Republic of the Philippines RECEIVED Ea<\
HOUSE OF REPRESENTATIVES [|= ATE October 4, 2022
* TIME 11:44 am *
NINETEENTH CONGRESS ws) BY = en

First Regular Session Xe, a

HOUSE BILL No.5403 Wo inpex

Introduced by Representative Gatchalian

AN ACT
PROVIDING FOR BUSINESS-FRIENDLY TAX REMEDIES IN LOCAL
GOVERNMENT UNITS BY AMENDING CERTAIN PROVISIONS IN BOOK II
OF REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS THE “LOCAL
GOVERNMENT CODE OF 1991”

EXPLANATORY NOTE

‘The power to tax is an incident of sovereignty and is unlimited in its
range, acknowledging in its very nature no limits... So potent indeed is the
power that it was once opined that the power to tax involved the power to
destroy. Therefore, it should be exercised with caution to minimize injury to
the proprietary rights of a taxpayer. It must be exercised fairly, equally and
uniformly, lest the tax collector “kill the hen that lays the golden egg.”

The security against its abuse is to be found only in the responsibility

of the legislature which imposes the tax on the constituency who is to pay it.

This bill aims to introduce amendments to Republic Act No. 7160,
otherwise known as the “Local Government Code of 1991” to uphold the right
of taxpayers to due process in the passage of local tax ordinances; clarify

publication, posting and public hearing requirements in the passage of local

' Tridharma Marketing Corp. v. Commissioner of Internal Revenue (CIR), G.R. No. 215950, June 20, 2016
2 Roxas, et.al, v. CIR, GR. No. L-25043, April 26, 1968
> Tridharma Marketing Corp., v. CIR, GR. No. 215950, June 20, 2016.


tax ordinances; and institutionalize procedures in the exercise of taxpayer's

remedies such as appeals, dispute assessments and claims for refund.

In view of the foregoing considerations, approval of this bill is earnestly

sought.

IN. REX GATCHALIAN
Representative

1st District, Valenzuela City


Republic of the Philippines
HOUSE OF REPRESENTATIVES

NINETEENTH CONGRESS
First Regular Session
HOUSE BILL No, 5403

—

Introduced by Representative Rex Gatchalian

LEE

AN ACT
PROVIDING FOR BUSINESS-FRIENDLY TAX REMEDIES IN LOCAL
GOVERNMENT UNITS BY AMENDING CERTAIN PROVISIONS IN BOOK II
OF REPUBLIC ACT NO. 7160, OTHERWISE KNOWN AS THE “LOCAL
GOVERNMENT CODE OF 1991”
Be it enacted by the Senate and the House of Representatives of the

Philippines in Congress assembled:

SECTION 1. Section 59 of Republic Act No. 7160, otherwise known as
the Local Government Code of 1991, hereinafter referred to as the “Code”, is

hereby amended to read as follows:

“Sec. 59. Effectivity of Ordinance or Resolutions. - (a) Unless
otherwise stated in the ordinance or the resolution approving the
local development plan and public investment program, the same
shall take effect after [ten{40}] FIFTEEN (15) days from the date a
copy thereof is posted in a bulletin board at the entrance of the
provincial capitol or city, municipal, or barangay hall, as the case
may be, and in at least two (2) other conspicuous places in the local
government unit concerned, AS WELL AS THE POSTING OF A
DIGITAL COPY THEREOF THROUGH THE USE OF THE
INTERNET.

THE PERIOD FOR POSTING SHALL BE SIMULTANEOUS
WITH THE REQUIREMENT FOR PUBLICATION IN A


ay

NEWSPAPER OF GENERAL OR LOCAL CIRCULATION.

(b) xxx

SEC. 2. Section 187 of the Code is hereby amended to read as follows:
“Sec. 187. Procedure for Approval and Effectivity of Tax
Ordinances and Revenue Measures; Mandatory Public Hearings. -
(A)The procedure for approval of local tax ordinances and revenue
measures shall be in accordance with the provisions of this
Code: Provided, That public hearings shall be conducted for the

purpose prior to the enactment thereof.

(B)THE CONDUCT OF PUBLIC HEARINGS SHALL BE

GOVERNED BY THE FOLLOWING PROCEDURE:

(1) WITHIN TEN (10) DAYS FROM FILING OF ANY PROPOSED
TAX ORDINANCE OR REVENUE MEASURES, THE SAME
SHALL FIRST BE PUBLISHED FOR THREE (3)
CONSECUTIVE DAYS IN A NEWSPAPER OF LOCAL
CIRCULATION AND SHALL BE POSTED
SIMULTANEOUSLY IN AT LEAST FOUR (4) CONSPICUOUS
PUBLIC PLACES WITHIN THE TERRITORIAL
JURISDICTION OF THE LGU CONCERNED.

(2)IN ADDITION TO THE REQUIREMENT FOR PUBLICATION
AND POSTING, THE SANGGUNIAN CONCERNED SHALL
CAUSE THE SENDING OF WRITTEN NOTICES OF THE
PROPOSED ORDINANCE, ENCLOSING A COPY THEREOF,
TO THE INTERESTED OR AFFECTED PARTIES
OPERATING OR DOING BUSINESS WITHIN THE
TERRITORIAL JURISDICTION OF THE LGU
CONCERNED.

(3) THE NOTICE OR NOTICES SHALL SPECIFY THE DATE
OR DATES AND VENUE OF THE PUBLIC HEARING. THE
INITIAL PUBLIC HEARING SHALL BE HELD NOT
EARLIER THAN TEN (10) DAYS FROM THE SENDING OUT


OF NOTICE OR NOTICES, OR THE LAST DAY OF
PUBLICATION AND DATE OF POSTING THEREOF,
WHICHEVER IS LATER.

(4)AT THE PUBLIC HEARING, ALL AFFECTED OR
INTERESTED PARTIES SHALL BE ACCORDED AN
OPPORTUNITY TO APPEAR AND PRESENT OR EXPRESS
THEIR VIEWS, COMMENTS AND RECOMMENDATIONS,
AND SUCH PUBLIC HEARING SHALL CONTINUE UNTIL
ALL ISSUES HAVE BEEN PRESENTED AND FULLY
DELIBERATED UPON AND/OR CONSENSUS IS
OBTAINED, WHETHER FOR OR AGAINST THE
ENACTMENT OF THE PROPOSED TAX ORDINANCE OR
REVENUE MEASURE: PROVIDED, FURTHER, THAT
TAXPAYERS ARE ALLOWED A SUFFICIENT PERIOD OF
TIME TO SUBMIT POSITION PAPERS.

(5) THE SECRETARY OF THE SANGGUNIAN CONCERNED
SHALL PREPARE THE MINUTES OF SUCH PUBLIC
HEARING AND SHALL ATTACH TO THE MINUTES THE
POSITION PAPERS, MEMORANDA, AND OTHER
DOCUMENTS SUBMITTED BY THOSE WHO
PARTICIPATED.

(C)NO TAX ORDINANCE OR REVENUE MEASURE SHALL BE

ENACTED OR APPROVED IN THE ABSENCE OF A PUBLIC
HEARING DULY CONDUCTED IN THE MANNER PROVIDED
IN THIS SECTION.

(D)ANY QUESTION ON NON-COMPLIANCE WITH THE

PROCEDURE OF PASSING AN ORDINANCE MAY BE RAISED
ON APPEAL WITHIN THIRTY (30) DAYS FROM THE
EFFECTIVITY THEREOF: Provided, further; That any (question
nthe] VIOLATION OF THE COMMON LIMITATIONS ON THE
TAXING POWERS OF LOCAL GOVERNMENT UNITS AS
PROVIDED UNDER SECTION 133 OR OF THE constitutionally

or legality of tax ordinances or revenue measures may be raised


v

Socwmir aus

on appeal [within-thirty {30} days from the effectivity thereof]
ANYTIME to the Secretary of Justice, who shall render a
decision within [sixty{60}] ONE HUNDRED TWENTY (120) days
from the date of receipt of such appeal: Provided, however, That

such appeal shall not have the effect of suspending the
effectivity of the ordinance and the accrual and payment of the
tax, fee, or charge levied therein, UNLESS OTHERWISE
PROVIDED BY THE ORDER OF THE SECRETARY OF
JUSTICE: Provided, finally, That within thirty (30) days after
receipt of the decision or the lapse of the [sixty] 120-day period
without the Secretary of Justice acting [apenthe] ON SUCH
appeal WITHOUT NECESSARILY RENDERING A DECISION
THEREON, the aggrieved party may file appropriate
proceedings with [a—court-of—competent jurisdiction] THE
REGIONAL TRIAL COURT, THE DECISION OF WHICH MAY
FURTHER BE APPEALED TO THE COURT OF TAX APPEALS.

SEC 3. Section 188 of the Code is hereby amended to read as follows:

“Sec. 188. Publication AND POSTING of Tax Ordinances and
Revenue Measures. ~ Within [ten-{10)] FIFTEEN (15) days after
their approval, certified true copies of all provincial, city, and
municipal tax ordinances and revenue measures shall be
published in full for three (3) consecutive days in a newspaper of
GENERAL OR local circulation, AS WELL AS THE POSTING OF A
DIGITAL COPY THEREOF THROUGH THE USE OF THE
INTERNET, AND: Provided, however, That in-provinees, cities-and

palities where there are ne-newspapers of local circulation,
the-same—may—be posted in A BULLETIN BOARD AT THE
ENTRANCE OF THE PROVINCIAL CAPITOL OR CITY,
MUNICIPAL, OR BARANGAY HALL, AS THE CASE MAY BE, AND
IN at least two (2) conspicuous and publicly accessible places
WITHIN THE LOCAL GOVERNMENT UNIT CONCERNED:



PROVIDED, FURTHER, THAT, NOTWITHSTANDING ANY
PROVISION IN THE TAX ORDINANCE OR REVENUE MEASURE
PROVIDING FOR THE EFFECTIVITY THEREEOF, NO TAX
ORDINANCE OR REVENUE MEASURES SHALL BE VALID
WITHOUT COMPLYING WITH THE PROVISIONS OF THIS
SECTION.”

SEC. 4. Section 195 of the Code shall be amended to read as follows:

“Sec. 195. Protest of Assessment. —- When the local treasurer
or his duly authorized representative finds that correct taxes, fees,
or charges have not been paid, he shall issue a notice of
assessment WITHIN THE PERIOD FOR ASSESSMENT AND
COLLECTION OF TAXES UNDER SECTION 194 OF THIS CODE
stating the nature of the tax, fee, or charge, the amount of
deficiency, the surcharges, interests [and] penalties, AND THE
FACTS AND LAW UPON WHICH SUCH ASSESSMENT IS BASED,
OTHERWISE, THE ASSESSMENT SHALL BE VOID. Within sixty
(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 sixty
(60) days from the time of its filing. If the local treasurer finds the
protest 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 thirty (30) days from the receipt of the
denial of the protest or from the lapse of the sixty (60) day period
prescribed herein within which to appeal with the [eourt—of
competent jurisdiction] SECRETARY OF FINANCE, WHO SHALL
RENDER A DECISION ON SUCH APPEAL WITHIN SIXTY (60)
DAYS FROM RECEIPT THEREOF otherwise the assessment


becomes conclusive and unappealable. WITHIN THIRTY (30)
DAYS FROM THE RECEIPT OF THE DENIAL OF THE PROTEST
OR FROM THE LAPSE OF THE SIXTY (60) DAY PERIOD
PRESCRIBED HEREIN WITHIN WHICH TO DECIDE, THE
AGGRIEVED PARTY MAY FILE APPROPRIATE PROCEEDINGS
WITH THE COURT OF TAX APPEALS.

THE NOTICE OF ASSESSMENT REFERRED TO IN THIS
SECTION PERTAINS TO THE ASSSESSMENT FOR THE
PAYMENT OF DEFICIENCY TAXES, FEES OR CHARGES
PURSUANT TO SECTION 171 OF THE CODE.

UNDER NO CIRCUMSTANCES SHALL THE LOCAL
TREASURER REQUIRE THE PAYMENT AS A PRECONDITION
FOR ENTERTAINING A PROTEST. NEITHER SHALL THE LOCAL
TREASURER WITHHOLD THE ISSUANCE OF BUSINESS
PERMIT ON ACCOUNT OF THE PENDING PROTEST.”

SEC 5. Section 196 of the Code shall be amended to read as follows:

“Sec. 196. Claim for Refund ef OR Tax Credit. - No case or
proceeding shall be maintained in any court for the recovery of any
tax, fee, or charge erroneously or illegally collected until a written
claim for refund or credit has been filed with the local treasurer
WITHIN TWO (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, WHICHER
IS LATER. THE LOCAL TREASURER SHALL HAVE SIXTY (60)
DAYS FROM THE DATE OF RECEIPT OF THE CLAIM WITHIN
WHICH TO DECIDE THE CLAIM.

WITHIN THIRTY (30) DAYS FROM RECEIPT OF THE
DECISION OR THE LAPSE OF THE 60-DAY PERIOD WITHOUT
THE LOCAL TREASURER ACTING UPON THE CLAIM, THE
TAYPAYER MAY FILE AN APPEAL WITH THE SECRETARY OF
FINANCE WHO SHALL RENDER A DECISION WITHIN SIXTY


(60) DAYS FROM RECEIPT THEREOF. THE PARTY ADVERSELY
AFFECTED BY THE DECISION OR INACTION OF THE
SECRETARY OF FINANCE MAY APPEAL TO THE COURT OF
TAX APPEALS WITHIN THIRTY (30) DAYS FROM RECEIPT OF
THE DECISION OR FROM THE LAPSE OF THE 60-DAY PERIOD

WITHIN WHICH TO DECIDE. [No-case-orproceedingshall_be

SEC 6. Section 226 of the Code shall be amended to read as follows:

“Sec. 226. Local Board of Assessment Appeals. - Any owner
or person having legal interest in the property who is not satisfied
with the action of the provincial, city or municipal assessor in the
assessment of his property may, within sixty (60) days from the
date of receipt of the written notice of assessment, FILE A
WRITTEN PROTEST THEREOF WITH THE LOCAL ASSESSOR,
WHO SHALL HAVE THIRTY (30) DAYS TO ACT ON SUCH
PROTEST. WITHIN THIRTY (30) DAYS FROM RECEIPT OF THE
ADVERSE DECISION OF THE LOCAL ASSESSOR TO RENDER A
DECISION, THE AGGRIEVED PARTY MAY appeal to the Board of
‘Assessment Appeals of the province or city by filing a petition under
oath in the form prescribed for the purpose, together with copies of
the tax declarations and such affidavits or documents submitted

in support of the appeal.”

SEC 7. Section 229 of the Code shall be amended to read as follows:

“Sec. 229. Action by the Local Board Assessment Appeals. —
(a) The LOCAL Board shall decide the appeal within one
hundred twenty (120) days from the date of receipt of
such appeal. The LOCAL Board, after hearing, shall


1

2 relevant evidence on record as a reasonable mind might
3 accept as adequate to support the conclusion.

4 (b) In the exercise of its appellate jurisdiction, the LOCAL
5 Board shall have the power to summon witnesses,
6 administer oaths, conduct ocular inspection, take
af depositions, and issue subpoena and subpoena duces
8 tecum. The proceedings of the LOCAL Board shall be
9 conducted solely for the purpose of ascertaining the facts
10 without necessarily adhering to technical rules
ul applicable in judicial proceedings.

2 () The secretary of the LOCAL Board shall furnish the
13 owner of the property or the person having legal interest
14 therein and the provincial or city assessor with a copy of
15 the decision of the LOCAL Board. In case the provincial
16 or city assessor concurs in the revision or the
17 assessment, it shall be his duty to notify the owner of the
18 property or the person having legal interest therein of
19 such fact using the form prescribed for the purpose. The
20 owner of the property or the person having legal interest
21 therein or the assessor who is not satisfied with the
22 decision of the LOCAL Board, may, within thirty (30) days
23 after receipt of said LOCAL Board OR AFTER THE
24 LAPSE OF 120-DAY PERIOD FOR THE LOCAL BOARD
25 TO ACT, appeal to the Central Board of Assessment
26 appeals, as herein provided. The decision of the Central
27 Board MAY BE APPEALED TO THE COURT OF TAX
28 APPEALS WITHIN THIRTY (30) DAYS FROM RECEIPT
29 OF THE DECISION OR AFTER THE LAPSE OF THE
30 120 DAY PERIOD GIVEN TO THE CENTRAL BOARD
31 TO ACT ON SUCH APPEAL.”

32

render its decision based on substantial evidence or such

33 SEC 8. Section 252 of the Code shall be amended to read as follows:


“Sec. 252. Payment Under Protest. -

(a) No protest shall be entertained unless the taxpayer first
pays the tax. There shall be annotated on the tax receipts
the words “paid under protest”. The protest in writing
must be filed within [thirty{30}] SIXTY (60) days from
payment of the tax to the provincial, city treasurer or
municipal treasurer, [in-the- ease-of a municipality within
Metropolitan-Manila Area] who shall decide the protest
within sixty (60) days from receipt.

(b) xxx

() xxx

(d) xxx

(E) THE DECISION OR INACTION OF THE LOCAL
TREASURER MAY BE APPEALED WITHIN THIRTY (30)
DAYS TO THE SECRETARY OF FINANCEE, WHO
SHALL RENDER A DECISION ON SUCH APPEAL
WITHIN SIXTY (60) DAYS FROM RECEIPT THREEOF.
THE PARTY ADVERSELY AFFECTED BY THE
DECISION OR INACTION OF THE SECRETARY OF
FINANCE MAY APPEAL TO THE COURT OF TAX
APPEALS WITHIN THIRTY (30) DAYS FROM RECEIPT
OF THE DECISION OR LAPSE OF THE 60-DAY PERIOD
TO DECIDE.”

SEC 9. Implementing Rules and Regulations. - The Department of
Interior and Local Government in coordination with the Department of
Finance and Department of Justice shall issue the necessary rules and
regulations to implement the provisions of this Act within sixty (60) days form
its effectivity.

SEC. 10. Repealing Clause. - All general and special laws, acts, city
charters, executive orders, presidential proclamations, issuances, rules and

9


1 regulations, or parts thereof which are contrary to or inconsistent with any
of the provisions of this Act are hereby repealed, amended, or modified
accordingly.

SEC. 11. Separability Clause. - If any portion or provision of this Act is

which are not affected thereby shall remain in full force and effect.

SEC. 12. Effectivity Clause. - This Act shall take effect fifteen (15) days

2
3
4
5
6 — subsequently declared invalid or unconstitutional, other provisions hereof
7
8
9
0 after its publication in the Official Gazette or in a newspaper of general

11 __ circulation.

13 Approved,