Basic Tax Finals Reviewer

- PRINCIPLES ON LOCAL GOVERNMENT TAXATION

1. Be equitable and based as far as practicable on the taxpayer’s ability to pay
2. Be levied and collected only for public purposes
3. Not be unjust, excessive, oppressive, or confiscatory
4. Not be contrary to law, public policy, national economic policy, or in restraint of trade
5. The collection of local taxes, fees, charges, and other impositions shall in no case be
let to any private person
6. The revenue collected pursuant to the provisions of this code shall inure solely to the
benefit of, and be subject to the disposition by, the local government unit levying the
tax, fee, charge, or other imposition unless otherwise specifically provided herein
7. Each local government unit shall, as far as practicable, evolve a progressive system
of taxation.
[Section 130, RA 7160]

 Local Taxing Authority of the LGU

The power to impose a tax, fee, or charge or to generate revenue under this
code shall be exercised by the sanggunian of the local government unit
concerned through an ordinance
[Section 132, RA 7160]
 When taxes are collected
Unless otherwise provided by this code, all local taxes, fees, and charges
shall accrue on the 1st day of January of each year . However, new taxes,
fees, or charges, or changes in the rates thereof, shall accrue on the 1 st
day of the quarter next following the effectivity of the ordinance imposing
such new levies or rates
 When are the periods of assessment and collection?
1. Assessed within 5 years from the date they became due. No action
for the collection of such taxes, whether administrative of judicial, shall be
instituted after the expiration of such period. PROVIDED that, taxes,
fees, or charges, which have accrued before the effectivity of this
code (RA 7160) may be assessed within a period of 3 years from the
date they became due.
2. In the case of fraud or intent to evade payment of taxes, the same may be
assessed within 10 years from discovery of the fraud or intent to evade
payment.
3. Local taxes, fees, or charges may be collected within 5 years from the
date of assessment by administrative judicial action. No such action
shall be instituted after the expiration of said period. PROVIDED,
however, that taxes assessed before the effectivity of this code (RA
7160) may be collected within a period of 3 years from the date of
assessment.
[Section 194, RA 7160]
- PROTEST ASSESSMENT (When taxes have not been
paid)
 When the local treasurer or his duly authorized representative finds that
correct taxes have not been paid, he shall issue a notice of assessment state
the nature of the tax, the amount of deficiency, the surcharges, interests, and
penalties. Within 60 days from the receipt of the notice of assessment, the
taxpayer may file a written protest with the local treasurer contesting the
assessment; otherwise, the assessment shall become final and
executory.

The local treasurer shall decide the protest within 60 days from the time of its
filing. If the local treasurer finds the protests to be wholly or partly
meritorious, he shall issue a notice cancelling wholly or partially the
assessment. However, if the local treasurer finds the assessment to be
wholly or partly correct, he shall deny the protest wholly or partly with notice
to the taxpayer. The taxpayer shall have 30 days from receipt of the denial of
the protest or from the lapse of the 60-day period prescribed herein within
which to appeal with the court of competent jurisdiction otherwise the
assessment becomes conclusive and unappealable.
- PROCESS FOR CLAIM FOR REFUND OR TAX CREDIT
 No case or proceeding shall be maintained in any court for the recovery of
any taxes, fees, or charges erroneously or illegally collected until a written
claim for refund or credit has been filed with the local treasurer. No case or
proceeding shall be entertained in any court after the expiration of 2 years
from the date of the payment of such tax, fee, or charge, or from the date the
taxpayer is entitled to a refund or credit.
- REAL PROPERTY TAXATION
 Fundamental Principles:

1. Real property shall be appraised at its current and fair market value
2. Classified for assessment purposes on the basis of its actual use
3. Assessed on the bases of a uniform classification with each local
government unit
4. The appraisal, assessment, levy, and collection of real property tax
shall not be let to any private person
5. The appraisal and assessment of real property shall be equitable.

 Valuation of Real Property

In cases where:
1. Real property is declared and listed for taxation for the first time
2. There is an ongoing general revision of property classification and
assessment
3. A request is made by the person in whose name the property is declared,
the provincial, city or municipal assessor or his duly authorized deputy
shall, in accordance with the provisions of this chapter, make a
classification, appraisal and assessment or taxpayer’s valuation thereon:
PROVIDED, however, that the assessment of real property shall not be
increased oftener than once every 3 years except in case of new
improvements substantially increasing the value of said property or of any
change in its actual use.

 Date of effectivity of assessment or reassessment

All assessments or reassessments made after the 1 st day of January of any

year shall take effects on the 1st day of January of the succeeding year:
PROVIDED, however, that the reassessment of real property due to its
partial or total destruction, or to a major change in its actual use, or to
any great and sudden inflation or deflation of real property values, or to the
gross illegality of the assessment when made or to any other abnormal
cause, shall be made within 90 days from the date any such cause or
causes occurred, and shall take effect at the beginning of the quarter next
following the reassessment.

 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
2. Charitable institutions, churches, parsonages, or convents appurtenant
thereto, mosques, non-profit or religious cemeteries and all lands,
buildings, and improvements, directly, and exclusively use for religious,
charitable or educational purposes
3. All machineries and equipment that are, 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. All real property owned by duly registered cooperative as provided further
under RA 6938
5. Machinery and equipment used for pollution control and environmental
protection.

Except as provided herein, any exemption from payment of real property

tax previously granted to, or presently enjoyed by, all persons, whether
natural or juridical, including all government-owned or controlled
corporations are hereby withdrawn upon the effectivity of this code.
[Section 234, RA 7160]
- JUDICIAL REMEDIES
 Cases under jurisdiction of the Court of Tax Appeals:
1. Decisions or resolutions on motions for reconsideration or new trial of the
court in divisions in the exercise of its exclusive appellate jurisdiction
over:

a. Cases arising from administrative agencies

b. Local tax cases decided by the RTC in the exercise of their original
jurisdiction
c. Tax collection cases decided by the RTC in the exercise of their
original jurisdiction involving final and executory assessments for
taxes, where the principal amount of taxes and penalties claimed is
less than 1 million pesos
2. Decisions, resolutions, or orders of the RTC in LOCAL TAX cases
decided or resolved by them in the exercise of their appellate jurisdiction
3. Decisions, resolutions, or orders from the RTC in TAX COLLECTION
cases decided or resolved by them in the exercise of their appellate
jurisdiction
4. Decisions, resolutions, or orders on motions for reconsideration or new
trial of the Court in Division in the exercise of its exclusive original
jurisdiction over tax collection cases
5. Decisions of the Central Board of Assessment Appeals (CBAA) 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 assessment appeals
6. Decisions, resolutions, or orders on motions for reconsideration or new
trial of the Court in Division in the exercise of its exclusive original
jurisdiction over cases involving criminal offenses arising from violations
of the National Internal Revenue Code (NIRC) or the Tariff and Customs
Code (TCC) and other laws administered by the BIR and Bureau of
Customs
7. Decisions, resolutions, or orders on motions for reconsideration or new
trial of the Court in Division in the exercise of tits exclusive appellate
jurisdiction over criminal offenses mentioned in the preceding
subparagraph
8. Decisions, resolutions, or orders of the RTC in the exercise of their
appellate jurisdiction over criminal offenses mentioned in the
subparagraph 6.
[Section 2, Rule 4, Revised Rules of the CTA]

 Suspension of Collection of tax during case proceedings

 No appeal taken to the court shall suspend the payment, levy, distraint, or
sale of any property of the taxpayer for the satisfaction of his tax liability as
provided under existing laws, except as hereinafter prescribed
[Section 1, Rule 10, Revised Rules of the CTA]
 Appeal to Supreme Court
Appeals upon decision of the Court of Tax Appeals shall be submitted under
Rule 45 of the Rules of Court