordinance shall be deemed
approved as if he had signed it. (Sec. 54 (b), LGC)
(d) The local chief executive may veto an ordinance or resolution only once. (Sec. 55
(c), LGC)
(e) The sanggunian concerned may override the veto of the local chief executive by
two-thirds (2/3) vote of all its members, thereby making the ordinance or resolution
effective for all legal intents and purposes. (Sec. 54 (a), LGC)
(f) Ordinances enacted by the sanggunian barangay shall, upon approval by the
majority of all its members, be signed by the punong barangay. (Sec. 54 (c), LGC)
5) Publication of Tax Ordinances and Revenue Measures. – (a) Within ten (10) days
after their approval, certified true copies of all provincial, city, and municipal tax
ordinances or revenue measures shall be published in full for three (3) consecutive days
in a newspaper of local circulation: Provided, however, That in provinces, cities and
municipalities where there are no newspapers of local circulation, the same may be
posted in at least two (2) conspicuous and publicly accessible places. (Sec. 188, LGC)
(b) If the tax ordinance or revenue measure contains penal provisions, the gist of such
ordinance or revenue measure shall be published in a newspaper of general circulation
within the province where the local sanggunian concerned belongs. In the absence of
any newspaper of general circulation within the province, posting of such ordinance or
measure shall be made in accessible and conspicuous public places in all municipalities
and cities of the province to which the sanggunian enacting the ordinance or revenue
measure belongs. (Art. 276, IRR, implementing Sec. 188, LGC)
A. Substantive Requirements for a Valid Revenue Ordinance. – To be valid, a tax, or

revenue ordinance must conform to the following substantive requirements:
1) It must not contravene the Constitution or any statute;

2) It must not be unfair or oppressive;
3) It must not be partial or discriminatory;
4) It must not prohibit but may regulate trade;
5) It must be generally consistent with public policy; and
6) It must not be unreasonable. (US vs. Abendan, 24 Phil.165)
B. Effectivity of Tax Ordinances or Revenue Measures. – The tax ordinances or revenue

measures take effect upon compliance with the above procedural and substantive
requirements.
C. Furnishing of Copies of Tax Ordinances and Revenue Measures. – Copies of all

provincial, city, and municipal, and barangay tax ordinances and revenue measures shall be
furnished the respective Local Treasurers for public dissemination.

D. Review of Tax Ordinances or Revenue Measures- R. A. No. 7160 or the Local
Government Code of 1991, provides the following cautionary steps wherein tax ordinances
or revenue measures of component cities and municipalities are reviewed by the
sangguniang panlalawigan, and ordinances of barangays by the sangguniang panlungsod
or sangguniang bayan:
1) Review of Component City and Municipal Ordinances or Resolutions by the

Sangguniang Panlalawigan. –
(a) Within three (3) days after the approval, the secretary of the sangguniang
panlungsod or sangguniang bayan shall forward to the sangguniang
panlalawigan for review, copies of approved revenue ordinances and
resolutions. (Sec. 56 (a), LGC)
(b) Within thirty (30) days after receipt of copies of such revenue ordinances and
resolutions, the sangguniang panlalawigan shall examine the documents or
transmit them to the provincial attorney, or if there be none, to the provincial
prosecutor for prompt examination. The provincial attorney or provincial
prosecutor shall within a period of ten (10) days from receipt of the documents,
inform the sangguniang panlalawigan in writing of his comments or
recommendations, which may be considered by the sangguniang panlalawigan
in making its decision. (Sec. 56 (b), LGC)
(c) If the sangguniang panlalawigan finds that such an ordinance or resolution is

beyond the power conferred upon the sangguniang panglunsod or sangguniang
bayan concerned it shall declare such ordinance or resolution invalid in whole or
in part. The Sangguniang panlalawigan shall enter its action in the minutes and
shall advise the corresponding city or municipal authorities of the action it has
taken. (Sec. 56 (c), LGC)
(d) The review by the sangguniang panlalawigan of the component city and
municipal revenue ordinances is limited to determining the legality thereof or if
the same exceed the powers conferred upon by law to the sangguniang
panglungsod or sangguniang bayan. Exceeding such powers is ultra vires and
amounts to usurpation of the legislative functions of the city or municipal
councils.
(e) The review by the sangguniang panlalawigan is in the nature of legislative check
and it is a measure by which the provincial government exercises its power of
general supervision over component units.
(f) If no action has been taken by the sangguniang panlalawigan within thirty (30)
days after submission of such an ordinance or resolution, the same shall be
presumed consistent with law and therefore valid. (Sec. 56 (d), LGC)
(g) Pending review by the higher council, a revenue ordinance continues to be in

force and effect.
(h) Declaration of invalidity of the revenue ordinance is equivalent to disapproval

thereof.

(i) The signature of the governor is required in relation to the resolution adopted by
the sangguniang panlalawigan, approving or disapproving the revenue
ordinance or resolution enacted by the sangguniang bayan or sangguniang
panlungsod.
2) Review of Barangay Ordinances by the Sangguniang Panlungsod or Sangguniang

Bayan. –
(a) Within ten (10) days after its enactment, the sangguniang barangay shall furnish
copies of all barangay ordinances to the sangguniang panlungsod or
sangguniang bayan concerned for review as to whether the ordinance is
consistent with law and city or municipal ordinances. (Sec. 57 (a), LGC)
(b) If the sangguniang panlungsod or sangguniang bayan, as the case may be, fails
to take action on barangay ordinances within thirty (30) days from receipt
thereof, the same shall be deemed approved. (Sec. 57 (b), LGC)
(c) If the sangguniang panlungsod or sangguniang bayan, as the case may be, finds
the barangay ordinances inconsistent with law or city or municipal ordinances,
the sanggunian concerned shall, within thirty (30) days from receipt thereof,
return the same with its comments and recommendations to the sangguniang
barangay concerned for adjustment, amendment, or modifications; in which
case, the effectivity of the barangay ordinance is suspended until such time as
the revision called for its effected. (Sec. 57 (c), LGC)
Annex 2:Policies, Rules and Procedures on Barangay Collections, Remittances and

Deposits. –
A. Basic Policies on Receipt of Barangay Collections:
(1) The Barangay Treasurer shall be responsible in handling collections of income and
other receipts of the barangay and the deposit thereof with Authorized Government
Depository Bank (AGDB).
(2) All collections either in cash or in check, shall be acknowledged by the issuance of a
pre-numbered Official Receipt – General Form or its equivalent like the Real Property
Tax Receipts and the Community Tax Certificate (CTC), subject to property custody,
accountability and audit.
(3) Temporary or provisional receipts shall not be issued to acknowledge collections.
(4) All accountable forms shall be secured from the City/Municipal Treasurer.
(5) All checks shall be in the name of the barangay
(6) Endorsed checks shall not be accepted as payment of obligation to the barangay.
(7) For checks received, the Official Receipt number and date of issued shall be indicated
at the back of the check for reference purposes.
(8) All particulars in the Official Receipt shall be filled out. Duplicate and Triplicate copies
thereof shall be the exact carbon copy of the Original.

(9) Overages discovered during the cash count/cash examination shall be receipted and
added to the accountability of the Barangay Treasurer.
(10) Cash shortages, including loss of cash through force majeure, theft, robbery, fire, etc.,
shall be deducted from the total cash account of the Barangay Treasurer/Accountable
Officer and shall be held personally accountable, pending the result of the Request for
Relief from Cash Accountability submitted to the Commission on Audit.
(11) All collections by the Barangay Treasurer for the barangay shall be reported in the
Summary of Collections and Deposits.
B. Policies and Procedures for Deposit of Barangay Collections:
(1) The Barangay Treasurer shall deposit all his collections including those turned over by
the deputized Barangay Collectors with the Authorized Government Depository Bank
intact daily or not later than the following banking day. In the case of a barangay where
travel time to the depository bank is more than one (1) day, deposit of collections shall
be made at least once a week or as soon as the collections reach P10,000.00.
(2) In the absence of an Authorized Government-Owned Depository Bank, deposits may be

made in any bank nearest the barangay and authorized by the Monetary Board (MB) of
the BangkoSentral ng Pilipinas as government depository bank.
(3) The selection of a depository bank other that the Authorized Government-Owned
Depository Bank shall be covered by a resolution of the Sangguniang Barangay and
approved by the Punong Barangay. The Sanggunian Barangay Resolution shall indicate
the name of the bank, the type of deposit to be maintained, whether current, savings or
time deposit and the authorized signatories to the checks/fund withdrawals.
(4) Funds earmarked for future operation which are not immediately needed may be
transferred to time deposit account of the barangay. Placement in time deposits shall be
duly authorized by the Sangguniang Barangay and approved by the Punong Barangay.
Certificate of time deposit/bank book shall be in the name of the barangay. Upon
maturity, the check for the proceeds shall be issued in the name of the barangay. Pre-
termination of time deposit or its renewal/roll-over shall have prior authorization of the
Sangguniang Barangay and approval of the Punong Barangay.
(5) In case of dishonored check, Notice of Dishonor shall be immediately sent to the payor
upon receipt of the Debit Memo and the dishonored check from the bank.
(6) The original of the dishonored check and a copy of the bank Debit Memo shall remain
with the Barangay Treasurer.
(7) All deposits by the Barangay Treasurer for the barangay shall be reported in the
Summary of Collections and Deposits.
C. Policies and Procedures on the Receipt and Remittance of Collections by the

Barangay Treasurer as Deputized by the City/Municipal Treasurer:
(1) The City/Municipal Treasurer shall issue a written authority deputizing the Barangay
Treasurer to collect Real Property Tax, Community Tax Certificate, etc. on his behalf.
(2) Collections made by the Barangay Treasurer as deputized on behalf of the

City/Municipal Treasurer, shall be remitted intact daily to the City/Municipal Treasurer.

(3) For a barangay where the travel time to the City/Municipal Treasurer’s Office is more
than one (1) day, remittance of collections shall be made at least once a week, or as
soon as the collections reach P5,000.00
(4) All remittances shall be supported by a Summary of Collections and Remittances.
(5) The Barangay Treasurer shall be accountable for all the forms received from the
City/Municipal Treasurer for use in the collection.
D. Policies and Procedures on the Receipt and Remittance of Collections by the

Barangay Collector as deputized by Sangguniang Bayan:
(1) The Sangguniang Bayan shall issue a resolution deputizing the Barangay Collector to
collect market fees, parking fees, community tax, etc. on behalf of the Barangay
Treasurer.
(2) Collections of the deputized Barangay Collector shall be remitted daily to the Barangay
Treasurer.
(3) All remittances shall be supported with Summary of Collections Report and Report of
Accountability for Accountable Forms.
(4) The deputized Barangay Collector shall be accountable for all forms received from the
Barangay Treasurer.
Annex 3:Direct Remittance to Barangay Bank Account
Credit Memo received from the bank for direct remittance made by the local government units
or the Department of Budget and Management for the barangay share in Real Property Tax or
the Internal Revenue Allotment, respectively, shall be recorded direct to the Cash on Hand and
in Bank Register and in the Cash Receipts and Deposits Register.
Annex 4:Recording of Receipt, Deposits and Remittances of Barangay Collections
A. Recording in the Summaries:
(1) Summary of Collections and Deposits
a) Collections and deposits by the Barangay Treasurer of the barangay shall be recorded
in the Summary of Collections and Deposits daily or as transaction occurs.
b) Issued official receipts including those cancelled shall be recorded in correct numerical
sequence.
c) Deposits shall be based on Validated Deposit Slip which shall be recorded as deposits
are made.
d) Collections and remittances by the deputized Barangay Collector recorded in the

Summary of Collections and Deposits shall be recorded in the Summary of Collections
and Deposits of the Barangay Treasurer daily or as transaction occurs.
e) Collections and remittances by the deputized Barangay Collector recorded in the

Summary of Collections and Remittances-Barangay Treasurer shall also be recorded
in the Summary of Collections and deposits.

f) The Summary of Collections and Deposits shall be sub-totaled daily.
g) The daily sub-totals of the Summary of Collections and Deposits shall be recorded in
the Cash on Hand and in Bank Registers maintained by the Barangay Treasurer.
h) Weekly, the Summary of Collections and Deposits shall be totaled, balanced and ruled
and submitted to the BRK supported by the duplicated copies of the official receipts
issued and the original of the validated deposit slips.
i) Receipt of the certified Summary of Collections and Deposits and its supporting
documents shall be acknowledged by the Barangay Record Keeper.
j) The Summary of Collections and Deposits shall serve as basis of the BRK in recording
the weekly collections and deposits in the Cash Receipts and Deposit Register.
(2) Summary of Collections and Remittances
a) Barangay Treasurer as deputized by City/Municipal Treasurer –
i. Collections of Barangay Treasurer shall be recorded daily in the Summary of

Collections and Remittances-Barangay Treasurer or as a collection is made.
ii. Issued Official Receipts, Community Tax Certificates, Real Property Tax Receipts
including cancelled ones shall be recorded in correct numerical sequence.
iii. Remittance of collection to the City/Municipal Treasurer shall be covered by a

certified Summary of Collections and Remittances supported by the duplicate
copies of the issued Official Receipts.
iv. Remittances shall be done daily, which shall be acknowledged by the City/
Municipal Treasurer in the appropriate portion of the Summary of Collections and
Remittances. For a barangay where the travel time to the city/municipality is more
than one (1) day, remittance of collections shall be made at least once a week or
as soon as collection reaches ₱5,000.00.
b) Barangay Collector as deputized by Sangguniang Bayan –
i. Collections of deputized Barangay Collector as deputized by the Sangguniang

Bayan shall be recorded daily in the Summary of Collections and Remittances-
deputized Barangay Collector as collections are made.
ii. Issued Official Receipts and accountable forms with money value shall be
recorded in batches showing the inclusive serial numbers (if available), quantity
issued and the total amount collected.
iii. Remittance of collections to the Barangay Treasurer shall be covered by the

certified Summary of Collections and Remittance supported by the duplicate
copies of Official Receipts issued.
iv. Remittances shall be done daily which shall be acknowledged by the Barangay
Treasurer in the appropriate portion of the Summary of Collections and
Remittances.
B. Recording in the Registers:

1) Cash Receipts and Deposits Register
a) The Barangay Record Keeper shall record weekly all receipts in the Cash Receipts
and Deposits Register based on the Summary of Collections and Deposits.
b) Bank credits and interest earned shall be recorded in the Cash Receipts and
Deposits Register by the Barangay Record Keeper, based on the bank Credit Memo.
c) At the end of the month, the Cash Receipts and Deposits Register shall be totaled,
balanced, ruled, recapitulated and certified.
d) The certified Cash Receipts and Deposits Register together with the Summary of
Collections and Deposits shall be submitted to the City/Municipal Accountant on or
before the 5th day of the following month.
2. Cash on Hand and in Bank Register
a) The Barangay Treasurer shall record all collections and deposits in the Cash on Hand
and in Bank Register daily based on the Summary of Collections and Deposits.
b) Bank credits/charges per Debit Memo, interests earned and withholding taxes as
reflected in the bank statement/passbook shall be recorded in the Cash on Hand and
in Bank Register by the Barangay Treasurer.
c) At the end of the month, the Cash on Hand and in Bank Register shall be totaled,
balanced, ruled, recapitulated and certified.
d) The certified Cash on Hand and in Bank Register shall be submitted to the City/
Municipal Accountant on or before the 5th day of the following month.
e) Balance on hand and in bank shall be forwarded to the next month’s Cash on Hand
and in Bank Register.
3. Report of Accountability for Accountable Forms
a) The Barangay Treasurer shall prepare the Report of Accountability for Accountable
Forms for the receipts and issuances of accountable forms and the outstanding
balance under his custody.
b) The deputized Barangay Collectors shall also prepare and submit their individual
Report of Accountability for Accountable Forms daily to the Barangay Treasurer to
summarize the receipts and issuances of accountable forms under their custody.
c) The Barangay Treasurer shall consolidate the individual Report of Accountability for
Accountable Forms submitted by the deputized Barangay Collectors with his own
Report of Accountability for Accountable Forms and shall submit the certified
Consolidated Report of Accountability for Accountable Forms to the Barangay Record
Keeper.
d) The Barangay Record Keeper shall certify the Consolidated Report of Accountability
for Accountable Forms and submit to the City/Municipal Treasurer on the fifth (5 th) of
the following month.

Annex 5:Requirements of a Valid Ordinance. –
In case of Magtajas Cagayan De Oro vs. Pryce Properties Corp. & PAGCOR 234 SCRA 255,
the Supreme Court ruled that an ordinance in order to be valid must conform to the following
substantive requirements.
1. It must not contravene the Constitution or any statute
LGUs not have the Inherent power to tax. The inherent power belongs to the State and is
merely a legislative. As such, tax ordinances must always yield to a legislative act which is
superior, having been enacted by the State (Bernas, The Revised Philippine Constitution,
Vol. 1 1983 ed. P. 445)
The sanggunian exercises only delegated legislative powers conferred on them by Congress
as the National law-making body. As mere agents, LGUs are vested with the power of
subordinate legislation. The delegate cannot be superior to not exercise powers higher than
those of the principal. Local government cannot undo acts of Congress from which they
derived their powers and negate by mere ordinance the mandate of the statute (Magtajas vs.
Pryce)
The constitution is a written instrument agreed upon by the people as the absolute rule of
action and decision for all departments and officers of the government and in the opposition
to which any act or rule of any department or officer of the government, or even of the people
themselves, will altogether be void (Cooley, Constitutional Limitation 3) Underscoring
supplied "It is, in other words the supreme written law of the land " (Bernas, The 1987
Constitution of the Republic of the Philippines: A Commentary, 1996)
2. It must not be unfair or oppressive
A tax ordinance is fair when it is equitable. It is equitable when it is just, reasonable, and
proportionate to one's ability to pay. The progressive system of taxation is one good example
of equitable taxation since it increases as the tax base increases. It is oppressive when it is
unreasonably burdensome, unjustly severe, or harsh.
3. It must not be partial or discriminatory
What is being espoused is uniformity of tax application. A tax uniform when it operates with the
same force and effect in every place where the subject of it is sound. The uniformity rule requires
merely a geographical and not intrinsic uniformity. A tax is not unconstitutional simply because it
is not intrinsically equal and uniform in its operation upon individuals. In other words, the
uniformity rule does not prohibit classification for purposes of taxation (Bernas, The Constitution
of the Republic of the Philippines: A Commentary, 1988). However, the classification must be
based upon real and substantial differences between the persons, property or privileges and
those not taxed must bear some reasonable relation to the object or purpose of legislation or to
some governmental policy of legitimate end of governmental action (See Tomas P. Matic,
Taxation in the Philippines, Vol. 1 pp. 79-80).
In Pepsi Cola vs. Butuan, the Supreme Court ruled that classification is permitted if (1) the
standards used are not arbitrary but reasonable and substantial (2) the classification is
germane to achieve the purpose of the legislation, (3) the classification present and future
conditions, other circumstances being equal, and (4) the classification applies equally to all
those belonging to one class;
4. It must not prohibit but only regulate trade

A provision under Section 133 (e) of the LGC prohibits LGUs from imposing taxes on goods
carried in or out of the municipalities. The rationale is to allow the free flow of commerce in the
country and thus, avoid causing an increase in the prices of commodities to the consuming public
(DOF Provincial Circular, Unnumbered, dated 4-17-47 cited in Ursal, Philippine Law on Taxation,
2000 Ed.)
 In the case of Wise & Co. vs. City of Manila, G.R. No. L9957, April 25, 1958, the Court
declared as invalid a tax ordinance requiring the inspection of, and charging of a fee
therefore, meat coming from outside city limits.
 In Saldana vs. City of Iloilo, G.R. No. L-10470, September 27, 1957, the Court declared
as a forbidden export tax an inspection fee on every hog, cattle and carabao transported
to other places
 The DOF likewise had directed municipal treasurers of Palawan to desist from charging
outgoing fee in the transport of rice and corn from one municipality to another, (DOF, 3rd
Indorsement dated July 7, 1987 to the Provincial Treasurer of Palawan)
5. It must be generally consistent with public policy
Public policy is defined in Black's Law Dictionary as "that principle of the law which holds that
no subject can lawfully do that which has a tendency to be injurious or against the public
good." The term "policy" in turn is defined as "the general principles by which government is
guided in the management of public affairs, or the legislature, in its measures".
Thus, since the local councils exercise only delegated legislative powers conferred on them by
Congress as the national law-making body, the ordinances they enact must be consistent with
the policies declared by Congress through the measures it enacted, as well as be reconciled with
the national government's policies manifested through executive orders and other administrative
issuances.
6. It must not be unreasonable
A tax is said to be unreasonable when it is unjust, excessive, oppressive or confiscatory. It is
 Unjust when it is deficient in justice and fairness
 Excessive when it is characterized by whatever is notably higher than what is,

reasonable, proper, usual, necessary and equitable
 Oppressive when it is unreasonably burdensome, unjustly severe, or harsh, and
 Confiscatory when it amounts to undue seizure or forfeiture of private property in favor

of the public treasury (Section 3, P.D. 231)
The question of reasonableness of tax rates is open to judicial inquiry, but, much is left to the
discretion of the municipal authorities in setting the tax rates. Courts in fact go slow in writing
off an ordinance as unreasonable unless the amount is so excessive as to be prohibitive. As
a rule, Courts consider the municipal conditions as a whole and the nature of business made
subject to the imposition as factors in determining the reasonableness of tax rates (Victorias
Milling Co. Inc. vs. Municipality of Victorias, G.R. No. L-21183, September 27, 1969)
A tax ordinance, however, does not become oppressive simply because it carries a penal clause
imposing a fine or imprisonment, neither does it become unconstitutional because it subjects the

taxpayers to criminal prosecution for non-payment (Villanueva vs. City of Iloilo, G.R. No. L-
262521, December 28, 1968).
Annex 6:Local Revenue Tool Kit for Philippine LGUs. –
The LGC provides LGUs with powerful resource mobilization tools that can be grouped into
five distinct classes of potential revenue sources. These are:
i. Land - based Tools;

ii. Community Activity - based Tools;
iii. Infrastructure - based Tools;
iv. Debt-based Tools; and
v. Revenue sharing Tools.
Most of these tools are being effectively used by rapidly growing LGUs in the Philippines,
Thailand and Indonesia.
Under the LGC, the province, as a political and corporate unit of government serves as a
dynamic mechanism for the "effective governance" and development of component
cities and municipalities within its territorial jurisdiction.
I. Land-Based Tools
These are potential revenue sources that rely on the real property (land and
improvements) resources of LGUs.
A. Basic Real Property Tax (Sec. 232). This is a yearly ad valorem tax on real property
such as land, building, plant, machinery and equipment, and other improvements. The
maximum tax is 2% of the assessed value of real properties which is a percentage of
the fair market value of real property. The LGC prescribes the graduated schedule of
assessment level for agricultural, residential, and other real property classification.
LGUs are required to prepare and update every three years a schedule of fair market
values for all classes of real property.
B. Special Education Fund (SEF) (Sec. 235). This is an additional yearly ad valorem tax
on real property. The amount of tax is 1% of the assessed value of real property and is
collected together with the basic real property tax.
C. Tax on Transfer of Real Property (Sec. 135). This tax is imposed on any mode of
transferring title of ownership of real property from one person to another, such as
through sale, barter or donation. The amount of tax is 50% of 1% of the total
consideration or fair market value, whichever is higher, and is payable within 60 days
from the execution of the deed. Sale or transfer under the Comprehensive Agrarian
Reform Program is exempt from this tax. (Applicable only to cities and provinces).
D. Idle Land Tax (Sec. 236). This is a yearly ad valorem tax on idle land and is in addition
to the basic real property tax and SEF. The maximum amount of tax is 5% of the
assessed value of property. Idle lands include agricultural lands more than one hectare
in area, one half of which remains uncultivated or unimproved; non-agricultural lands
more than 1,000 square meters in area, one-half of which remain unutilized or
unimproved; and residential lots in subdivision, regardless of area. (Applicable only to
cities, provinces, and Metro Manila municipality)
E. Public Land Use Tax (Sec. 234a). An LGU may collect real property tax on government
lands which are used for the private benefit of individuals or corporations. For example,
concessionaires or business establishments within government propertiessuch as the

lands of the Air Transportation Office may be levied real property taxes on government
lands they occupy.
F. Land Sale of Foreclosed Real Properties (Sec. 257, 258 and 260). Local taxes, fees
and charges constitute a lien on real properties owned by a taxpayer. An LGU may
foreclose on the properties of delinquent taxpayers and sell these properties through
public auction. In the absence of bidders, or if the bids are not enough to pay the tax
obligation, including interests and penalties, the LGU treasurer will purchase the
property for the LGU.
G. Land Investment. An LGU may acquire and develop land using its ordinary corporate
powers (Sec. 18), though purchase of foreclosed real properties (Sec. 263) or through
joint ventures (Sec. 302) with the private sector, or through build-operate and transfer
scheme (BOT). Such investment in land development provides direct revenues to the
LGU in terms of profits upon disposition and also in terms of enhanced property value
and higher property tax base.
H. Land Reclassification (Sec. 20). An LGU may reclassify at most 15% (for highly
urbanized and independent component cities), 10% for component cities and first to
third class municipalities, 5% for fourth to sixth class municipalities of existing
agricultural lands for other uses which are deemed to have greater economic value.
I. Land Development Permit Fee (557 and 558). The regulation of land development and
subdivisions is one of the devolved functions to LGUs. In the exercise of the functions,
LGUs may impose development permit fees, to cover the cost service in the process of
issuance of a permit. Alternatively, LGUs may base the development permit fee on the
financial impact or economic benefits to be derived from such a permit.
J. Tax on Sand, Gravel and other Quarry Resources (Sec. 138). This is an ad valorem
tax on ordinary stones, sand, gravel, earth and other quarry resources extracted from
public lands or from beds of seas, lakes, rivers, streams, creeks, and other public waters
within an LGU's territorial jurisdiction. The tax should be no more than 10% of the fair
market value in the locality per cubic meter. (Applicable only to cities and provinces)
II. Community Activity-Based Tools
These are potential revenue sources that rely on the flow of economic activity within the
territorial jurisdiction of an LGU.
A. Business Tax (Sec. 143). Description: This is a tax imposed on various categories of
business operations (manufacturer, retailer, exporter, service, etc.). The tax follows a
graduated schedule based on sales or receipts of the preceding year. The LGC
prescribes the graduated schedule of tax rates for the categories of business.
(Applicable only to cities and municipalities)
B. Community Tax (Sec. 156). This is a yearly tax on individuals and juridical persons. An
individual who is at least 18 years old and is gainfully employed or is engaged in
business or occupation or owns real property with assessed value of at least ₱1,000,
pays the community tax to the LGU where he resides. The amount of tax is Php 5 plus ₱
1 for every ₱ 1,000 of income from all sources, but not exceeding ₱ 5,000. In the case
of husband and wife, the additional tax is based on their totalcombined properties and
gross income. (Applicable only to cities and municipalities)
C. Franchise Tax (Sec. 137). This is a yearly tax imposed on a business enjoying a
franchise within the territorial jurisdiction of the LGU. The amount of tax is 75% of 1% of
gross receipts realized within the territorial jurisdiction of the LGU during the preceding

calendar year, payable within the first 20 days of January and quarterly thereafter. For a
newly started business, the amount of tax is 1/20 of 1% of capital investment.
(Applicable only to cities and provinces)
D. Tax on Business of Printing and Publication (Sec. 136). This is a yearly tax on the
business of persons engaged in the printing and/or publication of books, cards, posters,
leaflets, handbills, certificates, receipts, pamphlets, and others of similar nature. The
amount of tax is 50% of 1% of the gross annual receipts of the preceding calendar year.
For a newly started business, the amount of tax is 1/20 of 1% of capital investment.
E. Professional Tax (Sec. 139). This tax is imposed on the practice of a profession
requiring government examination. The tax is for every profession practiced, i.e., a CPA-
lawyer who practices both professions must pay for two professions. Professionals
working exclusively for the government are exempt. The amount of tax is ₱ 300 per year
and may be paid to the LGU where the professional resides. (Applicable only to cities
and provinces)
F. Amusement Tax (Sec. 140). This is a percentage tax on gross receipts from
admissions of amusement places such as movie houses, clubs and other places of
entertainment. The amount of tax should not exceed 10% of gross receipts. The time,
manner, terms and conditions for payment are to be prescribed by ordinance.
G. Annual Fixed Tax on Delivery Trucks or Vans (Sec. 141). This is an annual fixed tax
for every truck, van or any vehicle used by manufacturers, producers, wholesalers,
dealers or retailers in the delivery or distribution of products as may be determined by
the local legislative council to sales outlets or consumers whether directly or indirectly
within the LGU's jurisdiction in an amount not exceeding ₱500. (Applicable only to cities
and provinces)
H. Fees and Charges (Sec. 147). Municipalities and cities may impose such reasonable
fees and charges on business and occupation except those reserved to the province
under Sec. 139 commensurate with the cost of regulation, inspection and licensing.
I. Fees for Sealing and Licensing of Weights and Measures (Sec. 148). The local
legislative council may impose may levy reasonable fees for the sealing and licensing of
weights and measures. (Applicable only to cities and municipalities)
J. Fishery Rentals, Fees and Charges (Sec. 149). The local legislative council may grant
fishery privileges within its territorial waters and impose rentals, fees or charges.
(Applicable only to cities and municipalities)
K. Service Fees and Charges (Sec. 153). LGUs may impose and collect such reasonable
fees and charges for services rendered.
III. Infrastructure-Based Tools

These are potential revenue sources that are based on the "user" or "beneficiary" pay
principle that is people or entities like corporations should pay for the use of or
benefits derivable from public infrastructure.
These tools are primarily cost recovery mechanisms for infrastructure projects.
However, they can be converted to loan equivalents for purposes of raising credit
finance for infrastructure projects.
A. Special Levy by Local Government Units (Sec 240). This is a tax imposed on lands
specially benefited by public works projects which are funded by the local government.
Public works projects which provide benefits to adjacent lands are roads, drainage,
power transmission lines, water distribution lines, telecommunication lines. Benefits
include appreciation in value, increased economic/commercial activities, reduced
maintenance costs of property improvements, etc. The maximum amount of tax to be
generated from a special levy is 60% of the actual project costs, which include cost of
land and other real properties acquired in connection with the project. The tax liability
is allocated among the real properties affected by the project in proportion to the
benefits to be derived. The tax may be paid in yearly installment over at least 5 years
but not more than 10 years.
B. Toll Fees or Charges (Sec. 155). The local legislative body may prescribe the terms
and conditions and fix the rate of toll fees or charges for the use of any public road,
pier, waterway, bridge and ferry, including telecommunication systems funded and
constructed by the local government unit. Toll fees should be commensurate with the
economic benefits derived by users of the facilities.
C. Public Utility Charges (Sec. 155). LGUs may fix the rates for the operation of public
utilities owned, operated and maintained by them within their jurisdiction.
IV. Debt-Based Tools
These are tools that allow LGUs to secure debt finance for so-called "income-
generating projects" and to make investments in financial debt instruments like
securities Treasury bills, commercial papers, and shares of stocks.
A. Debt Financing (Sec. 297-302). LGUs may borrow money directly from the
financial/banking system- commercial or government - or other sources or through the
flotation of bonds in the financial markets to fund development projects. A-LOU may
use its real property as collateral for such loans. In addition to loans, credits, deferred
payment schemes, bond and security issues, and other forms of indebtedness, cities
are now allowed to enter into BOT agreements with the private sector.
B. Financial Investment (Sec 18). LGUs may invest in public or private financial
instruments. Excess or idle funds may generate additional revenues through bank time
deposits.
V. Revenue Sharing-Based Tools
These are tools based on national government revenues shared with LGUs as
provided for in the LGC.
A. Share in Mining, Fishery, and Forestry Taxes (Sec. 290). In addition to its IRA,
LGUs shall have a 40% share in 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 plus any share that may accrue

to it in any co-production, joint venture or production sharing agreement in the
utilization and development of the national wealth within their territorial jurisdiction.
B. Share in the Gross Sales or Taxes of Government-Owned and Controlled

Corporations (Sec. 291). LGUs may share in the gross sales or taxes of a
government-owned and controlled corporation (GOCC), if it is engaged in the
development and exploitation of natural resources located in a LGU.
1. Eighty percent, however, of the proceeds derived from the development and
utilization of hydropower, geothermal, and other sources of energy shall be applied
solely to lower the cost of electricity in the LGU where such energy sources are
located. (Sec. 294, LGC)
2. The share of the LGU is 1% of the gross sales of the preceding year or 50% of the
mining taxes, royalties, forestry and fishery charges, and such other taxes, fees
and charges, including related surcharges, interests, or fines the government
agency or GOCC would have paid if it were not exempt.
C. Congressional funds. Members of the House of Representatives as well as

members of the Senate are allocated funds that they may allocate for development
projects within their respective districts or in the case of the Senators, in any location
within the country that they may so choose. Congressional funds have both "hard" and
"soft" components. The infrastructure funds are for identified hard capital projects such
as roads, bridges, schools, hospitals, etc. while the Priority Development Assistance
Funds (PDAF) are for soft type projects such as medical expenses of indigent patients
or for scholarship funds.
Table G.1. Probable Infrastructure Financing Options for Philippine LGUs
Over the Next 3 Years Next 6 Years Over 6 Years

Regular Tax Sources Concessions Additional National Revenue
(Property and Business Sharing
Taxes)
Conveyance of Special Assessments Other Special Taxes and
Development Rights Charges like congestion
charges, higher vehicle
ownership fees
Debt Instruments Development Impact
including Fees
Bonds
Tax Incentives and Land Readjustment
Government
Guarantees
User Fees and Charges
Source: Annex G of N. R. Ramos, Investment Programming and Revenue Generation

Guidelines, ADB, 2007

Quezon City
Annex 7:Tax Collection through Mobile
1. Purpose -
This document provides the manual of operations of City ordinance no. SP-2228, S-2013
and its Implementing Rules and Regulations which authorized the use of electronic
payments and collections system including mobile money for the payment of government
taxes and fees
2. Scope -
This document shall cover the procedure of Local Government of Quezon City for collection
of taxes and fees from taxpayers through Electronic Payment Gateway Provider (EPGP).
3. Definition -
3.1 Authorized Government Depository Bank (AGDB) - refers to a bank where

Government entities are allowed by law to deposit their funds and maintain depository
accounts, or by way of exception, a bank authorized by the Department of Finance
and the Monetary board to be a government depository bank. For the purpose of this
Manual of Operations, the Land Bank of the Philippines (LBP), Quezon City Hall
branch, unless otherwise amended
3.2 Current non-delinquent account refers to accounts with no existing penalties and other
liabilities from previous taxable years
3.3 Electronic Data Message refers to information generated, sent, received, or stored by
electronic, optical or similar means.
3.4 Electronic Document refers to information or the representation of information, data,

figures, symbols or other modes of written expression, described or however
represented, by which a right is established or an obligation extinguished, or by which
a fact may be proved and affirmed, which is received, recorded, transmitted, stores,
processed, retrieved or produced electronically.
3.5 Electronic Official Receipt (eOR) refers to a proof of payment generated/issued

through an Electronic Payment and Collection System (EPCS) with unique or
sequential reference numbers that can be validated using the same system. More
specifically, the eOR refers to an evidence of payment for collection received by the
agency from clients generated through the agency's electronic collection system
3.6 EPCS refers to a system that accepts and processes Electronic Payments,
authenticates the payor and payee, validates availability of the funds and executes the
appropriate debit and credit instruction for the fund source and destination accounts,
generates and forwards electronic proof of payment to the payor, or allows secure
access thereto and creates, retains and safeguards the resulting detailed electronic
transaction records which are accessible by authorized personnel.
3.7 Electronic Payment Gateway Provider (EPGP) refers to a bank or non-bank entity
which operates and/or maintains an electronic payment and collection system.
3.8 Electronic Payment Server (ePayment Server) refers to a dedicated data center facility
of the Quezon City government that allows the use of applications for various
computing requirements for electronic collections

3.9 Mobile Money Provider (MMP) refers to a bank or non-bank entity which operates
and/or maintains an electronic payment and collection system
3.10 Electronic Time Stamp refers to the transaction date and time indicated on the
electronic document.
3.11 Payor or Originator refers to a person or entity by whom, or on whose behalf, the
electronic data message or electronic document has been created, generated and/or
sent. The term does not include a person acting as an intermediary with respect to
that electronic data message or electronic document.
3.12 Service Level Agreement refers to an agreement entered into by the Government
Entity with any Collecting Bank and/or EPGP and Land Bank of the Philippines (LBP),
Quezon City Hall branch concerning the use of EPCS
3.13 Short Message Service (SMS) refers to a text messaging service component of
phone, web or mobile communication
3.14 Web service refers to intermediary server which process request for assessment and
store payment records for MMP
4. References -
a. Bangko Sentral ng Pilipinas (BSP) Circular No.649
b. BSP Circular No. 704 Series of 2010
c. Joint Department Administrative Order (JDAO) Department of Finance - Department of

Trade and Industry (DOF-DTI) No. 2 Series of 2006
d. JDAO DOF-DTI No. 1 Series of 2010
e. Commission on Audit (COA) Circular 2004-006, September 9, 2004
f. COA Circular 2013-007, September 18, 2013
g. Ordinance No. SP-2228, S-2103 and its Implementing Rules and Regulations
5. Responsibility -
a. City Treasurer's Office (CTO)
i. Cash Division
b. Information Technology Development Office (ITDO) 3.3 City Accounting Office (CAO)
c. City Accounting Office (CAO)
6. Guidelines -
a. Payment of taxes and other fees through electronic payment systems will only cover
current non-delinquent accounts. Current non-delinquent accounts are accounts with
no existing penalties and other liabilities from previous taxable period.

i. Convenience fee shall be charged to the taxpayer for using the EPCS of the Local
Government of Quezon City. The amount, breakdown and billing process involving
convenience fees shall be determined in the Service Agreement.
ii. Quezon City Information Technology and Development Office (ITDO) shall make
sure that the ePayment server is always available for access of assessment and
payment by the taxpayers.
iii. Taxpayer can pay electronically using the mobile payment services from 12
midnight (00:00) to 11:59pm (23:59) on or before the due date.
b. Processing
i. EPGP is required to send the collection report to the City Treasurer's Office, ITDO
and City Accounting office by 08:00 am of the following day for reconciliation.
c. Reconciliation and Settlement
i. EPGP will transfer the total collection to the Land Bank of the Philippines (LBP),
Quezon City Hall Branch Account on or before 1 1:00 am, before the closing of
banking hours of the day following collections.
7. Procedure -
a. Taxpayer's Experience -
i. Taxpayer who successfully paid their taxes and fees using the EPCS will receive a
transaction reference number to serve as acknowledgement receipt of payment.
The date of the electronic transaction shall be the date of payment and will be the
reckoning point for computing any penalties that may be incurred.
ii. The City Treasurer's Office issues the official receipt in the name of the
taxpayer
a) The taxpayer can access their electronic official receipt (eOR) through the
Quezon City website (www.eor.quezoncity.gov.ph). The taxpayer has to enter
the transaction reference number which can be found in the confirmation SMS
message of the successful payment. For security purposes, the taxpayer will
also be required to enter the alphanumeric Captcha, a program to distinguish
human from machine input, typically as a way of thwarting spam and
automated extraction of data from websites. Upon validation from the
ePayment server, the eOR will be displayed as Adobe Portable Document
Format (PDF) that can be downloaded, saved or printed. The eOR can be
accessible in the system for two years and may only be downloaded once.
After the period, the taxpayer will need to request for a certified true copy from
the city hall.
b) The City Treasurer's Office can provide a certified official receipt which can be
claimed at the Payment Lounge in the Quezon City Hall. The taxpayer has to
provide the transaction reference number which can be found in the
confirmation SMS message of the successful payment.
b. Processing -
i. Upon successful payment, the Electronic Payment Gateway Provider (EPGP)

will send payment information to Quezon City for posting in the ePayment
server. Upon posting of the payment information, the ePayment server will

assign an Electronic Official Receipt Number and the date and time stamp of
the transaction and update the payment record in the ePayment server. The
payment record from the ePayment server will be replicated to the production
server for posting of taxpayer's subsidiary ledger.
ii. EPGP will send a digital copy of the collection report in the agreed format to
the City Treasurer's Office, ITDO and City Accounting Office. ITDO will validate
the collection report against payment recorded to the ePayments server.
iii. The Collection report shall contain the following information:

i. Name of Payor
ii. Payor's account number or mobile phone number
iii. Amount paid/received
iv. Result of payment, whether successful or unsuccessful
v. Transaction date and time
vi. Transaction reference number
vii. If data is verified and matched, ITDO prepares and transmits a letter
validating the collections report submitted to the Cash Division, City
Treasurer's Office
viii. If there are questions on the collection report, ITDO will send a report
detailing the discrepancy to the EPGP's Point-of-Contact for resolution
within 24 hours, as specified in the Service Agreement.
c. Reconciliation and Settlement
i. EPGP will transfers the total collection to the Land Bank of the Philippines (LBP),
Quezon City Hall Branch following collections.
ii. The Cash Division, City Treasurer's Office reconciles the collection report sent by
theEPGP and the total deposited collection in the Land Bank of the Philippines
(LBP), Quezon City Hall Account.
iii. Land Bank of the Philippines (LBP), Quezon City Hall branch sends system
generated report daily and credit memo (upon availability) to the Cash Division.
Once available, Cash Division can check amount deposited via internet banking.
iv. Cash division receives the bank statement from Land Bank of the Philippines
(LBP), Quezon City Account and verifies the total deposited collection to the total
collection from the EPGP
v. If there are any discrepancies, the Cash Division will inform the EPGP for
immediate resolution not exceeding two (2) banking days from the date the issue
was reported. Adjustment on the collections due to insufficient fund/technicalities
shall be effected against succeeding day's collection and shall be indicated in the
Collection Report with reference to the collection date subject of adjustment. The
EPGP shall also submit to the City Treasurer the appropriate exception
report/documentation required within five (5) banking days from collection date.
The exception report shall be addressed to the City Treasurer and City
Accountant.
vi. City Treasurer's Office will compile all the following reports and submit to City
Accounting Department, Revenue Abstract and Statistics Division (RAAD) for
completion of the following required documents:
a. Report of Collection and Deposit
b. Abstract of payment

c. Bank Statement
d. Electronic endorsement Letter from ITDO with the attached Collection report
from the EPGP
vii. RAAD prepares and completes the following required documents and submits to
Financial Accounts and Analysis Division (FAAD)
a. Summary of Collections
b. Daily Abstract including the following supporting documents for adjustments

on short and over remittance
c. Adjusted Collection Report with reference to the collection date subject of

adjustment
d. Exception report/documentation
viii. Collection through electronic system shall be accounted for in the books
of the government agency concerned in accordance with existing rules
and regulations for receipts and collections.
8. Supplements -
1. User Experience -
i. Mobile Money Application - To access the Mobile Money service, a taxpayer

must have a Globe sim card installed in a mobile phone. Taxpayer inputs *1374
from the mobile phone's dial pad and presses the call button. The Taxpayer inputs
the number that corresponds to Quezon City. After doing so, the taxpayer is given
the three options with corresponding numerical equivalents: Real Property Tax,
Business Tax, or Market Stall Fee.
ii. Real Property Tax - The taxpayer is given three types of Real Property Tax
transactions: Assessment & Payment, Assessment only, or Payment only. The
taxpayer inputs the type of transaction desired.
iii. Assessment & Payment - The taxpayer shall be prompted to input his or her
respective tax declaration number. The taxpayer shall then be asked to confirm or
cancel the request for assessment by inputting a corresponding digit. If the
taxpayer decides to confirm, his or her Quarter balance and Yearend balance,
along with its due date would appear. The taxpayer has then the option to continue
or cancel by inputting a corresponding digit. The taxpayer selects which amount
he or she wishes to pay by inputting the corresponding digit. After selecting which
balance to pay, the taxpayer shall be prompted to confirm or cancel the payment.
Confirming would prompt the taxpayer to enter his or her pin. Inputting the correct
pin shall complete the process. The taxpayer shall then receive an SMS
confirmation.
iv. Assessment Only - The taxpayer shall be prompted to input his or her respective
tax declaration number. The taxpayer shall then be asked to confirm or cancel the
request for assessment by inputting a corresponding digit. If the taxpayer decides
to confirm, his or her Quarter balance and Year-end balance, along with its due
date would appear. The taxpayer has then the option to continue or cancel by
inputting a corresponding digit. The taxpayer selects which amount he or she
wishes to pay by inputting the corresponding digit. After selecting which balance to

pay, the taxpayer shall be prompted to confirm or cancel the payment. Confirming
would prompt the taxpayer to enter his or her pin. Inputting the correct pin shall
complete the process. The taxpayer shall then receive an SMS confirmation.
v. Payment Only -The taxpayer shall be prompted to input his or her respective tax
declaration number. The taxpayer shall then be prompted to input his or her exact
amount of billing. After doing this, the taxpayer shall be prompted to confirm or
cancel payment by inputting a corresponding digit. Confirming would prompt the
taxpayer to enter his or her pin. Inputting the correct pin shall complete the
process. The taxpayer shall then receive an SMS confirmation.
2. Business Tax -
i. Assessment & Payment - The taxpayer shall be prompted to input his or her
respective Mayor's Permit Number. The taxpayer shall then be asked to confirm or
taxpayer decides to confirm, his or her Quarter balance and Year-end balance,
confirmation.
ii. Assessment Only - The taxpayer shall be prompted to input his or her respective
Mayor's Permit Number. The taxpayer shall then be asked to confirm or cancel the
iii. Payment Only - The taxpayer shall be prompted to input his or her respective
Mayor's Permit Number. The taxpayer shall then be prompted to input his or her
exact amount of billing. After doing this, the taxpayer shall be prompted to confirm
or cancel payment by inputting a corresponding digit. Confirming would prompt the
3. Market Stall Fee -
i. Assessment & Payment - The taxpayer shall be prompted to input his or her
respective Mayor's Permit Number. The taxpayer shall then be asked to confirm or
taxpayer decides to confirm, his or her Quarter balance and Year-end balance,
confirmation.

ii. Assessment Only - The taxpayer shall be prompted to input his or her respective
Mayor's Permit Number. The taxpayer shall then be asked to confirm or cancel the
iii. Payment Only - The taxpayer shall be prompted to input his or her respective
Mayor's Permit Number. The taxpayer shall then be prompted to input his or her
exact amount of billing. After doing this, the taxpayer shall be prompted to confirm
or cancel payment by inputting a corresponding digit. Confirming would prompt the

LTO Form 5
CASH BOOK
___________________________
LGU
Fund: ______________________
CASH IN VAULT
Date Particulars Reference Debit Credit Balance
LTO Form 5 – Cash Book(Cash in Vault)
INSTRUCTIONS
A. This form shall be accomplished as follows:
1. LGU - name of the province/city/municipality

2. Fund -- fund name/code
3. Date -- date of the source documents
4. Particulars - details or nature of transactions
5. Reference - the number of Report of Collections and Deposits
6. Debit- the amount of collections based on RCD
7. Credit - the amount deposited with the banks based on the RCD's attached deposit
slips
8. Balance - the difference between the Debit and Credit columns, which shall be equal
to the amount of cash in the hands of the Treasurer.
B. The Treasurer shall maintain this record to monitor the cash in vault balance as of specific
dated. All transactions for the day shall be recorded immediately
C. At the end of each day, the debit and credit shall be ruled and closed. All totals shall be
written legibly in ink and the balances shall be carried forward as opening balances of the
Cash Book for the next day.

D. The difference of the totals of Debit and Credit columns should tie-up with the running
balance column.
LTO Form 6
CASH BOOK
___________________________
LGU
Bank Account No.: _________________ Fund: ________________
CASH IN BANK
LTO Form 6 – Cash Book(Cash in Bank)
INSTRUCTIONS
1. LGU- name of the province/city/municipality

2. Fund - the Fund name/code
3. Bank Account No. - the bank name and account number
4. Date - date of the source documents
6. Reference - the number of the source document
7. Debit - the amount deposited for the day based on the RCD's deposit slips and
interest income and other related transactions based on Journal Entry Vouchers
{JEV)
8. Credit - the amount of checks issued for the day based on the Checks/Bank
Advise and withholding taxes/charges and other charges based on JEV
9. Balance - the difference between the Debit and Credit columns which shall be
equal to the amount of Cash in Bank.
B. The Treasurer shall maintain this record to monitor the cash in bank balance as of
specific date. All transactions for the day shall be recorded immediately.

written legibly in ink and the balance shall be carried forward as opening balances of
the Cash Book for the next day.
balance column.
LTO Form 7
CASH BOOK
___________________________
LGU
Disbursing Officer: _________________ Fund: ________________
CASH ADVANCES
LTO Form 7 – Cash Book (Cash Advances)
INSTRUCTIONS

2. Disbursing Office - name of Disbursing Officer
3. Fund - the fund from which cash advance was made
6. Reference - the number of the Voucher Payroll
7. Debit - the amount advanced by the Disbursing Officer based on the Voucher Payroll
8. Credit - the amount disbursed out of the cash advances
9. Balance - the difference between the Debit and Credit column which shall be equal
to the amount of cash in hand of Disbursing Officers.
B. The Treasurer shall maintain this record to monitor the cash advances balance as of
specific date. All transactions for the day shall be recorded immediately.

written legibly in ink and the balances shall be carried forward as opening balances of
the Cash Book for the next day.
balance column.
LTO Form 8
CASHBOOK LIQUIDATING OFFICER
__________________________
LGU
Liquidating Officer: _____________________ Fund: ________________
Collections Unremitted
Date Particulars Reference Collections Remitted to Collections
Received (DR) Cashier/Treasure (Balance on
r (CR) Hand)
LTO Form 8 – Cash Book (Liquidating Officer)
Instructions

2. Liquidating Officer - name of the designated liquidating officer

6. Debit - collections remitted by the tellers and market/field collectors and base
on RCD.
7. Credit - amounts remitted or turn-over to the treasurer/cashier supported by
RCDs and duplicate ORs of tellers/collector
8. Balance - the difference between the Debit and Credit column which shall be
equal to the amount of cash on hand not yet turned over to the
treasurer/cashier.
LTO Form 9
CASHBOOK – TELLER/COLLECTOR
_______________________________
LGU
Teller/Collector: ________________________ Fund: _______________________
Collections Unremitted
Date Particulars Reference Collections Remitted to Collections
Received (DR) Liquidating (Balance on
Officer (CR) Hand)
LTO Form 9 – Cash Book (Teller/Collector)
INSTRUCTIONS

2. Teller/Collector - name of the designated teller/collector
6. Debit - collections received by individual tellers and market/field collectors and
base on individual RCDs.
7. Credit- collections remitted to the designated liquidating officers supported by
ORs/Cash tickets
8. Balance - the difference between the Debit and Credit column which shall be equal
to the amount of cash on hand not yet remitted to the designated liquidating officer.
REPORT OF ACCOUNTABILITY FOR ACCOUNTABLE FORMS

______________________________________________________
LGU
Month of _________________________ 20 _____________
Accountable Officer: _____________________________ Designation: _____________________________ Report No.: _
Beginning Balance Receipt Issued

Name of Form & No. Inclusive Serial No Inclusive Serial No Inclusive Seri
Qty. From To Qty. Qty.
From To From
CERTIFICATION:
I hereby certify that the foregoing is a true statement of all accountable forms received, issued and transferred by me duri
correctness of the beginning balances.
______________________________________________ ____________________________
Name and Signature of the Accountable Officer Date

LTO Form 10

LTO Form 10 - Report of Accountability for Accountable Forms (RAAF)
INSTRUCTIONS
A. The report shall be accomplished as follows:

2. Month - month on which the report is made
3. Accountable Officer - name of accountable officer
4. Designation - position/designation
5. Report No. - number assigned by the Treasurer/Collectors/Accountable Officers
6. Name of Forms & No. - Name of accountable forms under the custody of the
accountable officers. Indicate the corresponding code number of each form.
7. Beginning Balance - balance of the accountable forms available at the beginning of
the month. Indicate inclusive serial numbers.
8. Receipt - number of units received by the accountable officers during the month.
Indicate inclusive serial numbers.
9. Issued - number of units issued by the accountable officers during the month.
Indicate inclusive serial number.
10. Ending Balance - remaining units of the accountable forms still in the custody of the
accountable officers at the end of the month. Indicate inclusive serial number.
B. The report shall be prepared in two copies and to be distributed as follows:
Original – Treasurer
2nd copy - Accountable Officer's file
C. Treasurers, collectors/tellers and other accountable officers shall render this report of
accountability for accountable forms at the end of each month for consolidation by the
local treasurer.
D. The report shall be certified correct by the Treasurer/Accountable Officers.
Updated Local Treasury Operations Manual (LTOM87

LTO Form 11
CONSOLIDATED REPORT OF ACCOUNTABILITY FOR ACCOUNTABLE FORMS
______________________________________________________
LGU
Month of _________________________ 20 _____________
Treasurer: _____________________________ Report No.: _____________________
Beginning Balance Receipt Issued Ending Balance

Name of Form & No. AF Inclusive Serial Nos Inclusive Serial Nos Inclusive Serial Nos Inclusive Serial Nos
No. Qty. From s To Qty. From To Qty. From To Qty. From To
Certified Correct:
_____________________________________________ ____________________________
Treasurer Date

LTO Form 11 - Consolidated Report of Accountability for Accountable Forms (CRAAF)
INSTRUCTIONS
1. LGU- name of the province/city/municipality

2. Month - month on which the report is made
3. Treasurer - name of the Treasurer
4. Report No. - number assigned by the Treasurer's Office on the report
5. Name of Forms - name of accountable forms under the custody of the
accountable officers.
6. Code no. - corresponding code number of the accountable forms
7. Beginning Balance - balance of the accountable forms available at the
beginning of the month. Indicate inclusive serial numbers.
8. Receipt - number of units received by the accountable officers during the month.
Indicate inclusive serial numbers.
9. Issued - number of units issued by the accountable officers during the month.
Indicate inclusive serial number.
10. Ending Balance - remaining units of the accountable forms still in the custody of
the accountable officers at the end of the month. Indicate inclusive serial number.
B. The report shall be prepared in two copies and to be distributed as follows:
Original - COA through the Accounting Office

2nd copy - Treasurer's file
C. The Treasurer shall render this report to consolidate the Report of Accountability for
Accountable Forms
D. This consolidated report shall be accompanied by the RAAF of all accountable officers
which shall be submitted to the auditor not later than the fifth day of the ensuing month

LTO Form 12
Page 1 of 2
REPORT OF COLLECTONS AND DEPOSITS
____________________________________
LGU
Fund: _____________________________ Date: ______________
Name of Accountable Officer: ___________________________ Report No.: ____________________
ii. COLLECTION
1. For Collectors
Official Receipt/Serial No. Amount
Type (Form No.) From To
2. For Liquidating Officers/Treasurers

Name of Accountable Officer Report No. Amount
iii. REMITTANCES/DEPOSITS
Accountable Officer/Bank Reference Amount
iv. ACCOUNTABILITY FOR ACCOUNTABLE FORMS

Beginning Balance Receipt Issued
Name of Form & No. Inclusive Serial No Inclusive Serial No Inclusive
s

Qty. From To Qty. Qty.
From To
From
v. SUMMARYOF COLLECTIONS AND REMITTANCES/DEPOSIT
Listof Checks:
BeginningBalance _ _ _ _ _ _ _ __ _ _ _ _ _ _ _ _ _ _ _ _ _ 20 _ _ ₱ x x x
Add: Collections Check No. Payee Amount
Cash xx x
Check/s xxx xxx
Total xxx
Less:Remittance/DeposittoCashier
Treasurer/DepositoryBankxxx
Balance ₱ x x x
NOTE:Use addItIonal sheet If necessary
CERTIFICATION: VERIFICATION ANDACKNOWLEDGEME
I hereby certify that the foregoing report of collections and deposits, and accountability I hereby certify that the foregoing report o
for accountable forms is true and correct. receipt of _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _
____________________________ ____________ _______________________________

Name and Signature of Accountable Officer Date Name and Signature Cashier/Treasurer

LTO Form 12 - Report of Collections andDeposits (RCD)
INSTRUCTIONS
1. LGU name of the province/city/municipality

2. Fund name/code
3. Name of Accountable Officer - the name of the accountable officer
4. Date - date of the report
5. Report No. - shall be numbered one series per year
6. COLLECTIONS
For Collectors
a. Type (Form No.) - type of official receipts used

b. Official Receipt No.(From _____ To_____) - serial number of the Official Receipts issued by the
Treasurer/Accountable Officer including the cancelled ones in chronological and numerical sequence
c. Amount - amount of collections received
For Liquidating Officers/Treasurers
a. Name of Accountable Officer - the name of collector/accountable officer remitting the collections
b. Report No. - the reference number of the Report of Collections and Deposits of the Collector, bearing
the collector no. and the series
c. Amount - amount of collections received from collectors/liquidating officers, taxpayers and other
sources
B. REMITTANCES/DEPOSITS
a. Accountable Officers/Bank the name of the liquidating officer to whom the collections were remitted or
the name of the depository bank
b. Reference - reference documents used as basis in the remittance/deposit of the collections like the
RCD number/deposit slip.
c. Amount - amount of remittances/deposits
C. ACCOUNTABILITY FOR ACCOUNTABLE FORMS

a. Name of Forms & No. - the name(s) of the form(s) (checks/official receipts/etc.) for which this report is
being made shall be written in the boxes provided
b. Qty. and Serial no. the quantity and the corresponding serial numbers of the forms on hand at the start
of the period; those received, and those issued or transferred during the period covered; and the
balance at the end of the period shall be entered in these columns.
D. SUMMARY OF COLLECTIONS AND REMITTANCES/DEPOSITS - A summary shall be prepared as shown in the

report.
1. Certification - shall be signed by the Accountable Officer preparing the report.
2. Verification and Acknowledgement - shall be signed by the Treasurer/Liquidating Officer receiving the
RCD and corresponding remittances. In case of RCD of the Local Treasurer, this portion shall no longer
be filled up. However, the validated deposit slip/remittance advice from the bank shall be attached to
the report.
E. This report shall be prepared in five (5) copies and to be distributed as follows:
Original - Auditor
2nd Copy- COA thru the Accounting Division together with the duplicate copy of the OR
3rdCopy – Treasurer's file
4th Copy – Liquidating Officer's file
5thCopy – Collector's file

F. Collections for the day should be deposited intact daily. The balance of collections not deposited during the day
due to cut-off should be deposited in the next working day.
LTO Annex 13
LTO Annex 13 – Process Flow on LGU Receipts, Collections and Deposits

Area of
Responsibility Person Seq. Activity
on Responsible
Receives payment from taxpayers/ creditors and issues Official Receipt (OR).
Prepares Report of Collections and Deposits. Remits to the Liquidating Officer
(if one is designated) or Treasurer.
Liquidating Officer 2 Checks remittances and verifies accountable forms of collectors/ tellers.
Consolidates collections and remits to the Treasurer/Cashier. Prepares RCD
Receives/remits collections, consolidates the same and prepares RCD.

Records in the Cashbook - Cash in Vault.
Treasurer/Liquidating Deposits collections in the appropriate bank account per authorized depository
Officer bank. Records deposit in the Cashbook - Cash in Bank.
Forwards RCD to Accounting Unit with copies of ORs and validates deposit
Treasurer 5 slips.
Prepares Journal of Entry Voucher and records in the Cash Receipt Journal.
Accountant 6

LTO Form14
1 P ro v in c e /C ity / Mu n icip al ity
2 P e rio d C o v e re d P op u lat io n :
Income % of General
General Total
P articu la r Target! SE F + S E F to
Fund (C + D)
3 Budget Total
Approx. Income'
4 A B C D E F
5 LOCAL SOURCES (6+10)
6 TAX REVENUE (7+8+9)
7 Real Property Tax
8 Tax on Business
9 Other Taxes
10 NON-TAX REVENUE (11+12+13+14)
11 Regulatory Fees (Permit and Licenses)
12 Service/User Charges (Service Income)
13 Income from Economic Enterprise (Business Income)
14 Other Receipts (Other General Income)
15 EXTERNAL SOURCES (16+17+18+19)
16 Internal Revenue Allotment
17 SHARES FROM NATIONAL TAX COLLECTIONS
18 INTER-LOCAL TRANSFER
19 EXTRAORDINARY RECEIPTS/G RA NTS/DONA TIO N/A IDS
20 TOTAL CURRENT OPERATING INCOME(5+15)
21 LESS: CURRENT OPERATING EXPENDITURES (PS + MOOE+FE)
22 General Public Service
23 Department of Education
24 Health, Nutrition & Population Control
25 Labor & Employment
26 Housing & Community Development
27 Social Services & Welfare
28 Economic Services
29 Debt Service (FE) (interest Expenses & Other Charges)
30 Other Services
31 TOTAL CURRENT OPERATING EXPENDITURES (22 to 30)
32 NET OPERATING INCOME/(LOSS) FROM CURRENT OPERATIONS(20-31)
33 ADD: NON INCOME RECEIPTS
_
34 CAPITAL/INVESTMENT RECEIPTS (35+36+37)
35 Proceeds from Sale of Property, Plant & Equipment
36 Proceeds from Sale of Debt Securities of Other Entities
37 Collection of Loans Receivables
38 RECEIPTS FROM LOANS AND BORROWINGS (39+40)
39 Acquisition of Loans _
40 Issuance of Bonds
41 TOTAL NON-INCOME RECEIPTS (34+38)
42 LESS: NON OPERATING EXPENDITURES
43 CAPITAL/INVESTMENT EXPENDITURES (44+45+46)
44 Purchase/Construct of Property Rant and Equipment (Capital Outlay)
45 Purchase of Debt Securities of Other Entities (Investment Outlay)
46 Grant/Make Loan to Other Entities (Investment Outlay)
47 DEBT SERVICE (48+49) (Principal Cost)
48 Payment of Loan Amortization,
49 Retirement/Redemption of Bonds/Debt Securities
50 TOTAL NON-OPERATING EXPENDITURES (43+47)
51 NET INCREASE!(DECREASE) IN FUNDS (32+41-50)
52 ADD: CASH BALANCE, BEGINNING
53 FUNDS AVAILABLE (51+52)
54 Less: Payment of Prior Year Accounts Payable
55 FUND BALANCE, END (53-54)
Fund balance Composition: GF SEF TOTAL

Amount set aside to finance projects with appropriations provided in
the previous years (Continuing appropriations)
Amount set aside for payment of Prior Year Accounts Payable
Amount set aside for Obligation not yet Due and Demandable
Amount Available for appropriations/operations
Fund Balance, End (should be reconciled w/cash flow statement)
Certified Correct:

Provincial/City/Municipal Treasurer
Item
Field Instructions Source
No.
Province/City/ Indicate the name of Local Government Unit. LGU
1
Municipality
Indicate the period covered by the report (i.e., January 1 LGU
2 Period to March 31 for the First Quarter Report, January 1 to
June 30 for the Second Quarter Report; etc.)
The LGU population based on the official record of the
3 Population National Statistics Office (NSO) is provided byBLGF - CO
the system.
Income The amount is based on the annual budget approved by Budget Office
Target/Budget the Sanggunian. This column can be used to determine Approved Budget
4-B the projected cash flow based on the approved budget.
Appropriation
Column
These are actual receipts and expenditures lifted from SRS Actual
the Statement of Receipt Sources (SRS) and Column and
General Fund Statement of Expenditures (SOE) for the General Fund SOE Actual
4-C
Column Expenditures
Column
They are receipts and expenditures lifted from the
Statement of Receipt Sources and Statement of
4-D SEF Column Expenditures (SOE) appropriate to the Special Education
Fund (SEF)
4-E Total Sum of General Fund and SEF

% of General + Sum of General Fund and SEF divided by Total. The sum
4-F SEF to Total determines the % of each income or expenditure
Column category in relation to the total.
5 Local Sources Sum of Tax Revenue and Non-Tax Revenue
Sub-total of Real Property Tax, Tax on
6 Tax Revenue Business and Other Taxes.
7 Real Property The amount should be lifted from the SRS SRS
8 _Tax on Business The amount should be lifted from SRS SRS
9 Other Taxes The amount should be lifted from SRS SRS
Sum of Regulatory fees, Service/User Charges, Income
10 Non-Tax Revenue from Economic Enterprise and Other Receipts
11 Regulatory Fees The amount should be lifted from SRS SRS

12 Service/User The amount should be lifted from SRS SRS
13 Income from The amount should be lifted from SRS SRS
14 Other Receipts The amount should be lifted from SRS SRS
Sum of Internal Revenue, Shares from Other National
Tax Collections, Inter-Local Transfer and Extraordinary
15 External Sources
Receipts/Grants/Aids/ Donations
16 Internal Revenue The amount should be lifted from SRS SRS

17 Shares from Other The amount should be lifted from SRS SRS
18 Inter-Local The amount should be lifted from SRS SRS

Extraordinary The amount should be lifted from SRS SRS
19 Receipts/Grants/
Aids/Donations
Total Current Sum of Local Sources and External Sources
20
Operating Income
The amount should be lifted from theSOE
General Public General Public Services sub-total of the Statement of
22
Service Expenditures (SOE)
The amount should be lifted from the SOE
Department of
23 Department of Education sub-total of the
Education
SOE
Health, Nutrition The amount should be lifted from Health, SOE
24 & Population Nutrition & Population Control sub-total of
Control the SOE
25 Labor and The amount should be lifted from the Labor SOE
_ Employment and Employment sub-total of the SOE
Housing and The amount should be lifted from the SOE
26 Community Housing & Community Development sub-
Development total of the SOE
Social Services The amount should be lifted from the Social SOE
27
and Welfare Services and Welfare sub-total of the SOE
Economic The amount should be lifted from Economic SOE
28 Services sub-total of the SOE
Services
The amount should be lifted from Debt SOE
Debt Service Service sub-total of the SOE
29
The amount should be lifted from Other SOE
30 Other Services Services SOE
Sum of General Public Service, Department -
of Education, Health, Nutrition &
Total Current Population Control, Labor and
31 Operating Employment, Housing and Community
Expenditures Development, Social Services and Welfare,
Economic Services, Debt Service and Other
Services.
Net Operating The difference between Total Current
32 Income {Loss) Operating Income and Total Current
from Current Operating Expenditures.
Operation Sub-total of Receipts from Sale of Property,
Capital/ Plant and Equipment, Receipt from Sale of
34 Investment Debt Securities of Other Entities, and
Receipts Collection of Principal on Loans to Other
Entities
Proceeds from Sale of The amount should be lifted from SRS SRS
35 Property, Plant and
Equipment
Proceeds from The amount should be lifted from SRS SRS
Sale of Debt
36
Securities of
Other Entities
The amount should be lifted from SRS SRS
Collection of
37 Loans
Receivables
Sub-total of Acquisition of Loans and
Receipts from Issuance of Bonds
38 Loans and
Borrowings

Acquisition of The amount should be lifted from SRS SRS
39
Loans
40 Issuance of Bonds The amount should be lifted from SRS SRS
Sum of Capital/Investment Receipts and

Total Non-Income
41 Receipts from Loans and Borrowings
Receipts
Sub-total of Purchase/Construct of
Capital/ Property, Plant and Equipment (Capital
43 Investment Outlay expenditures), Purchase of Debt
Expenditures Securities of Other Entities, and
Grant/Make Loan to Other Entities
Purchase/ Capital Outlay expenditures The amount SOE
Construct of should be lifted from SOE
44
Property, Plant
and Equipment
Purchase of Debt The amount should be lifted from SOE SOE
45
Securities of
Sub-total of Payment of Loan Amortization
47 Debt Service And Retirement/Redemption of Bond/ Debt Securities
Payment of Loan The amount should be lifted from SOE SOE

48 Amortization
(Principal)
Retirement/Redemption The amount should be lifted from SOE SOE
49 of Bond/Debt
Securities
Total Non- Sum of Capital/Investment Expenditures and
50 Operating Debt Service
Expenditures
Net Increase Sum of Net Operating Income, Total Non-
51 (Decrease) in Income Receipts less Total Non-Operating
Funds Expenditures
The amount is the ending cash balance per Treasurer Cash Book reconciled
Balance Sheet of last year (Dec. 31,) or Cash with Accounting
Cash Balance Flow Statement. The ending cash balance per Cash Flow/Balance
52 Beginning cash flow is assumed to be reconciled with the Sheet
Cash Book maintained by the Treasurer
Funds Available Sum of Net Increase (Decrease) in Funds and

53 Cash Balance Beginning
Payment of Prior The amount should be lifted from SOE SOE
54 Year Accounts
Payable
Fund Balance, Sum of Fund Balance Available less Payment
55 of Prior Year Accounts Payable
End
Fund Balance Reported at year end. The breakdown of Accounting
funds/cash shall be source from the Office Note to Financial
Composition Accounting office since this information is Statement at
included in the annual report submitted to year-end
COA specifically in the Notes to Financial
Statements. Fund balance breakdown is not

limited to the format shown in Exhibit 1 but
the important information required is how
much fund/cash is available or free for
appropriations as of the reporting date

Other important information that needs to be disclosed should be made as Notes to SRE

LTO Form 15
CASH RECEIPTS AND DEPOSITS REGISTER
___________________________________
Barangay: City/Municipality: CRDReg No:
Barangay Treasurer: Province:Page:
Undeposite Distribution of Receipts

Remittanc OTHERS (See List at the
d/ Garbag Clearance Business
Date Particulars Ref. Receipts Deposits e Market Rent Misc. Back)
Unremitted IRA RPT e & Cert. Permit Account
C/MT Fees Income Income Amount
Collection Fees Fees Fee Classification
Certification:
I hereby certify to the correctness of the above data. Recordings are based on the
certified SCDs supported with duplicate ORs and VDS submitted by the BT, CMs and bank statements which are all in my file.
____________________________________________ ____________________________
Barangay Record Keeper Date

LTO Form 15 - Cash Receipts and Deposits Register
INSTRUCTIONS
A. This form shall be accomplished as follows: xi. Distribution of Receipts – amount received and
distributed to the appropriate income
i. Month - the month covered by the Register account
ii. CDRReg No - The CDRReg shall be numbered as xii. Others - collection which could not be
follows: accommodated in the specific Columns
Account Classification - account used
00 00 0000 Amount - amount received
Serial number
(one series per year) B. At the end of the month, the Register shall be totaled,
balanced, ruled, recapitulated and certified as to the
Month of Issue
correctness. The ruling shall be made on the line
Date of issue
immediately after the last entry.
iii. Page - number assigned to the sheet vi. At the start of each month, the register shall be used. In
case where more than one sheet shall be utilized, each
iv. Date reference date of the Document sheet shall be totaled and the totals shall be carried
forward to the next sheet. The succeeding sheets shall
v. Particulars - brief description of the start with the totals brought forward.
collections/income received
vii. The Register shall be certified and Distributed as follows:
vi. Reference the SCE , CM number bank statement Original - City/Municipal Accountant
supporting and recording 2nd copy –BRK
vii. Receipts - total receipts as indicated in E. The certified Register shall be submitted to the City/
the SCD, CM and Banks Municipal Accountant on or before the 5th day of the
following month supported with the certified SCDs
viii. Deposits - total deposits made per SCD
b) All supporting documents to the SCDs shall remain with
ix. Remittances - total remittances to C/MT per SCD the BRK and shall be made available to COA
representative anytime for examination/audit.
x. Undeposited/Unremitted Collections - beginning
balance plus receipts less deposits/remittance

LTO Form 16
CASH ON HAND and IN BANK REGISTER
____________________________________
Barangay: City/Municipality: CHBReg No. :

Barangay Treasurer: Province: Page No.
Cash on Hand Cash in Bank
Date Receipt Deposit Deposits/CM/BnkS Checks/DM/BnkS
Particulars Ref Balance (In) (Out) Balance
(In) (Out)
Certification:
Acknowledgement:
I hereby certify to the correctness of the above data. Recording is based on This is to acknowledge that I have received from BT the CHBReg supported with
the SCDs, SCkls, Debit/Credit Memos and Bank Statement received which are all SCDs, SCkls, Credit/Debit Memos and Bank Statements the supporting documents.
submitted to the BRK.
__________________________ _________________ _____________________________ _______________

Barangay Treasurer Date Barangay Record Keeper Date
LTO Form 16 - Cash On Hand and In Bank Register
INSTRUCTIONS

A. This Register form shall be accomplished as follows: A. Daily, the BT shall record all the receipts and
deposits based on the SCD, all checks issued
i. Month - the month covered by the Register based on the SCkI and DM
ii. CHBReg No - The CHBReg shall be numbered as
follows: B. At the end of the month, the amount columns shall
be totaled, balanced and ruled. The balance shall
00 00 0000 be forwarded to the next month as beginning
Serial number balance. The ruling shall be made on the line
(one series per year) immediately after the last entry.
Month of Issue
Date of issue C. At the start of each month, a new sheet shall be
used. In case where more than one sheet shall be
utilized, for the month, each sheet shall be totaled
iii. Page - number assigned to the sheet
and the totals shall be carried forward to the next
sheet. The succeeding sheets shall start with the
iv. Date - date of the SCD, SCkl and bank DM/CM
totals brought forward.
v. Particulars –details or nature of receipts and
D. The certification shall be signed by the BT and the
payments
acknowledgment shall be signed by the BRK
vi. Reference the SCE , CM number bank statement
E. The certified report shall be distributed as follows:
supporting and recording
Original - City/Municipal Accountant
vii. Cash on Hand –
2nd copy -BT
Receipts (In) – collections per SCD shall be recorded in
3rd copy -BRK
this column
Deposit (Out) - the deposit of collection as
F. On the 5th day of the following month, the certified
reported in the SCD shall be recorded in this
report shall be distributed to the City/Municipal
column
Accountant supported with the certified SCDs
Balance - the running balance of the cash on
hand representing the undeposited collection
(Beg. Balance + Receipts (In) - Deposits (Out) G. All supporting documents to the SCD and SCkI
shall remain with the BRK and shall be made
viii. Cash in Bank available to COA the COA for examination/audit
Deposit (In) - the deposit made as reported
in the SCD and
CM/Banks shall be recorded in this column

Check Issued (Out) - all checks issued
reported in the SCkl and bank charges per
DMs as shown in the Banks shall be
recorded in this column
Balance - running balance of the cash in
bank available for withdrawal (Beg. Balance
+
Deposit (In) - Checks Issued (Out)

LTO Form 17
REPORT OF ACCOUNTABILITY FOR ACCOUNTABLE FORMS

For the period ____________________________________
Barangay City/Municipality: RAAF No.

Barangay Treasurer Province
Accountable Forms Beginning Balance Receipt Issuance Ending Balance
GF Face Inclusive Serial No. Inclusive Serial No. Inclusive Serial No.
Name of Inclusive Serial No. Qty
Number Value Qty From To Qty Qty From To From To
Form From To
Face Value
A. WITH FACE VALUE
B. WITHOUT FACE VALUE
A.CERTIFICATION B. ACKNOWLEDGEMENT C. CERTIFICATION

I hereby acknowledge receipt of the RAAF for the above stated I hereby certify that all items enumerated
I hereby certify that the foregoing is a true statement in the "receipt" portion are the only issued by
of all accountable forms received and issued during the this office.
period above stated and that the beginning and ending
balance are correct.
___________________________ _______ _________________________ _____
____________________ ____________ Signature over Printed Name Date
Signature over Printed Name Date
Barangay Treasurer Signature over Printed Name Date City/Municipal Treasurer
Barangay Record Keeper

LTO Form 17 - Report On Accountability for Accountable Forms
INSTRUCTIONS
A. This Report shall be accomplished as follows:
1. Month/Year - month/year on which the report is made

2. RAAF No - The RAAF shall be numbered as follows:
00 00 0000
Serial number
(one series per year )
Month of Issue
Year of Issue
3. Accountable forms name of form, General form (GF) number and face value of
accountable forms under the custody of the accountable officer
4. Beginning Balance - quantity of accountable forms available at the beginning of the

month (indicate inclusive serial number)
5. Receipt - number of units received during the month (indicate inclusive serial
numbers)
6. Issuance - number of units received during the month ( indicate inclusive serial
numbers)
7. Ending Balance - accountable forms still in the custody of the accountable officers at
the end of the month (indicate inclusive serial numbers)
B. Box A Certification to be signed by the BT
C. Box B Acknowledgement - to be signed by the BRK
D. Box C Certification to be signed by the City/Municipal Treasurer
E. Accountable Forms shall be grouped as follows:
 With face value

 Without face value
F. This report shall be prepared in three copies to be distributed as follows:
Original city/municipal treasurer (to be attached in the consolidated RAAF)

2nd copy - BRK
3rd copy – BT
G. This shall be prepared monthly by the BT having custody of any accountable forms

LTO Form 18
CONSOLIDATED REPORT OF ACCOUNTABILITY FOR ACCOUNTABLE FORMS
For the period ________________________

Barangay City/Municipality: RAAF No.
Barangay Treasurer Province
Accountable Forms Beginning Balance Receipt Issuance Ending Balance
Name of GF Face Qty inclusive Serial No. Qty Inclusive Serial No. Qty Inclusive Serial No. Qty Inclusive Serial No.
Form Number Value From To From To From To From To
A. WITH FACE VALUE
B. WITHOUT FACE VALUE
A. CERTIFICATION B. ACKNOWLEDGEMENT C. CERTIFICATION
I hereby certify that the foregoing is a true statement I hereby acknowledge receipt of the RAAF for the above stated I hereby certify that the above accountable form
of all accountable forms received and issued during the were issued by this office
period above stated and that the beginning and ending
balance are correct
_________________________ __________
Signature over Printed Name Date Signature over Printed Name Date Signature over Printed Name Date
Barangay Treasurer Barangay Record Keeper City/Municipal Treasurer

LTO Form 18 – Consolidated Report of Accountability ForAccountable Forms
INSTRUCTIONS
A. This Report shall be accomplished as follows:
1. Month/Year - month/year on which the report is made

2. RAAF No - The RAAF shall be numbered as follows:
00 00 0000
Serial number
(one series per year )
Month of Issue
Year of Issue
3. Accountable forms name of form, General form (GF) number and face value of
accountable forms under the custody of the accountable officer
4. Beginning Balance - quantity of accountable forms available at the beginning of

the month (indicate inclusive serial number)
5. Receipt - number of units received during the month (indicate inclusive serial
numbers)
6. Issuance - number of units received during the month ( indicate inclusive serial
numbers)
7. Ending Balance - accountable forms still in the custody of the accountable

officers at the end of the month (indicate inclusive serial numbers)
B. Box A Certification to be signed by the BT

C. Box B Acknowledgement - to be signed by the BRK
D. Box C Certification - to be signed by the City/Municipal Treasurer
E. Accountable Forms shall be grouped as follows:
 With face value

 Without face value
F. This report shall be prepared in three copies to be distributed as follows:
Original - city/municipal treasurer

2nd copy - BRK
3rd copy – BT

LTO Form 19
SUMMARY OF COLLECTONS AND DEPOSITS
For the period ________________
Barangay: City/Municipality: SCD No.:

Barangay Treasurer: Province: Page:
Date
OR/VDS/SCR No. Payor/Bank Particulars Barangay As deputized by
City/Municipality
Collections Deposit Balanc Collection Remittanc Balance
e
Certification: Acknowledgment:
I hereby certify that the foregoing is the complete and correct records of all my collections and I hereby acknowledge to have received the SCD complete with the duplicate
deposits from _______ to ________, 20 ___.The duplicate copies of the ORs issued, SCRs and copies of the ORs issued, SCRs and the VDS covering deposits as reported.
the originals of the VDS are hereto attached.
_____________________________ _________________________________
Barangay Treasurer Barangay Record Keeper

LTO Form 19 – Summary of Collections and Deposits
INSTRUCTIONS
1. Period - the covering period of the report

2. SCD No. - the SCD shall be numbered as follows:
00 00 0000
Serial number
(One series per year)
Month of Issue
Year of Issue
3. Page - where the page number is indicated. In case more than one sheet is used for the week, the first
page shall be numbered I of 3 and the next page is page 2 of 2 to fully account all the sheets used.
4. Date - date of the receipt of the collections/deposits
5. Reference - The source documents shall support the entries to be made
 OR No. serial number of the OR issued including the cancelled ones. For collections of DBT or
DBC, Ors shall be shown in batch.
 VDS No. - number of the validated deposit slip
 SCR No. - number of the SCR
6. Payor/Bank name of the payor or name of DBC and the Bank. For collections of DBT or DBC, "Various"
shall be used.
7. Particulars brief description of the transaction
8. Barangay - amounts of collections, deposits and balance for the barangay
 Collections amount received

 Deposits amount deposited as evidence by VDS
 Balance collections less deposits
9. As deputized by City/Municipality - amounts of collections, remittances and balance of funds held by

the BT
 Collections - amount received

 Remittances - amounts remitted to City/Municipal Treasurer
 Balance - collections less remittances
10. Certification to be signed by the Barangay Treasurer

11. Acknowledgement - to be signed by the Barangay Record Keeper
B. The daily sub-total of the SCD shall be recorded in the CHBReg by the BT and the weekly total in the
CRDReg by the BRK
C. This report shall be prepared in three copies to be distributed as follows:

2nd copy - BRK
3rd copy – BT
D. Any undeposited amount shall be forwarded to the balance column of the following weekly's summary.

LTO Form 20
Summary of Collections and Remittances-BT

_________________________
Date
Barangay: City/Municipality: SCR(BT) No.:
Deputized Collector: Province: Page:
RPTR/CTC Nature of Collections
Date Payor Amount
No. CTC-Indv CTC-Corp. RPT Others
I hereby certify that the foregoing is the I hereby acknowledge receipt of the certified
complete and correct record of all my collections for SCR complete with duplicate copies of the ORs and
Jan. _______. Duplicate copies of ORs and the the remittances of ____________________ (₱
remittance of are hereto attached. _______).
___________________ ________
Barangay Treasurer Date ____________________ _________
City/Municipal Treasurer Date
LTO Form 20 – Summary of Collections and Remittances-BT
INSTRUCTIONS
1. SCR No. the SCR shall be numbered as follows:
00 00 0000
Serial number
Month of Issue
Year of Issue
2. Page - the page number per sheet

3. Date - date of receipt of collections/remittances
4. OR No. - No. ofOR/CTC/RPTR issued including cancelled ones. For collections of DBC, Ors, shall be
shown in batch.
5. Payor - name of the payor. For collections of DBC, "Various" shall be used
6. Nature of Collections - amount collected by nature of collections
7. Amount - total amount collected
8. Certification - to be signed by the BT
9. Acknowledgement - to be signed by theCity/Municipal Treasurer
B. This summary shall be prepared daily in three copies to be distributed as follows:

2nd copy - BRK

3rd copy – BT
LTO Form 21
Summary of Collections and Remittances-DBC

_____________________________
Date
Barangay: City/Municipality: SCR(DBC)No.:
Deputized Collector: Province: Page No.:
Area:
Ticket Nature of
Date Qty Denomination Payor Amount
Series Collections
I hereby certify that the foregoing is the complete and correct record of I hereby acknowledge receipt of
all my collections for ___________ The remittances of ₱ _______ are hereto the SCR complete with the remittances of
attached. _________ (₱ ________).
________________________ _______________
Deputized Barangay Collector Date

LTO Form 21 – Summary of Collections and Remittances-DBC
INSTRUCTIONS

1. SCR No.- the SCR shall be numbered as follows:
00 00 0000
Serial number
Month of Issue
Year of Issue
2. Page - the page number per sheet

3. Date - date of receipt of collections/remittances
4. Ticket Series - the inclusive series of the ticket issued
5. Qty. - quantity of ticket issued based on the inclusive serial number
6. Denomination - the face value of the ticket
7. Payor - name of the payor. For accountable forms entered in batches, the term
various shall be used
8. Nature of Collections - brief description of the nature of collections
9. Amount - total amount collected

10. Certification - to be signed by the DBC
11. Acknowledgement - to be signed by the BT
B. This summary shall be prepared daily in three copies to be distributed as follows:
Original - BT
2nd copy - BRK
3rd copy - DBC

LTO Annex 22 - Process Flow on the Receipt and Recording of Collections by
Barangay Treasurer
Area of
Responsibility/Person Seq. Activity
Responsible
Barangay Treasurer 1 Receives cash/check from payor representing collections

of
income/other receipts
2 Prepares the OR
Note 1. The OR shall be prepared in three copies to be
distributed as follows:
Original - Payor
2nd copy - Barangay Record Keeper (BRK) to support the
SCD
3rd copy - BT (retained in the booklet)
Issues and forwards OR to the payor to acknowledge

3 collection
Forwards the 2 nd copy to the Barangay Record Keeper

4 for
recording in the SCD and retains 3rd copy for file
Counts collections (cash and checks)

5
Prepares Deposits Slips
Note 2. The Deposits Slips shall be prepared in three
6 copies for bank validation to be distributed as follows:
Original -Bank
2ndcopy - Barangay Record Keeper
3rdcopy - Barangay Treasurer
Deposits collections intact with the depository bank

daily or not later than the following banking day
7 Receives 2nd and 3rd copies of the Validated Deposit

Slips from the bank and files
Records the ORs issued including the cancelled ones in

8
correct numerical sequence in the SCD. Records the
Barangay Record Keeper deposits based on the Validated Deposits Slips.
Note 1. The SCD shall be prepared in three copies to be
9 distributed as follows:
Original - City/Municipality Accountant
2nd Copy - Barangay Bookkeeper
3rdCopy - Barangay Treasurer
Records the collections and remittances reported in the

summary of Collections and Deposits
Sub-totals the columns for collections, deposits and

remittance for the day
10
Totals and certifies the Summary of Collections and
Deposit weekly
11
Forwards three copies of the Summary of Collections
and Deposits to the Barangay Bookkeeper together with
the duplicate copies of the ORs Validated Deposits Slips
12
and Summary of Collections and Remittances.
Receives the Summary of Collections and Deposits and

13 checks supporting documents. Returns the 3rd copy to
the BT and retains the original (for City/Municipal
Barangay Record Keeper Accountant) and 2 nd copy for file
Retrieves the Summary of Collections and Deposits from

file
14
Records in the Cash Receipts and Deposits Registers
collections, deposits and remittances based on the SCD.
Fills out the "Distribution of Receipts" portion in the
sources of collections
Retrieves the Credit Memo from file

15
Records the Credit Memo in the "Receipts and Deposits"
column of the Cash Receipts and Deposits Registers
16
Retrieves the Bank Statement from file
Records the interest earned in gross

Note 2. The Cash Receipts and Deposits Registers shall
17 be prepared in two copies to be distributed as follows:
18
At month end, totals, balances and rules all the columns
of the Register. Recapitulates all the entries in the
"Others" column.
19
Certifies the Cash Receipts and Deposits Register.
20 Submits the original together with the Summary of
Collections and Deposits to City/Municipal Accountant
and keeps the 2 nd copy for file.
21

22
LTO Annex 23 – Process Flow on the Receipt and Recording of Collections by

Deputized BarangayCollectors
Area of
Responsible
A Collections
Deputized Barangay 1 Receives the accountable forms from the Barangay Treasurer
Collector to be used/issued to acknowledge collections.
2 Collects fees by issuing cash tickets to market peddlers or

parking fee tickets on the use of barangay pay parking lots.
3 Prepares and certifies the Summary of Collections and

Remittance
Note 1: The Summary of Collections and Remittance shall be
prepared in
three copies to be distributed as follows:
Original - Barangay Bookkeeper
2nd copy - Barangay Treasurer
3rd copy - Deputized Barangay Collector
B Remittance of Collections
4 Remits collections together with three copies of duly certified
Summary of Collections and Remittance to the Barangay
Treasurer
5 Receives remittance together with three copies of the

Summary of Collections and Remittance
6 Reviews the Summary of Collections and Remittance and

checks the completeness of data. Checks computation of
accountable forms issued/sold as against the reported
collections.
Note 2. In case of discrepancy, informs the Deputized

Barangay Collector immediately
Acknowledges the remittances by signing

7 theacknowledgement portion of the Summary of Collections
Deputized Barangay and Remittances
Collector
Note 3. The Acknowledgement portion of the Summary of
Collections and Remittances shall be filled out by recording the
amount received and date of receipts
8 Returns the 3 rdcopy of the Summary of Collections and

Remittances to the Deputized Barangay Collector and keeps

the original and 2 nd copy.
9 Receives the 3rd copy of the Summary of Collections and

Remittances for his file
Records daily collections in the Summary of Collections and

Remittances based on ORs issued including cancelled ones in
correct numerical sequence.
Deputized Barangay
Collector 10 Records the accountable forms issued in batches (showing the
denomination, quantity and sold and total amount collected)
Note 4. The Summary of Collections and Remittances shall be
prepared in three copies to be distributed as follows:
Original - Barangay Bookkeeper
2nd Copy - Barangay Treasurer
3rd copy - Deputized Barangay Collector
11 Total the amount column of the Summary of Collections and

Remittances to determine the amount due for remittance
12 Tallies the cash on hand with the amount collected as reported

in the Summary of Collections and Remittances
13 Certifies the Summary of Collections and Remittances
Barangay Treasurer 14 Attaches the duplicate copies of the ORs issued to the original
Summary of Collections and Remittances to support the
remittances
15 Submits the three copies of the certified Summary of

Collections and Remittances complete with the supporting
documents to the Barangay Treasurer for acknowledgement
together with the full remittance
Deputized Barangay
Collector 16 Receives the Summary of Collections and Remittances and
cash collections. Checks correctness of remittance and
completeness of supporting documents. Acknowledges
Barangay Treasurer receipt by signing the acknowledgement portion. Retains the
2ndcopy and sends the original to Barangay Bookkeeper and
3rdcopy to the Deputized Barangay Collector,
17 Records the Summary of Collections and Remittances in the

Summary of Collections and Deposits
18 Receives the 3 rd copy of the Summary of Collections and

Remittances and files
19 Counts collections (cash and checks)

Barangay Treasurer
20 Prepares Deposits Slips
Note 1. The Deposits Slips shall be prepared in three copies
for bank validation to be distributed as follows:
Original - Bank
2ndcopy - Barangay Record Keeper
3rdcopy - Barangay Treasurer
21 Deposits collections intact with the depository bank daily or not

later than the following banking day
Receives 2nd and 3rd copies of the Validated Deposit Slips

from the bank and files
22 Records the ORs issued including the cancelled ones in correct

numerical sequence in the Summary of Collections and
Deposits.
23 Records the deposits based on the Validated Deposit Slips.

Barangay Treasurer Note 2. The Summary of Collections and Deposits shall be
prepared in three copies to be distributed as follows:
2ndCopy - Barangay Bookkeeper
3rdCopy - Barangay Treasurer
24 Records the collections and remittances reported in the SCR
Barangay Record Keeper 25 Sub-totals the columns for collections, deposits and remittance
for the day
26 Totals and certifies the SCD weekly
27 Forwards three copies of the SCD to the Barangay

Bookkeeper together with the duplicate copies of the ORs VDS
and SCR
28 Receives the Summary of Collections and Deposits and

checks supporting documents. Returns the 3 rd copy to the BT
and retains the original (for City/Municipal Accountant) and
2ndcopy for file
29 Retrieves the Summary of Collections and Deposits (SCD) from

file
30 Records in the Cash Receipts and Deposits Registers

collections, deposits and remittances based on the SCD. Fills
out the "Distribution of Receipts" portion in the sources of
collections
31 Retrieves the Credit Memo from file
Records the Credit Memo in the "Receipts and Deposits"

32 column of the Cash Receipts and Deposits Registers
33 Retrieves the Bank Statement from file
34 Records the interest earned in gross

Note 1. The Cash Receipts and Deposits Registers shall be
prepared in two copies to be distributed as follows.'
35 At month end, totals, balances and rules all the columns of the
Register. Recapitulates all the entries in the "Others" column.
36 Certifies the Cash Receipts and Deposits Register. Submits the

original together with the Summary of Collections and Deposits

to City/Municipal Accountant and keeps the 2 nd copy for file.
LTO Annex 24 – Process Flow on the Receipt and Recording of Collections by

Barangay Treasurer asDeputized by the City/Municipal Treasurer
Area of
Responsible
A Collections
Barangay Treasurer 1 Receives the accountable forms from City/Municipal Treasurer to be

used/issued to acknowledge collections
2 Collects Real Property Tax, Community Tax and other authorized

receipts
3 Issues Real Property Tax Receipt and Community Tax Certificates to

payor, retains the 2 nd copy to support the Summary of Collections and
Remittances and the 3rd copy for file.
4 Prepares and certifies Summary of Collections and Remittances
B Remittance of Collections
City/Municipal Treasurer 5 Remits the collections to the City/Municipal Treasurer together with
the three copies of the certified Summary of Collections and
Remittances supported by the duplicate copies of the Real Property
Tax Receipt/Community Tax Certificate
6 Checks correctness of amount received against the actual remittance

in the Summary of Collections and Remittances
7 Examines the Summary of Collections and Remittances as to

completeness of supporting documents and correctness of recording
of the Real Property Tax Certificates/Community Tax Certificates
issued
Acknowledges receipt of the Summary of Collections and Remittances

8 and the remittance. Signs the acknowledgement portion of the
Summary of Collections and Remittances
Note 1. The acknowledgement portion of the Summary of Collections
Barangay Treasurer and Remittances shall he filled out, indicating the amount received
and date of receipt.
9 Returns 2nd and 3rdcopies of the Summary of Collections and

Remittances to the Barangay Treasurer and retains the original for file

Receives and files the Summary of Collections and Remittances
10
Records daily collections in the Summary of Collections and
11 Remittances based on ORs, Community Tax Certificates and Real
Property Tax Certificates issued in correct numerical sequence
including cancelled ones.
Note 1. The Summary of Collections and Remittances shall be
prepared in three copies to be distributed as follows
Original - City/Municipal Treasurer
2nd copy - Barangay Record keeper
3rd copy - Barangay Treasurer
Totals the amount column to determine the amount due for remittance
12
Barangay Treasurer Tallies the cash on hand with the collections as reported in the
Summary of Collections and Deposits
13
Certifies the Summary of Collections and Deposits
14 Attaches duplicate copies of the ORs, Community Tax Certificates and

Real Property Tax Certificates to the original Summary of Collections
15 and Remittances to support the remittances
Records the Summary of Collections and Remittances in the Summary

of Collections and Deposits
16
Records the ORs issued including the cancelled ones in correct
numerical sequence in the SCD. Records the deposits based on the
17 VDS.
Note 1. The SCD shall be prepared in three copies to be distributed
as follows:
3'rd Copy - Barangay Treasurer
Records the collections and remittances reported in the SCR

Barangay Record Keeper
18 Sub-totals the columns for collections, deposits and remittance for the
day
19
Totals and certifies the SCD weekly
20 Forwards three copies of the SCD to the Barangay Bookkeeper

together with the duplicate copies of the ORs VDS and SCR
21
Receives the SCD and checks supporting documents. Returns the 3 rd
copy to the BT and retains the original (for City/Municipal Accountant)
22 and 2ndcopy for file
Retrieves the Summary of Collections and Deposits (SCD) from file
23 Records in the Cash Receipts and Deposits Registers collections,

deposits and remittances based on the SCD. Fills out the "Distribution
24 of Receipts" portion in the sources of collections
Retrieves the Credit Memo from file

25 Records the Credit Memo in the "Receipts and Deposits" column of
the Cash Receipts and Deposits Registers
26
Retrieves the Bank Statement from file
27 Records the interest earned in gross

Note 1. The Cash Receipts and Deposits Registers shall be prepared
28 in two copies to be distributed as follows:
At month end, totals, balances and rules all the columns of the
Register. Recapitulates all the entries in the "Others" column.
29
Certifies the Cash Receipts and Deposits Register. Submits the
original together with the Summary of Collections and Deposits to
30 City/Municipal Accountant and keeps the 2 nd copy for file.
LTO Form 25 – Process Flow on the Receipt and Recording of Bank Debit/Credit
Memo and BankStatement
Area of Activity
Responsibility/Person Seq.
Responsible
Barangay Treasurer A Receipt of Debit/Credit Memo
1 1) Receives the Credit Memo on the receipt of Internal Revenue

Allotment/Real Property Tax due the barangay
2) Receives Debit Memo on the dishonored checks and other bank
charges
3) Photocopies Debit/Credit Memo. Submits the original
Debit/Credit Memo to the Barangay Record Keeper and keeps Xerox
copies for file
4) Receives and files the Debit/Credit Memo
Receipt of Bank Statement

Barangay Treasurer
1) Receives the bank statement from the bank
2) Forwards the Bank Statement to the Barangay Record Keeper
3) Receives the Bank Statements for submission to the City / Municipal
Accountant
Note 1.The Barangay Record Keeper shall furnish the Barangay

Treasurer with a Xerox copy of the Bank Statements.
4) Records the deposits per Credit Memo received under the "Deposits
(In)" column of the "Cash in Bank" section of the Cash on Hand and
in Bank Registers.
5) Records the interest earned at gross in the "Deposit (In)" column of

the "Cash in Bank" section of the Cash on Hand and in Bank Register
and the withholding taxes under the "Check/Debit Memo/ Bank
Statements (out)" column.
6) Records the disbursement of checks per Summary of Check Issued

in the 'Check/Debit Memo/Bank Statement (Out)" column under the
"Cash in Bank" section of the Cash on Hand and in Bank Register.
7) Totals, balances and rules the Cash on Hand and in BankRegister at

the end of the month
Note 2. The difference between the totals of the "Receipts" column plus
the beginning balance less the "Deposit" column shall equal the
"Balance" in the "Cash on Hand" section.
Note 3. The difference between the totals of the deposits, credit memo
and interest earned plus the beginning balance less checks/Debit Memo
and withholding taxes shall equal the "Balance" in the “Cash in Bank"
section.
Note 4. The Cash on Hand and in Bank Register shall be prepared in

three copies to be distributed as follows:
2nd copy - Barangay Treasurer
3rd copy - Barangay Record Keeper
8) Signs the certification portion of the Cash on hand and inBank

Register and forwards to the Barangay Record Keeper
9) Examines the Credit Memo and Bank Statement attached to it

and.acknowledges the receipt of the Credit Memo and
BankStatement.
Barangay Record Keeper 10) Submits the certified Cash on Hand and in Bank Register to the
City/Municipality Accountant. Forwards the 2 nd copy to the Barangay
Treasurer and retains 3rd copy for file

LTO Annex 26 – Letter of Authority/Appointment
Republic of the Philippines

Province/City/Municipality of ____________________
Office of the Provincial/City/Municipal Treasurer
LETTER OF AUTHORITY/APPOINTMENT
No. ____________
__________, 20 _______
_______________________
_______________________
_______________________
Sir/Madam/Gentlemen:
Pursuant to Section 171 of RA No. 7160, otherwise known as the Local Government Code of
1991, which has for its purpose the enforcement and collection of taxes, fees and charges
authorized thereunder, please be advised that the bearers hereof, from this office and as
deputies thereof, are hereby authorized to examine your books of accounts and other
pertinent records of your business, to verify, assess and collect the true and correct amount
of tax or taxes, fees and charges due from you during the period from
________________________, to ________________, 20 ___________.
Messrs. ___________________and ___________________ whose signatures

appear below, are provided with identification cards by this office and they are under
instruction to properly identify themselves and present their identification cards upon
demand.
As provided for in Section 171 of this Code cited above, the examination of your
books of accounts and other pertinent records shall be made during regular business hours
not oftener than once a year.
The examination made pursuant hereto shall be certified to by the above named
deputies and such certification shall be made of record in your books of accounts.
Your cooperation in this regard will be highly appreciated.
Very truly yours
____________________________

Provincial/City/Municipal
Treasurer
____________________________
(Signatures of Examination Team)

ACKNOWLEDGMENT:
Received by: _________________

Date:________________________ Name and Signature
_________________ _____________________
Position/Designation Telephone No.

Province/City/Municipality of____________________
NAME OF TAXPAYER : ____________________

LETTER OF AUTHORITY NO. : ____________________
Date Issued : ____________________
DOCUMENTS TO BE EXAMINED
Sir/Madam:
Pursuant to Letter of Authority attached hereto, please prepare the following pertinent business
records of your establishment/company, viz:
1. Business Permit__________ to_________(Xerox)
2. Business License Receipts ________to________ (Xerox)
3. Latest Letter of Authority and Letter of Confirmation (proof of examination) issued.
4. Audited Financial Statement _________to _______(Xerox)
5. Books of Accounts __________to ________
6. Purchases, Sales and Delivery Invoices
7. Value Added Tax (VAT), Percentage, Excise or Quarterly payments to Bureau of internal
Revenue (BIR) (Xerox)
8. Business Permit and Taxes paid in other cities or municipalities if the
establishment/company has branches outside Quezon City (Xerox)
9. Schedule of Gross Sales/Receipts for every branch duly certified by an authorized official
or representative of the establishment/company
10. Articles of Incorporation/Partnership
11. Contract of Lease (if place of business is rented)
12. List of employees submitted to Social Security System (SSS)
13. Letter of Credit/Bill of Lading (for importers & exporters)
14. POEA license, Deployment reports (for manpower agencies)
15. DOT Accreditation (for tourist oriented and related business)
16. Contract of Agreement on Projects (for general building and engineering contractors)
17. Community Tax Certificate ___________ (Xerox)
Very truly yours
___________________________

____________________________
Revenue Examiner
LTO Form 27 – Tax Data Sheet

Province/City/Municipality of________________
TAX DATA SHEET
Letter of_
Authority No.___________________
Date Examination Started_______________
Date Examination Finished______________
Period/Year Covered___________________
Name of Business Establishment

Business Address___________________________________
Owner/Licensee____________________________________
Citizenship________________________________________
Capital Investment__________________________________
Gross Gross Understatement Overstatement

Mayor's Date of Type of Sales/Receipts
Sales/Receipts of of
Permit No. Issue Business per
per Permit Sales Sales
Examination
PAYMENTS
Kind of Kind of Kind of Kind of Kind of
Business Business Business Business Business
Taxes/Fees/Ch Taxes/Fees/Ch Taxes/Fees/Ch Taxes/Fees/Ch Taxes/Fees/Ch
arges arges arges arges arges

REMARKS:
__________________________________________________________________________
__________________________________________________________________________
__________________________________________________________________________
CERTIFIED CORRECT:
____________________________________
Names and Signature of Examination Team

LTO Form 28 – Tax data and Assessment Form
Province/City/Municipality of_________________________
TAX DATA AND ASSESSMENT FORM
Name of Company President _____________________ Mayor’s Permit No. _________________

Business Name ________________________________ Area ____________________________
Address ______________________________________ Nature of Business _________________
LOA# ________________________________________ Date Issued ____________ Date Examined ____________________
Community Tax Certificate No. ____________________ Date Issued ____________ Place of Issue _____________________
Particulars Actual Sales Declared Sales Year Tax Due Tax Paid Difference Surcharge Interest
Findings and Recommendations

We have examined, reviewed and evaluated the foregoing accomplished data and
______________________________________________ assessment form concurs with the findings and recommendations of the deputy
______________________________________________
______________________________________________
______________________________________________
__________________
Revenue Examiner ____________________
Sr. Revenue Examiner Approved by:

_______________________

LTO Form 29 – Letter of Assessment (1st Notice)
REPUBLIC OF THE PHILIPPINES

Province/City/Municipality of ________________
_____________________
(Date)
LETTER OF ASSESSMENT (1 st Notice)
__________________
__________________
Sir:
Please be advised that the report of my deputy MR. _________________ has been
submitted to this office pursuant to Letter of Authority No. ___________ dated
____________, asa result of his examination, you are hereby requested to pay the amount of
Php _____________ representing additional business tax includingsurcharges and
penaltiesfortheyears .
To avoid the inconveniences of a legal action to enforce payment of your deficiency, it

is hereby required that you pay it within five (5) days from your receipt hereof.
Very truly yours
______________________________
Note: Subject to adjustment upon presentation of pertinent documents

LTO Form 30 – 2nd Notice

Province/City/Municipality of ____________
____________________
(Date)
SECOND NOTICE
___________________
___________________
___________________
Sir/Madam:
Records show that you failed to settle the remaining deficiencies discovered during
the examination of your books pursuant to Letter of Authority No. ________ dated ________.
As per our computation you are hereby requested to pay the amount of Php
__________ covering the period of ____________.
You are hereby required to pay the aforesaid amount within three (3) days from
receipt hereof. Your failure to do so will constrain us to cause the institution of appropriate
legal action against you.
Very truly yours,
____________________________
LTO Form 31 - Final Notice

Province/City/Municipality of _______________________
______________________
(Date)
FINAL NOTICE
___________________
___________________
___________________
Sir/Madam:
Records show that a Notice of Assessment in the amount of Php _________ was
issued by this Office, which was duly received by your company on __________. However, in
spite of these notices, no reply or attempt to settle this obligation was made by your
company.
Pursuant to Section 195 of the Local Government Code of 1991, x x x. "Within sixty
(60) days from the receipt of the Notice of Assessment, the taxpayer may file a written
protest with the local treasurer contesting the assessment, otherwise the assessment shall
become final and executory x x x".
In view of the foregoing and it appearing that the sixty (60) day period within which to
protest the tax assessment has already prescribed, the subject assessment becomes final
and executory and therefore, the immediate settlement of your tax obligation is requested,
otherwise, this Office will be constrained to cancel your Mayor's Permit or effect the civil
remedies provided for under Section 174 of the Code by enforcing the collection thru distraint
and levy or by judicial action.
Very truly yours,
____________________________
LTO Form 32 – Final Notice before Issuance of Warrant of Distraint and Levy

Province/City/Municipality of ___________________
___________________
(Date)
FINAL NOTICE BEFORE ISSUANCE OF WARRANT OF

DISTRAINT AND LEVY
The President
_______________________
_______________________
Subject: Tax Deficiency Discovered During Examination of your Books Pursuant to:
Letter of Authority No.: ______________
Amount: PHP _____________________
Year: ___________________________
Gentlemen/Madam:
Despite several notices served and duly receipted on your business establishment
and the considerable length of time that had lapsed, we have not been favored with your
reply.
In this connection, we would like to inform you that we are giving you the LAST
OPPURTUNITY to make the necessary settlement of your business tax liabilities within five
(5) days from receipt of this NOTICE.
Pursuant to Section 195 of the Local Government Code of 1991, "x x x. Within sixty
(60) clays from the receipt of the Notice of Assessment, the taxpayer may file a written
protest with the local treasurer contesting the assessment; otherwise, the assessment shall
become final and executory. x x x".
In view of the foregoing, and it appearing that the sixty (60) days period within which
to protest the tax assessment has already prescribed, the subject assessment becomes final
and executory and therefore, the immediate settlement of your tax obligation is requested,
otherwise, this Office will be constrained to cancel your Mayor's Permit or effect the civil
remedies provided for under Section 174 of the Code by enforcing thru distraint and levy or
by judicial action.
Very truly yours,
____________________________
LTO Form 33 – Non-presentation of Documents NPS

Province/City/Municipality of ______________________
___________________
(Date)
NON-PRESENTATION OF DOCUMENTS NPS
_____________________
_____________________
_____________________
Sir/Madam:
Records that you failed to present for examination your books of accounts and other
pertinent documents notwithstanding service to you or LETTER OF AUTHORITY No ______
on _________ and repeated demands thereof in violation of Section 220 of the Revenue
Code of _________.
You are hereby given three (3) days from receipt hereof to present for examination
your books of accounts and other pertinent documents to this Office during office hours. Your
failure to do so will constrain this office to resort to the legal remedies provided by law,
including action for the revocation of your business permit to effect the desired examination.
Very truly yours,
____________________________
LTO Form 35 – Letter of Confirmation

Province/City/Municipality of ________________________
____________________
(Date)
LETTER OF CONFIRMATION
____________________
____________________
____________________
Sir/Madam/Gentlemen:
With reference to our Letter of Authority No. ______________dated

________________, please be informed that the examination / investigation thereof has
been terminated and the corresponding report(s) of Revenue Examiner
_______________________ under the supervision of Senior Revenue Examiner
_________________________ of this office has been submitted for the calendar year
_____________________.
Very truly yours,
____________________________
LTO Form 36 – Certificate of Confirmation

Province/City/Municipality of _______________________
CERTIFICATE OF CONFIRMATION
This is to certify that on _____________, 20_____, the books, accounts and other
pertinent records covering the period from _____________, 20 _____ to __________, 20
___, of the business/businesses indicated above have been examined by the undersigned
whose findings and recommendations are stated herein.
A similar certification has been made in the books of same business on_____, 20
_____.
________________________
_______________________
Examining Deputy Examining Deputy
I.D. No. I.D. No.
VERIFIED AND CONCURRED IN:
____________________
Supervisor/In Charge
NOTE:
This is not a collection notice. This is simply an evidence that the business indicated
above has been inspected pursuant to Section 171 of R.A. 7160. Should there be any tax
due as a consequence hereof, the owner/operator of the business will be advised in writing
accordingly.
Original Received:
_______________________
LTO Form 37 – Certificate of Examination

____________________
(Date)
CERTIFICATE OF EXAMINATION
TO WHOM IT MAY CONCERN:
This is to certify that according to the records, the books of accounts and other
pertinent records for the year ________ of
___________________________________________ located at
__________________________________________________ have been examined by the
Examination Team from this Office whose signatures appear at the lower left hand corner
hereof under Authority No. __________ dated _________________. It is further certified that
the gross sales/receipts of the above-named establishment for Calendar Year had been
determined by virtue of this examination.
This certificate is issued to confirm the authenticity of the gross sales/receipts

mentioned above in the total amount of Php ______________ which shall be the basis in the
computation of the taxes, fees and other charges due from _______________ for the current
year.
____________________________
Examined by:
_______________________________
_______________________________
_______________________________
Examination Team
LTO Form 38 – Assessment Notice (Initial)

Province/City/Municipality of __________________
ASSESSMENT NOTICE (Initial)
License Case No. _____________

____________________________
Date
____________________________
____________________________
____________________________
S i r:
After an examination of your books of accounts and other pertinent documents for the
year and a verification of your business tax payments by the examination Team duly
deputized by this Office, it has been found out that you have a business tax deficiency in the
amount of Php _______________ including surcharges, interests and penalties, as shown on
the assessment sheet hereto attached.
In view hereof, you are requested to pay the amount abovementioned within three (3)
days from receipt hereof in order that a CERTIFICATE OF EXAMINATION may be issued to
consider this matter settled and closed.
Your preferential attention hereof is highly appreciated.
Very truly yours,
_____________________________
NOTE: Certificate of Examination will be required in the renewal of your business permit for the
calendar year _______________
LTO Form 39 – Final Demand

FINAL DEMAND
License Case No. __________
____________________________
____________________________
____________________________
A review of our records showed that you have neither replied to, nor paid the amount
indicated in our assessment notice to you dated ______________________________.
We give you again below the itemized statement of the amount due as assessed by our
deputies who inspected your business establishment.
Please give this matter your preferential attention because if we do not hear from you
within three (3) days from your receipt of this letter, we shall have to elevate your case to the
Office of the Mayor with our recommendation for the institution of such legal action as may lie
against you.
Very truly yours,
___________________________
Provincial/City/Municipal. Treasurer
Name of Province/City/Municipality
Address
No.
OBLIGATION REQUEST
Payee
Office
Address
Responsibility
Particulars F.P.P Account Amount
Center
Total
Certified Certified
Charges to appropriation/allotment necessary, lawful Existence of available appropriation

and under my direct supervision
Supporting documents valid, proper and legal

Signature Signature
Printed Printed
Name Name
Position Head, Requesting Office/Authorized Position Head, Budget Unit/ Authorized

Representative Representative
Date Date
LTO Annex 41 –Obligation Request (ObR)
INSTRUCTIONS
A. The Obligation Request shall be prepared in three copies, to be

distributed as follows: Original - to be attached to the DV
Duplicate - Budget Unit

Triplicate - Accounting Unit
B. The Budget Unit shall stamp the date of receipt on the face of this form.
C. This form shall be accomplished in the following manner:
1. No. - number assigned to the Obligation Request by the Budget Unit or its equivalent.
The numbering shall be as follows:
00-0000-00 – 0000
Serial number (one series

for each year) Month of
Issue
Year of Issue
Allotment Class
2. Payee - name of payee or creditor.
3. Office - name of the office of payee or creditor
4. Address - address or location of the office of the payee or creditor
5. Responsibility Center - code of the cost center where expenses shall be charged
6. Particulars -- brief description of the obligation requested
7. F.P.P. - code for function/program/project as shown in the approved appropriation/
allotment
8. Account Code - expense/asset/liability account code where the obligation shall be
charged
9. Amount - amount of obligation/ adjustment
10. Certified (Box A) - Certification by the Head of the Requesting Office or his authorized
representative on the necessity and legality of charges to the appropriation/allotment
under his direct supervision, and validity, propriety and legality of supporting documents
The certifying officer shall affix his signature, print his name, indicate his position, and
the date of his signing on the spaces provided.
11. Certified (Box B) - Certification by the Head of the Budget Unit or his authorized
representative on the existence of available appropriation.
The certifying officer shall affix his signature, print his name, indicate his position, and
the date of his signing on the spaces provided.
D. Any correction/adjustment by the Accounting Unit which will require the corresponding
adjustment in the appropriate RAAO shall be coordinated with the Budget
BLGF CENTRAL OFFICE DIRECTORS
JOCELYN T.PENDON
OIC – Executive Director
ATTY. FLOSIE F. FANLO TAYAG, CESO IV JOSE ARNOLD M. TAN, CESO V

Deputy Executive Director for Administration Deputy Executive Director for Operations
ARMI M. ADVINCULA, CESE MA. PAMELA P. QUIZON

Director II OIC – Director
Administration, Financial and Management Service Local Fiscal Policy Service
NIÑO RAYMOND B. ALVINA

Director II
Local Government Units Operations Service
TECHNICAL WORKING GROUP:
CONSOLACION Q. AGCAOILI DIVINA M. CORPUZ

OIC – Regional Director OIC – Regional Director
BLGF Region I BLGF Region III
GUALBERTO B. BERNAS IV AMALIA C. SANTOS

OIC – City Treasurer Parañaque City OIC – City Treasurer, Makati City
ENCARNACION E. SANTIAGO JOSEPHINE A. ASEO

OIC – City Treasurer, Navotas City OIC – Chief
Local Treasury Operations Division
TOMAS R. CARILLO BRENDA L. MIRANDA

Chief OIC – Chief
Policy, Planning, Programming and Standard Division Local Debt Monitoring and
Evaluation Division
RODERIC R. RAÑESES ALJIENAR J. BALIWAG

Local Treasury Examiner II Administrative Assistant III
BLGF REGIONAL DIRECTORS
MR. CARMELANE G. TUGAS MS. CONSOLACION Q. AGCAOILI

OIC-Regional Director OIC-Regional Director
BLGF CAR BLGF Region 1
MS. TERESITA S. ATUEL MS. DIVINA M. CORPUZ

BLGF Region II BLGF Region III
MR. GEORGE T. ROMA MS. AIDA D. ABREGANA

BLGF Region IV-A (CALABARZON) BLGF Region IV-B (MIMAROPA)
MR. RICARDO T. CAWED MR. GILBERT B. GUMABAY

BLGF Region V BLGF Region VI
MS. MERCY N. SANTOS MR. PETER PAUL D. BALUYAN

BLGF Region VII BLGF Region VIII
MS. REMA E. CALDERON MR. HERMINIGILDA G. GARSULA

BLGF Region IX BLGF Region X
MS. LUNINGNING R. LLANTO MS. TESSIE S. MANGACCAT

BLGF Region X BLGF Region XI
MR. EDUARDO L. DEL ROSARIO

OIC-Regional Director
BLGF Region XIII

CONTRIBUTORS:
ANASTACIA R. LLANETA BLGF Region 4-A

Financial Analyst IV, BLGF Region 5 DENNIS T. CUNAG
Local Treasury Operations Officer IV
CYNTHIA G. FAURILLO BLGF Region 4-B
BLGF Region 5 TROADIO P. BARRADAS
NEMIA D. SEGOVIA BLGF Region 4-B
BLGF Region 5 EILEEN M. VILLAGRACIA
Special Investigator III BLGF
MARIA RHODORA C. GASCON Region XI
Financial Analyst IV, BLGF Region 6
LINA R. REOYAN
JUNE ANN C. ABELLA Asst. Provincial Treasurer, Masbate
Financial Analyst IV, BLGF Region 7
CONCEPCION M. BENAVIDEZ
MARILOU Q. CAÑETE Municipal Treasurer, Virac, Catanduanes
BLGF Region 7 AMIE C. CASTELO
Asst. Municipal Treasurer, Tiwi, Albay
LILIAN B. AGTULAO
Local Treasury Operations Officer III NILDA V. GENEROSO
BLGF CAR Provincial Treasurer, Negros Occidental
SUSAN S. NISPEROS ROSALIA C. AGUILING

Local Treasury Operations Officer IV Acting Asst. Provincial Treasurer, Iloilo
BLGF Region I
ATTY. AMY GRACE O. BOLIVAR
CATHERINE B. GUTIERREZ City Treasurer, San Carlos City
Local Treasury Operations Officer III
BLGF Region I ELSIE S. JIMENEA
City Treasurer, Silay City
MAYVELYN N. RODRIGUEZ
Local Treasury Operations Officer III MA. CRISTINA G. FUENTES
BLGF Region I City Treasurer, Cadiz City
MARILYN F. RONQUILLO AYLIN C. PARADO

Financial Analyst IV, BLGF Region I Asst. Municipal Treasurer, Consolacion, Cebu
LINA T. DIVINA DELIA C. VILBAR

Local Treasury Operations Officer III Asst. City Treasurer, Ormoc City
BLGF Region III
ZOSIMA A. CORDANO
ENGRACIO S. MAGSINO JR. City Treasurer, Tacloban City
Local Treasury Operations Officer III
BLGF Region III ELIZABETH A. LIM
City Treasurer, Catbalogan City
NORMA M. MALLARE
Local Treasury Operations Officer IV HARRIET I. FLORENCIO
BLGF Region 4-A Municipal Treasurer, Barauen, Leyte
ILUMINADA B. DIMAYUGA CHARITA B. PACAYRA

Local Assessment Operations Officer IV Municipal Treasurer, Calbiga, Samar

LIBERTO Y. YUSORES ROMELITA F. ALCANTARA
OIC-Municipal Treasurer, Caramoran, City Treasurer, Dagupan City
Catanduanes
JOSEFINA J. CARANTO
REYMUNDO F. QUIÑONES City Treasurer, San Carlos City
Municipal Treasurer, Gubat, Sorsogon
EDMAR C. LUNA
AUGUSTO CEASAR E. ERMIÑO City Treasurer, San Fernando City
Asst. Municipal Treasurer, Gubat, Sorsogon
NENITA B. COLOMA
DIOSDADO V. LLOSALA Municipal Treasurer Solsona, Ilocos Norte
Municipal Treasurer, Castilla, Sorsogon
SEGUNDINO O. URBANO
Municipal Treasurer, Nueva Era, Ilocos Norte
RICARDO E. BADILLO
ICO-City Treasurer, Masbate City AMI RUEL S. COLOMA
Municipal Treasurer, Pinili, Ilocos Norte
REY C. VILLARUEL
OIC-Municipal Treasurer, Kalibo, Aklan HUBERT MAURICIO A. PAZ
Municipal Treasurer, Bantay, Ilocos Sur
RIC D. TAN
Provincial Treasurer, Siquijor
ISIDRO II A. FERNANDEZ
Municipal Treasurer, Umingan, Pangasinan
ATTY. REGAL M. OLIVA
City Treasurer, Mandaue City
JULIET G. QUINSAAT
City Treasurer, Angeles City
ALLAN G. VALENCIANO
Provincial Treasurer, Northern Samar
ELVIRA M. REYES
MERLINDA L. MARQUEZ City Treasurer, Tagaytay City
Municipal Treasurer, Malitbog, Southern Leyte
ATTY.EDITH C. NAPALAN
GERARDO AVORQUE City Treasurer, Bacoor City
ICO-Provincial Treasurer, Leyte
FERNANDO M. MANZANERO
ISABELO B. BELISARIO Asst. City Treasurer, Tanauan City
Acting Assistant Provincial Treasurer
ARJAN V. BABANI
WILMA K. IKITAN ICO-City Treasurer, San Pablo City
Municipal Treasurer, Calanasan, Apayao
IMELDA I. MACANES ALEXANDER L. BEJOSANO

Provincial Treasurer, Benguet Municipal Treasurer, Los Baños, Laguna
STEAWART B. BACCAY MINERVA V. BOONGALING

Acting Provincial Treasurer, Ifugao Municipal Treasurer, Pagsanjan, Laguna
CAWED A. GAMONNAC
MOHAYLA B. AMUD
Provincial Treasurer, Mt. Province
Local Treasury Operations Officer IV,
BLGF Region IX
ALEX B. CABARRUBIAS
Asst. City Treasurer, Baguio City
JEAN B. DAANG
JOSEPHINE P. CALAJATE Local Treasury Operations Officer IV
Provincial Treasurer, Ilocos Norte BLGF Region X

LYDIA R. PADILLA
Local Treasury Operations Officer II MERLINA G. CABALLERO
BLGF Region XI City Treasurer, Island Garden City Of Samal
MIMBAI M. MANGELEN MARTHA FLOR D. DE RAMOS

Local Treasury Operations Officer IV Municipal Treasurer, Sto. Tomas, Davao Del
BLGF Region XII Norte
JESSIE A. CONCEPCION
Provincial Treasurer, Zamboanga Del Norte
SUSAN S. YAMBA ALEXANDER U. DIMAPORO

Provincial Treasurer, Zamboanga Del Sur Municipal Treasurer, Amai Manabilang, Lanao
Del Sur
JOJO M. MAR
OIC – Provincial Treasurer, Tawi-Tawi MARLOUN C. GUMBAO
City Treasurer, Koronadal City
SANCEN D. CARORO
City Treasurer, Dipolog City RODILON G. LACAP
ICO – City Treasurer, General Santos City
PURA R. NUÑAL
City Treasurer, Isabela City MANOLITO S, FILIPINAS
Provincial Treasurer, Cotabato Province
GLENN C. BAÑEZ
OIC – City Treasurer, Cagayan De Oro City PERLITA S. SEARES
OIC – Provincial Treasurer, Sultan Kudarat
LOUELA S. MAYBITUIN Province
City Treasurer, Iligan City
TADJUDIN A. BATUA-AN
MILDRED J. HINGCO OIC – Provincial Treasurer, Lanao Del Sur
Provincial Treasurer, Lanao Del Norte
ALVIN G. ELORDE
ELMA B. GULA OIC – Provincial Treasurer, Agusan Del Sur
Provincial Treasurer, Misamis Occidental
ANNABELLE S. NALUAN
MERCELITA A. BARAN Provincial Treasurer, Dinagat Islands
Municipal Treasurer, Lala, Lanao Del Norte
MA. GAY Y. COTIANGCO
JUAN DESIDERIO U. PANADERO ICO – Provincial Treasurer, Surigao Del Norte
Municipal Treasurer, San Fernando, Bukidnon
JINKY H. LADIA
REGINA C. RICAFORT Acting Assistant City Treasurer, Bayugan City
Provincial Treasurer, Davao Del Norte
MA. REMA Q. CABUSAO
MA. LYDIA M. ELLICA Acting Assistant City Treasurer, Butuan City
ICO – Provincial Treasurer, Davao Del Sur
ADELINDA B. AMACNA
Provincial Treasurer, Davao Oriental

REFERENCES
1. The Local Government Code of 1991, Annotated, Jose A. Nolledo, 1993 Reprint with
August 1993 Addendum;
2. Local Government Taxation ( Philippine Laws on Local Government Finance),

Vol. III, Annotated, Sofronio B. Ursal, 1992;
3. Philippine Law on Local Government Taxation, Annotated, Sofronio B. Ursal, 2000;
4. Real Property Taxation, Annotated, Atty. Florecita P. Flores and Antonio A. Avila, Jr.,
First Edition, 2002;
5. Local Taxation and Fiscal Matters, Book II, LGC of 1991, PACTAA, Inc., 1992;
6. Local Government Code of the Autonomous Region in Muslim Mindanao (Muslim

Mindanao Autonomy Act No. 25);
7. Decentralization in the Philippines – Strengthening Local Government Financing

and Resource Management in the Short-Term, Joint Document of the World Bank
and Asian Development Bank, March 31, 2005;
8. Omnibus Election Code of the Philippines (BP 881), Commission on Elections

(COMELEC), 1992;
9. Omnibus Rules Implementing Book V of EO 292, as Amended by MC No. 41, s.

1998, Civil Service Commission (CSC);
10. State Audit Code (Government Auditing Code of the Philippines or PD 1445),
Reprinted 1999, Accounting and auditing Development Office, Commission on Audit
(COA);
11. Government Accounting and Auditing Manual (GAAM), Vol. 1, Government

Auditing Rules and Regulations, COA, 1992;

Accounting, COA, 1992;

Auditing Standards and Procedures, and Internal Control System, COA, 1992;
14. Manual on the New Government Accounting System (NGAS) for Local
Government Units, Vol. I – III, Professional Development Center, COA, 2002;
15. Updated Description of Accounts under the NGAS (COA Circular No. 2004-008),
Sept. 20, 2004;
16. 2005 IFAC Handbook of International Public Sector Accounting Standards

(IPSAS);
17. Handbook on the Implementing Rules and Regulations (IRR) to the Government
Procurement Reform Act (RA No. 9184);
18. Updated Budget Operations Manual (UBOM) for Local Government Units,
Department of Budget and Management (DBM), June 2005;
19. Management Services, Part II, 2nd Ed., Nenita Angeles Deaño-Mejorada, 1993;
20. Manual on Certificate of Settlement and Balances, Revised 1993, COA, 1993;
21. Rules Implementing the Barangay Micro-Business Enterprises (BMBE Act of

2002 or RA 9178), Department of Finance (DOF) Order No. 17-04;
22. Local Administrative Regulation (LAR) No. 1-85, DOF, 1985;
23. Training Handbook on Cash Management and Control System, Professional

Development Center, COA, May 2004;
24. Training Handbook on Internal Control Structure, Professional Development

Center, COA, Nov. 2002;
25. Training Handbook on Risk Management, Professional Development Center, COA,

Dec. 2004;
26. Revenue Audit Manual for Local Governments, Vol. I, COA, 1997;
27. DOF Circulars, Memoranda, Opinions, and Rulings, various years;
28. BLGF Circulars, Memoranda, Circular Letters, Opinions, and Rulings, various
years;
29. COA Circulars and Memoranda, various years.

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UPDATED

Receipts and Collection of Income,

Copyright © Bureau of Local Government Finance, 2016

Bureau of Local Government Finance

First Printing, 2008.

2016 Revised Edition

All rights reserved.

Printed in the Philippines

Updated Local Treasury Operations Manual (LTOM) 2

ACR - Abstract of Collection Report

Updated Local Treasury Operations Manual (LTOM) 3

Updated Local Treasury Operations Manual (LTOM) 4

Updated Local Treasury Operations Manual (LTOM) 5

Updated Local Treasury Operations Manual (LTOM) 6

Section 33. Definition of Terms...................................................................................................10

Updated Local Treasury Operations Manual (LTOM) 7

Updated Local Treasury Operations Manual (LTOM) 8

Updated Local Treasury Operations Manual (LTOM) 9

b) Current Operating Expenditures – refers to appropriations for the purchase of goods

c) eOR – refers to a proof of payment generated/issued through an Electronic Payment

e) Payor or Originator – refers to a person or entity by whom, or on whose behalf, the

Chapter 1:INCOME FROM LOCAL SOURCES

Section 34.Power to Create Sources of Revenue. –

Updated Local Treasury Operations Manual (LTOM) 10

Section 35. Fundamental Principles: The following fundamental principles shall

3.2 These are germane to the purpose of the legislation or ordinance;

Illustrative Case Box 1:

1Punzalan vs. City of Manila, 95 Phil. 46

Updated Local Treasury Operations Manual (LTOM) 11

1. Be equitable and based as far as practicable on the taxpayer’s ability to pay

Illustrative Case Box 2:

Illustrative Case Box 3:

The taxpayer’s ability to pay must be considered. It cannot be absolute or it cannot be

Illustrative Case Box 4:

2. Be levied and collected only for public purposes (Sec.130(b)(2), LGC).

Illustrative Case Box 5:

3. Not be unjust, excessive, oppressive, or confiscatory (Sec. 130, (b) (3),

Illustrative Case Box 6:

4. Not be contrary to law, public policy, national economic policy, or in

Illustrative Case Box 7:

Updated Local Treasury Operations Manual (LTOM) 12

Illustrative Case Box 9:

Section 36. Valid Revenue Ordinance. –

b) As in all revenue measures, it is up to the particular local government to enact the

Updated Local Treasury Operations Manual (LTOM) 13

a) Tax on Transfer of Real Property Ownership (Sec. 135, LGC);

Section 39. Taxing Powers of Cities. –

Updated Local Treasury Operations Manual (LTOM) 14

1. Tax on Transfer of Real Property Ownership (Sec. 135, LGC);

Section 40. Taxing Powers of Municipalities.–

a) Except as otherwise provided in the Local Government Code of 1991, municipalities

1. Tax on Business (Sec. 143, LGC);

Updated Local Treasury Operations Manual (LTOM) 15

Section 42. Taxing Powers of Barangays. –

c) Service Fees or Charges–Barangays may collect reasonable fees or charges for