Const v. City Of Cabanatuan

Third Division]. (https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#fnt4) CONST., art. X, sec.

5 provides: Section 5. Each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees, and charges subject to such guidelines and limitations as the Congress may provide, consistent with the basic policy of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local governments.

(https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt5) National Power Corporation v. City of Cabanatuan, 449 Phil. 233, 250 (2003) [Per J. Puno, Third Division]. (https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt6) Id. at 250.

(https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt7) CONST., art. x, sec. 5.

(https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt8) Ferrer v. Bautista, 760 Phil. 652, 698 (2015) [Per J. Peralta, En Banc], citing Manila ElectricCompany v. Province of Laguna, 366 Phil. 428 (1999) [Per J. Vitug, Third Division]. (https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#fnt9) LOCAL Gov. CODE, sec.

130 provides: Section 130. Fundamental Principles. - The following fundamental principles shall govern the exercise of the taxing and other revenue-raising powers oflocal government units: (a) Taxation shall be uniform in each local government unit; (b) Taxes, fees, charges and other impositions shall: (1) be equitable and based as far as practicable on the taxpayer's ability to pay; (2) be levied and collected only for public purposes; (3) not be unjust, excessive, oppressive, or confiscatory; (4) not be contrary to law, public policy, national economic policy, or in restraint of trade; (c) The collection of local taxes, fees, charges and other impositions shall in no case be let to any private person; (d) The revenue collected pursuant to the provisions of this Code shall inure solely to the benefit of, and be subject to the disposition by, the local government unit levying the tax, fee, charge or other imposition unless otherwise specifically provided herein; and, (e) Each local government unit shall, as far as practicable, evolve a progressive system of taxation.

(https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt10) LOCAL Gov. CODE, sec. 132 provides: 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. (https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#fnt11) LOCAL Gov.

CODE, sec. 133 provides: 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: (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; (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, tolls for bridges or otherwise, or other taxes, fees, or charges in any form whatsoever upon such goods or merchandise; (f) Taxes, fees or charges on agricultural and aquatic products when sold by marginal farmers or fishermen; (g) Taxes on business enterprises certified to by the Board of Investments as pioneer or non-pioneer 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 products; (i) Percentage or value-added tax (VAT) on sales, barters or exchanges or similar transactions on goods or services except as otherwise provided herein; (j) Taxes on the gross receipts of transportation 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; (k) Taxes on premiums paid by way of reinsurance or retrocession; (l) Taxes, fees or 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, or other charges on Philippine products actually exported, except as otherwise provided herein; (n) 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 "Cooperative Code of the Philippines"

respectively; and (o) Taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities, and local government units. (https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt12) LOCAL Gov. CODE, sec.

186 provides: Section 186. Power To Levy Other Taxes, Fees or Charges. - Local government units may exercise the power to levy taxes, fees or charges on any base or subject not otherwise specifically enumerated herein or taxed under the provisions of the National Internal Revenue Code, as amended, or other applicable Jaws: Provided, That the taxes, fees, or charges shall not be unjust, excessive, oppressive, confiscatory or contrary to declared national policy: Provided, further, That the ordinance levying such taxes, fees or charges shall not be enacted without any prior public hearing conducted for the purpose.

(https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt13) LOCAL Gov. CODE, sec. 151, par.

1 provides: Section 151. Scope a/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.

(https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt14) LOCAL Gov. CODE, sec. 151, par.

2 provides: Section 151. Scope of Taxing Powers The rates of taxes that the city may levy may exceed the maximum rates allowed for the province ormunicipality by not more than fifty percent (50%) except the rates of professional and amusementtaxes. (https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt15) See Cagayan Electric Power and Light Co., Inc. v. City of Cagayan de Oro, 698 Phil. 788, 811 (2012) [Per J. Carpio, Second Division].

(https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt16) National Power Corporation v. City of Cabanatuan, 449 Phil. 233, 250 (2003) [Per J. Puno, Third Division]. (https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt17) Id. (https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt18) Rollo, pp. 1042-1043, Reply.

(https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt19) Id. at 133, Comment. (https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt20) Id.

at 132-133. (https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt21) LOCAL Gov. CODE, sec.

151, par. 2 provides: Section 151.

Scope of Taxing Powers. - ... 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.

(https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt22) LOCAL Gov. CODE, sec. 143(d), provides: Section 143.

Tax on Business. - The municipality may impose taxes on the following businesses: (d) On retailers. With gross sales or receipts for the preceding calendar year of Rate of Tax Per Annum P400,000.00 or less 2% more than P400,000.00 1 % (https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt23) Fifty percent of I% is 0.5%, which is added to the rate imposed by law to arrive at the maximum tax rate that a city may impose.

This may be summed up using the following equation: 0.5(x/l 00) + x = y, where: x is the rate imposed under the Local Government Code y is the maximum tax rate that a city may impose (multiplied by 100 to arrive at the percentage) (https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt24) Local Gov. Code, sec. 191.

(https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt25) Rollo, p. 133, Respondents' Comment on the Appeal to the Department of Justice. (https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#rnt26) The Local Government Code of 1991 took effect on January 1, 1992.

Meanwhile, Davao City amended its old tax code in 2006. The Lawphil Project - Arellano Law Foundation [](javascript:history.back\(1\)) [](https://lawphil.net/judjuris/juri2017/jun2017/gr211093so2017.html#top)