4. Assessment and Collection of Local Taxes

Tax Period

The tax period shall be the calendar year, unless otherwise provided in the LGC. (LGC, Sec. 165)¹

Manner of Payment

It may be paid in quarterly installments. (LGC, Sec. 165)²

Accrual of Tax

GR: It shall accrue on the January 1 of each year, unless otherwise provided in the LGC.

EXCEPTION: New taxes, fees or charges, or changes in the rates thereof, shall accrue on the 1st day of the quarter next following the effectivity of the ordinance imposing such new levies or rates. (LGC, Sec. 166)³

Time of Payment

Unless otherwise provided in the LGC, all local taxes, fees, and charges shall be paid within the first 20 days of January or of each subsequent quarter, as the case may be. The sanggunian may, for a justifiable cause, extend the time for payment of such taxes without surcharges or penalty for a period not exceeding 6 months. (LGC, Sec. 167)⁴

Surcharges and Penalties on Unpaid Taxes, Fees, or Charges

The sanggunian may impose the following:

• Surcharge - not exceeding 25% of the unpaid taxes, fees or charges not paid on time.
• Interest - not exceeding 2% per month of the unpaid taxes, fees or charges including surcharges, until such amount is fully paid but in no case shall the total interest on the unpaid amount exceed 36 months. (LGC, Sec. 168)⁵
• On any other revenue due an LGU, except voluntary contributions or donations, interest shall be collected at a rate not exceeding 2% per month from the date it is due until it is paid, but in no case shall the total interest on the unpaid amount or a portion thereof exceed 36 months. (LGC, Sec. 169)⁶

Authority of the Local Treasurer

• All local taxes, fees and charges shall be collected by the provincial, city, municipal or barangay treasurer, or their duly authorized deputies.

The provincial, city or municipal treasurer may designate the barangay treasurer as his deputy to collect local taxes, fees or charges. In case a bond is required for the purpose, the provincial city or municipal government shall pay premiums in addition to the premiums of the bond that may be required under LGC. (LGC, Sec. 170)⁷

City Treasurer cannot be compelled by mandamus to accept payment of taxes, if in his reasoning and assessment, the payment is incorrect or deficient. (San Juan v. Castro, G.R. No. 174617, 27 December 2007)⁸

• He may examine the books of accounts and pertinent records of businessmen in order to ascertain, assess, and collect the correct amount of taxes, fees, and charges.

The examination shall be made during regular business hours, only once for every tax period, and shall be certified by the examining official. Such certification shall be made of record in the books of accounts of the taxpayer examined.

In case the examination is made by a duly authorized deputy of the local treasurer, the written authority of the deputy shall specifically state the name, address, and business of the taxpayer whose books, accounts, and pertinent records are to be examined, the date and place of such examination, and the procedure to be followed in conducting the same. (LGC, Sec. 171)⁹

Tax Period

The tax period shall be the calendar year, unless otherwise provided in the LGC. (LGC, Sec. 165)¹⁰

Manner of Payment

It may be paid in quarterly installments. (LGC, Sec. 165)¹¹

Accrual of Tax

GR: It shall accrue on the January 1 of each year, unless otherwise provided in the LGC.

EXCEPTION: New taxes, fees or charges, or changes in the rates thereof, shall accrue on the 1st day of the quarter next following the effectivity of the ordinance imposing such new levies or rates. (LGC, Sec. 166)¹²

Time of Payment

Unless otherwise provided in the LGC, all local taxes, fees, and charges shall be paid within the first 20 days of January or of each subsequent quarter, as the case may be. The sanggunian may, for a justifiable cause, extend the time for payment of such taxes without surcharges or penalty for a period not exceeding 6 months. (LGC, Sec. 167)¹³

Surcharges and Penalties on Unpaid Taxes, Fees, or Charges

The sanggunian may impose the following:

• Surcharge - not exceeding 25% of the unpaid taxes, fees or charges not paid on time.
• Interest - not exceeding 2% per month of the unpaid taxes, fees or charges including surcharges, until such amount is fully paid but in no case shall the total interest on the unpaid amount exceed 36 months. (LGC, Sec. 168)¹⁴
• On any other revenue due an LGU, except voluntary contributions or donations, interest shall be collected at a rate not exceeding 2% per month from the date it is due until it is paid, but in no case shall the total interest on the unpaid amount or a portion thereof exceed 36 months. (LGC, Sec. 169)¹⁵

Authority of the Local Treasurer

• All local taxes, fees and charges shall be collected by the provincial, city, municipal or barangay treasurer, or their duly authorized deputies.

The provincial, city or municipal treasurer may designate the barangay treasurer as his deputy to collect local taxes, fees or charges. In case a bond is required for the purpose, the provincial city or municipal government shall pay premiums in addition to the premiums of the bond that may be required under LGC. (LGC, Sec. 170)¹⁶

City Treasurer cannot be compelled by mandamus to accept payment of taxes, if in his reasoning and assessment, the payment is incorrect or deficient. (San Juan v. Castro)¹⁷

• He may examine the books of accounts and pertinent records of businessmen in order to ascertain, assess, and collect the correct amount of taxes, fees, and charges.

The examination shall be made during regular business hours, only once for every tax period, and shall be certified by the examining official. Such certification shall be made of record in the books of accounts of the taxpayer examined.

In case the examination is made by a duly authorized deputy of the local treasurer, the written authority of the deputy shall specifically state the name, address, and business of the taxpayer whose books, accounts, and pertinent records are to be examined, the date and place of such examination, and the procedure to be followed in conducting the same. (LGC, Sec. 171)¹⁸