TAX REMEDIES AND ADMINISTRATIVE MATTERS IN LOCAL TAXATION

Accrual of taxes

Unless otherwise provided in the Code, all local taxes, fees and charges shall accrue on the first
day of January of each year.

New taxes, fees or charges, or charges in the rates thereof, shall accrue on the first day of the
quarter of the next following the effectivity of the ordinance imposing such new levies or rates.
[Section 166, Local Government Code]

Tax period and time of payment

Calendar year unless otherwise provided

Taxes shall be paid within the first twenty (20) days of January or of each subsequent quarter,
as the case may be.

The sanggunian concerned may, for a justifiable reason or cause, extend the time for payment
of such taxes, fees, or charges without surcharges or penalties, but only for a period not
exceeding six (6) months. [Section 165 and 167, Local Government Code]

Local government lien

Local taxes, fees, charges and other revenues constitute a lien, superior to all liens, charges or
encumbrances in favor of any person, enforceable by appropriate administrative or judicial
action, not only upon any property or rights therein which maybe subject to the lien but also
upon property used in business, occupation or calling, or exercise of privilege with respect to
which the lien is imposed.

The lien is extinguished upon payment of the tax, fee or charge, including the interest and
surcharges. [Section 173, Local Government Code]

Civil remedies for collection

1. By administrative action
a. Distraint of personal property
b. Levy upon real property
2. By judicial action [Section 174, Local Government Code]

Period of assessment

Local taxes, fees, or charges shall be assessed within five (5) years from the date they became
due. [Section 194(a), Local Government Code]

In case of fraud or intent to evade the payment of taxes, fees, or charges, the same may be
assessed within ten (10) years from discovery of the fraud or intent to evade payment. [Section
194(b), Local Government Code]

Period of collection

Local taxes, fees, or charges may be collected within five (5) years from the date of assessment
of administrative or judicial action. [Section 194 , Local Government Code]

Suspension of period of assessment and collection

1. The treasurer is legally prevented from making the assessment or collection.
2. The taxpayer requests for a reinvestigation and executes a waiver in writing before expiration of
the period within which to assess or collect.

3. The taxpayer is out of the country or otherwise cannot be located.

Government Code]

[Section 194(d), Local

PROCEDURE FOR PROTEST OF ASSESSMENT

1. Notice of Assessment
When the local treasurer or his duly authorized representative finds that correct taxes, fees, or
charges have not been paid, he shall issue a notice of assessment stating the nature of the tax, fee or
charge, the amount of deficiency, the surcharge, interests and penalties.
[Section 195, Local
Government Code]
2. Written protest
Within sixty (60) days from the receipts of the notice of assessment, the taxpayer may file a
written protest with the local treasurer contesting the assessment; otherwise, the assessment shall
become final and executory. [Section 195, Local Government Code]
3. Decision
The local treasurer shall decide the protest within sixty (60) days from the time of its filing. If
the treasurer finds the protest to be wholly or partly meritorious, he shall issue a notice canceling wholly
or partially the assessment. However, if the local treasurer finds the assessment to be wholly or partly
correct, he shall deny the protest wholly or partly with notice to the taxpayer. [Section 195, Local
Government Code]
4. Appeal
The taxpayer shall have thirty (30) days from the receipt of the denial of the protest or from the
lapse of the sixty-day period prescribed within which to appeal with the court of competent jurisdiction;
otherwise, the assessment becomes conclusive and unappealable. [Section 195, Local Government
Code]

Claim for refund or tax credit

Remedy after payment in cases where tax was erroneously or illegally collected.

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 local
treasurer. [Section 196, Local Government Code]

Written claim for refund or credit must be filed with the treasurer within two (2) years form the
date of payment of the tax, fee or charge or from the date the taxpayer is entitled to a refund or
credit (doctrine of supervening cause therefore applies). [Section 196, Local Government Code]

Note: There is no provision governing the procedure in case the claim for refund or credit is denied or
not acted upon by the local treasurer. The same procedure for protest of assessment may be followed
and, as such, the taxpayer may appeal with the court of competent jurisdiction.

Injuction on the collection of local taxes

Unlike in the NIRC, the LGC does not specifically prohibit the issuance of injunctions on the
collection of local taxes.

However, injunctions cannot be issued on the basis of the alleged unconstitutionality of the tax
ordinance. Until the tax ordinance is declared to be unconstitutional, it is presumed to be valid
and constitutional.