SEVENTEENTH CONGRESS OF THE )
REPUBLIC OF THE PHILIPPINES
Second Regular Session ) 18 WR-3 P1S6

SENATE RECEL 3 4

8.B.No, 1772

Introduced by Senator SONNY ANGARA

AN ACT
PROVIDING FOR BUSINESS-FRIENDLY TAX REMEDIES IN LOCAL
GOVERNMENT UNITS BY AMENDING CERTAIN PROVISIONS IN BOOK I! OF
REPUBLIC ACT 7160, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT
CODE OF 1991

EXPLANATORY NOTE

The proposed bill seeks to introduce further amendments to Republic Act No.
7160, otherwise known as the Local Government Code of 1991, as amended, that
will ensure and uphold the right of taxpayers to due process in the passage of local
tax ordinances. This amendatory bill seeks, among others, to institutionalize legal
measures which are aimed at curbing the practice of local sanggunians promulgating
tax ordinances without conducting prior public hearings and affording proper notice.

Further, the subject bill likewise aims to provide additional measures to ensure
the observance of procedural due process in the exercise of remedies afforded to
taxpayers, particularly in disputing tax assessments and in filing of claims for tax
refund

In view of the foregoing, the immediate approval of this amendatory bill is

earnestly sought.
IN
SQRINY ANGARA



SEVENTEENTH CONGRESS OF THE ) Yost Oi

REPUBLIC OF THE PHILIPPINES )
Second Regular Session ) 18 Ipp-3 P16
SENATE RECN 5 ¢.
8.B. No. 17:72

Introduced by Senator SONNY ANGARA

AN ACT
PROVIDING FOR BUSINESS-FRIENDLY TAX REMEDIES IN LOCAL
GOVERNMENT UNITS BY AMENDING CERTAIN PROVISIONS IN BOOK II OF
REPUBLIC ACT 7160, OTHERWISE KNOWN AS THE LOCAL GOVERNMENT
CODE OF 1991

Be it enacted by the Senate and 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 Ordinances 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}- days

concerned] FIFTEEN (15) DAYS FOLLOWING THE COMPLETION OF
THEIR NEWSPAPER OF GENERAL OR LOCAL CIRCULATION.
(b) xxx

Xxx"



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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 MEASURE, 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 OR
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 OR 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, OR DATE OF
POSTING THEREOF, WHICHEVER IS LATER.



(4) AT THE PUBLIC HEARING OR HEARINGS, 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 OR HEARINGS 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 ARTICLE.

(D)ANY QUESTION ON NON-COMPLIANCE WITH THE PROCEDURAL

ASPECT OF PASSING AN ORDINANCE MAY BE RAISED ON APPEAL
WITHIN THIRTY (30) DAYS FROM THE EFFECTIVITY THEREOF:
PROVIDED, THAT ANY QUESTION ON NON-COMPLIANCE WITH THE
PROCEDURAL ASPECT OF PASSING AN ORDINANCE MAY BE RAISED
ON APPEAL WITHIN THIRTY (30) DAYS FROM THE EFFECTIVITY
THEREOF: Provided, further, That any question on the constitutionality or
[legality-of- tax ordinances-or revenue measures] VIOLATION OF COMMON
LIMITATIONS ON THE TAXING POWERS OF LOCAL GOVERNMENT
UNITS AS PROVIDED UNDER SECTION 133 OR CONSTITUTIONALITY
OF ORDINANCES may be raised on appeal [within-thirty-(30}-days-from-the
effectivity thereof] ANYTIME to the Secretary of Justice, who shall render a



29

decision within [sixty-460)] 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 [upon-the]
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—(49)] FIFTEEN (15) days after their approval,
certified true copies of all provincial, city, and municipal tax ordinances or
revenue measures shall be published in full for three (3) consecutive days in a
newspaper of local circulation: Provided, however, That in provinces, cities
and municipalities where there are no 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 THEREOF, NO TAX ORDINANCE
OR REVENUE MEASURE SHALL BE VALID WITHOUT COMPLYING WITH
THE PROVISIONS OF THIS SECTION.”



1 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

4 been paid, he shall issue a notice of assessment WITHIN THE PERIOD FOR
5 ASSESSMENT AND COLLECTION OF TAXES UNDER SECTION 194 OF
6 THIS CODE stating the nature of the tax, fee, or charge, the amount of
7 deficiency, the surcharges, interests [and] penalties, AND THE FACTS AND
8 LAW UPON WHICH SUCH ASSESSMENT IS BASED, OTHERWISE, THE
9 ASSESSMENT SHALL BE VOID. Within sixty (60) days from the receipt of
10 the notice of assessment, the taxpayer may file a written protest with the local
11 treasurer contesting the assessment; otherwise, the assessment shall
12 become final and executory. The local treasurer shall decide the protest within
B sixty (60) days from the time of its filing. If the local treasurer finds the protest
14 to be wholly or partly meritorious, he shall issue a notice cancelling wholly or
Is partially the assessment. However, if the local treasurer finds the assessment
16 to be wholly or partly correct, he shall deny the protest wholly or partly with
17 notice to the taxpayer. The taxpayer shall have thirty (30) days from the
Is receipt of the denial of the protest or from the lapse of the sixty (60) day
19 period prescribed herein within which to appeal with the [court-of competent
20 jurisdiction] SECRETARY OF FINANCE, WHO SHALL RENDER A
21 DECISION ON SUCH APPEAL WITHIN SIXTY (60) DAYS FROM RECEIPT
2 THEREOF otherwise the assessment becomes conclusive and unappealable.
23 WITHIN THIRTY (30) DAYS FROM THE RECEIPT OF THE DENIAL OF THE
24 PROTEST OR FROM THE LAPSE OF THE SIXTY (60) DAY PERIOD
25 PRESCRIBED HEREIN WITHIN WHICH TO DECIDE, THE AGGRIEVED
26 PARTY MAY FILE APPROPRIATE PROCEEDINGS WITH THE COURT OF
2 TAX APPEALS.

28 THE NOTICE OF ASSESSMENT REFERRED TO IN THIS SECTION
29 PERTAINS TO THE ASSESSMENT FOR THE PAYMENT OF DEFICIENCY
30 TAXES, FEES OR CHARGES PURSUANT TO SECTION 171. THIS IS
31 DIFFERENT FROM THE ACT OF ISSUING ASSESSMENT OR BILLING

32 FORMS FOR THE PAYMENT OF TAXES, FEES OR CHARGES, WHICH IS.



1 BASED ON SELF-ASSESSMENT, DURING THE APPLICATION FOR THE

2 ISSUANCE OR RENEWAL OF BUSINESS PERMITS.

3 UNDER NO CIRCUMSTANCE SHALL THE LOCAL TREASURER
4 REQUIRE THE PAYMENT AS A PRECONDITION FOR ENTERTAINING A
5 PROTEST. NEITHER SHALL THE LOCAL TREASURER WITHHOLD THE
6 ISSUANCE OF BUSINESS PERMIT ON ACCOUNT OF THE PENDING
7 PROTEST.”

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

9 “SEC. 196. Claim for Refund of Tax Credit. —- No case or proceeding shall

10 be maintained in any court for the recovery of any tax, fee, or charge
ul erroneously or illegally collected until a written claim for refund or credit has

12 been filed with the local treasurer WITHIN TWO (2) YEARS FROM THE
13 DATE OF THE PAYMENT OF SUCH TAX, FEE, OR CHARGE OR FROM
14 THE DATE THE TAXPAYER IS ENTITLED TO A REFUND OR CREDIT,
1s WHICHEVER IS LATER. THE LOCAL TREASURER SHALL HAVE SIXTY
16 (60) DAYS FROM THE DATE OF RECEIPT OF SUCH CLAIM WITHIN
7 WHICH TO DECIDE ON SUCH CLAIM. THE DECISION OR INACTION OF
1s THE LOCAL TREASURER MAY BE APPEALED WITHIN THIRTY (30)
19 DAYS TO THE SECRETARY OF FINANCE, WHO SHALL RENDER A
20 DECISION ON SUCH APPEAL WITHIN SIXTY (60) DAYS FROM RECEIPT
21 THEREOF. THE PARTY ADVERSELY AFFECTED BY THE DECISION OR
2 INACTION OF THE SECRETARY OF FINANCE MAY APPEAL TO THE
23 COURT OF TAX APPEALS WITHIN THIRTY (30) DAYS FROM RECEIPT
24 OF THE DECISION OR LAPSE OF THE 60-DAY PERIOD TO DECIDE. (No
25 58 9F proceeding shall bi Hertained 4 y it after the expiration of two
26 (2)years-from-the date of the payment of such-tax,fee,or- charge_or fromthe

27 date the taxpayer is entitled to a refund or credit |

28



1

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 OR THE LAPSE OF
THE PERIOD GIVEN TO 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 of 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 render its decision based on substantial evidence or such
relevant evidence on record as a reasonable mind might accept as adequate
to support the conclusion.

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



1 (c) The secretary of the LOCAL Board shall furnish the owner of the property or

2 the person having legal interest therein and the provincial or city assessor
3 with a copy of the decision of the LOCAL Board. In case the provincial or city
4 assessor concurs in the revision or the assessment, it shall be his duty to
5 notify the owner of the property or the person having legal interest therein of
6 such fact using the form prescribed for the purpose. The owner of the property
7 or the person having legal interest therein or the assessor who is not satisfied
8 with the decision of the LOCAL Board, may, within thirty (30) days after
9 receipt of the decision of said LOCAL Board OR AFTER THE LAPSE OF
10 THE 120-DAY PERIOD GIVEN TO THE LOCAL BOARD TO ACT ON SUCH

cn APPEAL, appeal to the Central Board of Assessment appeals, as herein
provided. The decision of the Central Board MAY BE APPEALED TO THE
13 COURT OF TAX APPEALS WITHIN THIRTY (30) DAYS FROM RECEIPT

4 OF THE DECISION OR AFTER THE LAPSE OF THE 120 DAY PERIOD
Is GIVEN TO THE CENTRAL BOARD TO ACT ON SUCH APPEAL.
16 SEC. 8. Section 252 of the Code is hereby amended to read as follows:
17 “SEC. 252. Payment Under Protest. - (a) No protest shall be entertained
18 unless the taxpayer first pays the tax. There shall be annotated on the tax
19 receipts the words "paid under protest". The protest in writing must be filed
20 within [thirty-(39}] SIXTY (60) days from payment of the tax to the provincial,
21 city treasurer or municipal treasurer, in the case of a municipality within
2 Metropolitan Manila Area, who shall decide the protest within sixty (60) days
23 from receipt.

(b) xxx

(c) xxx
26 (d) xxx
27 (E) THE DECISION OR INACTION OF THE LOCAL TREASURER MAY BE
28 APPEALED WITHIN THIRTY (30) DAYS TO THE SECRETARY OF
29 FINANCE, WHO SHALL RENDER A DECISION ON SUCH APPEAL
30 WITHIN SIXTY (60) DAYS FROM RECEIPT THEREOF. THE PARTY

31 ADVERSELY AFFECTED BY THE DECISION OR INACTION OF THE
8



+

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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. Repealing Clause. - All general and special laws, acts, city charters,
decrees, executive orders, proclamations and administrative regulations, or part or
parts thereof which are inconsistent with any of the provisions of this Act are hereby
repealed or modified accordingly.

SEC. 10. Separability Clause. ~ If, for any reason or reasons, any part of
provision of this Act shall be held unconstitutional or invalid, other parts or provisions

hereof which not affected thereby shall continue to be in full force and effect.

SEC. 11. Effectivity Clause. — This Act shall take effect fifteen (15) days after
its publication in the Official Gazette or in a newspaper of general circulation

Approved,