CHAPTER 3: Local Taxing Authority

The paradigm shift

• Local legislative bodies are now given direct authority to levy taxes, fees and charges
• In accordance with Article X, Section 5 of the Constitution

Local legislative power

a. sangguniang panlalawigan for the province
b. sangguniang panlungsod for the city
c. sangguniang bayan for the municipality
d. sangguniang barangay for the barangay

Ordinance
• A law adopted by a local legislative body with respect to a matter allowed to them under the
LGC.
• Legislative actions of a general and permanent character shall be enacted in the form of
ordinances

Resolution
•An expression of sentiment or opinion adopted by a legislative body, not having the force of law
•A declaration of a council or a legislative body, evidencing some purpose or intent to do some
act, not the doing of the act itself

Format of ordinances & resolutions

•Shall be in writing
•Shall contain an assigned number
•Shall have a title or caption
•An enacting or ordaining clause
•Date of proposed effectivity
•Brief explanatory note containing justification of its approval
•Signed by author/authors
Multiple Choice
Which statement is correct?
a.Legislative acts passed by the municipal council in the exercise of its lawmaking authority are
denominated as resolutions and ordinances
b.Legislative acts passed by the municipal council in the exercise of its lawmaking authority are
denominated as resolutions
c.Legislative acts passed by the municipal council in the exercise of its lawmaking authority are
denominated as ordinances
d.Both ordinances and resolutions are solemn and formal acts

Power to create revenues exercised through local government units

•The power to impose a tax, fee, or charge or to generate revenue under this Code shall be
exercised by the sanggunian of the local government unit concerned through an appropriate
ordinance. LGC SEC. 132

Tax ordinances within the authority of local sanggunian

•Imposing tax, fee or charge
•Adjusting local tax rates
•Prescribing penalties for violation of tax ordinances
•Granting local tax exemptions and incentives
•Condoning tax delinquencies

Procedure for approval and effectivity of tax ordinances LGC 187

•Public hearings shall be conducted for the purpose prior to the enactment thereof
•Any question on the constitutionality or legality of tax ordinances or revenue measures may be
raised on appeal within thirty (30) days from the effectivity thereof to the Secretary of Justice
who shall render a decision within sixty (60) daysfrom the date of receipt of the appeal
•Such appeal shall NOThave the effect of suspending the effectivity of the ordinance and the
accrual and payment of the tax, fee, or charge levied therein
•Within thirty (30) days after receipt of the decision or the lapse of the 60-day period without the
Secretary of Justice acting upon the appeal, the aggrieved party may file appropriate proceedings
with a court of competent jurisdiction.
Public hearing requirement
•Public hearings are required before the passage of a tax ordinance, not after
•The defect in the enactment of a revenue measure is not cured when another public hearing was
held after the questioned ordinance was passed

Approval of ordinances
•Majority of sanggunian members present (quorum) in regular or special session duly called for
the purpose
•Ifordinanceisforauthorizing or directing payment or creating liability, majority vote of ALL the
sanggunian members is required
•Every ordinance enacted shall be affixed with the signature of the local chief executives in each
and every page of such ordinance

Veto of local ordinances

•Local chief executives, except punong barangay, shall have the power to veto proposed
ordinances
•Grounds: Ordinances are ultra vires or prejudicial to public welfare

Communication of veto by local chief executive

•Must be made to the sanggunian within 15 days for province and 10 days for cities and
municipalities
•If not done within the timeframe, ordinance shall be deemed approved as if he had signed it

Limitations on veto power of local chief executive

•He may veto an ordinance or resolution only once
•The sanggunian may override the veto of the local chief executive by 2/3 vote of all the
sanggunian members making the ordinance or resolution effective for all legal intents and
purposes

Review by higher sanggunians

Review by Sangguniang Panlalawigan (SP) of ordinances/resolutions enacted by Component
Cities & Municipalities
•Within 3 days after approval, secretary of sangguniang bayan or panglungsod shall forward
approved ordinances & resolutions to the SP for review
•If SP finds them beyond the powers conferred to them, such ordinances or resolutions shall be
declared invalid in whole or in part
•If no action has been taken by SP within 30 days, such ordinances or resolutions shall be
presumed valid LGC SEC. 56
Review by Sangguniang Bayan or Panglungsod (SBP) of ordinances/resolutions enacted by
Barangays
•Within 10 days after enactment, sangguniang barangay shall forward approved ordinances &
resolutions to the SBP for review
•If SBP finds them inconsistent with law, SBP shall within 30 days from receipt, return them to
barangay with comments for adjustment, in which case, thee effectivity thereof is suspended
until revision is effected
•If no action has been taken by SBP within 30 days, such ordinances or resolutions shall be
presumed valid LGC SEC. 57

Attempt to enforce void or suspended tax ordinances

•Ground for administrative disciplinary action against local officials and employees responsible
for it LGC 190

Duty of sanggunian secretary to furnish copy of ordinance to Official Gazette

•Within 7 days following approval of ordinances, secretary of sanggunian shall transmit official
copies thereof to the CEO of Official Gazette

Publication of Tax Ordinances & Revenue Measures

•Within ten (10) days after their approval, certified true copies of all provincial, city, and
municipal tax ordinances or revenue measures shall be published in full for three (3) consecutive
days in a newspaper of local circulation
•In provinces, cities and municipalities where there are no newspapers of local circulation, the
same may be posted in at least two (2) conspicuous and publicly accessible places. LGC SEC.
188

Effectivity of local tax ordinances

•10 days from its posting at the bulletin board of the local government and in at least 2
conspicuous places in the LGU

Review by DOJ on issues of constitutionality

•Questions of legality or constitutionality of local tax ordinances and revenue measures must be
brought to DOJ within 30 daysfrom their effectivity
•No appeal to the Secretary, no refund to taxpayers assailing the validity of a local tax ordinance
True or False
Review of tax ordinance by Secretary of Justice as required in Section 187 of the Local
Government Code is an act of mere supervision not control.

What if DOJ Secretary does not act on the appeal?

•Aggrieved party could proceed to seek relief in court if 60 days have lapsed and DOJ Secretary
does not act on the appeal

True or False
•The failure of the Secretary of Justice to review an ordinance within the prescribed period does
not validate an otherwise invalid ordinance.

Effect of appeal to DOJ

•The appeal shall nothave the effect of suspending the effectivity of the ordinance and the
accrual and payment of tax, fee or charge levied

Exception to no injunction rule

•CTA may suspend collection if in their opinion, it will jeopardize the interest of the government
or the taxpayer

Penalty for public officer who violates an ordinance

•Administrative disciplinary action, without prejudice to the filing of the appropriate civil or
criminal action

Q&A
1. When and under what conditions may the effectivity of the tax ordinance be suspended?
2. The Sangguniang Panglungsod of Manila enacted an ordinance imposing taxes, fees or
other charges. The ordinance was approved by the City Mayor on June 15, 2020. On
February 17, 2021, the Federation of Market Vendors commenced an action in court
seeking the nullification of the ordinance on the ground that it was not published before
its enactment and after it was approved by the Sangguniang Panglungsod as required by
the revised Charter of the City of Manila. The Mayor and the City Market Administrator
on the other hand, contend that under Section 188 of the Local Government Code, the
publication of a tax ordinance is required only after its approval. Is the tax ordinance
valid?
3. On what grounds may Secretary of Finance suspend the effectivity of a tax ordinance?
Local initiative
•The legal process whereby the registered voters of a local government unit may directly
propose, enact, or amend any ordinance LGC SEC. 120

Local Referendum
•The legal process whereby the registered voters of the local government units may approve,
amend or reject any ordinance enacted by the sanggunian
•Under the control & direction of the COMELEC:
-within 60 days for provinces and cities
-within 45 days for municipalities
-within 30 days for barangays

Procedure in local initiative

a. Not less than 1,000 registered voters in provinces & cities, 100 in municipalities and 50
in barangays, may file a petition with the sanggunian concerned proposing the adoption,
enactment, repeal or amendment of an ordinance
(b-h) in LGC SEC.122

Effectivity of local propositions

•15 days after certification by COMELEC that proposition is approved by majority of votes cast
LGC SEC. 123

Limitations of local initiatives

•The power of local initiative shall not be exercised more than once a year LGC SEC. 124

Limitations upon Sanggunians

•Ordinances through initiative and referendum shall not be repealed, modified or amended by
sanggunian within 6 months from approval
•May be repealed, modified or amended within 3 year thereafter by ¾ voteof all the sanggunian
members (18 months for barangays)

Authority of Courts (LGC SEC. 127)

•Courts can declare null and void any proposition approved found to be in violation of
Constitution or want of capacity of the sanggunian