TAX REVIEW

If there is no law prohibiting LGU’s to

impose a particular kind of tax and there is
no law also granting LGUs to tax a particular
subject matter, i.e. tax on call centers, then
the interpretation of that would be LGUs
can impose tax on call centers, even if there
is no law, particularly because there is no
law prohibiting/ there is no limitation with
respect to imposing tax on call center. So
that is the implication of that constitutional
provision which appears starting 1973.

As to the conflict on branding whether Sec.

5 (21:05)

For instance the city mayor imposed an

executive order imposing other taxes other
than business tax on retailers, is that a valid
levy of business tax? No. By express
provision of Sec. 132, of the LGC the taxing
powers of LGUs shall be exercised by the
Sanggunian of the LGU through an
appropriate ordinance. It cannot be by
virtue of an executive order issued by the
chief executive. It must always be through
an ordinance as by the appropriate
sanggunian.
There are four types/class/ kinds of LGU.
1. Province
2. Barangay
3. City
4. Municipality

Among the four, the most powerful is the

city, because the city can imposed taxes
that are imposable either by the
municipality or by the province. On the
other hand, the province or municipality
except a municipality within Metro Manila.
In addition to that, a city is powerful
because, as a general rule, it has a premium
with respect to the imposition of tax rates
by an amount of 50%. For example, if the
maximum rate is 2% imposable by a
province or municipality, if the LGU is the
city it can impose an additional premium of
50%, so the maximum rate that the City can
impose based on that example is actually
3%.