LOCAL TAXATION
may be deemed expedient. Thus, municipalities
Source of Tax Powers
 Basco vs. PAGCOR. Local Governments do not
have the inherent power to tax except as may be
delegated to them.
 Article X, Constitution. Section 5. Each local
government unit shall have the power to create
its own sources of revenue 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.
 Section 6. The local government units shall have a
just share as determined by law, in the national
taxes which shall be automatically released to
them.
Limitations of Local Tax Powers
1. The taxpayer will not be over-burdened or
saddled with multiple and unreasonable
impositions;
2. Each local government unit will have its fair share
of available resources;
3. The resources of the national government will not
be unduly disturbed; and
4. Local taxation will be fair, uniform and just.
 The principle of local autonomy under the
Constitution simply means decentralization. It
does not make local governments sovereign
within the state or an imperium in imperio.
 Local Government has been described as a
political subdivision of a nation or state which is
constituted by law and has substantial control of
local affairs.
Scope of Local Taxation
 Two major parts:
1. Local Government Taxation – covers the
imposition of license taxes, fees, and other
impositions, including the community tax
2. Real Property Taxation – a system of levy on
real property imposed on a country-wide
basis but authorizing, to a limited extent and
within certain parameters, local governments
to vary the rates of taxation.
 RA 7160, Local Government Code of 1991
LOCAL GOVERNMENT TAXATION
The Local Structure
 Pepsi-Cola Bottling Co. vs. Municipality of
Tanauan. In delegating the authority, the State is
not limited to the exact measure of the power
which is exercised by municipalities and the like; it
is meant that there may be delegated such
measure of power to impose and collect taxes as
may be permitted to tax subjects which, for
reasons of public policy, the State has not deemed
wise to tax for more general purposes.
 The tax powers of local government units are to
be liberally construed but a doubt on the
application of a tax ordinance shall be construed
strictly against the LGU except tax exemptions.
Incentive or relief which shall be construed strictly
against the grantee.
 LGU and their officials are not exempt from
liability for death or injury to persons or damage
to property.
 The enactment of tax ordinances and revenue
measures requires public hearings to be first
conducted.
 Tax exemption privileges, except those provided
in the Code itself, have been withdrawn.
 LGU have a share in the proceeds of National
internal revenue taxes.
 Agricultural product – includes the yield of the
soil, such as corn, rice, wheat, rye, hay, coconuts,
sugarcane, tobacco, root crops, vegetables, fruits,
flowers and their by-products; ordinary salts; all
kinds of fish; poultry; and livestock and animal
products whether in their original form or not.
 Amusement – pleasurable diversion and
entertainment.
 Amusement places – include theaters, cinemas,
concert halls, circuses and other places of
amusement where one seeks admission to
entertain oneself by seeking or viewing the show
or performances
 Business – trade or commercial activity regularly
engaged in as a means of livelihood or with a view
of profit.
 Banks and other financial institutions – includes
non-bank financial intermediaries, lending
investors, finance and investment companies,
pawnshops, money shops, insurance companies,
stock markets, stockbrokers and dealer in
securities and exchange.
 Capital investment – the capital which a person
employs in any undertaking, or which he
contributes to the capital of a partnership,
corporation, or any other juridical entity or
association in a particular taxing jurisdiction.
 Charges – refer to pecuniary liability, as rents or
fees against persons or property.
 Contractor – includes persons, natural or juridical,
not subject to professional tax, whose activity
consists essentially of the sale of all kinds of
services for a fee, regardless of WON the
performance of the service calls for the exercise
or use of the physical or mental faculties of such
contractor or his employees.
 Corporation – includes partnerships, no matter
how created or organized, joint-stock companies,
joint accounts, associations or insurance
companies but does not include general
professional partnerships and a joint venture or
consortium formed for the purpose of
undertaking construction projects or engaging in
petroleum, coal, geothermal, and other
operations pursuant to an operating or
consortium agreement under a service contract
with the government.
 Countryside and barangay business enterprise –
refers to any business entity, association, or
cooperative registered under the Magna Carta for
Countryside and Barangay Business Enterprises
(kalakalan 20).
 Dealer – one whose business is to buy and sell
merchandise, goods, and chattels as a merchant.
 Fee – charge fixed by law or ordinance for the
regulation or inspection of a business or activity.
 Franchise – a right or privilege, affected with
public interest which is conferred upon private
persons or corporations, under such terms and
conditions as the government and its political
subdivisions may impose in the interest of public
welfare, security and safety.
 Gross sales or receipts – the total amount of
money or its equivalent representing the contract
price, compensation or service fee.
 Manufacturer – every person who, by physical or
chemical process, alters the exterior texture or
form or inner substance of any raw material or
manufactured or partially manufactured product
in such manner as to prepare it for special use or
uses to which it could not have been put in its
original condition.
 Marginal farmer or fisherman – an individual
engaged in subsistence farming or fishing which
shall be limited to the sale, barter or exchange of
agricultural or marine products produced by
himself and his immediate family.
 Motor vehicle – any vehicle propelled by any
power other than muscular power using the
public roads, but excluding road rollers, trolley
cars, street sweepers, sprinklers, lawn mowers,
bulldozers, graders, forklifts, amphibian trucks
and cranes if not used on public roads.
 Municipal waters – includes not only streams,
lakes, and tidal waters within the municipality, not
being the subject of private ownership and not
comprised within the national parks, public forest,
timber lands, forest reserves or fishery reserves,
but also marine waters included between 2 lines
drawn perpendicularly to the general coastline
from points where boundary lines of the
municipality or city touch the sea at low tide and a
third line parallel with the general coastline and
15 kilometers from it.
 Operator – includes the owner, manager,
administrator, or any other person who operates
or is responsible for the operation of a business
establishment or undertaking.
 Peddler – any person who, either for himself or
on commission, travels from place to place and
sells his goods or offers to sell and deliver the
same.
 Persons – every natural or juridical being,
susceptible of rights and obligations or of being
the subject of legal relations.
 Retail – a sale where the purchaser buys the
commodity for his own consumption, irrespective
of the quantity of the commodity sold.
 Vessel – includes every type of boat, craft, or
other artificial contrivance used, or capable of
being used, as a means of transportation on
water.
 Wharfage – a fee assessed against the cargo of a
vessel engaged in foreign or domestic trade based
on quantity, weight, or measure received and/or
discharged by vessel.
 Wholesale – a sale where the purchaser buys or
imports the commodities for resale to persons
other than the end user regardless of the quantity
of the transaction.
Notable Rules
 A revenue ordinance may only be imposed
through an appropriate ordinance and requires
prior to its enactment a public hearing.
 The legislative intendment appears to limit
provinces and municipalities, respectively, to the
imposition of taxes that the other may levy under
its specific authority; hence, municipalities may
levy taxes not otherwise levied by provinces and
the latter, upon the other hand, would be
prohibited from levying taxes that municipalities
may impose under the enumeration of its specific
authority.
 Cities have the broadest tax powers, embracing
both such specific and general tax powers as
provinces and municipalities may impose.
 Barangays may, under certain conditions:
1. Levy taxes on stores and retailers;
2. Fees and charges on billboards and
signboards, and cockpits, gamecocks and
cockfights; and
3. Impose service charges.
 Smart Communications Inc. vs. City of Davao.
Aside from the national franchise tax, the
franchisee is still liable to pay the local franchise
tax, unless it is expressly and unequivocally
exempted from the payment thereof under its
legislative franchise.
General Provisions
 The levy must not be unjust, excessive,
oppressive, confiscatory or contrary to a declared
national economic policy.
 Legislative in nature. The LGC has made it explicit
that a tax, fee, or charge or to generate revenue
under this code shall be exercised by the
Sanggunian of the LGU concerned through an
appropriate ordinance.
 General limitations. The following fundamental
principles must be observed:
1. Taxation shall be uniform in each LGU;
2. Taxes, fees, charges and other impositions
shall:
a. Be equitable;
b. Be levied and collected only for public
purposes;
c. Not be unjust, excessive, oppressive or
confiscatory;
d. Not be contrary to law, public policy and
national economic policy, nor in restraint
of trade.
3. In no case shall the collection of local taxes
and other impositions be let to any person;
4. The revenue collected under the Code shall
inure solely to the benefit of, and subject to
disposition by, the local government imposing
the tax or fee, unless otherwise specifically
provided in the Code; and
5. It shall be the responsibility of each local
political subdivision to evolve a progressive
system of taxation.
 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 LGU and not necessarily in comparison with
other units although belonging to the same
political subdivision.
 Uniformity is required only within the
geographical limits of the taxing authority.
 Classification to be reasonable:
1. It is based upon substantial distinctions which
make the real differences;
2. These are germane to the purpose of the
legislation or ordinance;
3. The classification applies, not only to present
conditions but also to future conditions
substantially identical to those of the present;
and
4. The classification applies equally to all those
who belong to the same class.
 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.
 A voiding of ordinances by courts is taken only
when the rates imposed are shown to be
oppressive, excessive and prohibitive.
Common Limitations
 The following taxes may NOT be imposed by any
LGU:
1. Income tax, except when levied on banks and
other financial institutions;
2. DST;
3. Taxes on estates, inheritance, gifts, legacies
and other acquisitions mortis causa, except as
otherwise provided in the LGC (transfer of
real property ownership by provinces);
4. Customs duties, registration fees of vessel
(except the fee that may be imposed on the
issuance of licenses for the operation of
fishing vessels of 3 tons gross or less by
municipalities and cities), and wharfage on
wharves, tonnage dues and all other kinds of
customs fees, charges and dues except
wharfage on wharves constructed and
maintained by the LGU concerned;
5. Taxes, fees, charges and other impositions
upon goods carried into or out of, or passing
though, the territorial jurisdictions of local
governments in the guise of unreasonable
charges for wharfage, use of bridges, or
otherwise, or other taxes in any form
whatever upon such goods or merchandise;
6. Taxes, fees and charges on agricultural and
aquatic products when sold by the marginal
farmers or fishermen;
7. Taxes on business enterprises certified by the
BOI as pioneer or non-pioneer for a period of
6 and 4 years, respectively, from such
registration;
8. Excise taxes on articles enumerated under the
NIRC and taxes, fees, or charges on petroleum
products, but not a tax on the business of
importing, manufacturing or producing said
products;
9. Percentage taxes on sales, barters or
exchanges of goods or services or similar
transactions thereon;
10. 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 by the Code;
11. Taxes on premiums paid for reinsurance or
retrocession;
12. 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;
13. Taxes, fees, or other charges on Philippine
products actually exported except as provided
by the Code.
14. Taxes, fees or charges on countryside and
barangay business enterprises and on
 cooperatives duly organized and registered
under RA 6810 and 6938;
15. Taxes, fees or charges of any kind on the
National Government, its agencies and
instrumentalities, and Local governments.
SPECIFIC TAX POWERS
Provinces
 Authorized to impose the ff taxes:
1. Tax, not exceeding ½ of 1% of the total
consideration or the fair market value if the
monetary consideration is not substantial,
whichever is higher, on the transfer of
ownership of real property, except transfers
pursuant to the Land Reform Code.
 Real property, for purposes of this tax,
refers only to land, buildings, and
machineries intended by the owner for an
industry or work which may be carried on
in a building or on a piece of land and
which tend directly to meet the needs of
said industry or work.
 It shall be the duty of the seller, donor,
transferor or executor or administrator to
pay the tax within 60 days from the date
of the execution of deed.
2. Tax on business of printing and publication of
books, cards, posters, leaflets, handbills,
certificates, receipts, pamphlets and similar
items, except books and materials prescribed
by the DepEd as school texts, at a rate not
exceeding ½ of 1% of gross annual receipts.
3. Franchise tax, notwithstanding any exemption
granted by any law or other special law, of ½
of 1% of gross receipts realized within its
jurisdiction.
4. Tax on sand, gravel and other query resources
of not more than 10% of market value
thereof.
5. Professional tax on individuals engaged in the
practice or exercise of his profession. In no
case to exceed P300.
 Professionals exclusively employed in the
government shall be exempt from the
payment of the tax.
 The payment of the tax in any province or
city entitles the person to practice his
profession anywhere in the Philippines
without being further made subject to any
local or national tax therefor.
6. Amusement tax on admission to be collected
from proprietors or operators of places of
amusement at the rate of not more than 10%
of gross receipts. Exempt from the tax is the
holding of operas, concerts, art exhibitions,
literary and oratorical presentations, except
pop, rock or similar concerts.
7. Annual fixed tax per delivery truck or van of
manufacturers or producers of certain
products, such as distilled spirits and soft
drinks in an amount not exceeding P500. Said
manufacturers and producers are exempt
from the tax on peddlers by cities and
municipalities.
Municipalities
 May levy taxes, fees and charges not otherwise
levied by provinces.
1. Business tax.
a. Minimum of P165 to a maximum of ½ of
1% based on the gross sales or receipts
during the preceding calendar year of
manufacturers, assemblers, repackers and
processors of any commerce.
b. Minimum of P18 to a maximum of ½ of
1% on the gross sales or receipts of
wholesalers, distributors, or dealers of
any article of commerce;
c. A fixed annual tax on exporters, and on
manufacturers, millers, producers,
wholesalers, distributors, dealers or
retailers of certain essential commodities
at a rate not exceeding ½ of the rates
stated in a and b;
d. 1% or 2% of the gross sales or receipts of
retailers, provided, however, that
barangays have exclusive power to levy
taxes if the gross receipts of retailers fo
not exceed P50,000 in the case of cities
and P30,000 in the case of municipalities;
e. Minimum of P27.50 to maximum ½ of 1%
of gross receipts of contractors and other
various other independent contractors.
f. ½ of 1% on the gross receipts of banks
and other financial institutions, including
intermediaries, pawnshops and stock
markets, brokers and dealers in Securities
and on insurance premium;
g. Not exceeding P50 on peddlers engaged
in the sale of ay merchandise or article or
commerce;
h. A tax on business; provided, however,
that in the case of any business subject to
the excise tax, VAT or percentage tax
under the NIRC, the rate of the tax shall
not exceed 2% of gross sales or receipts
for the preceding calendar year.
 Fixed annual tax – those whose tax base is the
amount of gross sales or receipts for the
preceding taxable period of the taxpayer.
 The business is paid by the person conducting the
business. In case he operates two or more
businesses which are subject to the same rate of
tax, the tax shall be computed on the combined
total gross sales or receipts of said two or more
 related businesses; otherwise, the tax liabilities
accrue and shall be reported separately.
 Municipalities may also impose:
a. Reasonable fees and charges on business and
occupation or calling, as well as the practice
of profession except those reserved to the
province, commensurate with the cost of
regulation, inspection and licensing.
b. Reasonable fees for the sealing and licensing
of weights and measures;
c. Fishery rentals, fees and charges, including
the authority to grant fishery privileges within
municipal waters, as well as issue licenses for
the operation of fishing vessels of 3 tons or
less.
Cities
 Authorized specifically to impose taxes, fees and
charges that provinces and municipalities may
levy, at rates that may be above the maximum
established for provinces and municipalities but
not exceeding 50% of such maximum rates except
the rates of professional and amusement taxes.
 Bagatsing vs. Ramirez. A subsequent general law
similarly applicable to all cities prevails over any
conflicting charter provision for the reason that a
charter must not be inconsistent with the general
laws and public policy of the State.
Barangays
 May levy, to the exclusion of the other LGUs, the
following taxes, fees and charges;
1. Taxes on stores or retailers with fixed
business establishment whose gross sales or
receipts for the preceding calendar year foes
not exceed P50K in cities and P30K in
municipalities, at a rate of not exceeding 1%
on such gross sales or receipt.
2. Service charges for services rendered in
connection with the regulation of the use of
barangay-owned properties or service
facilities such as palay, copra or tobacco dryer
and the like.
3. Reasonable fees and charges
a. On commercial breeding of fighting cocks,
cockfights and cockpits;
b. On laces of recreation which charge
admission fees; and
c. On billboards, signboards and outdoor
advertisements.
 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 the business is to be conducted. For such
clearance, the barangay may impose a reasonable
fee. If the clearance is not issued within 7 days,
the license or permit may be issued.
Common Revenue-Raising Powers
 LGUs may exercise the power to levy taxes, fees
or charges on any base or subject not otherwise
specifically enumerated in the LGC or taxed under
the NIRC.
 Legislative intent:
1. A specific enumeration of tax powers to a
local government unit should be understood
to be to the exclusion of the other LGUs
2. No LGU may impose taxes which are already
imposed under NIRC.
 LGUs are authorized to adjust tax rates not
oftener than once every 5 years but such
adjustment shall not exceed 10% of the rates
fixed by the LGC.
 LGUs are likewise authorized to:
1. Impose and collect reasonable fees and
charges for services rendered;
2. Fix rates for the operation of public utilities
owned, operated and maintained by them
within their jurisdiction; and
3. Prescribe the conditions and fix the rates for
the imposition of toll fees or charges. No such
toll fees shall be collected from officers and
enlisted men of the AFP and PNP, post office
personnel delivering mail and disabled
citizens who are 65 years or over.
RESUME
On business taxes
 Two categories of taxes on business
1. Fixed annual taxes
a. Imposed at unitary rates such as those
levied on retailers and peddlers, as well as
banks and financial institutions; and
b. Under a schedule of graduated tax rates
based on gross sales or receipts of
manufacturers, dealers, exporters or
products of various articles of commerce
and independent contractors.
2. VAT or percentage taxes on sales such as
those levied under NIRC
a. Fixed annual taxes may be imposed by
cities and municipalities but excluding, in
the case of municipalities, business taxes
which provinces may collect under their
specific authority.
b. VAT and percentage taxes on sales or its
equivalent may not be imposed by any
LGU.
On specific taxes
 A specific tax is one levied on an article rather
than on the person engaged in its production,
manufacture, importation or sale that
distinguishes it from a tax on business.
 The LGC does not prohibit the LGU from imposing
such a tax except on articles subject to excise tax.
 A LGU may impose a tax which is not among the
taxes that the LGC had not specifically
enumerated, provided the ff conditions ocncur:
1. The tax measure is not violative of any of the
fundamental principles of local taxation;
2. The tax is not among those explicitly
prohibited by the Code;
3. A public hearing is conducted.
Community Taxes
 Persons liable
1. Individuals liable to residence tax
 Every inhabitant of the Philippines 18 and
above who has been regularly employed
for at least 30 consecutive workings days
during any calendar year, or who is
engaged in business or occupation, or
who owns (naked or beneficial) real
property with an aggregate assessed
value of P1,000 or more or who is
required by law to file an income tax
return shall pay an annual community tax
of P5 and annual additional tax of P1 for
every P1,000 income regardless of
whether from business, exercise of
profession or from property which in co
case shall exceed P5,000.
 In case of husband and wife, the
additional tax shall be based upon the
total property owned by them or upon
the total gross receipts or earnings
derived by them.
2. Entities liable – every corporation, including
joint stock company, partnership, joint
account, association, or insurance companies,
but excluding GPPs and joint ventures for
undertaking construction projects or engaging
in energy operations under service contract
with the government, no matter how created
or organized, whether domestic or resident
foreign, engaged in or doing business in the
Philippines shall ay an annual community tax
of P500 and annual additional tax which, in no
case, shall exceed P10,000, in accordance
with the following schedule:
a. For every P5,000 worth of real property in
the Phil.- P2.00
b. For every P5,000 of gross receipts or
earnings, derived by it from its business in
the Phil, P2.00.
 The dividends received by a corporation
from another corporation shall, for the
purpose of additional tax, be considered
as part of the gross receipts or earnings of
said corporation.
 The following are exempt from CT:
1. Diplomatic and consular representatives;
2. Transient visitors when their stay in the Phil
does not exceed 3 months.
 Estates of deceased persons, being neither
corporations nor individuals, are not subject to
the tax, but the heirs must declare their
proportionate shares of the income.
Place and time of payment
 Paid in the place of residence (individual) or
principal place of business (juridical).
 Liability for community taxes accrues on the first
day of January of each year as regards persons
then residents of the Philippines and liable for the
taxes. The CT shall be paid not later than the last
day of February.
 Those who come to reside in the Philippines on or
before the last day of June, and those who reach
the age of 18 or otherwise lose the benefit of the
exemption on or before that day, shall pay the
residence taxes within 60 days from arrival in the
Philippines or reach the age of 18 or from the
time they lose the benefit of exemption.
 Persons who come to reside in the Philippines or
arrived at the age of 18 on or after the first day of
July of any year, or who cease to belong to an
exempt class on or after the same date, shall not
be subject to the taxes for that year.
 Corporations which may be established or
organized on or before the 30 th of June shall pay
the CT within 20 days from the date of
incorporation. Those which are established on or
after July 1 shall not be subject to the tax for such
year.
 If not paid, pay an interest of 24% from the due
date until it is paid.
Community Tax certificates
 Issued upon payment of the basic and additional
residence tax.
 Also issued to any person, not subject to the tax,
upon payment of P1.00.
 The proceeds of the tax accrue to the general
funds of the province, cities, municipalities and
barangays except a portion thereof which shall
accrue to the general funds of the National
Government to cover the cost of printing and
distribution of the forms and other incidental
expenses.
 The provincial or city treasurer shall remit to the
National treasurer the tax within 10 days after the
end of each quarter.
 Proceeds of the tax collected thru the barangay
treasurers, deputized by the city or municipal
treasurer shall be divided equally between the 2
LGUs concerned.
Enactment and Effectivity of Local Tax Ordinances
1. Passage – power to impose may be exercised only
be the sangguniang panlalawigan, panlungsod,
bayan or barangay concerned thru appropriate
ordinance.
2. Approval – shall be approved and signed by the
local chief executive concerned, but if he
considers such ordinance to be ultra vires or as
prejudicial to the public welfare, he may veto such
ordinance by signifying his disapproval thereof in
writing. The sanggunian may override the veto by
2/3 vote of all its members, in which case it shall
be deemed approved without the local chief
executive’s signature. If he neither approves or
vetoes the ordinance within 15 days in the case of
a province, or within 10 days in the case of a city
or municipality after its passage, it shall likewise
be deemed approved. Ordinances passed by the
sanggunian barangay shall, upon approval by the
majority of all its members, be signed by the
punong barangay.
3. Effectivity - 10 days from date of posting.
4. Accrual – generally, local taxes, fees and charges
accrue on the first day of the calendar year;
however, in case the effectivity of any new tax
ordinance falls on any date other then the
beginning of the quarter, the same shall be
considered as falling at the beginning of the next
ensuing quarter and the new tax levy or revised
rate due shall begin to accrue therefrom.
5. Publication – within 20 days from approval, be
published for 3 consecutive days in a newspaper
widely circulated with the local government’s
jurisdiction or in the absence thereof, posted in 2
conspicuous places. Copies of the ordinance shall
be furnished to the local treasurer for public
dissemination.
6. Review – within 3 days after approval, copies of
the approved tax ordinance of the municipality or
city shall be furnished to the provincial
sanggunian; and in the case of barangay
ordinances, within 10 days from enactment copies
thereof shall be forwarded to the sanggunian
bayan or the city sanggunian, for the review of the
ordinance.
7. Declaration of Invalidity or Suspension of Tax
ordinances – review within 30 days after receipt
of copy. If within the 30 days, no action was
taken, the ordinance shall be deemed consistent
with law and therefore valid.
8. Remedies upon Declaration of Invalidity or
Suspension
 Any question on the constitutionality or legality
of tax ordinances or revenue measures may be
raised on appeal within 30 days from the
effectivity thereof to the Secretary of Justice.
 Such appeal shall not have the effect of
suspending the effectivity of the ordinances.
 Certiorari
Civil Remedies for Collection
 The tax period of local taxes, fees and charges is
the calendar year, except when otherwise
provided in the Code, and such levies may be paid
on quarterly installments within the first 20 days
of each quarter.
 The time for payment may be extended by the
Sanggunian concerned, without surcharges or
penalties, at a rate not exceeding 2% per month
until the delinquent amount is fully paid but not
to exceed a total interest corresponding to 36
months.
 In determining the amount due, the local
treasurer may, by himself, or through his deputies
duly authorized in writing, examine the books,
accounts, and other pertinent record of a
taxpayer.
Tax Lien
 The LGC creates on any unpaid tax, fee or charge,
a lien, superior to all liens, charges or
encumbrances in favor of any person.
 The lien may only be extinguished upon full
payment of the delinquent local tax, fee or
charge, including related surcharges or interest.
 The tax lien does not extend to other revenues,
such as those arising from contracts or from laws
of general application.
 Distraint
1. Seizure – upon failure of the person to pay,
the treasurer or his deputy may, upon written
notice, seize and confiscate any personal
property belonging to the person or any
personal property subject to the tax lien in
sufficient quantity to satisfy the tax.
 The treasure or his deputy shall issue a
duly authenticated certificate based upon
the records of his office showing the fact
of delinquency and the amount of the tax
and penalty due.
 Shall be sold at public auction.
 A tax lien is distinguished from distraint in
that in the latter, the property must be
that of the taxpayer, although it need not
be the property in respect to which the
tax is assessed; a tax lien is generally
directed to the property subject to the tax
regardless of its owner.
2. Accounting of distrained goods – a copy of
such accounting shall be signed by the officer
executing the distraint, leave such with the
owner.
3. Publication – not less than 3 public places in
the territory of the LGU where the distraint is
made, specifying the time and place of sale
and the articles distrained. One place shall be
at the office of the chief executive.
 4. Release of distrained property upon payment
prior to sale.
5. Procedure of sale – at the time and placed
fixed in the notice, the officer shall sell the
goods or effects so distrained at public
auction to the highest bidder for cash. Within
5 days after the sale, the treasurer shall make
a report of the proceedings in writing to the
chief executive of the LGU concerned.
 Should the property be not disposed of
within 120 days from the date of distraint,
the same shall be considered as sold to
the local government for the amount of
the assessment made.
6. Disposition of proceeds – applied to satisfy
the tax, together with the increments thereto
incident to delinquency, and the expenses of
the distraint and sale. Residue will be
returned to the owner. If proceeds are
insufficient, other property may be distrained.
 Levy
1. Real property may be levied after the
expiration of the time required to pay the
delinquent tax, fee or charge
2. Publication – within 30 days after levy.
Advertisement shall cover a period of at least
30 days. It shall be effected by posting a
notice at the main entrance of the municipal
building or city hall, and in a public and
conspicuous place in the barangay where the
real property is located, and by publication
once a week in three weeks in a newspaper of
general circulation in the province, city or
municipality where the property is located.
3. Stay of sale – at any time before the date
fixed for the sale, the taxpayer may stay the
proceedings by paying the taxes, fees,
charges, penalties and interests.
4. Sale – within 30 days from the sale, the local
treasurer shall make a report of the sale to
the sanggunian concerned.
5. Right of redemption
Property exempt from distraint, levy, attachment or
execution
1. Tools and implements necessarily used by the
delinquent taxpayer in his trade or employment;
2. One horse, cow, carabao or other beast of
burden, such as the delinquent taxpayer may
select, and necessarily used by him in his ordinary
occupation;
3. His necessary clothing, and that of his family;
4. Household furniture and utensils necessary for
housekeeping and used for that purpose by the
delinquent taxpayer, such as he may select, of a
value not exceeding P10,000;
5. Provisions, including crops, actually provided for
individual or family use sufficient for 4 months;
6. The professional libraries of doctors, engineers,
lawyers and judges;
7. One fishing boat and net, not exceeding the total
value of P10,000, by the lawful use of which a
fisherman earns his livelihood;
8. Any material or article forming part of a house or
improvement of any real property.
Prescriptive periods of Assessment and Collection
 On assessment – 5 years from the date they
become due. In case of fraud or intent to evade
tax, the same shall be assessed within 10 years
from discovery of the fraud or intent to evade
payment.
 On collection – within 5 years from the date of
assessment.
 Suspension of Prescriptive Periods
1. The treasurer is legally prevented for making
the assessment or collection;
2. The taxpayer requests for reinvestigation and
executes a waiver in writing before expiration
of the period within which to assess or collect;
and
3. The taxpayer is out of the country or
otherwise cannot be located.
Tax Exemptions
 LGUs may, thru ordinances duly approved, grant
tax exemptions, incentives or reliefs under such
terms and conditions are they may deem
necessary.
 The LGC has withdrawn, except for those
provided therein, tax exemptions or incentives
granted to, or presently enjoyed by all persons,
including GOCCs, except local water districts,
cooperatives duly registered under RA 6938, non-
stock and non-profit hospitals and educational
institutions.
Tax Condonation
 LGUs may condone or remit taxes.
Remedies of Taxpayers.
 Prior to an assessment
1. Administrative appeal to the SOJ;
 Within 30 days from effectivity.
 SOJ shall render a decision within 60 days
from the date of receipt of the appeal.
 The appeal shall not have the effect of
suspending the effectivity of the
ordinance.
 Within 30 days after receipt of the
decision or the lapse of the 60-day period
without the SOJ acting upon the appeal,
the aggrieved party may file appropriate
proceedings with a court of competent
jurisdiction.
 2. Action for declaratory relief as and when
applicable.
 Within 2 years form payment.
 If no action was taken by the treasurer,
the taxpayer shall consider such inaction
as a denial and initiate court action so as
not to foreclose the statute of limitation.
 After assessment
1. Protest the assessment;
 Within 60 days from receipt of
assessment, the taxpayer may file a
written protest with the local treasurer
contesting the assessment.
 If the assessment is contested, the local
treasurer shall decide within 60 days from
filing.
 If protest is denied, may file within 30
days from receipt of the decision an
appeal with the court of competent
jurisdiction.
 The collection will be held in abeyance.
2. An action for refund.
 Within 2 years from payment.
 The payment must be made before the
lapse of the 60 day period.

REAL PROPERTY TAXATION
 The changes in the law were designed to increase
government revenues from the realty tax,
upgrade assessment procedures and practices,
and bring about an equitable distribution of the
tax burden.
 The Real property taxation covers the levy,
assessment and collection of:
1. An annual ad valorem tax that may be levied
on real property such as land, building,
machinery and other improvements affixed or
attached to real property; and
2. Special levies by the same LGUs on said
property such as:
a. An additional 1% tax for the Special
Educational Fund;
b. An additional 5% tax on idle lands;
 Idle lands – agricultural lands at least ½ of
which remain uncultivated or unimproved
by the owner or owners thereof and non-
agricultural lands, regardless of area, of
more than 1,000 square meters at least ½
of which remain unutilized or unimproved
by the owner or owners thereof.
c. Special levy or assessment that may be
imposed on property especially benefited
by certain infrastructure developments or
improvements undertaken by LGUs to
hold defray a part, not exceeding 6%, of
the cost thereof, including the cost of
acquiring land and other real property in
connection therewith.
Property Subject to Tax
 Only real property within the meaning of the Real
Property Taxation.
 Lands, buildings, machinery and other
improvements.
 Machinery embraces machines, equipment,
mechanical contrivances, instruments, appliances
or apparatus which may or may not be attached,
permanently or temporarily to the real property.
 Improvement – a valuable addition made to a
property or amelioration in its condition.
Amounting to more than a mere repair or
replacement of parts involving capital
expenditures and labor which is intended to
enhance to value, beauty or utility or to adopt it
for new or further purpose.
 SC. Article 415 of the Civil Code could be
controlling.
Fundamental Principles for the appraisal,
assessment, levy and collection of real property for
taxation
1. Real property shall be appraised at its current and
fair market value;
2. Real property shall be classified for assessment
purposes on the basis of its actual use;
3. Real property shall be assessed on the basis of a
uniform classification within each local political
subdivision;
4. The appraisal, assessment and levy of real
property for taxation purposes and the collection
of the real property tax shall not be let to any
private persons; and
5. The appraisal and assessment of real property
shall be equitable.
 In preparing a general schedule of value for a
province or city and in determining the classes of
property for assessment levels, real property shall
be assessed on the basis of its actual use
regardless of where located and whoever uses it.
 For purposes of assessment, real property shall be
classified as residential, agricultural, commercial,
industrial, mineral, timberland or special.
 The city or municipality within MM, through their
respective sanggunian, shall have the power to
classify lands.
 All lands, buildings, and other improvements
thereon actually, directly and exclusively used for
hospitals, cultural or scientific purposes, and
those owned and used by the local water districts,
and GOCCs rendering essential public services in
the supply and distribution of water and/or
generation and transmission of electric power
shall be classified as special.
 Real property shall be classifies, valued and
assessed on the basis of its actual use regardless
of where located, whoever owns it, and whoever
uses it.
 The provincial, city or municipal assessor shall
undertake a general revision of real property
assessments within 2 years after the effectivity of
this Code and every 3 years thereafter.
 The provincial, city or municipal assessor or his
duly authorized deputy shall make a classification,
appraisal and assessment of the real property
listed and described in the declaration
irrespective of any previous assessment or
taxpayer’s valuation thereon, in cases where:
a. Real property is declared and listed for
taxation purposes for the first time;
b. There is an ongoing general revision of
property classification and assessment; or
c. A request is made by the person in whose
name the property is declared.
 Real property declared for the first time shall be
assessed for taxes for the period during which it
would have been liable but in no case for more
than 10 years prior to the date of initial
assessment.
 If such taxes are paid on or before the end of the
quarter following the date of notice of assessment
was received by the owner or his representative,
no interest for delinquency shall be imposed
thereon; otherwise, such taxes shall be subject to
an interest at the rate of 2% per month or a
fraction thereof from the date of the receipt of
assessment until such taxes are fully paid.
 When real property is assessed for the first time
or when an existing assessment is increased or
decreased, the provincial, city or municipal
assessor shall within 30 days give written notice of
such new or revised assessment to the person in
whose name the property is declared. The notice
may be delivered personally or by registered mail
or through the assistance of the punong barangay
to the last known address of the person to be
served.
 The fair market value of a brand new machinery
shall be the acquisition cost. In all other cases, the
fair market value shall be determined by dividing
the remaining economic life of the machinery by
its estimated economic life and multiplied by the
replacement or reproduction cost.
 For purposes of assessment, a depreciation
allowance shall be made for machinery at a rate
not exceeding 5% of its original cost or its
replacement or reproduction cost, as the case
may be, for each year of use. The remaining value
for all kinds of machinery shall be fixed at not less
than 20% of such original, replacement or
reproduction cost for so long as the machinery is
useful and in operation.
Duty to Declare Real Property
 It shall be the duty of the owner or administrator
or their representatives to declare, under oath,
the true value of real property, taxable or exempt,
within 60 days after the acquisition or upon the
completion or occupancy of the improvement.
 The sworn deduction shall be filed once every 3
years. the failure or refusal to make that
declaration within the prescribed period would
authorize the provincial or city assessor to himself
declare the property in the name of the defaulting
owner if known, or against an unknown owner, as
the case may be, and to assess the property for
taxation.
Imposition of Real Property Tax
 The real property tax has been considered and
held to be national, not local. The realty tax has
always been imposed by the national law-making
body. The real estate tax is enforced throughout
the Philippines and not in a particular political
subdivision, although the bulk of the tax proceeds
accrue tot eh various LGUs where the property is
located.
 Rates of levy
1. Provinces – not exceeding 1% of the assessed
value of real property; and
2. Cities and municipalities in MM – not more
than 2% of the assessed value.
 Exemptions from Real Property Tax
1. Real Property owned by the RP or any of its
political subdivisions except when the
beneficial use thereon has been granted, for
consideration or otherwise, to a taxable
person;
2. Charitable institutions, churches, parsonages
or convents appurtenant thereto, mosques,
non-profit or religious cemeteries, and all
lands, buildings, and improvements actually,
directly and exclusively used for religious,
charitable or educational purposes;
3. All pieces of machinery and equipment that
are actually, directly and exclusively used by
local water districts and GOCCs engaged in
the supply and distribution of water and/or
generation and transmission of electric
power;
4. All real property owned by duly registered
cooperatives as provided for under RA 6938;
and
 Classification to be reasonable must
a. Rest on substantial distinction;
b. Be germane to the purpose of the
law;
c. Not to be limited to existing condition
only; and
d. Apply equally to all members of the
same class.
5. Machinery and equipment used for pollution
control and environmental protection.
 Every person by or for whom real property is
declared, who shall claim tax exemption for such
property shall file with the provincial, city or
municipal assessor within 30 days from the date
of the declaration of real property sufficient
documentary evidence in support of such claim.
 If the required evidence is not submitted within
the prescribed period, the property shall be listed
as taxable in the assessment roll.
Special Levies
 For the special Education Fund – the special levy
of 1% may be imposed on real property, in
addition to the basic real property tax.
 On idle lands – additional annual tax of not
exceeding 5% of the assessed value of the real
property. Imposed on:
a. Agricultural lands, more than 1 hectare in
area, suitable for cultivation, dairying, inland
fishery, and other agricultural uses, ½ of
which remain uncultivated or unimproved by
the owner or owners thereof, such land which
is planted with at least 50 fruit-bearing trees
 to a hectare as well as lands actually used for
grazing purposes, is not considered idle land;
b. Lands, other than agricultural, located in a city
or municipality more than 1,000 square
meters in area, including, regardless of area,
residential lots in subdivisions duly approved
by proper authorities, the ownership of which
has been transferred to individual owners and
½ of which remain unutilized and unimproved
by the owner or owners thereof. Individual
lots of such subdivisions, the ownership of
which has been transferred to the buyer shall
be considered as forming part of the
subdivision, and shall be subject to the
additional tax payable by the subdivision
operator.
 The LGU concerned may exempt idle lands from
additional levy by reason of force majeure, civil
disturbance, natural calamity or any cause or
circumstances which physically or legally prevents
the owner of the property or person having legal
interest therein from improving, utilizing or
cultivating the same.
 On Lands or Special Assessments as then known
under Old Assessment laws.
 The provincial, city or municipal sanggunian
may, by ordinance, provide for the imposition
and collection of a special levy on the lands
comprised within the province, city or
municipality or parts thereof specially
benefited by public works projects or
improvements funded by the LGU.
 The special levy shall correspond only to a
part not exceeding 60% of the costs of said
improvements or infrastructures financed by
the province, city or municipality, as the case
may be, including the cost of acquiring land
and other real property in connection
therewith.
 The special levy does not apply to lands
exempt from the real property tax and the
remainder of the land portions of which have
been donated tot eh LGU for the construction
of such projects or improvements.
 Remedies against a special levy
 An owner of real property, or any person
having a legal interest therein, affected by a
special levy may, upon receipt of the written
notice of assessment thereof, avail himself of
the same remedies of appeal that may be
taken from assessments of the provincial, city
or municipal assessor calling for the payment
of the ad valorem real property tax.
Accrual, Tax Lien and Payment
 The real property tax for any year shall attach and
become due and payable on the 1 st day of January
and the said basic and any other tax levied under
the title on real property taxation shall from the
date of accrual, constitute a lien upon the
property subject to such tax. Said lien shall be
superior to all other liens, mortgages, or
encumbrances of any kind whatsoever shall be
enforceable against the property, by
administrative or judicial action, whether in the
possession of the delinquent or any subsequent
owner or possessor, and shall be removable only
by the payment of the delinquent taxes and the
related interest and expenses.
 Real property taxes may, in the discretion of the
taxpayer, be paid without penalty in 4 equal
installments, except the special levies which shall
be governed by the local ordinance imposing the
levy.
 In case of delinquency in the payment of the real
property tax or any other tax on real property
taxation, an interest at the rate of 2% per month
on the unpaid tax or portion thereof is imposed
until it shall have been paid. The total interest on
such unpaid tax or portion hereof shall not exceed
36 months.
 If the basic real property tax and the additional
tax accruing to the Special Educational Fun are
paid in advance, the Sanggunian may grant a
discount not exceeding 20% of the annual tax due.
 Payments by a taxpayer shall first be applied to
delinquencies, interest and penalties due in prior
years; the excess, if any, may then be credited to
the current period.
Civil Remedies for Collection
 Collection shall be the responsibility of the
treasurer of the city or municipality where the
property is situated.
 Remedies:
1. Extrajudicial remedy of levy; and
2. Judicial action.
 The collection of tax may be enforced through
either or both administrative and judicial
remedies, alternatively or simultaneously, and the
use or non-use of one remedy shall not bar
against the availment of the other.
 A formal demand for the payment of the
delinquent tax is not required for the initiation of
either remedy. It is enough that a notice of
delinquency is caused to be posted and published.
 The remedy of levy can be pursued by putting up
for sale only the real property subject to tax.
 The personal liability for the tax delinquency is
generally whoever is the owner of the property at
the time the tax accrues; where, however, the tax
liability is imposed on the beneficial use of the
real property such as those owned but leased to
private persons or entities by the government or
when the assessment is made on the basis of the
actual use thereof, the liability is on any person
 who has such beneficial or actual use at the time
of the accrual of the tax. The personal liability
may be enforced by judicial action.
 While Section 254 of the LGC on the subject of
notice of delinquency mentions distraint of
personal property, the Code failed, however, to
elaborate on the matter that can raise doubts on
the continuing availability of that remedy.
Levy of Real Property
 Procedure:
1. Issuance of notice of delinquency;
2. Issuance of a warrant of levy;
3. Advertisement; and
4. Auction.
 Notice of delinquency – to be posted at the main
entrance of the provincial capital or city or
municipal hall and in a publicly accessible and
conspicuous place in each barangay of the LGU, as
well as to be published once a week for 2
consecutive weeks in a newspaper of general
circulation in the province, city or municipality.
 The notice shall state that unless the tax,
surcharges and penalties are aid before the
expiration of the year for which the tax is due,
except when the notice of assessment or special
levy is contested administratively or judicially, the
delinquent real property will be sold at public
auction.
 Within 30 days after service of the warrant of
levy, the provincial or city treasurer shall advertise
the sale at public auction of the real property or a
usable portion thereof as may be necessary to
satisfy all the taxes and penalties due and costs of
sale. Such advertisement shall be made by posting
a notice at the main entrance of the provincial,
city or municipal building and in a public and
conspicuous place in the barangay where the
property is situated and by publication once a
week for two consecutive weeks in a newspaper
of general circulation published in the province,
city or municipality.
 The announcement shall state the amount of
taxes, penalties and costs of sale; the date and
place of sale; the name of the taxpayer against
whom the tax was assessed; and the description
of the property to be sold.
 At any time before the date of sale, the taxpayer
may stay all proceedings by paying the taxes and
penalties due on the real property.
 Levy may be repeated as and when necessary
until the full amount due, including all expenses,
is collected.
 The local treasurer or his deputy shall make a
report on the sale to the sanggunian concerned
within 30 days after such sale. He shall deliver to
the purchaser a certificate of sale. The proceeds in
excess of the amount due shall be remitted to the
owner of the property or person having legal
interest therein.
 The final deed conveying the property to the
purchaser shall be executed by the local treasurer
after the expiration of the one-year period of
redemption without the right of redemption
having theretofore been exercised.
 In case there is no bidder at the public auction of
the delinquent real property, or if the highest bid
id for an amount not sufficient to pay the taxes,
penalties or costs of sale, the local treasurer shall
buy the delinquent real property in the name of
the local government concerned to satisfy the
amount due and the costs of sale. The ROD, upon
such declaration of forfeiture, shall transfer the
title of the forfeited property without the
necessity of a court order.
 Redemption of Real Property After Sale
 Within the one year from the date of the
registration of sale or of the forfeiture of the
property, the delinquent taxpayer or person
having legal interest therein, or his
representative, shall have the right to redeem
the same by paying the local treasurer or his
deputy the total amount of taxes and
penalties due up to the date of redemption,
the costs of sale and interest at the rate of 2%
per month on the purchase price from the
date of sale to the date of redemption, and
such payment shall invalidate the sale
certificate issued to the purchaser and shall
entitle the person making the same certificate
of redemption from the treasurer.
 Possession and Usufruct of Real Property within
One year from the date of sale
 After the sale and before redemption, the real
property shall remain in the possession of the
delinquent taxpayer, who shall have the right
to the usufruct thereof.
 Suits Assailing validity of Tax sale
 No court shall entertain any suit assailing the
validity of a tax sale of real estate until the
taxpayer shall have deposited with the court
the amount for which the real property was
sold, together with interest of 2% per month
upon that sum from the date of sale to the
time of instituting the suit. The money so paid
into court shall belong to the purchaser at the
tax sale if the deed is declared invalid, but
shall be returned to the depositor if the action
fails.
 Neither shall a court declare a sale invalid by
reason of irregularities or informalities in the
proceedings unless it shall have been proven
that such irregularities or informalities have
impaired the substantial rights of the
taxpayer.
Civil Action
 Shall be filed by the local treasurer within 5 years,
if based on fraud or intent to evade tax payment,
within 10 years.
 Payment of delinquent taxes on property subject
of controversy
 In any suit involving the ownership or
possession of, or succession to, real property,
the court may, on its own motion or upon
presentation of the provincial, city or
municipal treasurer or his deputy, award such
ownership, possession or succession to any
party to the controversy upon the payment to
the court of the taxes and penalties due on
the property and all the cost that may have
accrued subject to the final outcome of the
action.
 Prescriptive period
 Collect within 5 years from the date they
become due.
 No action for the collection of the tax,
whether administrative or judicial, shall be
instituted after the expiration of such period.
 In case of fraud or intent to evade payment of
the tax, such action may be instituted for the
collection thereof within 10 years from the
discovery of such fraud or intent to evade
payment.
 The period of prescription shall be suspended
during which:
a. The local treasurer is legally prevented
from collecting the tax;
b. The owner of the property or the person
having legal interest therein request for
reinvestigation and executes a waiver in
writing before the expiration of the period
within which to collect; and
c. The owner of the property or the person
having legal interest therein is out of the
country or otherwise cannot be located.
 Real property declared for the first time shall have
back taxes assessed against it for the period
during which it would have been liable if assessed
in proper course but in no case for more than 10
years prior to the year of initial assessment.
Remission of Tax
 Condonation or reduction of tax by the President
of the Philippines.
 The Pres of the Philippines may remit or
reduce the real property tax for any year in
any city, municipality within the MM area or
province if he deems that public interest so
requires.
 Remission of Tax by the Sanggunian
 In case of a general failure of crops or
substantial decrease in the price of products,
or calamity.
TAXPAYER’S REMEDIES
On Assessments
 Any owner or person having legal interest in the
property who is not satisfied with the action of
the provincial, city or municipal assessor may,
within 60 days from the date of receipt by him of
the written notice of assessment, appeal to the
Local Board of Assessment Appeals of the
province or city concerned by a petition under
oath together with the supporting documents
therefor.
 An appeal does not suspend the collection of the
tax as assessed without prejudice to a later
adjustment depending on the outcome of the
appeal.
 The board shall decide the appeal within 120 days
from receipt of the appeal.
 The decision of the Board may be appealed within
30 days from receipt thereof by the taxpayer to
the Central Board of Assessment Appeals.
 The decision of the CBAA shall be final and
executory.
 The special civil action of certiorari would be
proper to question the decision of the CBAA.
 CTA and CA has no jurisdiction to entertain
appeals from the decision of the CBAA.
 When the CTA was created, CBAA was not yet
created.
Payment Under Protest
 No protest shall be entertained unless the tax is
first paid.
 When a taxpayer desires for any reason to pay his
tax under protest, he shall indicate the amount or
portion thereof which he is contesting and such
protest shall be annotated on the tax receipts by
writing thereon the word “paid under protest”.
 The protest shall be confirmed in writing, with a
statement of the ground therefor, within 30 days.
 File with the local treasurer who shall decide the
protest within 60 days from the receipt of the
protest.
 The amount or portion of the tax contested shall
be held in trust by the treasurer and the
difference shall be treated as revenue.
 If decided in favor of the protestant, the amount
may be either refunded or applied as tax credit to
any other existing or future tax liability of said
protestant.
 If the protest is denied or upon the lapse of 60
days without the protest being finally decided, the
tax payer may appeal the same tot eh Boards of
Assessment appeals.
 The RTC has no jurisdiction to issue a writ of
prohibition which seeks to set aside the warrant
of garnishment over petitioner’s bank deposit in
satisfaction of real property taxes without first
 under protest the tax assessed and without
exhausting available administrative remedies.

When Protest is Excused

 Protest is not a requirement in order that a
taxpayer, who paid under a mistaken belief that it
is required by law, may claim for refund.

Refund on Over-payments
 When it appears that an assessment of real
property or the tax levied is illegal or erroneous
when made and the same is accordingly reduced
or adjusted, the taxpayer may file a written claim
for refund or credit for taxes and interest with the
treasurer within 2 years from the date the
taxpayer is entitled thereto.
 If the claim is denied, or it is not decided within 60
days, the taxpayer may avail himself of the
remedy of appeal to the board of assessment
appeals as in protest cases.

COURT OF TAX APPEALS
 The CTA was created under RA 1125 in order:
1. To entrust tax cases technically qualified men
in the field of, or those with specialized
knowledge in, taxation; and
2. To help expedite the proper disposition of tax
cases.
 The CTA is a court of special appellate jurisdiction.
The proceedings therein are judicial in nature
although the court is not bound by the technical
rules of evidence.
 The Rules of Court applies only by analogy or in a
suppletory character.
Jurisdiction of the CTA
A. Decisions of the CIR in cases involving:
1. Disputed assessments;
2. Refunds of internal revenue taxes, fees or
other charges;
3. Penalties imposed in relation thereto; and
4. Other matters arising under the NIRC or other
laws administered by the BIR.
B. Decisions of the Commissioner of Customs in
cases involving:
1. Liability for customs duties, fees, or other
money charges;
2. Seizure detention or release of property
affected thereby;
3. Fines, forfeitures or other penalties imposed
in relation thereto; and
4. Other matters arising under the Tariff and
Customs Code or other laws administered by
the BIR.
C. Decision of the SOF, in automatic review cases
where such decision is adverse to the taxpayer;
D. Decisions of the Secretary of Trade and Industry in
case of non-agricultural products and Secretary of
Agriculture in case of agricultural products,
involving dumping and countervailing duties
imposable under the Tariff and Customs Code and
safeguard measures pursuant to RA 8800.
 Expanded Jurisdiction:
1. Exclusive jurisdiction overall criminal offense
under the NIRC and TCC and other laws
admissible by the BIR and BOC where the
amount of taxes and fines is P1M or more;
2. Exclusive appellate jurisdiction in criminal
offense over appeals from the RTC whether in
the exercise of original or appellate
jurisdiction over tax cases where the amount
involved is less than P1M.
3. Appellate jurisdiction over decisions of RTC on
local taxes;
4. Appellate jurisdiction over decisions of the
Central Board of Assessment Appeals on real
estate tax cases;
5. Exclusive original jurisdiction over tax
collection cases where the amount involved is
P1M or more;
6. Exclusive appellate jurisdiction over tax
collection cases where the amount is less than
P1M.
 Commissioner vs. Joseph. A notice of tax following
distraint and levy would be appealable to the CTA
if the issue relates to the validity of such notice as
when it is not in accord with the assessment but
not when the assessment but not when the
assessment itself, after it has become final, is
questioned such as by prescription thereof.
 Commissioner vs. Villa. The taxpayer should have
first exhausted his administrative remedies, and it
is only after his protest is denied that a petition
may be entertained by the CTA.
Injunctions
 Section 11, RA 1125 gives the CTA authority to
order the suspension of tax collection when in its
view, such collection would work to the serious
prejudice of either the taxpayer or the
Government. This ancillary remedy is available
only when there is appending appeal over which
the CTA has jurisdiction.
 Blaquera vs. Rodriquez. No court has authority to
grant a writ of injunction to restrain the collection
of any internal revenue tax, fee or charge
imposed by the NRC refers to courts other than
the CTA.
 An appeal to the CTA does not automatically
suspend the collection of taxes except when so
enjoined by the CTA at any stage of the
proceedings and when the circumstances so
warrant.
Issues Cognizable by the CTA
 Once the CTA properly acquires jurisdiction by the
filing of a petition for review, it can consider
various issues that are either essential for or
incidental to the full and complete resolution of
the case.
 The defense of prescription of the assessment
should be raised while the case is still pending
with the BIR whereas the defense of prescription
of action could be raised for the first time with the
CTA, but not for the first time on appeal to the SC.
Rules of Procedure
 The decision of the CTA division is no longer
appealable to the CA, nut to the CTA en banc.
 Before filing an appeal by way of petition for
review to the CTA en banc, file first a motion for
reconsideration or new trial with the division
which renders the adverse decision.
 Within 15 days from the receipt of the resolution
denying the motion for new trial or
 reconsideration, an appeal by way of petition for
review must be filed with the CTA en banc.
 From the en banc decision, the losing party may
file with the SC a verified petition for review on
certiorari via Rule 45.

Period for CTA decisions

 The requirement that cases brought before the
CTA shall be decided within 30 days after
submission thereof for decision is merely
directory.