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REPUBLIC OF THE PHILIPPINES he
HOUSE OF REPRESENTATIVES RECEIVED
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SEVENTEENTH CONGRESS THE, BAG py
Third Regular Session a

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House Bill No. 8022 Ye

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Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

EXPLANATORY NOTE

In 1991, Congress enacted Republic Act No. 7160 or the Local Government Code of 1991 which
effectively delegated political and fiscal authority to local government units (LGUs). RA No.
7160 aims to encourage LGUs to become more self-reliant and to promote economic
development based on the needs of their constituents.

The Local Government Code mandates each local government unit to create its own sources of
revenue and to levy taxes, fees, and charges subject to the provisions provided in the law
consistent with the basic policy of local autonomy.

However, some local sanggunians promulgate tax ordinances without conducting prior public
hearings and affording their constituents proper notice. Hence, there is a need to amend some
provisions of the Local Government Code to curb this practice and ensure that their constituents
will be consulted and will be heard prior to approval of tax ordinances.

Likewise, the bill 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, immediate approval of this measure is earnestly sought.

ARY C/ALEJANO.
Representative
Magdalo Para sa Pilipino Party-List



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REPUBLIC OF THE PHILIPPINES
HOUSE OF REPRESENTATIVES
Quezon City
SEVENTEENTH CONGRESS
Third Regular Session

House Bill No. 8022

Introduced by MAGDALO Party-List Representative
HON. GARY C. ALEJANO

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:

BOOK II - LOCAL TAXATION AND FISCAL MATTERS

SEC. 1. Section 59 of the Local Government Code of 1991 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 (10) 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 concemed]| FIFTEEN (15) DAYS FOLLOWING THE COMPLETION
OF THEIR NEWSPAPER OF GENERAL OR LOCAL CIRCULATION.

SEC. 2. Section 187 of the Local Government Code of 1991 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; AND THAT ANY QUESTION ON CONSTITUTIONALITY OR
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
ANYTIME to the Secretary of Justice, who shall render a decision within ONE
HUNDRED TWENTY (120) DAYS from receipt of such appeal: Provided,
however, that such appeals shall not have the effect of suspending the effectivity
of the ordinance and the accrual of payment of the tax, fee, or charge levied
therein, UNLESS OTHERWISE PROVIDED BY THE ORDER OF THE
SECRETARY OF JUSTICE: Provided, further THAT WITHIN THIRTY (30)
DAYS AFTER RECEIPT OF THE DECISION OF THE SECRETARY OF
JUSTICE OR THE LAPSE OF THE 120-DAY PERIOD WITHOUT THE
SECRETARY OF JUSTICE ACTING ON SUCH APPEAL WITHOUT
NECESSARILY RENDERING A DECISION THEREON, the aggrieved party
may file appropriate proceedings with the REGIONAL TRIAL COURT, THE
DECISION OF WHICH MAY FURTHER BE APPEALED TO THE COURT
OF TAX APPEALS.”


SEC. 3. Section 188 of the Local Government Code of 1991 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 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 at least two (2) conspicuous and publicly

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10 accessible places] POSTED IN A BULLETIN BOARD AT THE ENTRANCE OF
1 THE PROVINCIAL CAPITOL OR CITY, MUNICIPAL, OR BARANGAY HALL,
12 AS THE CASE MAY BE, AND IN AT LEAST TWO (2) OTHER CONSPICUOUS
13 AND PUBLICLY ACCESSIBLE PLACES WITHIN THE LOCAL GOVERNMENT
14 UNIT CONCERNED; PROVIDED, FURTHER, THAT, NOTWITHSTANDING
15 ANY PROVISION IN THE TAX ORDINANCE OR REVENUE MEASURE
16 PROVIDING FOR THE EFFECTIVITY THEREOF, NO TAX ORDINANCE OR
7 REVENUE MEASURE SHALL BE VALID WITHOUT COMPLYING WITH THE
18 PROVISIONS OF THIS SECTION.”

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20 SEC. 4. Section 195 of the Local Government Code of 1991 shall be amended to read as
21 ~~ follows:

22 “SEC. 195. Protest of Assessment. - When the local treasurer or his duly authorized
23 representative finds that correct taxes, fees, or charges have not been paid, he shall issue a
24 notice of assessment WITHIN THE PERIOD FOR ASSESSMENT AND COLLECTION
2s OF TAXES UNDER SECTION 194 OF THIS CODE stating the nature of the tax, fee, or
26 charge, the amount of deficiency, the surcharges, interests [and] penalties, AND THE
27 FACTS AND LAW UPON WHICH SUCH ASSESSMENT IS BASED, OTHERWISE,
28 THE ASSESSMENT SHALL BE VOID. Within sixty (60) days from the receipt of the
29 notice of assessment, the taxpayer may file a written protest with the local treasurer
30 contesting the assessment; otherwise, the assessment shall become final and executory.
31 ‘The local treasurer shall decide the protest within sixty (60) days from the time of its
32 filing. If the local treasurer finds the protest to be wholly or partly meritorious, he shall
33 issue a notice cancelling wholly or partially the assessment. However, if the local
34 ‘treasurer finds the assessment to be wholly or partly correct, he shall deny the protest
35 wholly or partly with notice to the taxpayer. The taxpayer shall have thirty (30) days from
36 the receipt of the denial of the protest or from the lapse of the sixty (60) day period

37 prescribed herein within which to appeal with the [court of competent jurisdiction}


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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 ASSESSMENT FOR THE PAYMENT OF DEFICIENCY TAXES, FEES OR
CHARGES PURSUANT TO SECTION 171. THIS IS DIFFERENT FROM THE ACT
OF ISSUING ASSESSMENT OR BILLING FORMS FOR THE PAYMENT OF
TAXES, FEES OR CHARGES, WHICH IS BASED ON SELF-ASSESSMENT,
DURING THE APPLICATION FOR THE ISSUANCE OR RENEWAL OF BUSINESS
PERMITS.

UNDER NO CIRCUMSTANCE 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 Local Government Code of 1991 shall be amended to read as

follows:

“SEC. 196. Claim for Refund of 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, WHICHEVER IS LATER. THE LOCAL TREASURER
SHALL HAVE SIXTY (60) DAYS FROM THE DATE OF RECEIPT OF SUCH
CLAIM WITHIN WHICH TO DECIDE ON SUCH CLAIM. THE DECISION OR
INACTION OF THE LOCAL TREASURER MAY BE APPEALED WITHIN THIRTY
(30) DAYS TO THE SECRETARY OF FINANCE, WHO SHALL RENDER A
DECISION ON SUCH APPEAL 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 LAPSE OF THE 60-DAY PERIOD TO DECIDE. [No case or


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proceeding shall be entertained in any court after the expiration of 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.]”

SEC. 6. Section 226 of the Local Government Code of 1991 shall be amended to read as

follows:

read as

(b)

©

“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 Local Government Code of 1991 shall be amended to

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.

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 ao the facts without necessarily

The secretary of the LOCAL Board shall furnish the owner of the property or the
person having legal interest therein and the provincial or city assessor with a copy of
the decision of the LOCAL Board. In case the provincial or city assessor concurs in
the revision or the assessment, it shall be his duty to notify the owner of the property


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or the person having legal interest therein of such fact using the form prescribed for
the purpose. The owner of the property or the person having legal interest therein or
the assessor who is not satisfied with the decision of the LOCAL Board, may, within
thirty (30) days after receipt of the decision of said LOCAL Board OR AFTER THE
LAPSE OF THE 120 DAY PERIOD GIVEN TO THE LOCAL BOARD TO ACT ON
SUCH APPEAL, appeal to the Central Board of Assessment appeals, as herein
provided. The decision of the Central Board MAY BE APPEALED TO THE COURT
OF TAX APPEALS WITHIN THIRTY (30) DAYS FROM RECEIPT OF THE
DECISION OR AFTER THE LAPSE OF THE 120 DAY PERIOD GIVEN TO THE
CENTRAL BOARD TO ACT ON SUCH APPEAL.”

SEC. 8. Section 252 of the Local Government Code of 1991 is hereby 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
case of a municipality within Metropolitan Manila Area, who shall decide the protest
within sixty (60) days from receipt.

(b) The tax or a portion thereof paid under protest shall be held in trust by the treasurer
concerned.

(c) In the event that the protest is finally decided in favor of the taxpayer, the amount or
portion of the tax protested shall be refunded to the protestant, or applied as tax credit
against his existing or future tax liability.

(d) In the event that the protest is denied or upon the lapse of the sixty-day period prescribed
in subparagraph (a), the taxpayer may avail of the remedies as provided for in Chapter 3,
Title II, Book Il of this Code.

(E)THE DECISION OR INACTION OF THE LOCAL TREASURER MAY BE
APPEALED WITHIN THIRTY (30) DAYS TO THE SECRETARY OF FINANCE,
WHO SHALL RENDER A DECISION ON SUCH APPEAL 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 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.

Approved,