San Sebastian College-Recoletos de Manila

College of Law
TAXATION LAW
Atty. Raegan L. Capuno, CPA1

LOCAL TAXATION

I. Local Taxation

1. Local Taxation

2. Implementing Statutes of Local Taxation

a. Republic Act (RA) No. 7160
b. Date of Effectivity of RA No. 7160
Section 536, RA No. 7160

3. Necessity for an Implementing Revenue Code

Section 132, RA No. 7160
Marinduque Iron Mines, Inc. vs. Municipal Counsel of the Municipality of Hinabangan,
Samar, G.R. No. L-18924, June 30, 1964

4. Fundamental Principles of Local Taxation

Section 130, RA No. 7160

5. Nature and Source of Local Taxing Power

a. Constitutional Provision
i. Section 5, 18, 20(2), Article X of the 1987 Constitution
Mactan Cebu International Airport Authority vs. Ferdinand J. Marcos, G.R.
No. 120082, September 11, 1996
Manila Electric Company vs. Province of Laguna, G.R. No. 131359, May 5,
1999

b. Grant of local taxing power under the Local Government Code

Section 129, RA No. 7160

c. Authority to adjust local tax rates

Section 191, RA No. 7160

d. Authority to grant local tax exemptions

Section 192, RA No. 7160

e. Withdrawal of exemptions
Section 193, RA No. 7160

f. Residual taxing power of local governments

Section 186, RA No. 7160

g. Authority to prescribe penalties for tax violations

1
Tax Lawyer in Siguion Reyna, Montecillo and Ongsiako Law Offices, Top 12 in the 2015 Philippine Bar Examination, Pre-Bar
Reviewer in Taxation Law, Professor of Taxation Law at San Sebastian College-Recoletos College of Law, CPA Reviewer and
Lecturer in Management Advisory Services, Taxation and Regulatory Framework for Business Transactions, Lecturer in
Criminal Procedure for Criminologists Licensure Examination, Subject Matter Expert in Forensic Accounting and Business
Security Management, Professor of Accountancy and Finance, Registrar and former Chair of the BS Accountancy Program of
First Asia Institute of Technology and Humanities (FAITH), Former auditor at Isla Lipana & Co.

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 Section 516, RA No. 7160

6. Local Taxing Authority

a. Authority to issue local tax ordinances
Section 132, RA No. 7160

b. Procedure for approval and effectivity of tax ordinances

Section 54, 55, 59, 186, 187,188, 189, RA No. 7160
Antonio Reyes vs. Secretary of Justice Franklin Drilon, G.R. No. 118233, December
10, 1999, 320 SCRA 486

c. Questions on constitutionality and legality of tax ordinance or revenue measures

Section 187, RA No. 7160
Antonio Reyes vs. Secretary of Justice Franklin Drilon, G.R. No. 118233, December
10, 1999, 320 SCRA 486

7. Common Limitations on the Taxing Powers of Local Government Units

Section 133, RA No. 7160
Palma Development Corporation vs. Municipality of Malangas, Zamboanga Del Sur, G.R.
No. 152492, October 16, 2003
First Philippine Industrial Corporation vs. Court of Appeals, G.R. No. 125948, December
29, 1998
Land Transportation Office vs. City of Butuan, G.R. No. 131512, January 20, 2000
Manila International Airport Authority vs. City of Parañaque, G.R. No. 155650, July 20,
2016

8. Taxing Powers of Provinces

a. Tax on transfer of real property ownership
Section 135, RA No. 7160

b. Tax on business of printing and publication

Section 136, RA No. 7160

c. Franchise tax
Section 137, in relation to Section 193, RA No. 7160
Cagayan de Oro Electric Co. vs. Misamis Occidental, 181 SCRA 38
Reyes vs. San Pablo City, 305 SCRA 353
Meralco vs. Laguna, 306 SCRA 750
PLDT vs. City of Davao, 363 SCRA 522

d. Tax on sand, gravel and other quarry services

Section 138, RA No. 7160
Province of Bulacan vs. Court of Appeals, G.R. No. 126232. November 27, 1998

e. Professional tax
Section 139, in relation to Section 147, RA No. 7160

f. Amusement tax
Section 140, RA No. 7160
Philippine Basketball Association vs. Commissioner of Internal Revenue, G.R. No.
119122, August 8, 2000

g. Tax on delivery truck/van

Section 141, RA No. 7160

9. Taxing Powers of Cities

Section 151, RA No. 7160

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10. Taxing Powers of Municipalities
Section 142, RA No. 7160

a. Tax on various types of businesses

Section 143, RA No. 7160

b. Ceiling on business taxes imposable by LGUs within Metro Manila

Section 144, RA No. 7160

c. Tax on retirement of business

Section 145, RA No. 7160

d. Rules on payment of business taxes

Section 146, RA No. 7160
Iloilo Bottlers, Inc. vs. City of Iloilo, 164 SCRA 607

e. Situs of tax collected

Section 150, RA No. 7160

11. Taxing Powers of Barangays

Section 152-153, RA No. 7160

12. Common Revenue Raising Powers

Section 153, 154, 155, RA No. 7160

13. Community Tax

Section 156, RA No. 7160

a. Individuals Liable to Community Tax

Section 157, RA No. 7160

b. Juridical Persons Liable to Community Tax

Section 158, RA No. 7160

c. Exemptions
Section 159, RA No. 7160

d. Place of Payment
Section 160, RA No. 7160

e. Time for Payment

Section 161, RA No. 7160

f. Community Tax Certificate

Section 162, RA No. 7160

14. Collection of Business Taxes

a. Tax period and manner of payment

Section 165, RA No. 7160

b. Accrual of tax
Section 166, RA No. 7160

c. Time of payment

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 Section 167, RA No. 7160

d. Penalties on unpaid taxes, fees or charges

Section 168-169, RA No. 7160

e. Authority of treasurer in collection and inspection of books

Section 170-171, RA No. 7160

15. Civil remedies by the LGUs for collection of revenues

a. Local government’s lien for delinquent taxes, fees or charges

Section 173, RA No. 7160

b. Civil remedies, in general

i. Administrative action
ii. Judicial action
Section 174-185, RA No. 7160

16. Taxpayer’s Remedies

a. Periods of assessment and collection of local taxes, fees or charges

Section 194, RA No. 7160

b. Protest of assessment
Section 195, RA No. 7160
Team Pacific Corporation vs. Josephine Daza, in her capacity as Municipal
Treasurer of Taguig, G.R. No.167732, July 11, 2012
Yamane vs. BA Lepanto Condominium Corporation, G.R. No. 154993, October 25,
2005

c. Claim for refund of tax credit for erroneously or illegally collected tax, fee or
charge
Section 196, RA No. 7160

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