Local Taxation  Customs duties, registration fees vessels and wharfage on

wharves, tonnage dues, and all other kinds of customs fees,

Taxation under the Local Government Code of 1991 (RA 7160) charges, and dues except wharfage of wharfs constructed
Contents of the Topic and maintained by the local government unit concerned
 Taxes, fees, charges, and other imposition upon goods
 Local Government Taxation carried into or out of, or passing through, the territorial
o Scope jurisdictions of local government units in the guise of
o Power to create source of revenue charges for wharfage, tools for bridges or otherwise, and
o Fundamental Principles other taxes, fees, or charges in any form whatsoever upon
o Local Taxing Authority such goods or merchandise
o Common Limitations on the Taxing Powers of  Tax, fees, or charges on agricultural and aquatic products
Local Government Units when sold by marginal farmers or fishermen
 Specific Provisions on the Taxing and Other Revenue  Taxes on business enterprises certified to by the Board of
Raising Powers of Local Government Investments as pioneer or non-pioneer for a period of 6 and
o Provinces 4 years, respectively from the date of registration
o Municipalities  Excise taxes on articles enumerated under the National
Internal Revenue Code, as amended, and taxes, fees, or
o Cities
charges on petroleum products
o Barangays
 Percentage or value added tax (VAT) on sales, barters, or
o Common Revenue-Raising Powers
exchanges or similar transactions on goods or services
 Community Tax except as otherwise provided herein
 Real Property Taxation  Taxes on the gross receipts of transaction contractors and
 Collection of Taxes persons engaged in the transport of passengers or freight by
 Civil Remedies for Collection of Revenues hire and common carriers by air, land, or water, except as
 Tax Payer’s Remedies provided in this Code
 Taxes on Premium paid by way of reinsurance or
Scope of Local Taxation
retrocession
Sec. 128 -- Scope- The provision herein shall govern the exercise by  Taxes, fees, or charges for the registration of motor vehicle
provinces, cities, municipalities and barangays of their taxing and and for the issuance of all kinds of licenses or permits for
other revenue-raising powers. the driving thereof, except tricycles
 Taxes, fees, or charges on Philippine products actually
The Power to Create Source of Revenue exported, except tricycles.
 Taxes, fees, or charges, on Countryside and Barangay
Sec. 129 -- Each LGU shall exercise its power to create its own
Business Enterprises and cooperatives duly registered
sources of revenue and to levy taxes, fees, and charges subject to
under R.A. No. 6810 and RA. No. 6938 otherwise knowns
provisions herein, consistent with the basic policy of local autonomy.
as the Cooperative Code of the Philippines, respectively;
Such taxes, fees, and charges shall accrue exclusively to the LGU
and
Fundamental Principles  Taxes, fees, or charges of any kind on the National
Government, its agencies and instrumentalities and local
Sec. 130 Fundamental Principles – The following fundamental government units
principles shall govern the exercise of the taxing and other revenue-
raising powers of local government units: Specific Provisions on the Taxing and Other Revenue Raising
Powers of Local Government
1. Taxation shall be uniform in each LGU
2. Taxes, fees, charges, and other impositions shall PROVINCES
a. Be equitable and based as far as practicable on
Sec. 134. Scope of Taxing Powers – Except as otherwise provided in
the taxpayer’s ability to pay
this Code, the province may levy on the taxes, fees, and charges as
b. Be levied and collected for public purposes
provided in this Article
c. Not be adjust, excessive, oppressive, or
confiscatory Sec. 135. Tax on Transfer of Real Property Ownership – (a) The
d. Not be contrary to law, public policy, national province may impose a tax on the sale, donation, barter, or on any
economic policy, or in restraint of trade other mode of transferring ownership or title of real property at the
3. The collection of local taxes, fees, charges, and other rate of not more than 50% of 1% of the total consideration involved
impositions, shall in no se be let to any private persons in the acquisition of the property or of the fair market value in case
4. The revenue collected shall inure solely to the benefit of the monetary consideration involved in the transfer is not substantial,
and be subject to disposition by, the LGU unless otherwise whichever is higher. The sale, transfer, or other disposition of real
specifically provided herein property pursuant to R.A. No. 6657 shall be exempt from this tax.
5. Each LGU shall, as far as practicable, evolve a progressive
system of taxation Sec. 136. Tax on Business of Printing and Publication – The
Province may impose a tax on the business of persons engaged in the
Local Taxing Authority printing and/or publication of books, cards, posters, leaflets,
handbills, certificates, receipts, pamphlets, and other of similar
Sec. 132. Local Taxing Authority- The power to impose a tax, fee, or
nature, at a rate not exceeding 50% of 1% of the gross annual receipts
charge or to generate revenue under this Code shall be exercised by
for the preceding calendar year.
the Sanggunian of the Local Government Unit through an appropriate
ordinance In case of newly started business, the tax shall not exceed 1/20 (5%)
of 1% of the capital investment. In the succeeding calendar year,
Sec. 133. Common Limitations on the Taxing Power of Local
regardless of when the business started to operate, the tax shall be
Government Units – Unless otherwise provided herein, the exercise
based on the gross receipts for the preceding calendar year, or any
of the taxing powers of provinces, cities, municipalities, and
fraction thereof, as provided herein.
Barangays shall not extend to the levy of the following:
The receipts from the printing and/or publishing of books or other
 Income tax, except when levied on banks and other
reading materials prescribed by the Department of Education, Culture
financial institutions
and Sports as school texts or reference shall be exempt from the tax
 Documentary stamp tax
herein imposed.
 Taxes on estate, inheritance, gifts, legacies and other
acquisitions mortis causa, except as otherwise provided Sec. 137. Franchise Tax – Notwithstanding any exemption granted
herein by any law or other special laws, shall not exceed 50% of 1% of the
gross annual receipts for the preceding calendar year. In case of failure to pay the tax, the Sangguniang Panlalawigan may impose
newly started business, the tax shall not exceed 1/20 of 1% of the such surcharges, interests and penalties.
capital investments
(7) The proceeds from the amusement tax shall be shared equally by
SECTION 138. Tax on Sand, Gravel and Other Quarry the province and the municipality where such amusement places are
Resources - The province may levy and collect not more than ten located.
percent (10%) of fair market value in the locality per cubic meter of
ordinary stones, sand, gravel, earth, and other quarry resources, as SECTION 141. Annual Fixed Tax For Every Delivery Truck or
defined under the National Internal Revenue Code, as amended, Van of Manufacturers or Producers, Wholesalers of, Dealers, or
extracted from public lands or from the beds of seas, lakes, rivers, Retailers in, Certain Products. - (a) The province may levy an
streams, creeks, and other public waters within its territorial annual fixed tax for every truck, van or any vehicle used by
jurisdiction. manufacturers, producers, wholesalers, dealers or retailers in the
delivery or distribution of distilled spirits, fermented liquors, soft
The permit to extract sand, gravel and other quarry resources shall be drinks, cigars and cigarettes, and other products as may be
issued exclusively by the provincial governor, pursuant to the determined by the Sangguniang Panlalawigan, to sales outlets,
ordinance of the Sangguniang Panlalawigan. consumers, whether directly or indirectly, within the province in an
amount not exceeding Five hundred pesos (P500.00).
The proceeds of the tax on sand, gravel and other quarry resources
shall be distributed as follows: (8) The manufacturers, producers, wholesalers, dealers, and retailers
referred to in the immediately foregoing paragraph shall be exempt
(4) Province - Thirty percent (30%); from the tax on peddlers prescribed elsewhere in this Code.
(5) Component City or Municipality where the sand, LET’S APPLY:
gravel, and other quarry resources are extracted - Thirty
percent (30%); and (1) Mr. Harry Potter, who just got married is processing the
transfer of ownership of a 300sqm land in the Province of
(6) Barangay where the sand, gravel, and other quarry Hogwarts which he bought from Mr. Dumbledore, his
resources are extracted - Forty percent (40%). uncle. The following details of the transactions are:
SECTION 139. Professional Tax - (a) The province may levy an Fair Market ValuePhp450,000.00
annual professional tax on each person engaged in the exercise or
practice of his profession requiring government examination as such Selling price128,000.00
amount and reasonable classification as the Sangguniang
Panlalawigan may determine but shall in no case exceed Three Question: How much is the tax on transfer of Real Property
hundred pesos (P300.00) Ownership that Province Hogwarts will collect?

(b) Every person legally authorized to practice his profession shall

pay the professional tax to the province where he practices his
(2) Mr Snape franchised one of the famous Chicken Inasal in
profession or where he maintains his principal office in case he
the Province of Godric’s Hollow, he is on his second year
practices his profession in several places: Provided, however, That
of business and on the process of processing permit for the
such person who has paid the corresponding professional tax shall be
business. At the end of the year:
entitled to practice his profession in any part of the Philippines
without being subjected to any other national or local tax, license, or Gross Sales Php1,466,000.00
free for the practice of such profession.
Capital Investments 2,500,000.00
(1) Any individual or corporation employing a person subject to
professional tax shall require payment by that person of the tax on his Question: How much is the franchise tax Province Godric’s Hollow
profession before employment and annually thereafter. will collect?

(2) The professional tax shall be payable annually on or before the (3) Mr Snape franchised one of the famous Chicken Inasal in
thirty first (31st) day of January must, however, pay the full tax the Province of Godric’s Hollow, he is on his second year
before engaging therein. A line of profession does not become exempt of business and on the process of processing permit for the
even if conducted with some other profession for which the tax has business. At the end of the year:
been paid. Professionals exclusively employed in the government
Gross Sales Php1,466,000.00
shall be exempt from the payment of this tax.
Capital Investments 2,500,000.00
(3) Any person subject to the professional tax shall write in deeds,
receipts, prescriptions, reports, books of account, plans and designs, Question: If the franchise business is in the first year of operation,
surveys and maps, as the case may be, the number of the official how much is the franchise tax Province Godric’s Hollow will collect?
receipt issued to him.

SECTION 140. Amusement Tax - (a) The province may levy an

amusement tax to be collected from the proprietors, lessees, or MUNICIPALITIES
operators of theaters, cinemas, concert halls, circuses, boxing stadia,
and other places of amusement at a rate of not more than thirty SECTION 142. Scope of Taxing Powers. _ Except as otherwise
percent (30%) of the gross receipts from admission fees. provided in this Code, municipalities may levy taxes, fees, and
charges not otherwise levied by provinces.
(4) In the case of theaters of cinemas, the tax shall first be deducted
and withheld by their proprietors, lessees, or operators and paid to the SECTION 143. Tax and Business - The municipality may impose
provincial treasurer before the gross receipts are divided between said taxes on the following business:
proprietors, lessees, or operators and the distributors of the
(9) (9) On manufacturers, assemblers, repackers, processors, brewers,
cinematographic films.
distillers, rectifiers, and compounders of liquors, distilled spirits, and
(5) The holding of operas, concerts, dramas, recitals, painting and art wines or manufacturers of any article of commerce of whatever kind
exhibitions, flower shows, musical programs, literary and oratorical of nature, in accordance with the following schedule: (please refer
presentations, except pop, rock, or similar concerts shall be exempt schedule in Local Government Code)
from the payment of the tax herein imposed.
(10) On wholesalers, distributors, or dealers in any article of
(6) The Sangguniang Panlalawigan may prescribe the time, manner, commerce of whatever kind or nature in accordance with the
terms and conditions for the payment of tax. In case of fraud or following schedule: (please refer schedule in Local Government
Code)
(c) On exporters, and on manufacturers, millers, producers, (b) In cases where a person conducts or operates two (2) or more of
wholesalers, distributors, dealers or retailers of essential commodities the businesses mentioned in Section 143 of this Code which are
enumerated hereunder at a rate not exceeding one-half (1/2) of the subject to the same rate of tax, the tax shall be computed on the
rates prescribed under subsections (a), (b) and (d) of this Section: combined total gross sales or receipts of the said two (2) or more
related businesses.
(4) Rice and corn;
(c) In cases where a person conducts or operates two (2) or more
(5) Wheat or cassava flour, meat, dairy products, locally businesses mentioned in Section 143 of this Code which are subject
manufactured, processed or preserved food, sugar, salt and other to different rates of tax, the gross sales or receipts of each business
agricultural, marine, and fresh water products, whether in their shall be separately reported for the purpose of computing the tax due
original state or not; from each business.
(6) Cooking oil and cooking gas; SECTION 147. Fees and Charges. - The municipality may impose
and collect such reasonable fees and charges on business and
(7) Laundry soap, detergents, and medicine;
occupation and, except as reserved to the province in Section 139 of
(8) Agricultural implements, equipment and post harvest facilities, this Code, on the practice of any profession or calling, commensurate
fertilizers, pesticides, insecticides, herbicides and other farm inputs; with the cost of regulation, inspection and licensing before any
person may engage in such business or occupation, or practice such
(9) Poultry feeds and other animal feeds; profession or calling.
(10) School supplies; and SECTION 148. Fees for Sealing and Licensing of Weights and
Measures. - (a) The municipality may levy fees for the sealing and
(11) Cement
licensing of weights and measures at such reasonable rates as shall be
(d) On retailers, With gross sales or prescribed for
receipts by the Sangguniang
the Bayan.
Preceding calendar year of:
(b) The Sangguniang bayan shall prescribe the necessary regulations
Rate of Tax Per Annum for the use of such weights and measures, subject to such guidelines
as shall be prescribed by the Department of Science and Technology.
P 400,000.00 or less 2% The Sanggunian concerned shall, by appropriate ordinance, penalize
fraudulent practices and unlawful possession or use of instruments of
More than P 400,000.00 1% weights and measures and prescribe the criminal penalty therefore in
accordance with the provisions of this Code. Provided, however, That
Provided, however, That Barangays shall have the exclusive power to
the Sanggunian concerned may authorize the municipal treasurer to
levy taxes, as provided under Section 152 hereof, on gross sales or
settle an offense not involving the commission of fraud before a case
receipts of the preceding calendar year of Fifty thousand pesos
therefore is files in court, upon payment of a compromise penalty of
(P50,000.00) or less in the case of municipalities.
not less than Two hundred pesos (P200.00).
(e) On contractors and other independent contractors, in accordance
SECTION 149. Fishery Rentals, Fees and Charges. - (a)
with the following schedule: (please refer schedule in Local
Municipalities shall have the exclusive authority to grant fishery
Government Code)
privileges in the municipal waters and impose rentals, fees or charges
(f) On banks and other financial institutions, at a rate not exceeding therefore in accordance with the provisions of this Section.
fifty percent (50% of one percent (1) on the gross receipts of the
(b) The Sangguniang Bayan may:
preceding calendar year derived from interest, commissions and
discounts from lending activities, income from financial leasing, (1) Grant fishery privileges to erect fish corrals, oyster,
dividends, rentals on property and profit from exchange or sale of mussels or other aquatic beds or bangus fry areas, within a
property, insurance premium. definite zone of the municipal waters, as determined by it:
Provided, however, That duly registered organizations and
(g) On peddlers engaged in the sale of any merchandise or article or
cooperatives of marginal fishermen shall have the
commerce, at a rate not exceeding Fifty pesos (P50.00) per peddler
preferential right to such fishery privileges: Provided,
annually.
further, That the Sangguniang bayan may require a public
(11) On any business, not otherwise specified in the preceding bidding in conformity with and pursuant to an ordinance for
paragraphs, which the Sanggunian concerned may deem proper to the grant of such privileges: Provided, finally, That in the
tax: Provided, That on any business subject to the excise, value-added absence of such organizations and cooperatives or their
or percentage tax under the National Internal Revenue Code, as failure to exercise their preferential right, other parties may
amended, the rate of tax shall not exceed two percent (2%) of gross participate in the public bidding in conformity with the
sales or receipts of the preceding calendar year. above cited procedure.

The Sanggunian concerned may prescribe a schedule of graduated tax (2) Grant the privilege to gather, take or catch bangus fry,
rates but in no case to exceed the rates prescribed herein. prawn fry or kawag-kawag or fry of other species and fish
from the municipal waters by nets, traps or other fishing
SECTION 144. Rates of Tax within the Metropolitan Manila gears to marginal fishermen free of any rental, fee, charge
Area. - The municipalities within the Metropolitan Manila Area may or any other imposition whatsoever.
levy taxes at rates which shall not exceed by fifty percent (50%) the
maximum rates prescribed in the preceding Section. (3) Issue for the operation of fishing vessels of three (3)
tons or less for which purpose the Sangguniang bayan shall
SECTIOIN 145. Retirement of Business. - A business subject to tax promulgate rules and regulations regarding the issuances of
pursuant to the preceding sections shall, upon termination thereof, such licenses to qualified applicants under existing laws.
submit a sworn statement of its gross sales or receipts for the current
year. If the tax paid during the year, the difference shall be paid Provided, however, That the Sanggunian concerned shall,
before the business is concerned officially retired. by appropriate ordinance, penalize the use of explosives,
noxious or puissance substances, electricity, muro-ami, and
SECTION 146. Payment of Business Taxes. - (a) The taxes other deleterious methods of fishing and prescribe a
imposed under Section 143 shall be payable for every separate or criminal penalty therefore in accordance with the
distinct establishment or place where business subject to the tax is provisions of this Code: Provided, finally, That the
conducted and one line of business does not become exempt by being Sanggunian concerned shall have the authority to prosecute
conducted with some other business for which such tax has been any violation of the provisions of applicable fishery laws.
paid. The tax on a business must be paid by the person conducting the
same. SECTION 150. Situs of the Tax. - (a) For purposes of collection of
the taxes under Section 143 of this Code, manufacturers, assemblers,
repackers, brewers, distillers, rectifiers and compounders of liquor, may impose a reasonable fee. The application for clearance shall be
distilled spirits and wines, millers, producers, exporters, wholesalers, acted upon within seven (7) working days from the filing thereof. In
distributors, dealers, contractors, banks and other financial the event that the clearance is not issued within the said period, the
institutions, and other businesses, maintaining or operating branch or city or municipality may issue the said license or permit.
sales outlet elsewhere shall record the sale in the branch or sales
outlet making the sale or transaction, and the tax thereon shall accrue (d) Other Fees and Charges - The Barangay may levy reasonable fees
and shall be paid to the municipality where such branch or sales and charges:
outlet is located. In cases where there is no such branch or sales outlet
78
in the city or municipality where the sale or transaction is made, the
sale shall be duly recorded in the principal office and the taxes due (1) On commercial breeding of fighting cocks, cockfighting and
shall accrue and shall be paid to such city or municipality. cockpits;
(b) The following sales allocation shall apply to manufacturers, (2) On places of recreation which charge admission fees; and
assemblers, contractors, producers, and exporters with factories,
project offices, plants, and plantations in the pursuit of their business: (3) On billboards, signboards, neon signs, and outdoor
advertisements.
(4) Thirty percent (30%) of all sales recorded in the principal office
shall be taxable by the city or municipality where the principal office COMMON REVENUE-RAISING POWERS
is located; and
Sec. 153. Service Charges and Fees. Local government units may
(5) Seventy percent (70%) of all sales recorded in the principal office impose and collect such reasonable fees and charges for services
shall be taxable by the city or municipality where the factory, project rendered.
office, plant, or plantation is located.
Sec 154. Public Utility Charges. - The Sanggunian concerned may
(c) In case of a plantation located at a place other than the place prescribe the terms and conditions and fix the rates for the imposition
where the factory is located, said seventy percent (70%) mentioned in of toll fees or charges for the use of any public road, pier or wharf,
subparagraph (b) of subsection (2) above shall be divided as follows: waterway, bridge, ferry or telecommunication system funded and
constructed by the local government unit concerned: Provided, That
(1) Sixty percent (60%) to the city or municipality where the factory no such toll fees or charges shall be collected from officers and
is located; and enlisted men of the Armed Forces of the Philippines and members of
the Philippine National Police on mission, post office personnel
(2) Forty percent (40%) to the city or municipality where the
delivering mail, physically-handicapped, and disabled citizens who
plantation is located.
are sixty-five (65) years or older. When public safety and welfare so
(d) In case where a manufacturer, assembler, producer, exporter or requires, the Sanggunian concerned may discontinue the collection of
contractor has two (2) or more factories, project offices, plants, or the tolls, and thereafter the said facility shall be free and open for
plantations located in different localities, the seventy percent (70%) public use.
mentioned in subparagraph (b) of subsection (2) above shall be
COMMUNITY TAX
prorated among the localities where the factories, project offices,
plants, and plantations are located in proportion to their respective Sec 156. Community Tax. - Cities or municipalities may levy a
volume or production during the period for which the tax is due. community tax in accordance with the provisions of this Article.
(e) The foregoing sales allocation shall be applied irrespective of SECTION 157. Individuals Liable to Community Tax. - Every
whether or not sales are made in the locality where the factory, inhabitant of the Philippines eighteen (18) years of age or over who
project office, plant or plan is located. has been regularly employed on a wage or salary basis for at least
thirty (30) consecutive working days during any calendar year, or
CITIES
who is engaged in business or occupation, or who owns real property
SECTION 151. Scope of Taxing Powers. - Except as otherwise with an aggregate assessed value of One thousand pesos (P1,000.00)
provided in this Code, the city, may levy the taxes, fees, and charges or more, or who is required by law to file an income tax return shall
which the province or municipality may impose: Provided, however, pay an annual community tax of Five pesos (P5.00) and an annual
That the taxes, fees and charges levied and collected by highly additional tax of One peso (P1.00_ for every One thousand pesos
urbanized and independent component cities shall accrue to them and (P1,000.00) of income regardless of whether from 79 business,
distributed in accordance with the provisions of this code. exercise of profession or from property which in no case shall exceed
Five thousand pesos (P5,000.00).
The rates of taxes that the city may levy may exceed the maximum
rates allowed for the province or municipality by not more than fifty In the case of husband and wife, the additional tax herein imposed
percent (50%) except the rates of professional and amusement taxes. shall be based upon the total property owned by them and the total
gross receipts or earning derived by them.
BARANGAYS
SECTION 158. Juridical Persons Liable to Community Tax. -
Every corporation no matter how created or organized, whether
domestic or resident foreign, engaged in or doing business in the
SECTION 152. Scope of Taxing Powers. - The Barangays may levy Philippines shall pay an annual community tax of Five hundred pesos
taxes, fees, and charges, as provided in this Article, which shall (P500.00) and an annual additional tax, which, on no case, shall
exclusively accrue to them: exceed Ten thousand pesos (P10,000.00) in accordance with the
following schedule:
(a) Taxes - On stores or retailers with fixed business establishments
with gross sales or receipts of the preceding calendar year of Fifty (1) For every Five thousand pesos (P5,000.00) worth of real property
Thousand pesos (P50,000.00) or less, in the case of cities and Thirty in the Philippines owned by it during the preceding year based on the
thousand pesos (P30,000.00) or less, in the case of municipalities, at a valuation used for the payment of the real property tax under existing
rate not exceeding one percent (1%) on such gross sales or receipts. laws, found in the assessment rolls of the city or municipality where
the real property is situated - Two pesos (P2.00); and
(b) Service Fees or Charges - Barangays may collect reasonable fees
or charges for services rendered in connectioin with the regulation or (2) For every Five thousand pesos (P5,000.00) of gross receipts or
the use of Barangay-owned properties or service facilities such as earnings derived by it from its business in the Philippines during the
palay, copra, or tobacco dryers. preceding year - Two pesos (P2.00). The dividends received by a
corporation from another corporation however shall, for the purpose
(c) Barangay Clearance - No city or municipality may issue any
of the additional tax, be considered as part of the gross receipts or
license or permit for any business or activity unless a clearance is
earnings of said corporation.
first obtained from the Barangay where such business or activity is
located or conducted. For such clearance, the Sangguniang Barangay
SECTION 159. Exemption. - The following are exempt from the market value prevailing in the locality where the property is situated.
community tax: The Department of Finance shall promulgate the necessary rules and
regulations for the classification, appraisal, and assessment of real
(1) Diplomatic and consular representatives; and property pursuant to the provisions of this Code.
(2) Transient visitors when their stay in the Philippines does not SECTION 205. Listing of Real Property in the Assessment Rolls.
exceed three (3) months - (a) In every province and city, including the municipalities within
the Metropolitan Manila Area, there shall be prepared and maintained
SECTION 160. Place of Payment. - The community tax shall be
by the provincial, city or municipal assessor an assessment roll
paid in the place of residence of the individual, or in the place where
wherein shall be listed all real property, whether taxable or exempt,
the principal office of the juridical entity is located.
located within the territorial jurisdiction of the local government unit
SECTION 161. Time for Payment; Penalties for Delinquency. - (a) concerned. Real property shall be listed, valued and assessed in the
The community tax shall accrue on the first (1st) day of January of name of the owner or administrator, or anyone having legal interest in
each year which shall be paid not later than the last day of February the property.
of each year. If a person reaches the age of eighteen (18) years or
(b) The undivided real property of a deceased person may be listed,
otherwise loses the benefit of exemption on or before the last day of
valued and assessed in the name of the estate or of the heirs and
June, he shall be liable for the community tax on the day he reaches
devisees without designating them individually; and undivided real
such age or upon the day the exemption ends. However, if a person
property other than that owned by a deceased may be listed, valued
reaches the age of eighteen (18) years or loses the benefit of
and assessed in the name of one or more co-owners: Provided,
exemption on or before the last day of June, he shall be liable for the
however, That such heir, devisee, or co-owner shall be liable
community tax on the day he reaches such age or upon the day the
severally and proportionately for all obligations imposed by this Title
exemption ends. However, if a person reaches the age of eighteen
and the payment of the real property tax with respect to the undivided
(18) years or loses the benefit of exemption on or before the last day
property.
of March, he shall have twenty (20) days to pay the community tax
without becoming delinquent. (c) The real property of a corporation, partnership, or association
shall be listed, valued and in the same manner as that of an
Persons who come to reside in the Philippine or reach the age of
individual.
eighteen (18) years on or after the first (1st) day of July of any year,
or who cease to belong to an exempt class on or after the same date, (d) Real property owned by the Republic of the Philippines,
shall not be subject to the community tax for that year. instrumentalities and political subdivisions, the beneficial use of
which has been granted, for consideration or otherwise, to a taxable
(b) Corporation established and organized on or before the last day
person, shall be listed, valued and assessed in the name of the
of June shall be liable for the community tax for that year. But
possessor, grantee or of the public entity if such property has been
corporations established and organized on or before the last day of
acquired or held for resale or lease.
March shall have twenty (20) days within which to pay the
community tax without becoming delinquent. Corporations SECTION 215. Classes of Real Property for Assessment
established and organized on or after the first day of July shall not be Purposes. - For purposes of assessment, real property shall be
subject to the community tax for that year. classified as residential, agricultural, commercial, industrial, mineral,
or special. The city or municipality within the Metropolitan Manila
If the tax is not paid within the time prescribed above, there shall be
Area, through their respective Sanggunian, have the power to classify
added to the unpaid amount an interest of twenty-four percent (24%)
lands as residential, agricultural, commercial, industrial, mineral,
per annum from the due date until it is paid.
timberland, or special in accordance with their zoning ordinances.
SECTION 162. Community Tax Certificate. - A community tax
SECTION 216. Special Classes of Real Property. - All lands,
certificate shall be issued to every person or corporation upon
buildings, and other improvements actually, directly and exclusively
payment of the community tax. A community tax certificate may also
used for hospitals, cultural, or scientific purposes, and those owned
be issued to any person or corporation not subject to the community
and used by local water districts, and government-owned or -
tax upon payment of One peso (P1.00).
controlled corporations rendering essential public services in the
(insert problem here) supply and distribution of water and/or generation and transmission
of electric power shall be classified as special.
REAL PROPERTY TAXATION
SECTION 217. Actual Use of Real Property as Basis for
SECTION 198. Fundamental Principles. - The appraisal, Assessment. - Real property shall be classified, valued and assessed
assessment, levy and collection of real property tax shall be guided on the basis of its actual use regardless of where located, whoever
by the following fundamental principles: owns it, and whoever uses it.
(a) Real property shall be appraised at its current and fair market SECTION 218. Assessment Levels. - The assessment levels to be
value; applied to the fair market value of real property to determine its
assessed value shall be fixed by ordinances of the Sangguniang
(b) Real property shall be classified for assessment purposes on the
Panlalawigan, Sangguniang panlungsod or Sangguniang bayan of a
basis of its actual use;
municipality within the Metropolitan Manila Area, at the rates not
(c) Real property shall be assessed on the basis of a uniform exceeding the following:
classification within each local government unit;
(refer to the softcopy of the Local Government Code)
(d) The appraisal, assessment, levy and collection of real property tax
SECTION 219. General Revision of assessments and Property
shall not be let to any private person; and
Classification. - The provincial, city or municipal assessor shall
(e) The appraisal and assessment of real property shall be equitable. undertake a general revision of real property assessments within two
(2) years after the effectivity of this Code and every three (3) years
SECTION 200. Administration of the Real Property Tax. - The thereafter.
provinces and cities, including the municipalities within the
Metropolitan Manila Area, shall be primarily responsible for the Real Property Taxation: Imposition of Real Property tax
proper, efficient and effective administration of the real property tax.
SECTION 233. Rates of Levy. - A province or city or a municipality
within the Metropolitan Manila Area shall fix a uniform rate of basic
real property tax applicable to their respective localities as follows:
Real Property Taxation: Appraisal and Assessment
(a) In the case of a province, at the rate not exceeding one percent
SECTION 201. Appraisal of Real Property. - All real property, (1%) of the assessed value of real property; and
whether taxable or exempt, shall be appraised at the current and fair
(b) In the case of a city or a municipality within the Metropolitan Real Property Taxation: Disposition of Proceeds
Manila Area, at the rate not exceeding two percent (2%) of the
assessed value of real property. SECTION 271. Distribution of Proceeds. - The proceeds of the
basic real property tax, including interest thereon, and proceeds from
SECTION 234. Exemptions from Real Property Tax. - The the use, lease or disposition, sale or redemption of property acquired
following are exempted from payment of the real property tax: at a public auction in accordance with the provisions of this Title by
the province or city or a municipality within the Metropolitan Manila
(a) Real property owned by the Republic of the Philippines or any of Area shall be distributed as follows:
its political subdivisions except when the beneficial use thereof has
been granted, for consideration or otherwise, to a taxable person; (a) (a) In the case of provinces:

(b) Charitable institutions, churches, parsonages or convents (1) province - Thirty-five percent (35%) shall accrue to the
appurtenant thereto, mosques, nonprofit or religious cemeteries and general fund;
all lands, buildings, and improvements actually, directly, and
exclusively used for religious, charitable or educational purposes; (2) municipality - Forty percent (40%) to the general fund
of the municipality where the property is located; and
(c) All machineries and equipment that are actually, directly and
exclusively used by local water districts and government-owned or - (3) Barangay - Twenty-five percent (25%) shall accrue to
controlled corporations engaged in the supply and distribution of the Barangay where the property is located.
water and/or generation and transmission of electric power;
(b) In the case of cities:
(d) All real property owned by duly registered cooperatives as
(1) city - Seventy percent (70%) shall accrue to the general
provided for under R. A. No. 6938; and
fund of the city; and
(e) Machinery and equipment used for pollution control and
(2) Thirty percent (30%) shall be distributed among the
environmental protection. Except as provided herein, any exemption
component Barangays of the cities where the property is
from payment of real property tax previously granted to, or presently
located in the following manner:
enjoyed by, all persons, whether natural or juridical, including all
government-owned or -controlled corporations are hereby withdrawn (i) Fifty percent (50%) shall accrue to the
upon the effectivity of this Code. Barangay where the property is located;
SECTION 235. Additional Levy on Real Property for the Special (ii) Fifty percent (50%) shall accrue equally to all
Education Fund. - A province or city, or a municipality within the component Barangays of the city; and
Metropolitan Manila Area, may levy and collect an annual tax of one
percent (1%) on the assessed value of real property which shall be in (c) In the case of a municipality within the Metropolitan Manila Area:
addition to the basic real property tax. The proceeds thereof shall
(1) Metropolitan Manila Authority - Thirty-five percent
exclusively accrue to the Special Education Fund (SEF).
(35%) shall accrue to the general fund of the authority;
Real Property Taxation: Collection of Real Property Tax
(2) municipality - Thirty-five percent (35%) shall accrue to
SECTION 246. Date of Accrual of Tax.- The real property tax for the general fund of the municipality where the property is
any year shall accrue on the first day of January and from that date it located;
shall constitute a lien on the property which shall be superior to any
(3) Barangays - Thirty percent (30%) shall be distributed
other lien, mortgage, or encumbrance of any kind whatsoever, and
among the component Barangays of the municipality where
shall be extinguished only upon the payment of the delinquent tax.
the property is located in the following manner:
SECTION 247. Collection of Tax. - The collection of the real
(i) Fifty percent (50%) shall accrue to the
property tax with interest thereon and related expenses, and the
Barangay where the property is located;
enforcement of the remedies provided for in this Title or any
applicable laws, shall be the responsibility of the city or municipal (ii) Fifty percent (50%) shall accrue equally to all
treasurer concerned. The city or municipal treasurer may deputize the component Barangays of the municipality.
Barangay treasurer to collect all taxes on real property located in the
Barangay: Provided, That the Barangay treasurer is properly bonded (d) The share of each Barangay shall be released, without need of any
for the purpose: Provided, further, That the premium on the bond further action, directly to the Barangay treasurer on a quarterly basis
shall be paid by the city or municipal government concerned. within five (5) days after the end of each quarter and shall not be
subject to any lien or holdback for whatever purpose.
SECTION 250. Payment of Real Property Taxes in Installments. -
The owner of the real property or the person having legal interest SECTION 272. Application of Proceeds of the Additional One
therein may pay the basic real property tax and the additional tax for Percent SEF Tax. - The proceeds the additional one percent (1%) tax
Special Education Fund (SEF) due thereon without interest in four (4) on real property accruing to the Special Education Fund (SEF) shall
equal installments; the first installment to be due and payable on or be automatically released to the local school boards: Provided, That,
before March Thirty-first (31st); the second installment, on or before in case of provinces, the proceeds shall be divided equally between
June Thirty (30); the third installment, on or before September Thirty the provincial and municipal school boards: Provided, however, That
(30); and the last installment on or before December Thirty-first the proceeds shall be allocated for the operation and maintenance of
(31st), except the special levy the payment of which shall be public schools, construction and repair of school buildings, facilities
governed by ordinance of the Sanggunian concerned. The date for the and equipment, educational research, purchase of books and
payment of any other tax imposed under this Title without interest periodicals, and sports development as determined and approved by
shall be prescribed by the Sanggunian concerned. Payments of real the Local School Board.
property taxes shall first be applied to prior years delinquencies,
interests, and penalties, if any, and only after said delinquencies are Collection of Taxes- General
settled may tax payments be credited for the current period.
SECTION 165. Tax Period and Manner of Payment. - Unless
SECTION 251. Tax Discount for Advanced Prompt Payment. - If otherwise provided in this Code, the tax period of all local taxes, fees
the basic real property tax and the additional tax accruing to the and charges shall be the calendar year. Such taxes, fees and charges
Special Education Fund (SEF) are paid in advance in accordance with may be paid in quarterly installments.
the prescribed schedule of payment as provided under Section 250,
SECTION 166. Accrual of Tax. - \Unless otherwise provided in this
the Sanggunian concerned may grant a discount not exceeding twenty
Code, all local taxes, fees, and charges shall accrue on the first (1st)
percent (20%) of the annual tax due.
day of January of each year. However, new taxes, fees or charges, or
changes in the rates thereof, shall accrue on the first (1st) day of the
quarter next following the effectivity of the ordinance imposing such tax, fee, or charge erroneously or illegally collected until a written
new levies or rates. claim for refund or credit has been filed with the local treasurer. No
case or proceeding shall be entertained in any court after the
SECTION 167. Time of Payment. - Unless otherwise provided in expiration of two (2) years from the date of the payment of such tax,
this Code, all local taxes, fees, and charges shall be paid within the fee, or charge, or from the date the taxpayer is entitled to a refund or
first twenty (20) days of January or of each subsequent quarter, as the credit.
case may be. The Sanggunian concerned may, for a justifiable reason
or cause, extend the time of payment of such taxes, fees, or charges
without surcharges or penalties, but only for a period not exceeding
six (6) months.

SECTION 168. Surcharges and Penalties on unpaid Taxes, fees,

or Charges. - The Sanggunian may impose a surcharge not
exceeding twenty-five percent (25%) of the amount of taxes, fees or
charges not paid on time and an interest at the rate not exceeding two
percent (2%) per month of the unpaid taxes, fees or charges including
surcharges, until such amount is fully paid but in no case shall the
total interest on the unpaid amount or portion thereof exceed thirty-
six (36) months.

SECTION 169. Interests on Other Unpaid Revenues. Where the

amount of any other revenue due a local government unit, except
voluntary contributions or donations, is not paid on the date fixed in
the ordinance, or in the contract, expressed or implied, or upon the
occurrence of the event which has given rise to its collection, there
shall be collected as part of that amount an interest thereon at the rate
not exceeding two percent (2%) per month from the date it is due
until it is paid, but in no case shall the total interest on the unpaid
amount or a portion thereof exceed thirty-six (36) months.

SECTION 170. Collection of Local Revenues by Treasurer. - All

local taxes, fees, and charges shall be collected by the provincial, city,
municipal, or Barangay treasurer, or their duly authorized deputies.
The provincial, city or municipal treasurer may designate the
Barangay treasurer as his deputy to collect local taxes, fees, or
charges. In case a bond is required for the purpose, the provincial,
city or municipal government shall pay the premiums thereon in
addition to the premiums of bond that may be required under this
Code.

Remedies for Collection of Revenues

1. Local Government’s Lien

2. Civil Remedies
3. Distraint of Real Property
4. Levy on Real Property
5. Penalty for Failure to Issue and Execute Warrant
6. Advertisement and Sale
7. Redemption of Property Sold
8. Final Deed to Purchaser
9. Purchase of Property by the Local Government Units for
Want of Bidder
10. Resale of Real Estate taken for Taxes, Fees, or Charges
11. Collection of Delinquent Taxes, Fees, Charges, or other
Revenues through Judicial Action
12. Further Distraint or Levy

Taxpayer’s Remedies

SECTION 195. Protest of Assessment. - When the local treasurer or

his duly authorized representative finds that correct taxes, fees, or
charges have not been paid, he shall issue a notice of assessment
stating the nature of the tax, fee or charge, the amount of deficiency,
the surcharges, interests and penalties. 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. The local treasurer
shall decide the protest within sixty (60) days from the time of its
filing. If the local treasurer finds the protest to be wholly or partly
meritorious, he shall issue a notice canceling wholly or partially the
assessment. However, if the local treasurer finds the assessment to be
wholly or partly correct, he shall deny the protest wholly or partly
with notice to the taxpayer. The taxpayer shall have thirty (30) days
from the receipt of the denial of the protest or from the lapse of the
sixty (60) day period prescribed herein within which to appeal with
the court of competent jurisdiction otherwise the assessment becomes
conclusive and unappealable.

SECTION 196. Claim for Refund of Tax Credit. - No case or

proceeding shall be maintained in any court for the recovery of any