LOCAL TAXING AUTHORITY Flashcards
Powers to Create Revenues Exercised Through LGUs
Each LGU has the power to: (Sec. 129, LGC) 1. Create its own sources of revenue; and 2. Levy taxes, fees, and charges subject to the provisions herein, consistent with the basic policy of local autonomy.
NOTE: Such taxes, fees, and charges shall accrue exclusively to the LGUs (Ibid.).
Who has the power to impose local tax
The power to impose a tax, fee, or charge or to generate revenue under the LGC shall be exercised by the sanggunian of the LGU concerned through an appropriate ordinance (Sec. 132, LGC).
Q: In order to raise revenue for the repair and maintenance of the newly constructed City Hall of Makati, the City Mayor ordered the collection of P1.00, called “elevator tax”, every time a person rides any of the high-tech elevators in the city hall during the hours of 8:00 a.m. to 10:00 a.m. and 4:00 p.m. to 6:00 p.m. Is the “elevator tax” a valid imposition? Explain. (2003 Bar)
A: NO. The imposition of a tax, fee, or charge or the generation of revenue under the LGC, shall be exercised by the SANGGUNIAN of the LGU concerned through an appropriate ordinance (Sec. 132 of the Local Government Code). The city mayor alone could not order the collection of the tax; as such, the “elevator tax” is an invalid imposition.
Procedure for Approval and Effectivity of Tax Ordinances
- The procedure applicable to local government ordinances in general should be observed (Sec. 187, LGC).
The following procedural details must be complied with: a. Necessity of a quorum; b. Submission for approval by the local chief executive; c. The matter of veto and overriding the same; d. Publication and effectivity (Secs. 54, 55, and 59, LGC).
- Public hearings are required before any local tax ordinance is enacted (Sec. 187, LGC). 3. Within 10 days after their approval, publication in full for 3 consecutive days in a newspaper of general circulation. In the absence of such newspaper in the province, city or municipality, then the ordinance may be posted in at least two conspicuous and publicly accessible places (Sec. 188 & 189, LGC).
Is publication mandatory?
YES. The requirement of publication in full for 3 consecutive days is mandatory for a tax ordinance to be valid. The tax ordinance will be null and void if it fails to comply with such publication requirement (Coca-Cola v. City of Manila, G.R. No. 161893, June 27, 2006).
When does an ordinance take effect?
When an ordinance takes effect In case the effectivity of any tax ordinance or revenue measure falls on any date other than the beginning of the quarter, the same shall be considered as falling at the beginning of the next ensuing quarter, and the taxes, fees, or charges due shall begin to accrue therefrom.
Test in determining the validity of an ordinance
1.It must not contravene the Constitution or a statute 2. It must not prohibit but may regulate trade 3. It must not be discriminatory, unfair, unjust, confiscatory, unreasonable, and oppressive 4. It must be general and consistent with the national or public policy of the government
Q: The City Government of Quezon City imposed two additional taxes, which are now being assailed as unconstitutional. The taxes are (1) a socialized housing tax (SHT) which is imposed at a rate of 0.5% based on the assessed value of the land, and (2) a garbage fee, which is imposed in varying amounts based on land/floor area, classifying between residential lots and condominium units. Are the taxes valid?
A: The SHT is a valid tax. The legal basis is found on RA No. 7279 or the “Urban Development and Housing Act of 1992 (UDHA). Moreover, the use of property bears a social function and that all economic agents shall contribute to the common good. This is likewise the use of taxation as an implement of police power. Police power, which flows from the recognition that salus populi est suprema lex (the welfare of the people is the supreme law), is the plenary power vested in the legislature to make statutes and ordinances to promote the health, morals, peace, education, good order or safety and general welfare of the people. Property rights of individuals may be subjected to restraints and burdens in order to fulfill the objectives of the government in the exercise of police power. The general welfare clause of the LGC allows local governments to exercise police power.
The garbage fee is an invalid tax. Although the authority of a local government unit to regulate garbage falls within its police power to protect public health, safety, and welfare, the garbage fee violates the equal protection clause of the Constitution and the provisions of the LGC that an ordinance must be equitable and based as far as practicable on the taxpayer’s ability to pay, and not unjust, excessive, oppressive, confiscatory. For the purpose of garbage collection, there is, in fact, no substantial distinction between an occupant of a lot, on one hand, and an occupant of a unit in a condominium, socialized housing project or apartment, on the other hand. The classifications under Quezon City’s tax ordinance are not germane to its declared purpose of “promoting shared responsibility with the residents to attack their common mindless attitude in overconsuming the present resources and in generating waste.” (Ferrer v. Bautista, G.R. No. 210551, June 30, 2015)
