Local Government Taxation (Ateneo Blue Tips 2019)

Q133: What are the fundamental principles of local taxation?

1) Uniform in each LGU;
2) Taxes, fees, charges and other impositions shall:
   (a) Be equitable and based on taxpayer's ability to pay;
   (b) For public purposes;
   (c) Not unjust, excessive, oppressive, or confiscatory;
   (d) Not contrary to law, public policy, national economic policy, or in the restraint of trade;
3) The collection shall in no case be let to any private person;
4) The revenue collected shall be for the sole benefit of and disposition by, the LGU levying the tax, fee, charge or other imposition unless otherwise specified; and
5) Evolve a progressive system of taxation. (LGC, Sec. 130)

Q134: Discuss the significance of a local tax ordinance.
The local tax ordinance is vital because the power of LGUs to impose local taxes is exercised through the appropriate ordinance enacted by the Sangguinian. What determines tax liability is the tax ordinance. (Yamane v. BA Lepanto Condominium Corporation, 2005)

Q135: What is the extent of the prohibition against imposition of taxes with respect to petroleum products?
The exercise of the taxing powers of LGUs does not extend to the levy of all kinds of taxes, fees or charges on petroleum products. The absence of such a qualification leads to the conclusion that all sorts of taxes on petroleum products, including business taxes, are prohibited by Section 133(h). (Petron Corporation v. Tiangco, 2008)

Q136: Is a professional required to pay professional taxes in all the places where he practices his profession?
No. Upon payment of the professional tax in the province of his principal office, he is entitled to practice his profession in any part of the country. (Section 139(b), LGC)

Q137: Can local governments tax PBA games?
No. PBA games are subject to amusement taxes, which are percentage taxes collected by the National Government. (Philippine Basketball Association v. CA, 2000)

Q138: Are condominium corporations liable to pay business taxes?
No. They are exempt from local business taxation under the LGC, regardless of any local ordinance that seeks to declare otherwise because none of its stated corporate purposes are geared towards maintaining a livelihood. (Yamane v. BA Lepanto Condominium Corporation, 2005)

Q139. May the regular courts issue an injunction to restrain local government units from collecting taxes?
Yes. the LGC does not specifically prohibit an injunction enjoining the collection of local taxes. (Angeles City v. Angeles Electric Corporation, 2010)

Q140: What authority is given the Secretary of Justice with respect to review of tax ordinances?
The Secretary of Justice may only review the constitutionality or legality of the tax ordinance and, if warranted, to revoke it on either or both of these grounds. He is not allowed to alter or set aside a tax ordinance. He is also not permitted to substitute his own judgment for the judgment of the local government that enacted the measure. (Drilon v. Lim, 1994)

Q141: What is an exception to the payment under protest rule?
Prior payment under protest is not required when the taxpayer is questioning the very authority and power of the assessor to impose the assessment and of the treasurer to collect the tax. (Jardine Davies Insurance Brokers, Inc. v. Aliposa, 2003)