Tax Law M. Real Property Taxation (R.A. No. 7160, Book II, Title II)

Question 1

M. Real Property Taxation (R.A. No. 7160, Book II, Title II)
1. Fundamental Principles; Nature

Answer 1

Certainly! Here are the general principles of real property taxation outlined in R.A. No. 7160 (Local Government Code of 1991), Book II, Title II:

1. Uniformity: Real property taxation should be uniform within the territorial jurisdiction of the local government unit.
2. Equality: Taxes imposed must be equitable and based on the property’s fair market value.
3. Proportionality: The amount of tax levied should correspond to the property’s assessed value.
4. Public Purpose: Taxation should serve public purposes, such as funding local government projects and services.
5. Non-Discrimination: Taxes should not discriminate against any property or person.
6. Local Government Autonomy: The power to levy real property taxes is vested in the local government unit, ensuring autonomy in fiscal matters.
7. Periodic Reassessment: Properties should undergo periodic reassessment to reflect changes in their market value.
8. Fair and Transparent Assessment: Assessments should be fair, transparent, and based on objective criteria.
9. Due Process: Property owners have the right to due process in the assessment and collection of real property taxes.
10. Efficient Collection: Local government units should implement efficient collection mechanisms to ensure timely receipt of taxes.

These principles guide the implementation of real property taxation, promoting fairness, equity, and accountability in the tax system.

Question 2

M. Real Property Taxation (R.A. No. 7160, Book II, Title II)

2. Exemption from Real Property Tax – Section 234

Answer 2

Certainly! Here’s a summary of the exemptions from real property tax as outlined in Section 234:

1. Real property owned by the Republic of the Philippines or any of its political subdivisions, unless the beneficial use is granted to a taxable person.
2. Charitable institutions, churches, parsonages or convents, mosques, non-profit or religious cemeteries, and properties used exclusively for religious, charitable, or educational purposes.
3. Machinery and equipment used exclusively by local water districts and government-owned or controlled corporations engaged in water supply, distribution, and electric power generation and transmission.
4. Real property owned by duly registered cooperatives under R.A. No. 6938.
5. Machinery and equipment utilized for pollution control and environmental protection.
6. Any previous exemptions from real property tax granted to individuals or entities, including government-owned or controlled corporations, are withdrawn upon the effectivity of the Local Government Code, unless specifically provided otherwise.

These exemptions aim to ensure that properties serving public welfare, charitable, or essential service purposes are not burdened with real property taxes, while also promoting environmental protection and equitable taxation.

Question 3

M. Real Property Taxation (R.A. No. 7160, Book II, Title II)

3. Government’s Remedies
   a. Real Property Tax Assessment

Answer 3

Here’s a summary of the government remedies for real property tax assessment as outlined in the provisions of Title II of R.A. No. 7160:

1. Assessment by Local Government Unit (LGU): The LGU assesses real property taxes based on the schedule of fair market values set by the provincial, city, or municipal assessor.
2. Notice of Assessment: Upon assessment, the LGU issues a notice of assessment to the property owner, stating the amount of tax due.
3. Filing of Protest: Within sixty (60) days from receipt of the notice of assessment, the property owner may file a written protest with the local treasurer, contesting the assessment.
4. Decision by Local Treasurer: The local treasurer decides on the protest within sixty (60) days from its filing. If the protest is found meritorious, the assessment may be partially or wholly cancelled.
5. Appeal: If the protest is denied, the property owner has thirty (30) days from receipt of the denial to appeal to the court of competent jurisdiction.
6. Collection: The LGU may collect the real property tax within five (5) years from the date of assessment through administrative or judicial action. The collection action must be initiated within this period.
7. Prescriptive Periods: The prescription period for assessment and collection of real property taxes is five (5) years, extendable to ten (10) years in cases of fraud or intent to evade payment.

These remedies ensure a fair and transparent process for the assessment and collection of real property taxes, with opportunities for property owners to contest assessments and appeal decisions.

Question 4

M. Real Property Taxation (R.A. No. 7160, Book II, Title II)

4. Taxpayer’s Remedies
   a. Administrative
   b. Judicial
   c. Refund or Credit

Answer 4

Here are the remedies available to the taxpayer in relation to real property taxation under Title II of R.A. No. 7160:

1. Protest of Assessment: Upon receiving a notice of assessment from the local treasurer, the taxpayer has sixty (60) days to file a written protest contesting the assessment. Failure to protest within this period renders the assessment final and executory.
2. Appeal: If the protest is denied wholly or partly, the taxpayer has thirty (30) days from the receipt of the denial to appeal to the court of competent jurisdiction. Failure to appeal within this period makes the assessment conclusive and unappealable.
3. Claim for Refund: Before initiating any court case or proceeding for the recovery of erroneously or illegally collected taxes, fees, or charges, the taxpayer must file a written claim for refund or credit with the local treasurer. Such claim must be filed within two (2) years from the date of payment or entitlement to a refund or credit.

These remedies provide avenues for taxpayers to challenge assessments they believe to be incorrect or seek refunds for taxes collected in error.

Question 5

M. Real Property Taxation (R.A. No. 7160, Book II, Title II)

3. Government’s Remedies

b. Collection

Answer 5

Here are the key principles as to collection of real property taxes outlined in Title II of R.A. No. 7160:

1. Assessment Period: Real property taxes shall be assessed within five (5) years from the date they became due.
2. Collection Period: The collection of real property taxes may be made within five (5) years from the date of assessment by administrative or judicial action.
3. Prescriptive Period: No action for the collection of real property taxes, whether administrative or judicial, shall be instituted after the expiration of five (5) years from the date they became due. In cases of fraud or intent to evade payment, the prescriptive period is extended to ten (10) years from discovery.
4. Suspension of Prescriptive Period: The prescriptive period for assessment and collection is suspended under certain circumstances, such as when the treasurer is legally prevented from making the assessment or collection, upon taxpayer’s request for reinvestigation with a written waiver, or when the taxpayer is out of the country or cannot be located.
5. Withdrawal of Exemptions: Exemptions from payment of real property tax, except those specifically provided for, are withdrawn upon the effectivity of the Code.

These principles ensure timely and effective collection of real property taxes while providing safeguards against undue delay or abuse of the tax collection process.