Local Tax Flashcards
LOCAL TAXATION
- same limitations as basic principle
- local tax → inure solely to benefit of LGU
Can collection of local tax be done by a private person?
No
Local Tax is not inherent (because it is conferred by the constitution)
- Can congress remove LGU’s power to tax?
- Can LGUs impose national taxes?
- national laws > municipal ordinances
- congress cannot remove LGU’s power to tax, they can only limit it
- Pre-Emption → LGU cannot impose national taxes (if yes, double taxation)
The legislative is the one who has the power to create and impose taxes
- headed by the sanggunian (vice + councilors)
- Before tax ordinance is enacted → public hearing
Yes
EXAMPLES OF LOCAL TAXES
1. Local Business Tax
2. Community Tax
3. Real Property Tax
Yes
Local Business Tax
TAXING POWER OF PROVINCES
- Transfer of Real Property
- Printing and Publication
- Franchise Tax
- Sand, Gravel and Other Quarry Resources
- Professional Tax
- Amusement Tax
- Delivery Truck or Van
Yes
Local Business Tax
TAXING POWER OF PROVINCES
- Transfer of Real Property
- Franchise Tax
- Professional Tax
- Amusement Tax
What is the limit? What is the base?
Transfer of RP
- base = ↑ SP or FMV
- limit = 0.5%
Franchise Tax
- base = annual GSR
- limit = 0.5%
Professional Tax
- limit = P300 / year
Amusement Tax
- base = GSR from admission fees
- limit = 10%
NOTE : Some info to remember
- Real Property → as long as transfer (sale / donation)
- Professional → place = place of practice or place of principal office
- Amusement → if subject to OPT = exempt
Local Business Tax
TAXING POWER OF MUNICIPALITIES
- On business
- Weights and Measures
- Liquors and Wines
- Banks and Other Financial Institutions
Yes
Local Business Tax
TAXING POWER OF CITIES
- province + municipality
Yes
Local Business Tax
TAXING POWER OF BARANGAYS
- Stores or Retailers
- Service Fees
- Barangay Clearance
Yes
Community Tax
All corporations are liable to community tax. True or False?
All individuals are liable to community tax. True or False?
- False → X NRFC
- False
Individual (must be 18 years old)
- regularly employed
- engaged in business
- has real property (value of ≥ P1,000)
- required to file ITR
In summary, mga nagkakaroon ng income
Community Tax
PERSONS EXEMPT
- Diplomatic and consular representatives
- Transient visitors (stay in PH = less than 3 Months)
Yes
Community Tax
What is the basic community tax for individuals?
What is the additional community tax for individuals? (and its limits)
- Basic = P5
- Additional = P1 every 1K income
- Limit = Max 5K + P5
Community Tax
What is the basic community tax for corporations?
What is the additional community tax for corporations? (and its limits)
- Basic = P500
- Additional = P2 every 5K real property
- Additional = P2 every 5K gross receipts
- Limit = Max 10K + P500
Community Tax
- Accrues on January 1 → payable on February 28
- If not subject to CT → may have cedula, pay P1.00
Yes
Real Property Tax
- direct tax on ownership of Real Property
- land, building, machineries (attached to land & buildings), improvements (CAPEX)
Remember
- doctrine of actual use → ✘ purpose
Yes
Who can collect RPT?
- Provinces, Cities, Municipalities in NCR
X Municipalities, X Barangays
Steps in computing RPT
- Determine FMV
- Determine Assessment Level (TRAGIC)
- Assessed Value (1 x 2)
- Multiply RPT rate
Steps in computing RPT
1. Determine FMV (can be revised every 3 years)
2. Determine Assessment Level (TRAGIC)
Assessment Level (TRAGIC)
- Timberland, Residential = 20%
- Agricultural = 40%
- Gold, Industrial, Commercial = 50%
Steps in computing RPT
3. Assessed Value (1 x 2)
4. Multiply RPT rate
What is the RPT rate for provinces?
What is the RPT rate for cities / municipalities in NCR?
- Province = 1%
- Cities = 2%
Real Property Tax
Basic RPT
+ Special Education Fund
+ Idle Land
+ Special Assesment
Total RPT
Yes
Real Property Tax
What is the rate and basis for SEF?
What is the rate and basis for Idle Land?
What is the rate and basis for Special Assessment?
- SEF → 1% of Assessed Value
- Idle Land → 5% of Assessed Value
- Special Assessment → 60% of Actual Project Cost
Real Property Tax
It is considered idle when 1/2 of it is unutilized. What is the required area if
- agricultural
- non agricultural
- Agricultural = 1 hectare
- Non Agricultural = 1000 m²
EXEMPT FROM RPT
- owned by government
- owned by cooperatives
- religious, charitable, educational (ADE)
- local water districts, GOCC in water (ADE)
- pollution control and environment protection
Yes
COLLECTION OF RPT
- accrues on January 1
- must be collected by City or Municipal Treasurer
XPN : Barangay Treasurer
What is the interest rate per month? What is the maximum months?
Interest = 2% per month (max of 36 months)
