NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
SENATE
S. B. No. 905
finale
of ti]f m cvrr.-'.rp
•22 JUL27 P4-43
RECEIVED BV;.
Introduced by Senator SONNY ANGARA
AN ACT
TO SIMPLIFY LOCAL TAXES TO ENHANCE TAX COMPLIANCE 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
Nearly three decades ago, Republic Act No. 7160 otherwise known as the 
Local Government Code of 1991 (Code) was enacted to create an environment of 
greater local autonomy, devolving and decentralizing powers, resources, and 
responsibilities from the central government to local government units. Although the 
implementation of the Code was difficult, this landmark legislation made it possible 
for many local government units (LGUs) to develop new businesses, create new 
jobs, and revitalize and work for economic growth in their respective communities.
Among the primary objectives of the Code was to provide LGUs greater 
means to create their own sources of revenue in order to carry out their expanded 
responsibilities. In the course of reviewing the Code during the 17th Congress, it has 
become evident that the effectiveness of certain provisions in the Code have been 
overtaken by changes in the economy. These changes necessitate key reforms in 
implementation of the law, particularly towards simplifying the taxing process.
The proposed bill introduces one such reform by harmonizing the business tax 
imposed by LGUs to a single rate of 1.5% of gross sales or receipts. With the 
adoption of a uniform rate, the administration, enforcement and collection of taxes is 
expected to be simpler and faster and will thereby increase competitiveness of our 
LGUs.
In view of the foregoing, approval of this bill is earnestly requested.
SONNY ANGARA


NINETEENTH CONGRESS OF THE 
REPUBLIC OF THE PHILIPPINES 
First Regular Session
SENATE
S. B. No. 905
•22 JUL27 P4--43
RECEIVED 8\,.
Introduced by Senator SONNY ANGARA
AN ACT
TO SIMPLIFY LOCAL TAXES TO ENHANCE TAX COMPLIANCE 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 House of Representatives of the Philippines in 
Congress assembled:
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Section 1. Section 143 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. 143. Tax on Business. - The municipality may impose taxes on 
[the following] ANY business[es], INCLUDING THOSE SUBJECT 
TO FRANCHISE TAX UNDER SEC. 137, AT RATES NOT 
EXCEEDING ONE AND A HALF PERCENT (1.5%) OF GROSS 
SALES OR RECEIPTS OF THE PRECEDING CALENDAR YEAR.
[(a) On manufacturers, assomblcrs, repackcrs, processors, brGwcr57
distiHeFST-FGCtificrsr-and compounders of liquorsT-distillod spirits, and
wines or manufacturers of any article of commerce of whatever kind or
nature, in accordance with the following schedulGv 
With-gross-sales Of receipts for the-----------------------------------Amount of Tax
preceding calendar year in-the amount-of-f-
Per-ARnm
Less than P10,000.00
P166tOQ
P10,000.00 or more but less than
P15,000.00-
220.00


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15,000.00 or more but less than
20,000-m
302.00
2O,00QtQ0 or more but less than
-^OtOOOtOO-
4^0.00
30,000.00 or more but less than
40,000.00
660.00
40,000.00 or more but less than
50,000.00-
825.00
50,000.00 or more but less than
75,000.00-
1,320.00
75,000.00 or more but less than
100,000.00-
1,650.00
100,000.00 or more-but tess-than-
150,000.00
2,20000
150,000.00 or more but less than
200,000.00
2,750.00
200,000:00-Qr-more but less than
300,0Q0vOO-
3,850.00
300,000.00 or more but less than
500,000.00
5,500.00
500,000.00 or more but less than
750,000.00
S.OOOtOO
750,000.00 or more but less than
1,000,000.00
10,000.00
1,000,000.00 or more but less than
2,000,000.00 or more but less than
3,000,000.00 or more but less than
4,000,000.00 or more but less than
5,000,000.00 or more but less than
6,500,000.00 or more------------------
-^ooo,ooo-.oa-
3,000,00OtOO-
4,000,000.00-
5,000-,00Ot0O-
6,500,000.00-
13,750.00
16,500.00
19,800.00
23,100.00
24,375.00
at a rate-not exceeding
thirty-seven and a half
percent-(37 1/2%) of one
percent (1%)
(bj-Gn-wholcsolcrs, distributor-s, or dcQlcrs in any Grticlc of commerce
of whatever-kind or-naturo in accordance with the-following schedule:
With gross sales or receipts for the--------------------------------Amount of Tax
Dor A nni im
UqI^I iUcti y^al—H-rll 
ctl I lUUl 11 UJ.
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+Hor> D4 nnn nn
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UUL 1^00 It ICtl 1
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—tiiuf tj uui i^oo If ten 1--------------
4 nnn nn
7° on
Ul—lllUlG UUl ic^oo u icti 1--------------
A nnn nn 
ryyr\rr\ Ki if 
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fi nnn nn
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□ ,UUU.UU Ul—iMUi^ UUl t^oo U ICiH-------------------
nnn nn 
Ki if 
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7 nnn nn
143 QQ
U,Ul—lilUlt^ UUL IwOO U tCM 1-------------------
7,000.00 or more but less than-------- —8,000.00-------------- 165.00


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8,000.00 or more but less than--------
1 n non no nr mom hi it IP99 thnn
—10,000.00--------
1 non nn
------187.-QQ
^^O 00
•i R nnn nn mr 
ki 1+ Iqc'C' thor*
'^0 nnn nn
00
1 U,UUw,U\J \J1 
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on OnO no nr mnm hi it lpc^9 thnn
'^0 non 00
330 QQ
Qn nnn nn r ro/~iKi it ii^oo +i-ior»
^0 000 00
A AC) 00
/in nnn nn ntr 
Kiit Icioo +hor»
RO 000 00
660 QQ
Cn nnn nn /~>r rrir\r/2i Ki 1+ I/Tioo tk\or>
000 00
QQO 00
OU}\JwU,Uw \Ji—fflvJf^ UUl i^Oo 11 iCU 1-------------
7^ nnn nn r\r mr\r^ Ki 1+ IciOo +Krsn
100 000 00
1 020 00
"1 nn nnn nn r^r 
Ki it i<=ioo tKon
1 fi0 000 00
1 870 00
■1 Kn nnn nn /^r m/^rQ Ki it i^oo ti-ion
'^OO 000 00
2 A20 00
1 OU?UUU.AJU Ul—IIIUI^ UUl 1^00 It tal l----------
onn nnn nn r\r 
Ki i+ 
m
?no 000 nn
3 300 00
/LUUj\JUU•\J\J Ul—rrlc^l 
UUl l^oO U tcH i-----------
onn nnn nn r\r 
Kii+ 
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isnn nnn nn
A "100 00
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c;nn non no nr mnm hi it Ip00 thnn
7RC) nnn on
6 600 00
UUUyt/UU.\J\J VJt—IIIUI“ UUL !“00 LI lOI 1
7C^n nnn nn r\r 
rr^ Ki i+ 
+l^rsr>
1 nnn nnn nn
3 300 00
f 0\JfU\J\JT^\J Ul—MIUIC? UUL ItJOo LI let! t----------
4 nnn nnn nn r\r rmr^rr^ Ki i+ \aoo +K-om
o non non on
10 000 00
1 
\JI—tllUlt^ fc^Ur ItJoo LI ICII 1
o nnn nnn nn r\r rv^i^rp
ot n rot Cl nnt PYPPPrtinn
iL,UUU,UUV>-.UU Ul—-------------------------------------
fifty percent (50%) of
one percent (-1-%)
(€)—9fi—exporters,—and—m—monufacturers7—millers-,—produeersj
wholesalers, distributors, dealers or retailers of essential commodities
enumerated hereunder at a rate not exceeding one half (1/2) of-t-he
rates prescribed under subsections (a), (b) and (d) of this Section:-
(1}-Riee and-comt
—Wheat or cassava—flouts—meat7—dairy productS7—locally
manufactured, processed or preserved food, sugar, salt and other
agricultural, marine, and fresh water products, whether in -thei-r
original state or nett 
(3) Cooking oil and cooking gas;
(1) Laundry soap, detergents, and medicine;
(5) Agricultural implements, equipment and-post harvest facilities,
fertilizers, pesticides, insecticides, herbicides and other farm inputsj
(6) Poultry feeds and other animal feedsj
(7) School supplies;-and


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(8) CcnriGnt.
(d) On-Retailers/
With gross sales or receipts for the-
Amount of Tax
precediBg calendar year in the amount of:
Per Annum
00,000.00- or- less
more than P400,000.00
4%
Pfevfdcelr-lwwevef:7l\\ditbdivdif\qu^^ shall have the-cxclusivc power to levy
taxes, as provided under Section 152 hereof, on gross soles or rcccipts-of
the precedifvg-ealendor year of Fifty thousand pesos (P50-,000.00) or4ess7
in the case of cities, and Thirty thousand pesos (P30,000.00) or less, in
the case of municipalities.
(e) On contractors and other-independent contractors,
with the following schedule:
\A/i+K nrooo oolcio r\r rar'Cvifr\r +hc\
in accordance
A mrM ir»t r\f To v
VViLII y 1 w1 
Ul
rcsr'C^A I r>/-i o o 1 <=> rwH o r \ o r in +l-m o mm int nf-
Dear A r>nt im
wwllwliVJuJI 
III LI lO <JI i lU U1 1L U1.
1 QC'o thorLD^^^OrLOO
P^l 50
U lOM 1 1
DC^ nnn nn nr mnm Ki if Inoo fhnn
P10 000 00
fi1 50
10 non on nr mnrp hi it lp°o thnn
15 000 00
1 V./1 \J 
w 1 111 La/1 L^ L/ LJ L 1L^ %»/ w LI 1 
1 1
A R non nn nr mnm Ki it Inoo thon
'^O 000 00
155 00
on nnn nn nr mnrp hi it Ip00 thnn
00 000 00
°75 00
on nnn nn nr mnrp hi it Ippp thon
AO 000 00
585 00
/in nnn nn nr mnrp hi it Ip^p thon
50 000 00
550 00
^L^jL^VJU.UU \J\ rtlLJf C? UUL 1^00 LI ICII 1
c;0 non no nr mnrp hi it lp°o thnn
75 000 00
880 00
<J\J j\J\J\J.\J\J v/1 11 lUi Cf UU4L 
LllCtll
000 00 nr mnrp hi it Ip°p thnn
100 000 00
1 520 00
100 000 00 nr mnrp hi it Ip00 thon
1 50 000 00
1 080 00
1 \J\J jKJKJKJ.U\J Ul lilUlt^ ULtL tt7DO LI tCtli
4 Rn nnn nn r\r 
K• |+ l^^oo
^^00 000 00
o «/in nn
1 
1 
1 III 1 Lr Lm L I 
X/ LI 1 Vil 11^
OOO 000 00 nr mnrp hi it Ippp thon
050 nnn nn
5 550 00
^yj\J ,U\JKJ 
Ul IllUltx UUL lUoo LI ICtI 1
^^SO 000 00 nr mnrp hi it Ip00 thnn
500 000 00
A 520 00
^UUjUUU.UU Ul—It lUf O UUL tr?OOLf Idl 1
^00 000 00 nr mnrp hi it Ipp° thnn
'lOO 000 00
5 150 00
OUUjUUU.UU Ul—IllUiO UUL 1^00 LI Idl 1
/inn nnn nn r^r 
ri^ Ki i+ i^^oo
500 000 00
8 250 00
T’UUjUUU.UU Ul—fllUlw UUL l“00 LI iCtM
500,000.00 or more but less than------ —750,QQ0.QQ----------- 9,250.00


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750,000.00 or more but less than
1,000,000.00
10,250.00
-17000,000700-or more but less than
2,000,000.00 or more------------------
-2,000,000.00
-11 ,50OtOO
at a rate not exceeding
fifty percent (50%) of
one percent (1%)
(f) - On-banks and other financial institutions, at a rate not exceeding
fifty percent (50%)-of one percent (1%) on the gross-receipts of the
preceding calendar-year—derived—frem—interest, commissions-and
discowts-from lending activities, - income from financial leasfftg7
dividendS7-fentals on property and profit from-cixchangc or safe-ef
propet=tyrinsurance premium.
(g) On peddlers engaged in the sole of any merchandise or article of
commerce, at a rate not exceeding Fifty pesos (P50.00)-per peddler
annually-.-
(h) On any busif>essr-not—etberwise specified in the preceding
paragraphs, which the sanggunian-eoncerned may deem proper to tax:
ProvidedT^rhat on any business subject to the excise, value-added or
percentage--tax- under the National—Internal—Revenue Code, as
amended, the rate of tax shall-not-exceed two percent (2%) of gross
sales or receipts of the preceding -calendar-year. The sanggunian
coneer-ned-may-prescribe a schedule-of graduated tax rates but in no
case to exceed the rates prescribed herein.]"
Sec. 2. Section 146 of the Code is hereby amended to read as follows: 
"Sec. 146. Payment of Business Taxes. - (a) The taxes imposed under 
Section 143 shall be payable for every separate or distinct 
establishment or place where business subject to the tax is conducted 
and one line of business does not become exempt by being conducted 
with some other businesses for which such tax has been paid. The tax 
on business must be paid by the person conducting the same.
(b) In cases where a person conducts or operates two (2) or more [ef 
the] businesses [mentioned in Section II3 of this Code which are 
subject to the same rate of-tax], the tax shall be computed on the


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combined total gross sales or receipts of the said two (2) or more
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[related] businesses.
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(c) [In cases, where a person conducts or operates two (2) or more of
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the businesses mentioned in Section -143 of the Code which are
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subjeet-to different rates of tax, the gross sales or receipts of each
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business shall be separately reported for the purpose or computing-the
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tax-due-from each business.] THE PAYMENT OF THE LOCAL
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BUSINESS TAX SHALL BE MADE NO LATER THAN MARCH 31
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OF THE CURRENT YEAR.
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Sec. 3. Implementing Rules and Regulations. - The Department of Interior
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and Local Government and the Department of Finance shall issue the necessary
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rules and regulations to implement the provisions of this Act within sixty (60) days
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from its effectivity.
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Sec. 4. Repealing Clause. - All general and special laws, acts, city charters,
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executive orders, presidential proclamations, issuances, rules and regulations, or
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parts thereof which are contrary to or inconsistent with any of the provisions of this
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Act are hereby repealed, amended, or modified accordingly.
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Sec. 5. Separability Clause. - If any portion or provision of this Act is
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subsequently declared invalid or unconstitutional, other provisions hereof which are
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not affected thereby shall remain in full force and effect.
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Sec. 6. Effectivity Clause. - This Act shall take effect fifteen (15) days after its
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publication in the Official Gazette or in a newspaper of general circulation.
Approved,