THE LOCAL GOVERNMENT CODE OF THE PHILIPPINES
LOCAL TAXATION AND FISCAL MATTERS
TITLE ONE. – LOCAL GOVERNMENT TAXATION CHAPTER 1. – GENERAL PROVISIONS
SECTION 128. Scope − The provision herein shall govern the exercise by provinces, cities, municipalities, and Barangays of their taxing and other revenue−raising powers.
SECTION 129. Power to Create Source of Revenue − Each local government unit shall exercise its power to create its own sources of revenue and to levy taxes, fees, and charges subject to the provisions herein, consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local government units.
SECTION 130. Fundamental Principles. − The following fundamental principles shall govern the exercise of the taxing and other revenue−raising powers of local government units:
Taxation shall be uniform in each local government unit;
Taxes, fees, charges and other impositions shall:
be equitable and based as far as practicable on the taxpayer's ability to pay;
be levied and collected only for public purposes;
not be adjust, excessive, oppressive, or confiscatory;
not be contrary to law, public policy, national economic policy, or in restraint of trade;
(3) The collection of local taxes, fees, charges and other impositions shall in no case be let to any private person;
(4) The revenue collected pursuant to the provisions of this Code shall inure solely to the benefit of, and be subject to disposition by, the local government unit levying the tax, fee, charge or other imposition unless otherwise specifically provided herein; and,
Each local government unit shall, as far as practicable, evolve a progressive system of taxation.
SECTION 131. Definition of Terms. − When used in this Title, the term:
(6) "Agricultural Product" includes the yield of the soil, such as corn, rice wheat, rye, hay, coconuts, sugarcane, tobacco, root crops, vegetables, fruits, flowers, and their by−products; ordinary salt; all kinds of fish; poultry; and livestock and animal products, whether in their original form or not.
The phrase "whether in their original form or not" refers to the transfers to the transformation of said products by the farmer, fisherman, producer or owner through the application of processes to preserve or otherwise to prepare said products for the market such as freezing, drying salting, smoking, or stripping for purposes of preserving or otherwise preparing said product s for market;
(7) "Amusement" is a pleasurable diversion and entertainment. It is synonymous to relaxation, avocation, pastime, or fun;
(8) "Amusement Places" include theaters, cinemas, concert halls, circuses and other places of amusement where one seeks admission to entertain oneself by seeing or viewing the show or performances;
(9) "Business" means trade or commercial activity regularly engaged in as a means of livelihood or with a view to profit;
(10) "Banks and other financial institutions" include non−bank financial intermediaries, lending investors, finance and investment companies, pawnshops, money shops, insurance companies, stock markets, stockbrokers and dealers in securities and foreign exchange, as defined under applicable laws, or rules and regulations thereunder;
(11) "Capital Investment" is the capital which a person employees in any undertaking, or which he contributes to the capital of a partnership, corporation, or any other juridical entity or association in a particular taxing jurisdiction
"Charges" refer to pecuniary liability, as rents or fees against persons or property;
(13) "Contractor" includes persons, natural or juridical, not subject to professional tax under Section 139 of this Code, whose activity consists essentially of the sale of kinds of services for a fee, regardless of whether or not the performance of the service calls for the exercise or use of the physical or mental faculties of such contractor or his employees.
As used in this Section, the term "contractor" shall include general engineering, general building and specialty contractors as defined under applicable laws; filling, demolition and salvage works contractors; proprietors or operators of mine drilling apparatus; proprietors or operators of dockyards; persons engaged in the installation of water system, and gas or electric light, heat, or power, proprietors or operators of smelting plants; engraving, plating, and plastic lamination establishments; proprietors or operators of establishments for repairing, repainting, upholstering, washing or greasing of vehicles, heavy equipment, vulcanizing, recapping and battery charging; proprietors or operators of furniture shops and establishment for planning or surfacing and recutting of lumber, and sawmills under contract and recutting of lumber, and sawmill under contract to saw or cut logs belongings to others proprietors or operators of dry−cleaning or dyeing establishments, steam laundries using washing machines; proprietors or owners of shops for the repair of any kind of mechanical and electrical devices, instruments, apparatus, or furniture and shoe repairing by machine or any mechanical contrivance; proprietors or operators of establishments or lots for parking purposes; proprietors or operators of tailor shops, dress shops, millineres and hatters, beauty parlors, barbershops, massage clinics, sauna, Turkish and Swedish baths, slenderizing and building saloons and similar establishments; photographic studios; funeral parlors; proprietors or operators of hotels, motels, and lodging houses; proprietors or operators of arrastre and stevedoring, warehousing, or forwarding establishments; master plumbers, smiths, and house or sign painters; printers, bookbinders, lithographers; publishers except those engaged in the publication or printing of any newspaper, magazine, review or bulletin which appears at regular intervals with fixed prices for subscription and sale and which is not devoted principally to the publication of advertisements, business agents, private detective or watchman agencies, commercial and immigration brokers, and cinematographic film owners, lessors and distributors.
(14) "Corporation" includes partnerships, no matter how created or organized, joint− stock companies, joint accounts (cuentas en participation), associations or insurance companies but does not include general professional partnership but does not include general professional partnership and a joint venture or consortium formed for the purpose of undertaking construction projects or engaging in petroleum, coal, geothermal, and other energy operations pursuant to an operating or consortium agreement under a service contract with the government. General professional partnership are partnership formed by persons for the sole purpose of exercising their common profession, no part of the income of which is derived from engaging in any trade or business.
The term "resident foreign" when applied to a corporation means a foreign corporation not otherwise organized under the laws of the Philippines but engaged in trade or business within the Philippines;
(15) "Countryside and Barangay Business Enterprise" refers to any business entity, association, or cooperative registered under the provisions of Republic Act Numbered Sixty−eight hundred ten (R.A. No. 6810)., otherwise known as "Magna Carta For Countryside and Barangay Business Enterprises (Kalakalan 20)'.
(16) "Dealer" means one whose business is to buy and sell merchandise, goods, and chattels as a merchant. He stands immediately between the producer or manufacturer and the consumer and depend for his profit not upon the labor he bestows upon his commodities but upon the skill and foresight with which he watches the market;
(17) "Fee" means a charge fixed by law or ordinance for the regulation or inspection of a business or activity;
(18) "Franchise" is a right or privilege, affected with public interest which is conferred upon private persons or corporations, under such terms and conditions as the government and its political subdivisions may impose in the interest of public welfare, security, and safety;
(19) "Gross Sales or Receipt" include the total amount of money or its equivalent representing the contract price, compensation or service fee, including the amount charged or materials supplies with the services and deposits or advance payments actually or constructively received during the taxable quarter for the services performed or to be performed for another person excluding discounts if determinable at the time of sales, sales return, excise tax, and value−added tax (VAT);
(20) "Manufacturer" includes every person who, by physical or chemical process, alters the exterior textures or form or inner substance of any raw material or manufactured product in such manner as to prepare it for special use or uses to which is could not have been put in its original condition, or who by any such process alters the quality of any such raw materials or manufactured or partially manufactured products so as to reduce it to marketable shape or prepare it for any of the use of industry, or who by any such process combines any such raw material or manufactured products with other materials or products of the same or of different kinds and in such manner that the finished products of such process or manufacture can be put to a special use or uses to which such raw material or manufactured or partially manufactured products in their original condition could not have been put, and who in addition alters such raw material or manufactured products, or combines the same to produce such finished products for the purpose of their sale or distribution to others and not for his own use or consumption;
(21) "Marginal Farmer or Fisherman" refers to an individual engaged in subsistence farming or fishing which shall be limited to the sale, barter or exchange of agricultural or marine products produced by himself
and his immediate family;
(22) "Motor Vehicle" means any vehicle propelled by any power other than muscular power using the public roads, but excluding road rollers, trolley cars, street−sweepers, sprinklers, lawn mowers, bulldozers, graders, fork−lifts, amphibian trucks, and cranes if not used on public roads, vehicles which run only on rails or tracks, and tractors, trailers, and traction engines of all kinds used exclusively for agricultural purposes;
(23) "Municipal Waters" includes not only streams, lakes, and tidal waters within the municipality, not being the subject of private ownership and not comprised within the national parks, public forest, timber lands, forest reserves or fishery reserves, but also marine waters included between two lines drawn perpendicularly to the general coastline from points where the boundary lines of the municipality or city touch the sea at low tide and a third line parallel with the general coastline and fifteen (15) kilometers from it. Where two (2) municipalities are so situated on the opposite shores that there is less than fifteen (15) kilometers of marine waters between them, the third line shall be equally distant from opposite shores of the perspective municipalities;
(24) "Operator" includes the owner, manager, administrator, or any other person who operates or is responsible for the operation of a business establishment or undertaking;
(25) "Peddler" means any person who, either for himself or on commission, travels from place to place and sells his goods or offers to sell and deliver the same. Whether a peddler is a wholesale peddler or a retail peddler of a particular commodity shall be determined from the definition of wholesale dealer or retail dealer as provided in this Title;
(26) "Persons" means every natural or juridical being, susceptible of rights and obligations or of being the subject of legal relations;
(27) "Residents" refer to natural persons who have their habitual residence in the province, city, or municipality where they exercise their civil rights and fulfill their civil obligations, and to juridical persons for whom the law or any other provision creating or recognizing them fixes their residence in a particular province, city, or municipality. In the absence of such law, juridical persons are residents of the province, city, or municipality where they have their legal residence or principal place of business or where they conduct their principal business or occupation;
(28) "Retail means a sale where the purchaser buys the commodity for his own consumption, irrespective of the quantity of the commodity sold;
(29) "Vessel" includes every type of boat, craft, or other artificial contrivance used, or capable of being used, as a means of transportation on water;
(30) "Wharfage" means a fee assessed against the cargo of a vessel engaged in foreign or domestic trade based on quantity, weight, or measure received and/or discharged by vessel; and
(31) "Wholesale" means a sale where the purchaser buys or imports the commodities for resale to persons other than the end user regardless of the quantity of the transaction.
SECTION 132. Local Taxing Authority − 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.
SECTION 133. Common Limitations on the Taxing Powers of Local Government Units. − Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and Barangays shall not extend to the levy of the following:
(32) Income tax, except when levied on banks and other financial institutions;
(33) Documentary stamp tax;
(34) Taxes on estates, inheritance, gifts, legacies and other acquisitions mortis causa, except as otherwise provided herein;
(35) Customs duties, registration fees vessels 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;
(36) Taxes, fee 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, tolls for bridges or otherwise, or other taxes, fees or charges in any form whatsoever upon such goods or merchandise;
(37) Taxes, fees, or charges on agricultural and aquatic products when sold by marginal farmers or fishermen;
(38) Taxes on business enterprises certified to by the Board of Investments as pioneer or non−pioneer for a period of six (6) and (4) four years, respectively from the date of registration;
(39) Excise taxes on articles enumerated under the National Internal Revenue Code, as amended, and taxes, fees or charges on petroleum products;
(40) Percentage or value added tax (VAT) on sales, barters or exchanges or similar transactions on goods or services except as otherwise provided herein;
(41) Taxes on the gross receipts of transaction contractors and persons engaged in the transportation of passengers or freight by hire and common carriers by air, land or water, except as provided in this Code;
Taxes on premium paid by way or reinsurance or retrocession;
(43) Taxes, fees or charges for the registration of motor vehicle and for the issuance of all kinds of licenses or permits for the driving thereof, except tricycles;
Taxes, fees or charges on Philippine products actually exported, except as otherwise provided herein;
(45) Taxes, fees, or charges, on Countryside and Barangay Business Enterprises and cooperatives duly registered under R.A. No. 6810 and Republic Act Numbered Sixty−nine hundred thirty−eight (R.A. No. 6938) otherwise known as the "Cooperatives Code of the Philippines" respectively; and
(46) Taxes, fees or charges, of any kind on the National Government, its agencies and instrumentalities, and local government units.
CHAPTER 2. − Specific Provisions on the Taxing and Other Revenue Raising Powers of Local Government Units
Article One − Provinces
SECTION 134. Scope of Taxing Powers. − Except as otherwise provided in this Code, the province may levy only the taxes, fees, and charges as provided in this Article.
SECTION 135. Tax on Transfer of Real Property Ownership. − (a) The province may impose a tax on the sale, donation, barter, or on any other mode of transferring ownership or title of real property at the rate of not more than fifty percent (50%) of one percent (1%) of the total consideration involved in the acquisition of the property or of the fair market value in case the monetary consideration involved in the transfer is not substantial, whichever is higher. The sale, transfer or other disposition of real property pursuant to R.A. No. 6657 shall be exempt from this tax.
(b) For this purpose, the Register of Deeds of the province concerned shall, before registering any deed, require the presentation of the evidence of payment of this tax. The provincial assessor shall likewise make the same requirement before canceling an old tax declaration and issuing a new one in place thereof. Notaries public shall furnish the provincial treasures with a copy of any deed transferring ownership or title to any real property within thirty (30) days from the date of notarization.
It shall be the duty of the seller, donor, transferor, executor or administrator to pay the tax herein imposed within sixty (60) days from the date of the execution of the deed or from the date of the decedent's death.
SECTION 136. Tax on Business of Printing and Publication. − The Province may impose a tax on the business of persons engaged in the printing and/or publication of books, cards, posters, leaflets, handbills, certificates, receipts, pamphlets, and other of similar nature, at a rate not exceeding fifty percent (50%) of one percent (1%) of the gross annual receipts for the preceding calendar year.
In the case of a newly started business, the tax shall not exceed one−twentieth (1/20) of one percent (1%) of the capital investment. In the succeeding calendar year, regardless of when the business started to operate, the tax shall be based on the gross receipts for the preceding calendar year, or any fraction thereof, as provided herein.
The receipts from the printing and/or publishing of books or other reading materials prescribed by the Department of Education, Culture and Sports as school texts or reference shall be exempt from the tax herein imposed.
SECTION 137. Franchise Tax − Notwithstanding any exemption granted by any law or other special laws, the province may impose a tax on business enjoying a franchise, at a rate exceeding fifty percent (50%) of one percent (1%) of the gross annual receipts for the preceding calendar year based on the incoming receipt, or realized, within its territorial jurisdiction.
In the case of a newly started business, the tax shall not exceed one−twentieth (1/20) of one percent (1%) of the capital investment. In the succeeding calendar year, regardless of when the business started to operate, the tax shall be based on the gross receipts for the preceding calendar year, or any fraction thereof, as provided herein.
SECTION 138. Tax on Sand, Gravel and Other Quarry Resources − The province may levy and collect not more than ten percent (10%) of fair market value in the locality per cubic meter of ordinary stones, sand, gravel, earth, and other quarry resources, as defined under the National Internal Revenue Code, as amended, extracted from public lands or from the beds of seas, lakes, rivers, streams, creeks, and other public waters within its territorial jurisdiction.
The permit to extract sand, gravel and other quarry resources shall be issued exclusively by the provincial governor, pursuant to the ordinance of the Sangguniang Panlalawigan.
The proceeds of the tax on sand, gravel and other quarry resources shall be distributed as follows:
Province − Thirty percent (30%);
(5) Component City or Municipality where the sand, gravel, and other quarry resources are extracted − Thirty percent (30%); and
Barangay where the sand, gravel, and other quarry resources are extracted − Forty percent (40%).
SECTION 139. Professional Tax − (a) The province may levy an annual professional tax on each person engaged in the exercise or practice of his profession requiring government examination as such amount and reasonable classification as the Sangguniang Panlalawigan may determine but shall in no case exceed Three hundred pesos (P300.00)
(b) Every person legally authorized to practice his profession shall pay the professional tax to the province where he practices his profession or where he maintains his principal office in case he practices his profession in several places: Provided, however, That such person who has paid the corresponding professional tax shall be entitled to practice his profession in any part of the Philippines without being subjected to any other national or local tax, license, or free for the practice of such profession.
(1) Any individual or corporation employing a person subject to professional tax shall require payment by that person of the tax on his profession before employment and annually thereafter.
(2) The professional tax shall be payable annually on or before the thirty first (31st) day of January must, however, pay the full tax before engaging therein. A line of profession does not become exempt even if conducted with some other profession for which the tax has been paid. Professionals exclusively employed in the government shall be exempt from the payment of this tax.
(3) Any person subject to the professional tax shall write in deeds, receipts, prescriptions, reports, books of account, plans and designs, surveys and maps, as the case may be, the number of the official receipt issued to him.
SECTION 140. Amusement Tax − (a) The province may levy an amusement tax to be collected from the proprietors, lessees, or operators of theaters, cinemas, concert halls, circuses, boxing stadia, and other places of amusement at a rate of not more than thirty percent (30%) of the gross receipts from admission fees.
(4) In the case of theaters of cinemas, the tax shall first be deducted and withheld by their proprietors, lessees, or operators and paid to the provincial treasurer before the gross receipts are divided between said proprietors, lessees, or operators and the distributors of the cinematographic films.
(5) The holding of operas, concerts, dramas, recitals, painting and art exhibitions, flower shows, musical programs, literary and oratorical presentations, except pop, rock, or similar concerts shall be exempt from the payment of the tax herein imposed.
(6) The Sangguniang Panlalawigan may prescribe the time, manner, terms and conditions for the payment of tax. In case of fraud or failure to pay the tax, the Sangguniang Panlalawigan may impose such surcharges, interests and penalties.
(7) The proceeds from the amusement tax shall be shared equally by the province and the municipality where such amusement places are located.
SECTION 141. Annual Fixed Tax For Every Delivery Truck or Van of Manufacturers or Producers, Wholesalers of, Dealers, or Retailers in, Certain Products. − (a) The province may levy an annual fixed tax for every truck, van or any vehicle used by manufacturers, producers, wholesalers, dealers or retailers in the delivery or distribution of distilled spirits, fermented liquors, soft drinks, cigars and cigarettes, and other products as may be determined by the Sangguniang Panlalawigan, to sales outlets, consumers, whether directly or indirectly, within the province in an amount not exceeding Five hundred pesos (P500.00).
(8) The manufacturers, producers, wholesalers, dealers, and retailers referred to in the immediately foregoing paragraph shall be exempt from the tax on peddlers prescribed elsewhere in this Code.
Article Two. − Municipalities
SECTION 142. Scope of Taxing Powers. _ Except as otherwise provided in this Code, municipalities may levy taxes, fees, and charges not otherwise levied by provinces.
SECTION 143. Tax and Business − The municipality may impose taxes on the following business:
(9) On manufacturers, assemblers, repackers, processors, brewers, distillers, rectifiers, and compounders of liquors, distilled spirits, and wines or manufacturers of any article of commerce of whatever kind of nature, in accordance with the following schedule:
With gross sales or receipts for the Preceding calendar year in Amount of Tax Per the amount of Annum Less than 10,000.00 165.00 P 10,000.00 or more but less than 15,000.00 220.00 15,000.00 or more but less than 20,000.00 302.00 20,000.00 or more but less than 30,000.00 440.00 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 less than 150,000.00 2,200.00 150,000.00 or more but less than 200,000.00 2,750.00 200,000.00 or more but less than 300,000.00 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 8,000.00 750,000.00 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 13,750.00 2,000,000.00 or more but less than 3,000,000.00 16,500.00 3,000,000.00 or more but less than 4,000,000.00 19,800.00 4,000,000.00 or more but less than 5,000,000.00 23,100.00 5,000,000.00 or more but less than 6,500,000.00 24,375.00
6,500,000.00 or more
at a rate not exceeding thirty−seven and a half percent (37 1/2%) of one percent (1%)
(10) On wholesalers, distributors, or dealers in any article of commerce of whatever kind or nature in accordance with the following schedule:
With gross sales or receipts for the Preceding calendar year in the Amount of Tax amount of: Per Annum Less than P1,000.00 18.00 P 1,000.00 or more but less than 2,000.00 33.00 2,000.00 or more but less than 3,000.00 50.00 3,000.00 or more but less than 4,000.00 72.00 4,000.00 or more but less than 5,000.00 100.00 5,000.00 or more but less than 6,000.00 121.00 6,000.00 or more but less than 7,000.00 143.00 7,000.00 or more but less than 8,000.00 165.00 8,000.00 or more but less than 10,000.00 187.00 10,000.00 or more but less than 15,000.00 220.00 15,000.00 or more but less than 20,000.00 275.00 20,000.00 or more but less than 30,000.00 330.00 30,000.00 or more but less than 40,000.00 440.00 40,000.00 or more but less than 50,000.00 660.00 50,000.00 or more but less than 75,000.00 990.00 75,000.00 or more but less than 100,000.00 1320.00 100,000.00 or more but less than 150,000.00 1870.00 150,000.00 or more but less than 200,000.00 2420.00 200,000.00 or more but less than 300,000.00 3300.00 300,000.00 or more but less than 500,000.00 4400.00 500,000.00 or more but less than 750,000.00 6600.00 750,000.00 or more but less than 1,000,000.00 8800.00 1,000,000.00 or more but less than 2,000,000.00 10000.00 2,000,000.00 or more at a rate not exceeding fifty percent (50%) of one percent (1%)
(c) On exporters, and on manufacturers, millers, producers, wholesalers, distributors, dealers or retailers of essential commodities enumerated hereunder at a rate not exceeding one−half (1/2) of the rates prescribed under subsections (a), (b) and (d) of this Section:
Rice and corn;
(5) Wheat or cassava flour, meat, dairy products, locally manufactured, processed or preserved food, sugar, salt and other agricultural, marine, and fresh water products, whether in their original state or not;
Cooking oil and cooking gas;
Laundry soap, detergents, and medicine;
(8) Agricultural implements, equipment and post harvest facilities, fertilizers, pesticides, insecticides, herbicides and other farm inputs;
Poultry feeds and other animal feeds;
School supplies; and
With gross sales or receipts for the Preceding calendar year Rate of Tax Per Annum of: P 400,000.00 or less 2% More than P 400,000.00 1%
Provided, however, That Barangays shall have the exclusive power to levy taxes, as provided under Section 152 hereof, on gross sales or receipts of the preceding calendar year of Fifty thousand pesos (P50,000.00) or less in the case of municipalities.
On contractors and other independent contractors, in accordance with the following schedule:
With gross receipts for the preceding Calendar year in the amount of:
Amount of Tax Per Annum
Less than P 5,000.00 27.50 P 5,000.00 or more but less than 10,000.00 61.60 10,000.00 or more but less than 15.000.00 104.50 15,000.00 or more but less than 20,000.00 165.00 20,000.00 or more but less than 30,000.00 275.00 30,000.00 or more but less than 40,000.00 385.00 40,000.00 or more but less than 50,000.00 550.00 50,000.00 or more but less than 75,000.00 880.00 75,000.00 or more but less than 100,000.00 1320.00 100,000.00 or more but less than 150,000.00 1980.00 150,000.00 or more but less than 200,000.00 2640.00 200,000.00 or more but less than 250,000.00 3630.00 250,000.00 or more but less than 300,000.00 4620.00 300,000.00 or more but less than 400,000.00 6160.00 400,000.00 or more but less than 500,000.00 8250.00 500,000.00 or more but less than 750,000.00 9250.00 750,000.00 or more but less than 1,000,000.00 10250.00 1,000,000.00 or more but less than 2,000,000.00 11500.00 2,000,000.00 or more 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 from interest, commissions and discounts from lending activities, income from financial leasing, dividends, rentals on property and profit from ex change or sale of property, insurance premium.
(g) On peddlers engaged in the sale of any merchandise or article or commerce, at a rate not exceeding Fifty pesos (P50.00) per peddler annually.
(11) On any business, not otherwise specified in the preceding paragraphs, which the Sanggunian concerned may deem proper to tax: Provided, That 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 concerned may prescribe a schedule of graduated tax rates but in no case to exceed the rates prescribed herein.
SECTION 144. Rates of Tax within the Metropolitan Manila Area. − The municipalities within the Metropolitan Manila Area may levy taxes at rates which shall not exceed by fifty percent (50%) the maximum rates prescribed in the preceding Section.
SECTIOIN 145. Retirement of Business. − A business subject to tax pursuant to the preceding sections shall, upon termination thereof, submit a sworn statement of its gross sales or receipts for the current year. If the tax paid during the year, the difference shall be paid before the business is concerned officially retired.
SECTION 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 business for which such tax has been paid. The tax on a business must be paid by the person conducting the same.
(b) In cases where a person conducts or operates two (2) or more of the businesses mentioned in Section 143 of this Code which are subject to the same rate of tax, the tax shall be computed on the combined total gross sales or receipts of the said two (2) or more related businesses.
(c) In cases where a person conducts or operates two (2) or more businesses mentioned in Section 143 of this Code which are subject to different rates of tax, the gross sales or receipts of each business shall be separately reported for the purpose of computing the tax due from each business.
SECTION 147. Fees and Charges. − The municipality may impose and collect such reasonable fees and charges on business and occupation and, except as reserved to the province in Section 139 of this Code, on the practice of any profession or calling, commensurate with the cost of regulation, inspection and licensing before any person may engage in such business or occupation, or practice such profession or calling.
SECTION 148. Fees for Sealing and Licensing of Weights and Measures. − (a) The municipality may levy fees for the sealing and licensing of weights and measures at such reasonable rates as shall be prescribed by the Sangguniang Bayan.
(b) The Sangguniang bayan shall prescribe the necessary regulations for the use of such weights and measures, subject to such guidelines as shall be prescribed by the Department of Science and Technology. The Sanggunian concerned shall, by appropriate ordinance, penalize fraudulent practices and unlawful possession or use of instruments of weights and measures and prescribe the criminal penalty therefore in accordance with the provisions of this Code. Provided, however, That the Sanggunian concerned may authorize the municipal treasurer to settle an offense not involving the commission of fraud before a case therefore is files in court, upon payment of a compromise penalty of not less than Two hundred pesos (P200.00).
SECTION 149. Fishery Rentals, Fees and Charges. − (a) Municipalities shall have the exclusive authority to grant fishery privileges in the municipal waters and impose rentals, fees or charges therefore in accordance with the provisions of this Section.
The Sangguniang Bayan may:
(1) Grant fishery privileges to erect fish corrals, oyster, mussels or other aquatic beds or bangus fry areas, within a definite zone of the municipal waters, as determined by it: Provided, however, That duly registered organizations and cooperatives of marginal fishermen shall have the preferential right to such fishery privileges: Provided, further, That the Sangguniang bayan may require a public bidding in conformity with and pursuant to an ordinance for the grant of such privileges: Provided, finally, That in the absence of such organizations and cooperatives or their failure to exercise their preferential right, other parties may participate in the public bidding in conformity with the above cited procedure.
(2) Grant the privilege to gather, take or catch bangus fry, prawn fry or kawag−kawag or fry of other species and fish from the municipal waters by nets, traps or other fishing gears to marginal fishermen free of any rental, fee, charge or any other imposition whatsoever.
(3) Issue for the operation of fishing vessels of three (3) tons or less for which purpose the Sangguniang bayan shall promulgate rules and regulations regarding the issuances of such licenses to qualified applicants under existing laws.
Provided, however, That the Sanggunian concerned shall, by appropriate ordinance, penalize the use of explosives, noxious or puissance substances, electricity, muro−ami, and other deleterious methods of fishing and prescribe a criminal penalty therefore in accordance with the provisions of this Code: Provided, finally, That the Sanggunian concerned shall have the authority to prosecute any violation of the provisions of applicable fishery laws.
SECTION 150. Situs of the Tax. − (a) For purposes of collection of the taxes under Section 143 of this Code, manufacturers, assemblers, repackers, brewers, distillers, rectifiers and compounders of liquor, distilled spirits and wines, millers, producers, exporters, wholesalers, distributors, dealers, contractors, banks and other financial institutions, and other businesses, maintaining or operating branch or sales outlet elsewhere shall record the sale in the branch or sales outlet making the sale or transaction, and the tax thereon shall accrue and shall be paid to the municipality where such branch or sales outlet is located. In cases where there is no such branch or sales outlet in the city or municipality where the sale or transaction is made, the sale shall be duly recorded in the principal office and the taxes due shall accrue and shall be paid to such city or municipality.
(b) The following sales allocation shall apply to manufacturers, assemblers, contractors, producers, and exporters with factories, project offices, plants, and plantations in the pursuit of their business:
(4) Thirty percent (30%) of all sales recorded in the principal office shall be taxable by the city or municipality where the principal office is located; and
(5) Seventy percent (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.
(c) In case of a plantation located at a place other than the place where the factory is located, said seventy percent (70%) mentioned in subparagraph (b) of subsection (2) above shall be divided as follows:
Sixty percent (60%) to the city or municipality where the factory is located; and
Forty percent (40%) to the city or municipality where the plantation is located.
(d) In case where a manufacturer, assembler, producer, exporter or contractor has two (2) or more factories, project offices, plants, or plantations located in different localities, the seventy percent (70%) mentioned in subparagraph (b) of subsection (2) above shall be prorated among the localities where the factories, project offices, plants, and plantations are located in proportion to their respective volume or production during the period for which the tax is due.
(e) The foregoing sales allocation shall be applied irrespective of whether or not sales are made in the locality where the factory, project office, plant or plan is located.
Article Two. − Cities
SECTION 151. Scope of Taxing Powers. − Except as otherwise provided in this Code, the city, may levy the taxes, fees, and charges which the province or municipality may impose: Provided, however, That the taxes, fees and charges levied and collected by highly urbanized and independent component cities shall accrue to them and distributed in accordance with the provisions of this code.
The rates of taxes that the city may levy may exceed the maximum rates allowed for the province or municipality by not more than fifty percent (50%) except the rates of professional and amusement taxes.
Article Four. − Barangays
SECTION 152. Scope of Taxing Powers. − The Barangays may levy taxes, fees, and charges, as provided in this Article, which shall exclusively accrue to them:
(a) Taxes − On stores or retailers with fixed business establishments with gross sales or receipts of the preceding calendar year of Fifty Thousand pesos (P50,000.00) or less, in the case of cities and Thirty thousand pesos (P30,000.00) or less, in the case of municipalities, at a rate not exceeding one percent (1%) on such gross sales or receipts.
(b) Service Fees or Charges − Barangays may collect reasonable fees or charges for services rendered in connectioin with the regulation or the use of Barangay−owned properties or service facilities such as palay, copra, or tobacco dryers.
(c) Barangay Clearance − No city or municipality may issue any license or permit for any business or activity unless a clearance is first obtained from the Barangay where such business or activity is located or conducted. For such clearance, the Sangguniang Barangay may impose a reasonable fee. The application for clearance shall be acted upon within seven (7) working days from the filing thereof. In the event that the clearance is not issued within the said period, the city or municipality may issue the said license or permit.
Other Fees and Charges − The Barangay may levy reasonable fees and charges:
On commercial breeding of fighting cocks, cockfighting and cockpits;
On places of recreation which charge admission fees; and
On billboards, signboards, neon signs, and outdoor advertisements.
Article Five. − Common Revenue−Raising Powers
SECTION 153. Service Fees and Charges. − Local government units may impose and collect such reasonable fees and charges for services rendered.
SECTION 154. Public Utility Charges. − The Sanggunian concerned may prescribe the terms and conditions and fix the rates for the imposition of toll fees or charges for the use of any public road, pier or wharf, waterway, bridge, ferry or telecommunication system funded and constructed by the local government unit concerned: Provided, That no such toll fees or charges shall be collected from officers and enlisted men of the Armed Forces of the Philippines and members of the Philippine National Police on mission, post office personnel delivering mail, physically−handicapped, and disabled citizens who are sixty−five (65) years or older.
When public safety and welfare so requires, the Sanggunian concerned may discontinue the collection of the tolls, and thereafter the said facility shall be free and open for public use.
Article Six. − Community Tax
SECTION 156. Community Tax. − Cities or municipalities may levy a community tax in accordance with the provisions of this Article.
SECTION 157. Individuals Liable to Community Tax. − Every inhabitant of the Philippines eighteen (18) years of age or over who has been regularly employed on a wage or salary basis for at least thirty (30) consecutive working days during any calendar year, or who is engaged in business or occupation, or who owns real property with an aggregate assessed value of One thousand pesos (P1,000.00) or more, or who is required by law to file an income tax return shall pay an annual community tax of Five pesos (P5.00) and an annual additional tax of One peso (P1.00_ for every One thousand pesos (P1,000.00) of income regardless of whether from business, exercise of profession or from property which in no case shall exceed Five thousand pesos (P5,000.00).
In the case of husband and wife, the additional tax herein imposed shall be based upon the total property owned by them and the total gross receipts or earnings derived by them.
SECTION 158. Juridical Persons Liable to Community Tax. − Every corporation no matter how created or organized, whether domestic or resident foreign, engaged in or doing business in the Philippines shall pay an annual community tax of Five hundred pesos (P500.00) and an annual additional tax, which, on no case, shall exceed Ten thousand pesos (P10,000.00) in accordance with the following schedule:
(1) For every Five thousand pesos (P5,000.00) worth of real property in the Philippines owned by it during the preceding year based on the valuation used for the payment of the real property tax under existing laws,
found in the assessment rolls of the city or municipality where the real property is situated − Two pesos (P2.00); and
(2) For every Five thousand pesos (P5,000.00) of gross receipts or earnings derived by it from its business in the Philippines during the preceding year − Two pesos (P2.00).
The dividends received by a corporation from another corporation however shall, for the purpose of the additional tax, be considered as part of the gross receipts or earnings of said corporation.
SECTION 159. Exemption. − The following are exempt from the community tax:
Diplomatic and consular representatives; and
Transient visitors when their stay in the Philippines does not exceed three (3) months.
SECTION 160. Place of Payment. − The community tax shall be paid in the place of residence of the individual, or in the place where the principal office of the juridical entity is located.
SECTION 161. Time for Payment; Penalties for Delinquency. − (a) The community tax shall accrue on the first (1st) day of January of each year which shall be paid not later than the last day of February of each year. If a person reaches the age of eighteen (18) years or otherwise loses the benefit of exemption on or before the last day of June, he shall be liable for the community tax on the day he reaches such age or upon the day the exemption ends. However, if a person reaches the age of eighteen (18) years or loses the benefit of exemption on or before the last day of June, he shall be liable for the community tax on the day he reaches such age or upon the day the exemption ends. However, if a person reaches the age of eighteen (18) years or loses the benefit of exemption on or before the last day of March, he shall have twenty (20) days to pay the community tax without becoming delinquent.
Persons who come to reside in the Philippine or reach the age of eighteen (18) years on or after the first (1st) day of July of any year, or who cease to belong to an exempt class on or after the same date, shall not be subject to the...