Local Taxing Authority
Chapter 3
The paradigm shift
• Local legislative bodies are now given direct authority to levy taxes,
fees and charges
• In accordance with Article X, Section 5 of the Constitution
Local legislative power
a.
b.
c.
d.
sangguniang panlalawigan for the province
sangguniang panlungsod for the city
sangguniang bayan for the municipality
sangguniang barangay for the barangay
LGC SEC. 48
Ordinance
• A law adopted by a local legislative body with respect to a matter
allowed to them under the LGC.
• Legislative actions of a general and permanent character shall be
enacted in the form of ordinances
Resolution
• An expression of sentiment or opinion adopted by a legislative body,
not having the force of law
• A declaration of a council or a legislative body, evidencing some
purpose or intent to do some act, not the doing of the act itself
Format of ordinances & resolutions
• Shall be in writing
• Shall contain an assigned number
• Shall have a title or caption
• An enacting or ordaining clause
• Date of proposed effectivity
• Brief explanatory note containing justification of its approval
• Signed by author/authors
Multiple Choice
Which statement is correct?
a. Legislative acts passed by the municipal council in the exercise of its
lawmaking authority are denominated as resolutions and
ordinances
b. Legislative acts passed by the municipal council in the exercise of its
lawmaking authority are denominated as resolutions
c. Legislative acts passed by the municipal council in the exercise of its
lawmaking authority are denominated as ordinances
d. Both ordinances and resolutions are solemn and formal acts
Power to create revenues exercised through local
government units
• The power to impose a tax, fee, or charge or to generate revenue
under this Code shall be exercised by the sanggunian of the local
government unit concerned through an appropriate ordinance.
LGC SEC. 132
Tax ordinances within the authority of local sanggunian
• Imposing tax, fee or charge
• Adjusting local tax rates
• Prescribing penalties for violation of tax ordinances
• Granting local tax exemptions and incentives
• Condoning tax delinquencies
Procedure for approval and effectivity of tax ordinances
LGC 187
• Public hearings shall be conducted for the purpose prior to the enactment
thereof
• Any question on the constitutionality or legality of tax ordinances or revenue
measures may be raised on appeal within thirty (30) days from the effectivity
thereof to the Secretary of Justice who shall render a decision within sixty (60)
days from the date of receipt of the appeal
• 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
• Within thirty (30) days after receipt of the decision or the lapse of the 60-day
period without the Secretary of Justice acting upon the appeal, the aggrieved
party may file appropriate proceedings with a court of competent jurisdiction.
Public hearing requirement
• Public hearings are required before the passage of a tax ordinance,
not after
• The defect in the enactment of a revenue measure is not cured when
another public hearing was held after the questioned ordinance was
passed
Approval of ordinances
• Majority of sanggunian members present (quorum) in regular or
special session duly called for the purpose
• If ordinance is for authorizing or directing payment or creating
liability, majority vote of ALL the sanggunian members is required
• Every ordinance enacted shall be affixed with the signature of the
local chief executives in each and every page of such ordinance
Veto of local ordinances
• Local chief executives, except punong barangay, shall have the power
to veto proposed ordinances
• Grounds: Ordinances are ultra vires or prejudicial to public welfare
Communication of veto by local chief executive
• Must be made to the sanggunian within 15 days for province and 10
days for cities and municipalities
• If not done within the timeframe, ordinance shall be deemed
approved as if he had signed it
Limitations on veto power of local chief executive
• He may veto an ordinance or resolution only once
• The sanggunian may override the veto of the local chief executive by
2/3 vote of all the sanggunian members making the ordinance or
resolution effective for all legal intents and purposes
Review by higher sanggunians
Review by Sangguniang Panlalawigan (SP) of ordinances/resolutions enacted by
Component Cities & Municipalities
• Within 3 days after approval, secretary of sangguniang bayan or panglungsod
shall forward approved ordinances & resolutions to the SP for review
• If SP finds them beyond the powers conferred to them, such ordinances or
resolutions shall be declared invalid in whole or in part
• If no action has been taken by SP within 30 days, such ordinances or resolutions
shall be presumed valid
LGC SEC. 56
Review by higher sanggunians …(continued)
Review by Sangguniang Bayan or Panglungsod (SBP) of ordinances/resolutions
enacted by Barangays
• Within 10 days after enactment, sangguniang barangay shall forward approved
ordinances & resolutions to the SBP for review
• If SBP finds them inconsistent with law, SBP shall within 30 days from receipt,
return them to barangay with comments for adjustment, in which case, thee
effectivity thereof is suspended until revision is effected
• If no action has been taken by SBP within 30 days, such ordinances or resolutions
shall be presumed valid
LGC SEC. 57
Attempt to enforce void or suspended tax ordinances
• Ground for administrative disciplinary action against local officials and
employees responsible for it
LGC 190
Duty of sanggunian secretary to furnish copy of ordinance
to Official Gazette
• Within 7 days following approval of ordinances, secretary of
sanggunian shall transmit official copies thereof to the CEO of Official
Gazette
Publication of Tax Ordinances & Revenue Measures
• Within ten (10) 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
• 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 accessible places.
LGC SEC. 188
Effectivity of local tax ordinances
• 10 days from its posting at the bulletin board of the local government
and in at least 2 conspicuous places in the LGU
Furnishing treasurers with copy of tax ordinances
• Treasurers of the local government units shall be given copies of
approved ordinances for public dissemination
Review by DOJ on issues of constitutionality
• Questions of legality or constitutionality of local tax ordinances and
revenue measures must be brought to DOJ within 30 days from their
effectivity
• No appeal to the Secretary, no refund to taxpayers assailing the
validity of a local tax ordinance
True or False
Review of tax ordinance by Secretary of Justice as required in Section
187 of the Local Government Code is an act of mere supervision not
control.
What if DOJ Secretary does not act on the appeal?
• Aggrieved party could proceed to seek relief in court if 60 days have
lapsed and DOJ Secretary does not act on the appeal
True or False
• The failure of the Secretary of Justice to review an ordinance within
the prescribed period does not validate an otherwise invalid
ordinance.
Effect of appeal to DOJ
• The appeal shall not have the effect of suspending the effectivity of
the ordinance and the accrual and payment of tax, fee or charge
levied
Exception to no injunction rule
• CTA may suspend collection if in their opinion, it will jeopardize the
interest of the government or the taxpayer
Penalty for public officer who violates an ordinance
• Administrative disciplinary action, without prejudice to the filing of
the appropriate civil or criminal action
Q&A
When and under what conditions may the effectivity of the tax
ordinance be suspended?
Q&A
The Sangguniang Panglungsod of Manila enacted an ordinance
imposing taxes, fees or other charges. The ordinance was approved by
the City Mayor on June 15, 2020. On February 17, 2021, the
Federation of Market Vendors commenced an action in court seeking
the nullification of the ordinance on the ground that it was not
published before its enactment and after it was approved by the
Sangguniang Panglungsod as required by the revised Charter of the City
of Manila. The Mayor and the City Market Administrator on the other
hand, contend that under Section 188 of the Local Government Code,
the publication of a tax ordinance is required only after its approval. Is
the tax ordinance valid?
Q&A
On what grounds may Secretary of Finance suspend the effectivity of a
tax ordinance?
Local initiative
• The legal process whereby the registered voters of a local government
unit may directly propose, enact, or amend any ordinance
LGC SEC. 120
Local Referendum
• The legal process whereby the registered voters of the local
government units may approve, amend or reject any ordinance
enacted by the sanggunian
• Under the control & direction of the COMELEC:
- within 60 days for provinces and cities
- within 45 days for municipalities
- within 30 days for barangays
Procedure in local initiative
a. Not less than 1,000 registered voters in provinces & cities, 100 in
municipalities and 50 in barangays, may file a petition with the
sanggunian concerned proposing the adoption, enactment, repeal
or amendment of an ordinance
(b-h) in LGC SEC.122
Effectivity of local propositions
• 15 days after certification by COMELEC that proposition is approved
by majority of votes cast
LGC SEC. 123
Limitations of local initiatives
• The power of local initiative shall not be exercised more than once a
year
LGC SEC. 124
Limitations upon Sanggunians
• Ordinances through initiative and referendum shall not be repealed,
modified or amended by sanggunian within 6 months from approval
• May be repealed, modified or amended within 3 year thereafter by
¾ vote of all the sanggunian members (18 months for barangays)
Authority of Courts
(LGC SEC. 127)
• Courts can declare null and void any proposition approved found to
be in violation of Constitution or want of capacity of the sanggunian
End