Jurisdiction of the Court of Appeals originally decided by the MTC in

their respective jurisdiction

Criminal Offenses
If originating from MTC:
1. Exclusive original jurisdiction over all
criminal offenses arising from
violations of the NIRC or Tariff and
Decision by MTC
Customs Code and other laws Optional Motion for Reconsideration
administered by the BIR or the Appeal to RTC within 15 days from promulgation of
Bureau of Customs judgment

Provided: That offenses or felonies

mentioned in this paragraph where
the principal amount of taxes and
fees, exclusive of charges and
penalties, claimed is less than Decision by RTC
P1,000,000 or where there is no Appeal to CTA En Banc through a review on certiorari,
specified amount claimed shall be Rule 43 within 15 days from receipt of decision by the
RTC
tried by the regular courts and the
jurisdiction of the CTA shall be
appellate.
Any provision of law or the Rules of
Court to the contrary
notwithstanding, the criminal action Decision by CTA En Banc
Appeal to Supreme Court within 15 days after receipt
for the recovery of civil liability for
of CTA En Banc decision through appeal by certiorari,
taxes and penalties shall at all times Rule 45
be simultaneously instituted with,
and jointly determined in the same
proceeding by the CTA, the filing of *Only cases decided by the RTC in its appellate jurisdiction
sand decision by the CBAA can be appealed directly to the
the criminal action being deemed to CTA En Banc
necessarily carry with it the filing of
the civil action, and no right to
reserve the filing of such civil action
separately from the criminal action
will be recognized.
2. Exclusive appellate jurisdiction in
criminal offenses
a. Over appeals from the judgments,
resolutions or orders of the RTC in
tax cases originally decided by them
in their respective territorial
jurisdiction
b. Over petitions for review of the
judgments, resolutions, or orders of
the RTC in the exercise of their
appellate jurisdiction over tax cases
If originating from the RTC: decided by them, in their respective
territorial jurisdictions
b. Over petitions for review of the
Decision by the RTC judgments, resolutions or orders of
Appeal to CTA Division through ordinary appeal, the RTC in the exercise of their
within 15 days after receipt of decision from RTC appellate jurisdiction over tax
collection cases originally decided
by the MTC in their respective
jurisdiction.
If originating from MTC:
Decision by CTA Division
Appeal to CTA En Banc through a review on
Certiorari, Rule 43, within 15 days from receipt of
decision Decision by the MTC
Ordinary appeal with the RTC, within 15 days from
receipt of the decision by the MTC

Decision by the CTA En Banc

Appeal to Supreme Court within 15 days after receipt
of CTA En Banc decision through appeal by certiorari, Decision by the RTC
Rule 45 Appeal with the CTA En banc through review on
Certiorari, Rule 43, within 30 days from receipt of the
decision by the RTC

Tax Collection Cases

1. Exclusive original jurisdiction in tax
collection cases involving final and
executory assessments for taxes,
Decision by the CTA En Banc
fees, charges, and penalties
Appeal to Supreme Court within 15 days after receipt
of CTA En Banc decision through appeal by certiorari,
Provided: That collection cases
Rule 45
where the principal amount of taxes
and fees, exclusive of charges and
penalties, claimed is less than
P1,000,000 shall be tried by the
proper MTC
 Due to the increase in
jurisdictional amount by virtue of
R.A. 9282, RTC does not have
original jurisdiction over tax
collection cases
2. Exclusive appellate jurisdiction in tax
collection cases:
a. Over appeals from the judgments,
resolutions or orders of the RTC in
tax collection cases originally
If originating from RTC:

Decision by the RTC
Petition for Review, Rule 42, with the CTA Division
within 30 days from receipt of decision
Decision by the CTA Division
Mandatory Motion for Reconsideration, 15 days from
receipt for decision by the CTA Division
If MR is denied, file review on certiorari with the CTA
En Banc, Rule 43, within 15 days from receipt of
decision in the MR
Decision by the CTA En Banc
Appeal to Supreme Court within 15 days after receipt
of CTA En Banc decision through appeal by certiorari,
Rule 45
If originating from CTA Division:
Decision by CTA Division
Mandatory Motion for Reconsideration or Motion for
New Trial. If denied, review on certiorari, Rule 43, with
the CTA En Banc, within 15 days from receipt of
decision in the MR/New Trial
Decision by the CTA En Banc
Appeal to Supreme Court within 15 days after receipt
of CTA En Banc decision through appeal by certiorari,
Rule 45
To harmonize Section 4 of the 1997
NIRC with PD 242, the following
interpretation should be adopted: (1) As
regards private entities and the BIR, the
power to decide disputed assessments,
refunds of internal revenue taxes, fees or
other charges, penalties in relation thereto,
or other matters arising under the NIRC or
other laws administered by the. BIR is
vested in the CIR subject to the exclusive
appellate jurisdiction of the CTA, in
accordance with Section 4 of the NIRC; and
(2) Where the disputing parties are all public
entities (covers disputes between the BIR
and other government entities), the case
shall be governed by PD 242.
— Power Sector Assets and Liability
Management Corporation v.
Commissioner of Internal Revenue,
August 8, 2017, G.R. No. 198146
Exclusive Appellate Jurisdiction
1. Decisions of the Commissioner of
Internal Revenue in cases involving
disputed assessments, refunds of
internal revenue taxes, fees, or other
charges, penalties in relation
thereto, or other matters arising
under the National Internal Revenue
Code or other laws administered by
the Bureau of Internal Revenue
 An assessment is considered
disputed when it is refuted after
the issuance of the Final
Assessment Notice.
2. Inaction by the Commissioner of
Internal Revenue in cases involving
disputed assessments, refunds of
internal revenue taxes, fees, or other
charges, penalties in relation
thereto, or other matters arising
under the National Internal Revenue
Code or other laws administered by
 the Bureau of Internal Revenue,
where the National Internal Revenue
Code provides a specific period of
action, in which case the inaction
shall be deemed a denial
3. Decisions, orders or resolutions
of the Regional Trial Court in local
tax cases originally decided of
resolved by them in the exercise of
their original or appellate jurisdiction
4. Decisions of the Commissioner of
Customs in cases involving liability
for customs duties, fees or other
money charges, seizure, detention
or release of property affected, fines,
forfeitures or other penalties in
relation thereto, or other matters
arising under the Customs Law or
other laws administered by the
Bureau of Customs
5. Decisions of the Central Board of
Assessment Appeals in the
exercise of its appellate jurisdiction
over cases involving the assessment
and taxation of real property
originally decided by the provincial
or city board of assessment appeals
6. Decisions of the Secretary of
Finance on customs cases elevated
to him automatically for review from
decisions of the Commissioner of
Customs which are adverse to the
Government under Sec. 2315 of the
Tariff and Customs Code
7. Decisions of the Secretary of
Trade and Industry, in the case of
nonagricultural product, commodity
or article, and the Secretary of
Agriculture in the case of
agricultural product, commodity or
article, involving dumping and
countervailing duties under Secs.
301 and 302 respectively, of the
Tariff and Customs Code, and
safeguard measures under R.A. No.
8800, where either party may appeal
the decision to impose or not to
impose said duties.
Stages in Collection of Taxes
1. Levy – enactment of laws
2. Assessment – auditing;
determination of liabilities
3. Collection
Auditing Process
I. Issuance of Letter of Authority
- Grants power to the BIR Officer to
audit a particular taxpayer
- Lack of letter of authority = void
audit, void assessment
- Letter of notice =/= letter of authority
- Memorandum of assignment –
transferring of auditor in charge of
audit when audit is unfinished =
invalid
Requisites of Letter of Authority
1) Must pertain only to one taxable
year
2) Signed by the CIR or any of his duly
authorized representatives
- Sec. 10-C authorizes the Revenue
Regional Director to issue letters of
authority within his region
3) Served within 30 days to the
taxpayer from date of issuance
- Otherwise, it becomes void and
must be revalidated by issuing a
new LOA
- Modes of service: personal,
substituted, or mail
- Personal: If the taxpayer refuses to
accept, call a barangay official and
two disinterested witnesses
- Substituted: to clerk or anyone in
charge of the office; if in known
address at residence, make to a
 person of legal age residing in that
place
- Mail: registered or courier; if none,
ordinary mail will be allowed;
presumption of receipt of mail matter
in the Rules of Court applies; burden
shifted to BIR to prove actual receipt
if taxpayer denies
4) Must not contain erasures or
alterations
II. Audit
- LOA should be accompanied with a
checklist of documents to be
submitted and the required period to
submit them. If there is failure to
supply documents after such notice,
the BIR shall issue a subpoena
deuces tecum. If there is no
compliance still, taxpayer may be
held criminally liable
- If there is noncompliance, apply the
Best Evidence Obtainable Rule
(Sec. 5 A-E)
 Can be based on hearsay
evidence when: there is failure to
submit documents required and
when there is ground to believe
that the documents submitted
are false or inaccurate
- How frequent: only once every
taxable year
- How long: 120 days from receipt by
the taxpayer of the LOA. Even if not
completed, examiner can continue
with revalidated LOA without
prejudice to administrative liability
that can be incurred
III. Notice of Discrepancy
- Notice of the findings issued after
audit
- Failure to issue = violation of right to
due process
- Discussion on discrepancies must
be set within 5 days from receipt of
NOD – can be extended if there is a
need to produce documents, but not
more than 30 days from receipt of
NOD
IV. Issuance of Preliminary
Assessment Notice
- Indicate computation of tax liabilities
as well as basis of assessment
- Taxpayer shall be given 15 days
from receipt of the PAN to refute
V. Issuance of the Final
Assessment Notice and the
Final Letter of Demand
- Final letter of demand shall contain
the amount of taxes, deficiency
taxes, and a demand to pay the
same within a specific time period
- Final assessment notice shall
include factual and legal basis of the
assessment; indispensable
PAN and FAN cannot be delivered at the
same time. This shall result in the denial of
due process because the taxpayer was not
given the opportunity to refute the PAN, a
right expressly provided in Sec. 3.1.2.
— CIR v. Yumex, May 5, 2021, G.R.
No. 222476
PAN v. FAN
- PAN does not contain a demand to
pay; all it requires is a response.
Meanwhile, FAN must contain a
demand to pay within a specific
period
 - Receipt of the FAN signifies start of
taxpayer’s right to avail remedies
against the assessment
Taxpayers’ Remedy
- File an administrative protest (either
motion for reconsideration or motion
for reinvestigation) with the CIR. Can
be delegated to regional director or
assistant of the CIR; direct resort is
prohibited as per recent issuance
- Reconsideration – the examination
of the findings of BIR without taking
into account new evidence
- Reinvestigation – review its findings
on the basis of not only existing
records but also on newly
discovered evidence
- File 30 days from receipt of the
assessment. Failure to do so within
this period, the assessment shall
become final
- In case of reinvestigation, taxpayer
shall be given 60 days from filing to
submit documents
Two Possible Scenarios:
i) If the decision is rendered within
180 days
Denial: file appeal under Rule 42
with the CTA Division within 30
days from receipt of decision
If it is stipulated in the FAN to file
protested with CTA, BIR is
estopped to deny (Allied Banking
case)
If the case originated from the
Revenue Regional Director, the
180 days shall not restart if it is
transferred to the CIR
Can avail of option to wait for the
decision of the CIR
ii) If there is inaction
Appeal to the CTA or wait for a
decision and appeal once
decision is rendered
File within 30 days from lapse of
180 day period
*Options are mutually exclusive
Requisites of a Valid Assessment
1. Assessment must be addressed to
proper party
2. Must be made within the prescription
period
- Three years from the date of filing of
return or due date, whichever comes
later
- EXCEPTIONS:
a) failure to file a return
b) if it is false of fraudulent (period to
assess is 10 years from discovery)
c) there is waiver executed by the
taxpayer in favor of BIR
 must be for a specific period
 executed before expiration of
prescriptive period
 signed by taxpayer or his duly
authorized representative
 accepted by BIR which must be
indicated in the waiver (specific
taxes need not be indicate din
the waiver
Remedies for Collection of National
Internal Revenue Taxes
- When issuing the Final Decision on
Disputed Assessment, also issue
warrant of restraint, levy, or
garnishment
Sec. 11 of R.A. 1125, as amended by R.A.
9282: No appeal taken to the CTA from the
decision of the Commissioner of Internal
Revenue or the Commissioner of Customs
or the Regional Trial Court, provincial, city
or municipal treasurer or the Secretary of
Finance, the Secretary of Trade and
Industry and Secretary of Agriculture, as the
case may be shall suspend the payment,
levy, distraint, and/or sale of any property of
the taxpayer for the satisfaction of his tax
liability as provided by existing law:
- Under this provision, the BIR can
already initiate action to collect tax
assessed despite protest
Power to Enjoin or Suspend Collection
of Taxes
Provided, however, That when in the
opinion of the Court the collection by the
aforementioned government agencies may
jeopardize the interest of the Government
and/or the taxpayer the Court any stage of
the proceeding may suspend the said
collection and require the taxpayer either to
deposit the amount claimed or to file a
surety bond for not more than double the
amount with the Court.
- The same provision, however,
provides a remedy for the taxpayer.
It grants the CTA the power to issue
an injunction against collection of
taxes
- This is an exception to Sec. 218 of
the NIRC which states that “no court
shall have the authority to grant an
injunction to restrain the collection of
any national internal revenue tax,
fee or charge imposed by this
Code.”
- National Internal Revenue Taxes
refer to those in Sec. 21: (a) Income
tax; (b) Estate and donor's taxes; (c)
Value-added tax; (d) Other
percentage taxes; (e) Excise taxes;
(f) Documentary stamp taxes; and
(g) Such other taxes as are or
hereafter may be imposed and
collected by the Bureau of Internal
Revenue.
Conditions:
1) Collection jeopardizes interest of the
taxpayer or government
2) Bond must be posted which is
equivalent to the amount so to be
collected or in case of surety bond,
not more than double (Pacquiao
case)
- EXCEPTION: violation of right to
due process of taxpayer or when the
right to collect has already
prescribed
Sec. 219 of the NIRC: If any person,
corporation, partnership, joint-account
(cuentas en participacion), association
or insurance company liable to pay an
internal revenue tax, neglects or refuses
to pay the same after demand, the
amount shall be a lien in favor of the
Government of the Philippines from the
time when the assessment was made
by the Commissioner until paid, with
interests, penalties, and costs that may
accrue in addition thereto upon all
property and rights to property
belonging to the taxpayer: Provided,
That this lien shall not be valid against
any mortgagee purchaser or judgment
creditor until notice of such lien shall be
filed by the Commissioner in the office
of the Register of Deeds of the province
or city where the property of the
taxpayer is situated or located.
- Under the LGC, a lien is also
established in favor of the LGU for
unpaid Real Property Taxes. If the
same taxpayer is obligated to pay
income tax, Real Property Tax, and
local tax at the same time, apply the
principle of preference and
concurrence of credits.
 In order for Art. 110 of the Labor Code, ii. Levy – taking of real property of taxpayers
or the lien in favor of workers, to prevail
- The real property shall be sold at
over Sec. 219 of the NIRC, there must be
public auction. If there is no bidder
insolvency proceedings or the corporation
or the amount is insufficient to
must be bankrupt. Otherwise, Sec. 219
answer for the tax due, the BIR shall
shall prevail.
be authorized to forfeit the property
— DBP v. NLRC, March 1, 1995, G.R. in favor of the government.
No. 108031 - One (1) year from the date of sale or
forfeiture shall be given to the
Remedies for the Collection of
taxpayer to exercise his right of
Delinquent Taxes (Sec. 205)
redemption. Ownership still remains
1. Administrative - By distraint of to the taxpayer within such period.
goods, chattels, or effects, and other
iii. Compromise (Sec. 204-A, in relation to
personal property of whatever
Sec. 7) – BIR and taxpayer settle tax liability
character, including stocks and other
in lower amount
securities, debts, credits, bank
accounts and interest in and rights to Grounds:
personal property, and by levy upon
a) There is reasonable doubt as to the
real property and interest in rights to
validity of the government’s claim
real property
- Minimum compromise rate: 40% of
i. Restraint – taking of personal properties of tax assessed
taxpayers b) Taxpayer demonstrates a clear
inability to pay the assessed tax
a) Constructive – government does not
- Minimum compromise rate: 10%,
take possession but the taxpayer
can be lowered, provided it is with
shall be prohibited from disposing
the approval of the National
without permission. Violation of such
Evaluation Board
prohibition opens the taxpayer to
criminal liability Who can enter into compromise:
b) Actual – actual taking or possession
- Commissioner of Internal Revenue.
of property to be sold at public
Cannot be delegated unless:
auction to answer for the tax liability.
a) Assessments issued by regional
Once it is sold, there will be no right
offices involving taxes of Php
of redemption.
500,000 or less
Instances where the Government Resorts to b) Minor criminal violations
Constructive Restraint - Regional Evaluation Board, if
delegated under the
a) When the taxpayer is retiring from
abovementioned circumstances
the business subject to the tax
b) When the taxpayer intends to leave Compromise of Criminal Violations possible
the Philippines except those involving fraud or if already
c) When the taxpayer intends to hide or filed in court.
conceal his property
- Payment of compromise penalty
d) When the taxpayer takes an action
which shall depend on the crime is
that may prejudice collection of the
required.
tax
 2. Judicial – civil or criminal action
i. Civil – ordinary collection suit filed by the
BIR
ii. Criminal – filed with BIR; violations of
taxpayer of penal provisions of the NIRC
- Sec. 220. Form and Mode of
Proceeding in Actions Arising under
this Code. - Civil and criminal
actions and proceedings instituted in
behalf of the Government under the
authority of this Code or other law
enforced by the Bureau of Internal
Revenue shall be brought in the
name of the Government of the
Philippines and shall be conducted
by legal officers of the Bureau of
Internal Revenue but no civil or
criminal action for the recovery of
taxes or the enforcement of any fine,
penalty or forfeiture under this Code
shall be filed in court without the
approval of the Commissioner.
- Payment of tax after apprehension is
not a valid defense in criminal
prosecutions.
- If offender is a foreign national, he
shall be deported immediately after
service of sentence without need of
conducting deportation proceedings.
- If the offender is a government
employee, penalty shall be
prescribed and he shall be
dismissed from service with
perpetual disqualification from public
office, to vote, and to participate in
public elections.
- If the offender is a CPA, his license
shall be revoked after conviction
even without administrative
proceedings.
If the crime was committed under the
old NIRC, the penalty of perpetual
disqualification shall not apply.
— Buenafe, et al. v. COMELEC, G.R.
No. 260734
Subsidiary penalty of imprisonment shall
apply if accused is unable to pay fine
- 1 day for each Php 850 but subject
to Art. 39 of the Revised Penal Code
Prescription (Sec. 281)
- 5 years from commission of the
offense. If date of commission is
unknown, it shall commence from
the date of discovery AND institution
of proceedings for investigation and
punishment
Section 354 speaks not only of
discovery of the fraud but also institution of
judicial proceedings.
— Lim v. CA, 192 SCRA 616
Remedies of Taxpayer
1. Compromise
2. Claim for refund or Tax Credit
Claim for Refund or Tax Credit
Refund – claim excess money or money
illegally collected
Credit – apply excess payment to other tax
liability
Applicable laws: Sec. 229 and Sec. 112
- Sec. 229 is the general provision on
refund
Sec. 229. Recovery of Tax Erroneously
or Illegally Collected. - no suit or proceeding
shall be maintained in any court for the
recovery of any national internal revenue
tax hereafter alleged to have been
erroneously or illegally assessed or
collected, or of any penalty claimed to have
been collected without authority, of any sum
alleged to have been excessively or in any
manner wrongfully collected without
authority, or of any sum alleged to have
been excessively or in any manner
wrongfully collected, until a claim for refund
or credit has been duly filed with the
Commissioner; but such suit or proceeding
may be maintained, whether or not such
tax, penalty, or sum has been paid under
protest or duress.
In any case, no such suit or proceeding
shall be filed after the expiration of two (2)
years from the date of payment of the tax or
penalty regardless of any supervening
cause that may arise after payment:
Provided, however, That the Commissioner
may, even without a written claim therefor,
refund or credit any tax, where on the face
of the return upon which payment was
made, such payment appears clearly to
have been erroneously paid.
When to file:
- Administrative claim: must be a
written claim filed by the taxpayer
before the BIR. Administrative claim
is a condition precedent before
judicial claim
- Judicial claim: appeal lodged before
the CTA
- Period: 2 years from payment.
Reckoning point is the time the
payment was made. If paid in
installment, runs on date when the
last installment was paid. For
corporations, it shall run at the time
of filing of final adjustment return
- In case of forfeited real property, it
shall start to run on the date of
forfeiture; if personal property is sold
at public auction, count from the time
the proceeds is applied to the tax
liability
- CIR is not given a period within
which to decide
 If the commissioner renders a
decision, the appeal to the CTA
division (under Rule 42) must be
made also within the two-year
prescription period. Both the
administrative and judicial claim
must be filed within the two-year
prescription period.
 If the CIR does not decide within two
years, there is no option to wait.
Taxpayer must already appeal., and
generally, it must be done within 30
days from receipt of decision.
Filing of claim and appeal in the span of
ten days is possible. There is no required
period. As long as both are filed within the
two-year period, the appeal shall be valid.
— CIR v. Carrier, July 27, 2021, G.R.
No. 226592
 Ruling in CIR v. Carrier shall not
apply if both are filed on the same
day because they are practically
filed at the same time
Sec. 112 applies to specific forms of refund
(input taxes)
- Input taxes refer to the value added
tax shifted to the taxpayer from the
purchase of goods or services or
from the importation of goods
a) Excess import taxes on zero-rated or
effectively zero-rated transactions
 Export sales, destination principles –
goods are taxed when they are
consumed
b) Unutilized input taxes when the
taxpayer is already retiring from the
business or his status as a VAT
entity business
 VAT registration threshold: Php
3,000,000 gross sales
- CIR decides 90 days from
submission the submission of the
documents in support of the claim.
 All the documents should be
submitted upon filing
- Period of filing: within 2 years after
the close of the taxable quarter
when the sales were made
- If the CIR finds the claim
unmeritorious, the taxpayer can
appeal to the CTA
- No need to file both the
administrative and judicial claim
within two years. Sec. 112-D states
that “in case of full or partial denial of
the claim for tax refund or tax credit,
or the failure on the part of the
Commissioner to act on the
application within the period
prescribed above, the taxpayer
affected may, within thirty (30) days
from the receipt of the decision
denying the claim or after the
expiration of the one hundred twenty
day-period, appeal the decision or
the unacted claim with the Court of
Tax Appeals.”
Taxes Imposable by Provinces
Local taxation
- The LGU has been granted by the
constitution the power to tax
- However, Congress may enact laws
providing for limitations:
1) Fundamental Principles under Sec.
130 of the Local Government Code
A) Taxation shall be uniform in each
local government
B) Taxes, fees, charges and other
impositions shall:
(a) Be equitable and based as far as
practicable on the taxpayer’s ability
to pay;
(b) Be levied and collected only for
public purposes
(c) Not be adjust, excessive,
oppressive, or confiscatory
(d) Not be contrary to law, public policy,
national economic policy, or in
restraint of trade
C) The collection of local taxes, fees,
charges and other impositions shall
in no case be let to any private
person
D) The revenue collected pursuant to
the provisions of this Code shall
inure solely to the benefit of, and be
subject to disposition by, the local
government unit levying the tax, fee,
charge or other imposition unless
otherwise specifically provided
herein; and
E) Each local government unit shall, as
far as practicable, evolve a
progressive system of taxation.
2) Sec. 133 of the LGC
- Taxes which cannot be imposed by
the LGUs because they are taxed by
the national government (pre-
emption)
3) Provisions specifying taxes
imposable by provinces,
municipalities, barangays
1. Tax of transfer of Real Property
Ownership (Sec. 135)
- There must be transfer by donation,
sale, barter, succession, or on any
other mode of transferring ownership
or title
- Tax not more than 50% of 1% of the
total consideration involved in the
acquisition of the property or of the
fair market value in case the
monetary consideration involved in
the transfer is not substantial,
whichever is higher.
- Due: In case of succession, 60 days
from the date of the decedent’s
death. Other cases, 60 days from
execution of the deed.
- In case the acceptance of donation
is in another instrument, start
counting upon the date of
acceptance.
 - In case of foreclosure, the 60 day-
period shall be counted once
ownership is transferred after the
one-year period for right of
redemption.
2. Tax on Business of Printing and
Publication (Sec. 136)
3. Franchise Tax (Sec. 137)
- A franchise grants the taxpayer the
right to exercise some privileges
- Secondary, not primary (primary
franchise provides life to the
taxpayer)
- Conditions: a) taxpayer is holder of a
secondary franchise and b) he
exercises the secondary franchise
within the territorial jurisdiction of the
province.
Franchise by NTC for CATV system is in
the nature of an administrative franchise
and hence, covered by Sec. 137.
— New Vision Satellite Network, Inc. v.
Provincial Treasurer of Cagayan,
February 28, 2022, G.R. No. 248840
4. Tax on sand, gravel, and other
quarry resources (Sec. 138)
5. Professional tax (Sec. 139)
- Those who can exercise profession
after passing licensure exam
- If no exam, municipalities shall
impose tax
6. Amusement Tax (Sec. 140)
- Theaters, cinemas, concert halls,
circuses, boxing stadia, and other
places of amusement
- Other places: places which cater to
artistic forms of entertainment
Swimming pools are not subject to
amusement tax. There must be a show or
performance.
— Pelizloy v. Benguet, April 10, 2013,
G.R. No. 183137
- R.A. 9167: Amusement tax rewards
entitled to producers
 Grade A – 100%
 Grade B – 65% to producer; 35% for
film development council
- Provision on amusement tax
rewards was deemed
unconstitutional for impairing fiscal
autonomy
Taxes Imposable by Municipalities
1. Business Permit (Sec. 143)
2. Professionals who do not have
licensure exam (Sec. 148)
3. Fees for Sealing and Licensing of
Weights and Measures (Sec. 148)
4. Fishery Rentals, Fees and Charges
(Sec. 149)
Situs of Tax (Sec. 150)
Paragraph B of Sec. 150: if taxpayer
whose principal office is in one municipality
with other offices is in another:
30% of all sales in principal office
shall be taxable to there the principal office
is located
70% taxable to where the factory is
located
“project office is equivalent to factory
of a manufacturer”
— City of Makati v. Municipality of
Bakun, July 7, 2020, G.R. No.
225226
Remedies in Local Taxation
1. Civil and Judicial (Sec. 174)
Civil: Restraint and Levy
Judicial: Civil action for collection
- Sec. 183 mainly speaks of criminal
action as means of collecting local
taxes
- Jurisdiction shall be based on R.A.
No. 11576, as amended
 2. Taxpayer Remedies
- Sec. 187: Appeal to the Secretary of
Justice
Mandatory Periods
a) Period to file to question
constitutionality or legality of a tax
ordinance: 30 days from effectivity of
ordinance. The SOJ shall decide
within 60 days.
b) Period after SOC renders decision:
question SOJ decision in court 30
days from receipt
- If to CA, petition for review
- Rule 65 if there is grave abuse of
discretion
c) Failure to decide by the SOJ
- 30 days
- Acts or omissions of administrative
bodies are cognizable by the CA
If what is questioned is not a tax ordinance,
Sec. 187 is inapplicable.
— Municipality of San Mateo v. Smart
Communications, June 23, 2021,
G.R. No. 219506
Sec. 195: Protest of an assessment
- Assessment protest period: 60 days
from receipt of assessment; 60 days
for treasurer to decide
- Can be appealed to RTC; original
civil action to question decision of
local treasurer
- Appeal to CTA Division
Sec. 196: Claim for Refund of Tax Credit
- Assessment must be paid within 60
days from receipt for refund to be
valid
- Not necessary that there is an
assessment
- Written claim: 2 years from payment
- If decision is adverse: action in
court, ordinary civil action filed
against the LGU with the MTC or
RTC
- Court action should also be filed
within 2 years
A local tax case is understood to mean
as a dispute between the local government
unit (LGU) and a taxpayer involving the
imposition of the LGU's power to levy tax,
fees, or charges against the property or
business of the taxpayer concerned.
— Mactel Corp. v. City of Makati, July
24, 2021
- CTA En banc appeal
*In City Treasurer v. Philippine Beverage partners,
Inc., it was ruled that the remedies can be availed of
simultaneously.
Imposition of Real Property Tax (Sec.
232)
- Definition under the Civil Code of
Real Property may be applied
- Machinery under Sec. 199 (o) of the
LGC: it must be actively, directly, and
exclusively used in the business or
industry and which by their very
nature and purpose are designed
for, or necessary to its
manufacturing, mining, logging,
commercial, industrial or agricultural
purposes
 Gasoline tanks considered real
property for purposes of real
property tax
 Cash registers, typewriters are not
essential in retail business because
business can continue even without
them
 Forklifts, pressure pumps are also
not essential
 Mindanao Bus v. City Treasurer:
repair shop not essential and
therefore, not subject to real
property tax
- Improvement under Sec. 199 (m) of
the LGC: enhances the value,
 beauty, or utility of the estate
improved
Exemptions from Real Property tax
1. Real property owned by the
Republic of the Philippines or any of
its political subdivisions except when
the beneficial use thereof has been
granted, for consideration or
otherwise, to a taxable person
“Except when the beneficial use is granted
to a taxable person”: if leased to private
entities, it shall be subject to real property
tax.
— Philippine Heart Center v. LGU, G.R.
No. 225409
- Tax shall be paid by the beneficial
user
2. Charitable institutions, churches,
parsonages or convents appurtenant
thereto, mosques, nonprofit or
religious cemeteries and all lands,
buildings, and improvements
actually, directly, and exclusively
used for religious, charitable or
educational purposes
3. All machineries and equipment that
are actually, directly and exclusively
used by local water districts and
government-owned or -controlled
corporations engaged in the supply
and distribution of water and/or
generation and transmission of
electric power
4. Real property owned by duly
registered cooperatives
5. Machinery and equipment used for
pollution control and environmental
protection
- Does not specify who the user is, as
long as used for pollution control and
environmental protection
Fundamental Principles in Real Property
Taxation
1. It must be based at its current and
fair market value
- Value for which the seller is willing to
sell his property without being forced
- Value prevailing in the open market
2. Classified for assessment purposes
on the basis of its actual use
- Actual use refers to the purpose for
which the property is principally or
predominantly by the person in
possession thereof
- Regardless of location
3. Uniform classification within each
local government
- SECTION 215. Classes of Real
Property for Assessment Purposes.
– For purposes of assessment, real
property shall be classified as
residential, agricultural, commercial,
industrial, mineral, or special. The
city or municipality within the
Metropolitan Manila Area, through
their respective Sanggunian, have
the power to classify lands as
residential, agricultural, commercial,
industrial, mineral, timberland, or
special in accordance with their
zoning ordinances.
- SECTION 216. Special Classes of
Real Property. - All lands, buildings,
and other improvements actually,
directly and exclusively used for
hospitals, cultural, or scientific
purposes, and those owned and
used by local water districts, and
government-owned or -controlled
corporations rendering essential
public services in the supply and
distribution of water and/or
generation and transmission of
electric power shall be classified as
special.
4. Cannot be delegated to any private
person
 5. The appraisal and assessment of
real property shall be equitable
Who may impose real property tax:
provinces, cities and municipalities within
the Metro Manila area
Rate (Sec. 233)
- Province: not exceeding 1% of the
assessed value
- City or municipality within the
Metropolitan Manila Area: not
exceeding 2% of assessed value of
real property
- Mandated to share within territorial
jurisdiction
Tax Lien (Sec. 257)
- Local government liens
- Rules on preference and
concurrence of credit determines
which lien enjoys supremacy
Who is liable: owner at the time real
property tax accrues
- EXCEPTION: beneficial user of
government-owned property
- Unpaid tax attaches to the property
(Provincial Government of Cavite v.
CQM Management)
When does real property tax accrue (Sec.
246): 1st day of January
Remedies of LGU for Collection of Taxes
(Sec. 256)
1. Administrative – Levy
2. Judicial – Civil action for sum of
money
Failure to comply with the statutes
governing tax sales makes the sale null and
void.
— Province of Bataan v. Hon.
Escalada, G.R. No. 181311
- Sec. 260 – LGU must auction
property to satisfy tax delinquency
Remedies of the Taxpayer
1. Before payment, after assessment
- Sec. 226 of the LGC, in relation to
Sec. 229: appeal to the Local board
of Assessment Appeals made within
60 days from receipt of assessment
does not suspend collection
- Appeal to CBAA – 30 days from
receipt of LBAA decision
- From CBAA, appeal to CTA En Banc
30 days from receipt of CBAA
decision, Rule 43
- Appeal to SC under Rule 45 15 days
from receipt of decision by the CTA
En banc
2. After payment
- Sec. 252 provides for remedy of
payment under protest
- Payment of tax is required which
should be made under protest
- File protest 30 days from payment;
Local treasurer has 60 days from
receipt to decide
- If denied or not decided, appeal to
LBAA 60 days from receipt of
decision or end from end of the 60
day period to decide
3. Refund (Sec. 253)
- Avail within 2 years from the time
taxpayer becomes entitled to refund
- If decision is adverse, appeal to
LBAA within 60 days
- Appeal next to CBAA within 30 days
from receipt
- CTA En banc, within 30 days from
receipt, Rule 45
- SC, 15 days from receipt, Rule 45
 Since what is assailed is the authority of
the LGU and not the computation of the
assessment, what is involved is a pure
question of law and there is no factual
matter to be looked int. The principle of
exhaustion of administrative remedies does
not apply when the authority is in question.
Proper recourse is judicial action.
— MWSS v. CBAA, January 31, 2021,
G.R. No. 215955
The ruling of the CTA En Banc
invalidating the assessment of the RPT in
the absence of an ordinance fixing the
assessment levels and fair market values is
dangerous and it is tantamount to cmiailing
the power of local governments to levy RPT.
The prescription under Section 219 of the
LGC for local governments to undertake a
general revision of real property
assessments within two years after the
effectivity of the LGC and every three years
thereafter is only to make sure that the
schedule of fair market values and
assessment levels capture the true
economic realities in the community where
the property is located taking into
consideration inflation and other economic
indicators.
— Province of Nueva Vizcaya v. Ce
Casecnan Water and Energy
Company, February 1, 2021, G.R.
No. 241302