Local Government Taxation
in the Philippines
• Local Government Taxation in the
Philippines is based on Republic
Act 7160, otherwise known as
Local Government Code of 1991
which was signed into law on 10
October 1991 and took effect on 1
January 1992.
1
Power to Create Sources of
Revenue
(Sec. 129)
• Each local government unit (LGU) has the
power to create its own sources of revenue
and to levy taxes, fees, and charges
• The grant of power to create sources of
revenue is consistent with the basic policy
of local autonomy
• The taxes, fees and charges shall accrue
exclusively to the LGUs
Sec. 133 - Common Limitations on the
Taxing Powers of Local Government
Units
a. Income tax, except when levied on banks
and other financial institutions;
b. Documentary stamp tax;
c. Taxes on estates, inheritance, gifts,
legacies and other acquisitions mortis
causa, except as otherwise provided herein;
d. Customs duties, registration fees of
vessel and wharfage on wharves, tonnage
dues , and all other kinds of customs fees,
charges and dues except wharfage on
wharves constructed and maintained by the
local government unit concerned;
2
e. Taxes, fees and charges and other
impositions upon goods carried into or
out of, or passing through, the
territorial jurisdictions of local
government units in the guise of
charges for wharfage, tools for
bridges or otherwise, or other taxes,
fees and charges in any form
whatsoever upon such goods or
merchandise;
f. Taxes, fees and charges on
agricultural and aquatic products
when sold by marginal farmers or
fisherman.
g. Taxes on business enterprises
certified to by the Board of
Investments as pioneer or nonpioneer for a period of six (6) and
four (4) years, respectively from the
date of registration.
h. Excise taxes on articles enumerated
under the National Internal Revenue
Code, as amended, and taxes, fees
or charges on petroleum product
i. Percentage or value-added tax (VAT)
on sales, barters or exchanges or
similar transactions on goods or
services except as otherwise
provided herein;
3
j. Taxes on the gross receipts of
transportation of passengers of freight by
hire and common carriers by air, land or
water, except as provided in this code.
k. Taxes on premiums paid by way of
reinsurance or retrocession
l. Taxes , fees and charges for the
registration of motor vehicles and for the
issuance of all kinds of licenses or
permits for the driving thereof, except
tricycles;
m. Taxes, fees and other charges on
Philippine products actually exported,
except as otherwise provided herein;
n. Taxes, fees and charges, on
Countryside and Barangay Business
Enterprises and cooperative duly
registered under R.A. No. 6810 and
Republic Act Numbered Sixty-nine
hundred thirty eight (R.A. No. 6938)
otherwise known as the “cooperative
code of the Philippines” respectively;
and
o. Taxes, fees or charges of any kinds
on the National Government, its
agencies and instrumentalities, and
Local Government Units.
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1.) GENERAL FUND – USED TO ACCOUNT FOR
SUCH MONIES AND RESOURCES AS MAY BE
RECEIVED BY AND DISBURSED FROM THE LOCAL
TREASURY.
2.) SPECIAL EDUCATION FUND – SHALL CONSIST
OF THE RESPECTIVE SHARES OF PROVINCES,
CITIES , MUNICIPALITIES, AND BARANGAYS IN
THE PROCEEDS OF THE ADDITIONAL TAX ON
REAL PROPERTY.
3.) TRUST FUND – SHALL CONSIST OF PRIVATE
AND PUBLIC MONIES WHICH HAVE OFFICIALLY
COME INTO THE POSSESSION OF THE LGU OR OF
A LOCAL GOVERNMENT OFFICAIL AS TRUSTEE,
AGENT OR ADMINISTRATORR, WHICH HAVE BEEN
RECEIVED AS A GUARANTY FOR FULFILLMENT OF
SOME OBLIAGATION.
5
SOURCES OF INCOME FOR
LOCAL GOVERNMENT UNITS
I. LOCAL SOURCES
a) Real Property Taxes
b) Business Taxes
c) Non-tax Revenues
II. EXTERNAL SOURCES
a) Internal Revenue Allotment
b) National Aids
c) National Wealth
III. BORROWINGS
6
REAL PROPERTY TAX
The province or city or municipality within the
Metropolitan Manila area shall fix a uniform
rate of basic real property tax.
A. Province - at rate not exceeding 1% of the
assessed value of the real property.
Province
35%
Municipality
40%
Barangay
25%
B. City or Municipality within Metropolitan
Manila Area - at rate not exceeding 2% of
the assessed value of real property.
City
70%
Barangay
30%
Formula in Computing
Real Property Tax
FMV x AL = AV
AV x Rate = RPT
Assessment level
Residential
Where :
Commercial
FMV = Fair Market
Industrial
Value
Machinery
AL = Assessment Level
Commercial
AV = Assessed Value
Industrial
LGC
Q.C.
20%
15%
50%
40%
50%
40%
80%
-
70%
-
50%
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REAL PROPERTY TAX
Special Levy on Real Property for Special Educational Fund
A. province or city or a municipality within the Metropolitan
Manila area may levy and collect an annual tax of 1% on the
assessed value of real property in addition to the basic real
property tax.
Additional ad Valorem Tax on Idle Lands
B. Manila area may levy an annual tax on idle lands at the rate
not exceeding 5% of the assessed value of the property in
addition to the basic real property tax.
Real Property for Assessment Purpose
Classes
1) Residential
2) Agricultural
3) Commercial
4) Industrial
5) Mineral
6) Timberland
Types
1. Land
2. Building
3. Machineries
Local Business Taxes
• Revenues
Taxes - enforced contribution
Kinds:
1. Property taxes
2. Business and other taxes
• Receipts
Fees – imposed on the exercise of
regulatory powers
Charges – cost recovery impositions
for services delivered or use of
facilities
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BUSINESS TAXES
TAXING POWERS OF LOCAL GOVERNMENT UNITS
PROVINCES - They may collect taxes, fees and charges
on:
1) Tax on Transfer of Real Property Ownership - at rate
not more than 50% of 1% of total consideration
2) Franchise Tax - at rate not exceeding 50% of 1 % of
the gross receipts for the preceding calendar year
3) Tax on Sand, Gravel and Other Resources - at rate
not more than 10% of fair market value
4) Tax on Business of Printing and Publication -at rate
not exceeding 50% of 1%
5) Professional Tax - at rate not more than
P 300.00 annually
6) Amusement Tax - at rate not more than 30% of gross
receipts from admission fees
7) Annual fixed Tax for every Delivery Truck, or Van of
Manufacturers or Producers, Wholesalers of, Dealers,
or Retailers in, Certain Products - at rate not
exceeding P 500.00 annually.
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TAXING POWERS OF LOCAL
GOVERNMENT UNITS
MUNICIPALITIES - They may collect taxes, fees and
charges not otherwise levied by provinces.
1.) Manufacturer - at rate not exceeding 37 1/2 %
of 1% of gross sales or receipts for the
preceding calendar year.
2.) Wholesalers - at rate not exceeding 50% of 1 %
of gross sales or receipts for the preceding
calendar year.
3.) On Exporters, Manufacturers, Wholesalers or
Retailers of essential commodities - at rate not
exceeding 1/2 of the rate prescribed under
letters A, B, and D.
4.) Retailers -at rate with gross sales or receipts
for the preceding calendar year or
P 400,000 or less
2% per annum
More than P 400,000
1% per annum
5.) Contractors – at rate not exceeding 50%
of 1% on the gross sales or receipts for
the preceding calendar year.
6.) Banks and other financial Institution –
at rate not exceeding 50% of 1% on the
gross receipts of the preceding calendar
year derived from interest, commissions
and discounts from lending activities.
7.) Peddlers – at rate not exceeding P 50.00
annually.
8.) On any business, not otherwise
specified – at rate not exceeding 2% of
gross sales or receipts of the preceding
calendar year.
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TAXING POWERS OF LOCAL
GOVERNMENT UNITS
CITIES - They may levy taxes, fees and charges which the
province or municipalities may impose and may exceed the
maximum rates allowed for provinces or municipalities by not
more than 50% except the rates for professional and
amusement taxes.
BARANGAY - They may levy taxes, fees and charges which shall
exclusively accrue to them.
1) Taxes - on stores or retailers with gross sales or
receipts of the preceding calendar year of P 50,000 or less
in the case of cities and P 30,000 or less in the case of
municipalities.
2) Service Fees and Charges - they may collect reasonable
fees or charges for services rendered.
3) Barangay Clearance - no city or municipality may issue
any license or permit unless a clearance is first obtained
from the barangay at reasonable rate.
4) Other Fees and Charges - reasonable fees and charges.
•BARANGAY INCOME
SOURCES
I. Internal Revenue Allotment
(IRA)
II. Real Property Tax (RPT)
III. Barangay Taxing Power
IV. Community Tax
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SHARES OF LOCAL GOVERNMENT UNITS IN
THE PROCEEDS OF NATIONAL TAXES
A. INTERNAL REVENUE ALLOTMENT - Local government
units shall have a share in the national internal revenue
taxes based on the collection of the third fiscal year
preceding the current fiscal year at 40% allocated in the
following manner.
1) Provinces
23%
2) Cities
23%
3) Municipalities
34%
4) Barangays
20%
The share of each province, city and municipality shall
be determined on the bases of the following formula.
a) Population
50%
b) Land Area
25%
c) Equal Sharing
25%
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B. SHARES OF LGU IN THE PROCEEDS
OF NATIONAL WEALTH - Local
government units shall have an
equitable share in the proceeds
derived from the utilization and
development areas at 40% of the
gross collection derived by the
national
government
from
the
preceding year from mining taxes,
royalties, forestry and fishery charges
in addition to the internal revenue
allotment.
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Tax on Transfer of Real
Property
• Tax subject: sale, donation, barter or any
mode of transfer of ownership or title of real
property
• Tax rate: not to exceed
Tax Base
Provinces
Fair market value,
50% of 1%
or total consideration
whichever is higher
Cities
75% of 1%
Tax on Transfer of Real
Property
• payment must be made within 60 days
from date of execution of deed or from
date of owner’s death
• proceeds not shared
• exemption: disposition of real property
under CARP (Republic Act No. 6657)
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Tax on Business of Printing
and/or Publication
• Tax subject: printing and/or publication of
books, cards, posters, leaflets, handbills,
certificates, receipts, pamphlets, and
printed materials of similar nature
• Tax rate: not to exceed
Tax Base
Provinces
Cities
Gross receipts
50% of 1%
75% of 1%
Capital investment
For start-ups
1/20 of 1%
3/40 of 1%
Tax on Business of Printing
and/or Publication
• Capital Investment
The capital which a person employs in any
undertaking, or which he contributes to the
capital of a partnership, corporation, or any
other judicial entity or association in a
particular taxing jurisdiction.
• proceeds not shared
• exemptions: receipts from printing and/or
publishing of books and reading materials
prescribed by DECS as text and references
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Franchise Tax
• Franchise
Right or privilege, affected with public interest
conferred upon private person or corporation,
under government- imposed terms and conditions
in interest of public welfare, security and safety
• Tax rate: not to exceed
Tax Base
Provinces
Cities
Gross receipts
50% of 1%
75% of 1%
Capital investment
For start- ups
1/20 of 1%
3/40 of 1%
Franchise Tax
•proceed not shared
•exemption: holders of
certificates of public
convenience for
operation of public utility
vehicle
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BLGF Opinion dated 06
February 2003
• The province should impose
the tax on business enjoying a
franchise within its territorial
jurisdiction, excluding the
territorial limits of any city
located therein.
FRANCHISE TAX
• Meralco, Globe, Smart,
Manila Water Maynilad
and PLDT are subject
to franchise tax on the
receipts derived within
the LGU
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Tax on sand, gravel and other
quarry resources
• Tax subject: extraction of ordinary
stones, sand, gravel, earth. Etc. from
public lands or beds of public waters
within LGU
• Tax rate: not to exceed
Tax Base
Fair market value
Of extract at site
Provinces
Cities
10%
15%
Tax on sand, gravel and other
quarry resources
• proceeds shared (Sec. 10 of P.D. No. 426):
• Provinces
province
component city/municipality
barangay
• Cities
highly urbanized city
barangay
30%
30%
40%
60%
40%
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Tax on Professionals
• Tax subject: persons engaged in the practice of
profession requiring government exams
• Tax rate:
Provinces- maximum of Php 300/ profession
Cities- maximum of Php 300/ profession
• Payment: on or before January 31 in the
province/city where practice is done, or principal
office is located
• proceeds not shared
• exemption: practice of profession exclusively as
government employee
BLGF Opinion dated 29
April 2003
• The municipality is authorized to
impose reasonable fees and
charges on professionals which
do not require govt. examination
in the exercise of their
profession. The imposition,
however, shall be denominated
as fee not tax.
19
Amusement Tax
• Tax subject: patrons of shows and
entertainment activities; collected
and remitted by proprietors, lessees
and operators
• Tax rate:
Provinces-not to exceed 30% of
paid admission fees.
Cities- not to exceed 30% of paid
admission fees
• “no admission fee, no tax”
Amusement Tax
• proceeds shared: 50-50 between
province and municipality
• exemptions: operas, concerts,
dramas, recitals, painting and art
exhibition, flower shows, musical
and literary presentations except
rock and similar concerts
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Annual fixed tax on delivery
trucks and vans
• Tax subject: trucks, vans or any motor
vehicle used by manufacturers, producers,
wholesalers, dealers or retailers within LGU
territory
• Tax rate: maximum of
Province - Php 500/vehicle
City - Php 750/vehicle
• collected with other business taxes
. proceeds not shared
• potential source of avoiding payment of
other business taxes, when vehicle used as
sales outlet
Computation of
Business-related Taxes
• Exclusions to gross
sales/receipts
1. Discounts, at the time of
sales, if determinable
2. Sales return
3. Excise tax
4. Value-added tax
21
Computation of Businessrelated Taxes
• Three-step process
Step 1. Classify the business
Step 2. Determine gross receipts
Step 3. Determine tax due
- locate tax due on tax
schedule then compute
• Tax due= tax base x tax rate +/penalty/discount
BLGF Opinion dated 05
August 2002
• Where Pepsi-Cola Products Phils. Inc.
(PCPPI) maintains sales offices and
warehouse in certain municipalities or
cities for purposes of selling to
retailers, wholesalers and distributors
the softdrinks products it
manufacture, such municipalities or
cities should classify PCPPI for
business tax purposes as a
manufacturer, not as
a wholesaler,
distributor, dealer, or contractor.
22
BLGF Opinion dated 26
September 2002
• The tax on contractors is NOT
imposed on the project
itself but on the business of
constructing the project,
irrespective of whether those are
exempt from the real
property taxes.
BLGF Opinion dated 27
November 2002
• Bistro Americano (Q.C.)
Corporation as restaurant
operators and caterers shall
be subject to the business
tax pursuant to Section 143(h)
of the LGC (others).
23
Sec. 193. Withdrawal of Tax
Exemption Privileges
• Unless otherwise provided in this Code, tax
exemptions or incentives granted to, or presently
enjoyed by all persons, whether natural or judicial,
including government- owned or controlled
corporations are hereby withdrawn upon the
effectivity of this Code except:
• 1. Local water districts
2. Cooperatives registered under R.A. No. 6938
3. Non
- stock non
- profit hospitals and educational
institutions
4. Business enterprises certified by BOI as pioneer
or non
- pioneer
5. Business entity, association or cooperatives
registered under R.A. No. 6810
6. Printer and/or publisher of books and other
reading materials prescribed by DECS
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Administrative Procedures
Requirements for Existing
Business
•Mayor’s Permit must be
renewed within January 1-20
of every year
•Renewal of existing business
permit is not automatic
25
Sec. 191. Authority of Local
Government Units to adjust
Rates of Taxes.
• Local government shall have the
authority to adjust the tax rates
as prescribed herein not oftener
than once every five (5) years, but
in no case shall such adjustment
exceed ten (10) percent of the
rates fixed under this code.
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. No case
or 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.
26
ART. 242 - RELATED OR
COMBINED BUSINESS
(a) The conduct or operation of
two or more related
businesses provided in Article
232 of this Rule by any one
person, natural or juridical,
shall require the issuance of a
separate permit or license to
each business
(b) If a person conducts or
operates two (2) or more
related businesses which
are subject to the same
rate of imposition, the tax
shall be computed on the
basis of the combined total
gross sales or receipts of
the said two (2) or more
related businesses.
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(c) If, however, the businesses
operated by one person are
governed by separate tax
schedules or the rates of the
taxes are different, the
taxable gross sales or receipts
of each business shall be
reported independently and
the tax thereon shall be
computed on the basis of the
appropriate schedule.
SITUS OF THE TAX
•
Taxable 100% where the sale is made or
effected 30% of all sales recorded in the
principal
•
office shall be taxable by the city or
municipality where the principal office is
located.
•
70% of all sales recorded in the principal
office shall be taxable by the city or
municipality where the factory, project
office, plant or plantation is located.
•
In cases where 2 or more factories, project
offices, plants or plantation located in
different localities, the 70% sales allocation
shall be prorated among the localities.
28
Assessment
• Assessment is the inherent function
of the local treasurer.
• Securing/applying business permit is
under the Office of the City Mayor.
• EDP for Billing functions.
• Acceptance of payment is again a
function of the Treasurer’s Office.
Community Tax
• Should be paid in the place of
residence of the individual or
in the place where the
principal office of the
juridical entity is located.
• Branches are not required to
secure community tax.
29
Manufacturers
• Manufacturers sales office
which distributes its product
should also be classified as
manufacturers and taxable as
such and not as
distributor/wholesaler/retailer.
Retailer
• Car dealers should not be
classified as wholesalers/dealers
simply because they are
commonly known as car dealers.
• They should be classified as
retailers since they sell directly
to end-user or customers.
30
Real Estate Dealers
• Real Estate
dealers/developers/lessors are subject
to the 70-30 allocation of sales.
• Principal office – 30% of gross sales.
• Project office or location of the real
estate is subject to 70% of gross
sales.
Non Profit, Non Stock
Corporation
• Only hospitals and educational institutions
are exempt from paying business tax.
• Income derived from non-members who use
or rent the facilities are subject to business
taxes.
• Required to pay regulatory fees and
charges.
31
Retirement of Business
• Should be retired on or before the
20th day of January.
• Should pay for the entire year
after January 20.
• Sales realized from January up to
the time of retirement should
likewise be paid.
Security Agency
• Security agency are subject
to business tax as
contractor and subject to
situs of tax at 70% - 30%
32
Educational Institutions
• Canteens and bookstore
operated by the school are
exempted from the payment of
business tax.
• Concessionaires operating
canteen and bookstores are
subject to business taxes.
Contractors
• Contractors doing business in an
LGU are subject to business tax at
70%.
• Main or Principal office are subject
to 30%.
• Sub-contractors are not subject to
contractors tax. Only main
contractors are liable to pay the tax.
Tantamount to double taxation if
collected from sub-contractors.
• Income derived from abroad are not
taxable.
33
Examination of
Books of Accounts
• Function of the Provincial, City,
Municipal or Barangay Treasurer or
their duly authorized representatives.
• Books of Accounts and records of
business establishments could only be
examined for a maximum period of 5
years.
Liquefied Petroleum
Products
LPG is not subject to local
tax. However, said LPG
business shall still be liable
to pay the Mayor’s permit
and other regulatory fees or
service charges.
34
RE-EXPORTATION
Re-exportation of finished
product should not be
classified as exporter or
local/domestic sale but
should be classified as
rendering service ”contractor”
FRANCHISE TAX ON ELECTRIC
COOPERATIVE
BLGF Ruling Dated May 12, 2006
Electric cooperative shall be subject to
or liable to the payment of franchise
tax imposed by the province or city.
Base on the Ordinance approved by
the province or city.
Before the EPIRA Law (1997-2001)
Gross receipts less:
NPC Basic Power Cost
Allowance for system loss
Reinvestment fund
Amortization Cost
35
Upon the effectivity of the
EPIRA Law (2002)
Gross receipts less:
NPC Charges
TransCo charges
Reinvestment fund
Universal Charges
Remedies for Collection
of Taxes
• Civil Remedies
• Administrative Remedies – thru
distraint of goods or other personal
properties.
• Closure of business establishments
by the office of the mayor.
• Judicial Action
• Filing of Tax evasion case
36
VICTOR B. ENDRIGA, Ph.D.
Quezon City Treasurer
QUEZON CITY
• Former Capital of the Philippines
• Largest City in Metro Manila in terms
of population and land area with 2.17
Million residents occupying over
16,000 hectares of land area
• Was known as the most financially
distressed Local Government Unit in
Metro Manila and probably nationwide
in 2001
37
THE FINANCIAL RECOVERY OF QUEZON
CITY
• Cash Balance in the General Fund of Quezon
City was negative P10.35 million when Mayor
Belmonte assumed office on July 1, 2001
• Inherited claims for payment amounting to P1.4
billion, including GSIS, Phil Health, BIR,
Meralco etc.
• Bank Loan of P1.25 billion left by previous
administration with the Land Bank of the
Philippines
1.
Auction Sale of
real property
instead of Tax
Amnesty every
quarter.
38
PERIOD OF DELINQUENCY TO BE
INCLUDED IN THE AUCTION SALE
1. For residential – 5 years
2. For commercial and industrial
– 3 years
3. For machineries – 3 years
This is an internal rule
promulgated by the auction
committee
2.) Reassignment of
permanent employees to
avoid familiarization with
Taxpayer.
3.) Prepared at least 20
delinquency letters per day
per employee assigned in the
Real Estate Division.
4.) Computerization of
systems and processes.
39
5.) Issued new Official Receipts
with security features to
identify and curb the
proliferation of fake receipts.
6.) Constructed the taxpayers
assessment and payment
lounges (free Coffee & Ice
Tea).
7.) Recognized the 10
outstanding Taxpayers for
Business and Real Property.
8.) Increased the discount given to Real
Property Taxpayers paying annually from
10% to 20%, and from 5% to 10% for
those paying promptly quarterly.
9.) Conducted Auction Sale of Government
Owned and Controlled Corp. such as
Heart Center, Lung Center, Kidney
Center and MWSS.
10.) Hired an independent and private
encoding company to encode all RPT
payment records and Tax Declarations.
11.) Automatically Generated and issued
Computerized Delinquency Letters
amounting to P10.7 Billion Pesos.
40
12.) Filed anti-graft cases with the office of
the Ombudsman against employees issuing
fake RPT Receipts, that resulted to the
dismissal of 6 employees.
13.) Declared Tax Amnesty on Machinery and
Equipment from Oct. to Dec. 2002.
14.) Created a special Task Force on
Machinery composed of representatives
from the Treasury, Assessor’s and
Engineering Departments to conduct
physical inventories of all machinery and
equipment which failed to avail of the Tax
Amnesty.
15.) Posted 300 Billboards in
major thoroughfares informing the
date of the Auction Sale and the
increased discount from 10% to
20%, if RP Tax is paid annually.
16.) Allowed staggered payment of
Delinquent Real Property Taxes
upon payment of a minimum of
30% down and the balance
payable within 6 months.
41
17.) Verified the total value of
machinery as appearing in the Tax
Declaration issued by the
Assessor’s Office and counter
checked this ,with that appearing
in the financial statements.
18.) Instruct the Building Official to
forward to the City Assessor the
building / occupancy permit,
stating the total value of the
construction cost, for issuance of
a new tax declaration.
19.) Instruct the City Engineer to
forward to the City Assessor all
application for mechanical
permit for issuance of a new tax
declaration on machineries.
20.) Implemented the Geographic
Information System (GIS) for
future tax mapping of Real
Property.
42
Parcels with No Tax
Declaration Record
43
Undeclared Buildings Map
44
Misclassification of
Land Use
All Tax Payments records
Analysis
By pointing and clicking
to a parcel, payment
history can be displayed
and delinquent tax payers
can be easily identified.
45
1.) Required taxpayers with gross
receipts of over P500,000.00 to
submit BIR stamped 2005
financial statements and
records of monthly payments
of VAT and NON-VAT for the
year 2006; for comparison
against declared gross
receipts for 2006 before
renewing their Mayor’s Permit
for 2007.
2.) Utilized the
presumptive income
level approach
(implementing a
schedule of minimum
gross) to make gross
tax declarations more
realistic and current.
46
3.) Alignment of Business
Taxes with Metro Manila
Rates
4.) Consultation and
Dialogue with the
Business Sector
particularly QCCCI
5.) SEC / BIR gross-sales data versus
declared gross sales with LGU’s.
6.) Census and listing of tax payers.
7.) Adequate and competent staffing.
8.) Examinations of books of account
and pertinent records by the Treasurer
or his authorize representative.
9.) Revenue target setting
47
10.) Required
contractors to pay
business tax prior to
the release of the
building, excavation
and occupancy
permits.
11.) Required dealers, sellers,
and developers of real
estate, such as land,
building, condominium units
and the like, especially
corporations and other
juridical entities, to present
their Mayor’s Permit and
proof of payment of Business
Taxes before processing the
Transfer Tax.
48
12.) Instructed the City
Accountant to deduct
from the voucher the
amount owing to the
payment of Business
Tax for contractors and
suppliers doing
business with the City.
13.) Instructed the BPLO to
conduct a door to door, street by
street, inspection and verification
of all unlicensed establishments.
14.) Identified establishments
having decreased current
declared gross receipts compared
to previous years and examined
their Books of Accounts for
verification of actual sales.
49
15.) Used (ink) color
coding in signing the
tax bills and stamp
pad with my picture
on it, and other
official documents
during renewal period.
16.) Employed the
raffle system in
the assignment of
Letters of Authority
to revenue
examiners.
50
17.) Grounded a number of
revenue examiners with
low collection outputs
every month.
18.) Rewarded top collector
revenue examiner with a
free trip to Hong Kong and
other incentives.
19.) Created a special team to
compare Treasury records of
Transfer Tax payments with
those found in the Land
Registration Authority.
(Transfer Tax Records in 2001
revealed that 58% of those
recorded in the LRA were fake
receipts and only 42% were
valid and legitimate.)
51
20.) Maintained a
photo gallery of all
permanent and casual
employees with
corresponding
assignments, for
easier identification.
21.) Required
advertising agency
to pay contractors
tax prior to the
release of the
billboard permit.
52
22.) Update local business
tax ordinances by 10%
once every 5 years.
23.) Adjust existing fees
and charges.
24.) Require payment of
community tax on all
transaction with LGU’s.
QUEZON CITY IS THE RICHEST
CITY NOT ONLY IN METRO
MANILA BUT IN THE ENTIRE
COUNTRY AS WELL, AS
AUTHENTICATED BY THE
COMMISSION ON AUDIT,
BEATING MAKATI AND MANILA
IN TERMS OF REVENUE
COLLECTION FOR THE YEAR
2002,2003,2004 AND 2005
53
FMV along EDSA
•
•
•
•
•
Caloocan
Quezon City
Mandaluyong
Makati
Pasay
P55,000
P 5,500
P12,000
P48,000
P25,000
The highest FMV in Quezon City is only
P5,500
Report Collection for CY 2002
2001-2002
Nature of Collection
2001
2002
Real Estate
%
722,437,380
847.964,965
17.38
1,209,965,603
2,467,209,132
103.91
Fees and Charges
149,224,960
231,964,478
93.51
Transfer Tax
107,510,561
200,013,469
86.04
Amusement Tax
Business Taxes
146,400,840
131,480,835
-10.19
LOCAL SOURCES
2,335,539,344
3,878,632,879
66.07
BIR Allotment
1,300,485,734
1,290,701,951
-0.75
MMDA Contribution
97,716,000
126,564,000
29.52
Other Income
47,929,204
106,091,335
121.35
3,781,670,287
5,401,990,168
42.85
330,991,390.01
364,308,924
10.07
626,228,233
721,696,806
15.25
39,564,876
65,517,016
65.59
4,778,454,787
6,553,512,915
37.15
GENERAL FUND
Barangay Share RPT
SEF
Other Trusts
GROSS COLLECTION
54
Report of Collection for CY 2005
as of January to December 31, 2006
2005
2006
Increase
(decrease)
%
Real Estate
1,017,808,956
1,337,428,919
319,619,963
Business Taxes
2,633,377,989
2,899,388,991
266,011,001
10.01
Other Regulatory/Misc Fees
265,051,332
352,074,538
87,023,205
32.83
Transfer Tax
237,212,000
235,725,565
(1,486,434)
(0.63)
Amusement Tax
143,141,648
131,262,836
(11,878,812)
(8.30)
Community Tax
59,941,629
66,833,390
6,891,761
218,481,333
526,562,216
308,080,882
Other Income
31.40
11.50
141.01
SUBTOTAL
4,575,014,890
5,549,276,458
974,261,568
21.30
IRA
1,325,076,782
1,295,641,743
(29,435,039)
(2.22)
19.09
IRA Contribution to MMDA
213,845,000
252,528,000
38,683,000
6,113,936,804
7,097,446,201
983,509,529
16.09
Special Education Fund
826,935,804
1,038,674,677
211,738,872
25.61
Bgy. Share
437,656,191
550,756,457
113,100,266
25.84
7,378,528,668
8,686,877,336
1,308,348,668
17.73
81,957,537
143,021,796
61,064,258
74.51
7,460,486,205
8,829,899,133
1,369,412,927
18.36
GENERAL FUND
Total City Collection
Other Trusts
GROSS COLLECTION
GENERAL FUND
as of December 31, 2006
BUDGET
6,250,000,000
ACTUAL
7,097,446,201
SURPLUS
847,446,201
55
Top 10 in terms of highest total income generated
for CY 2004 as compared to 2001
(NCR)
CLASS
RANK
RANK
2004
2001
CITY
QUEZON CITY
S
1ST
MAKATI
MANILA
PASIG
6,496,282,210
3RD
4,276,721,410
1
2ND
6,247,252,757
1ST
5,122,321,279
S
3RD
6,029,451,082
2ND
4,422,171,694
2,220,682,718
1
4TH
2,969,849,218
4TH
KALOOKAN
1
5TH
1,681,228,300
6TH
1,493,125,921
MANDALUYONG
1
6TH
1,601,355,056
7TH
1,165,955,784
PARANAQUE
1
7TH
1,590,065,300
5TH
1,533,439,002
MUNTINLUPA
1
8TH
1,250,547,925
8TH
1,087,802,228
1
9TH
1,246,598,000
9TH
1,075,895,000
1
10TH
1,1,73,179,686
10TH
872,868,370
SAN JUAN
1
1ST
519,580,000
2ND
430,370,000
NAVOTAS
1
2ND
276,671,818
3RD
292,835,782
PATEROS
3
3RD
72,952,324
4TH
62,188,114
PASAY
VALENZUELA
MUNICIPALITY
GEN. FUND
S.E.F.
TRUST
FUND
TOTALS
83,216,459
107,266,365
154,191,123
345,001,948
Time Deposits
1,423,966,330
431,777,055
431,925,255
2,287,668,641
Cash on Hand &
in Bank
1,512,560,010
539,043,420
586,444,378
2,638,047,810
FUNDS
Funds
Available
Today
56
FINANCIAL PERFORMANCE OF LOCAL GOVERNMENT UNITS
COA REPORT / National Capital Region – CY 2002
Internal Sources
3,946,465.3
External Sources
1,339,568.0
Grand Total
5,286,033.3
3,816,458.7
403,992.6
4,220,451.3
3. Manila City
3,116,507.8
1,047,027.1
4,163,534.9
4. Pasig City
1,677,114.8
388,438.6
2,065,553.3
5. Caloocan City
640,142.2
740,218.3
1,380,360.5
6. Mandaluyong City
778,135.5
280,363.8
1,058,499.3
7.) Paranaque City
708,046.2
345,447.7
1,053,493.8
8. Pasay City
639,536.0
306,163.3
945,699.3
9. La Pinas City
467,153.0
373,755.2
840,908.2
10. Muntinlupa City
533.984.0
304,334.4
838,318.3
11. Valenzuela City
434,465.2
375,762.2
810,227.3
12. Marikina City
382,179.0
318,950.7
701,129.7
13. Taguig
337,956.7
226,678.0
564,634.7
14. Malabon City
139,776.2
289,257.2
429,033.4
15. San Juan
314,598.4
66,611.7
381,210.9
16. Navotas
91,122.0
116,296.9
207,418.9
17. Pateros
23,734.1
37877.1
61,611.2
Cities/Municipalities
1. Quezon City
2. Makati
2004 INCOME STATEMENT
GENERAL FUND
INCOME
Tax revenues
QUEZON CITY
MANILA
MAKATI
3,932,060,660
3,017,485,962
3,422,250,392
897,657,280
608,287,258
1,405,161,315
2,753,350,830
2,234,148,853
1,826,109,950
281,052,550
175,049,851
190,379,126
Non-Tax Revenues
390,022,310
593,099,926
337,607,540
Regulatory fees
Real property tax
Business tax
Other tax
213,071,460
178,841,429
214,303,596
Service/User charges
53,899,860
161,887,878
45,243,634
Economic Enterprise
20,302,230
154,474,482
37,601,206
102,748,770
96,871,990
40,459,102
Shares from national tax
collection/Grants/Aids
1,472,766,930
1,100,610,001
629,435,809
Loans and borrowings
-------
Inter-Local Transfers
-------
Other receipts
TOTAL INCOME
5,794,829,900
-------830,345,778
5,541,541,667
108,866,054
-------
4,489,159,795
57
STATEMENT OF INCOME AND EXPENDITURES
CY
- 2005
INCOME
EXPENDITURES
EXCESS/DEFICIT
1.Quezon City
7,376,391,780.00
4,769,022,210.00
2,580,389,570.00
2.Manila City
7,119,823,858.00
5,902,084,336.00
1,217,739,522.00
3.Makati City
6,320,342,864.75
4,416,865,605.91
1,903,477,258.84
4.Pasig City
2,969,849,218.46
2,897,677,927.86
72,171,290.60
5.Parañaque City
1,997,001,967.15
1,892,401,933.02
104,599,764.13
6.Kalookan City
1,681,228,300.25
1,456,825,963.54
224,402,336.71
7.Mandaluyong City
1,601,355,056.00
1,422,370,155.00
178,984,901.00
8.Muntinlupa City
1,364,082,104.90
1,329,592,287.06
34,489,817.84
9.Valenzuela City
1,173,179,685.75
942,242,676.82
230,937,008.93
10.Marikina City
1,123,019,340.00
778,312,420.00
344,706,920.00
11.Las Piñas City
1,098,864,570.00
1,011,286,870.00
87,577,700.00
12.Taguig
831,014,000.00
812,357,000.00
18,657,000.00
13.Malabon City
570,243,044.42
463,194,670.88
107,048,373.54
14.San Juan
519,580,000.00
459,200,000.00
60,380,000.00
15.Navotas
276,671,818.05
253,653,320.10
23,018,497.95
16.Pateros
83,297,713.42
79,738,124.59
3,559,588.83
37,352,537,051.15
29,852,591,500.78
7,499,945,550.37
TOTAL
PARTICULARS
QUEZON CITY
MANILA
MAKATI
INCOME
7,376,391,780.00
7,119,823,858.00
6,320,342,864.75
LOCAL SOURCES
5,828,214,960.00
5,103,606,479.00
5,810,054,849.16
TAX REVENUE
5,240,530,690.00
4,438,344,332.00
5,264,943,985.16
Real Property
2,299,519,760.00
1,889,166,686.00
2,462,986,843.28
Business Taxes
2,635,229,130.00
2,351,070,156.00
2,513,988,823.49
305,781,800.00
198,107,490.00
287,968,318.39
NON-TAXES REVENUE
587,684,270.00
665,262,147.00
545,110,864.00
Regulatory Fees
304,124,060.00
269,796,183.00
187,575,606.84
Service/User Chrages
122,166,900.00
166,311,490.00
66,601,993.32
30,658,620.00
185,458,341.00
105,744,778.21
Other Taxes
Receipts from Eco. Ent.
Toll Fees
Other Receipts
SHARES FROM NATIONAL TAX
COLLECTIONS
0.00
9,913.00
0.00
130,734,690.00
43,686,220.00
185,188,485.63
1,548,176,820.00
1,156,140,434.00
431,979,800.00
EXTRAORDINARY
RECEIPTS/GRANTS/AIDS
0.00
500,000.00
26,608,118.85
LOANS AND BORROWINGS
0.00
0.00
51,700,096.74
INTER-LOCAL TRANSFER
0.00
859,576,945.00
0.00
58
5,820,000,000.00
5,707,509,556
5,600,000,000.00
5,304,608,683
5,200,000,000.00
5,286,033,298
4,700,000,000.00
3,641,861,948
4,072,000,000.00
2,000,000,000
3,286,396,701
3,000,000,000
3,870,000,000.00
4,000,000,000
3,788,687,846
5,000,000,000
5,175,000,000.00
6,000,000,000
6,122,034,764.55
1999-2005 Estimate VS. Actual Comparative
1,000,000,000
Estimate
Actual
1999
2000
2001
2002
2003
2004
2005
Report of Collection as of Feb. 27, 2007
2006
Real Estate
Business Taxes
Other Reg./Misc Fees
2007
Increase (decrease)
% surf (def)
274,682,517
284,534,710
9,852,192
1,201,456,187
1,279,649,917
78,193,729
6.51
61,844,723
152,218,191
90,473,467
146.29
Transfer Tax
31,631,495
39,779,550
8,148,054
Amusement Tax
22,340,412
13,099,296
(9,241,116)
3.59
25.76
(41.37)
Community Tax
45,190,061
53,389,517
8,199,456
18.14
Other Income
42,060,602
102,179,426
60,118,823
142.93
8,572,061
23,980,793
15,480,732
179.76
1,687,778,062
1,948,931,403
261,153,341
15.47
IRA
88,485,716
133,847,738
45,362,022
51.26
IRA Contribution to MMDA
18,407,000
21,923,000
3,516,000
19.10
Special Accounts
SUBTOTAL
1,794,670,778
2,104,702,141
310,031,363
17.28
Special Education Fund
230,823,737
239,292,657
8,468,920
3.67
Barangay Share
116,380,658
121,933,264
5,552,605
4.77
2,141,875,175
2,465,928,063
324,052,888
15.13
16,319,502
31,341,864
15,022,361
92.05
2 158 194 678
2 497 269 928
339 075 250
15 71
GENERAL FUND
TOTAL City collection
Other Trusts
GROSS COLLECTION
59
Cash Report
as of Feb. 27, 2007
FUNDS
GEN. FUND
S.E.F.
TRUST
FUND
TOTALS
Funds
Available
Today
432,716,682
174,710,097
446,251,976
1,053,678,955
Time
Deposits
5,086,775,946
230,654,885
184,794,997
5,502,225,829
Cash on
Hand & in
Bank
5,539,826,738
405,364,982
631,046,973
6,576,238,694
60
OTHER TREASURY
FUNCTIONS:
1.GASOLINE CALIBRATION
2.INSPECTION OF WEIGHTS
AND MEASURES
3.BILLBOARDS
GASOLINE CALIBRATION
Increase penalty of defective gasoline
pumps:
1. 1st Offense - from P200 to P4,000
2. 2nd Offense - from P500 to P5,000
3. 3rd Offense - cancellation/revocation
of mayor’ permit to operate a business
* Calibration of gas pump from annually to
quarterly.
Note: The court may impose 3 months to 1
year imprisonment or both fine and
imprisonment at the discretion of court
61
CALIBRATING BUCKET
62
TEST WEIGHTS
63
Ordinance 1508, S-2005
An Ordinance authorizing the
city treasurer to accept as an
alternative mode of payment
for taxes and fees from
taxpayers through the use of
over the counter payments in
accredited banks, internet
banking and automated teller
machines.
64
ACCREDITED BANKS
REPRESENTED BY
1. LANDBANK OF THE PHILIPPINES
– MS. GILDA E. PICO – Pres.& CEO
2. DEVELOPMENT BANK OF THE PHILS.
- MR. REYNALDO DAVID – Pres. & CEO
3. PHILIPPINE NATIONAL BANK
- MR. OMAR BRYON T. MIER – Pres.& CEO
4. PHILIPPINE VETERANS BANK
- MR. RICARDO A. BALBIDO, JR. –Pres.& CEO
5. UNION BANK OF THE PHILS.
- MR. EDWIN R. BAUTISTA – Exec. Vice-Pres.
6. PHILIPPINE POSTAL SAVINGS BANK
- MR. ROLANDO L. MACASAET – Pres. & CEO
ORDINANCE NO. 1663,
S-2006
An Ordinance authorizing the
city Mayor to require the city
treasurer or his duly authorized
representatives to apprehend
persons, corporations and
entities doing business in
Quezon City not issuing
receipts and/or sales invoice.
65
66
VICTOR B. ENDRIGA, Ph.D.
Cel. NO. 0920-9555444
Tel. No. (02) 928-8336
67
68