Local Treasury Operations Manual 2nd Edition Quiz

Professional Tax

• An annual tax levied on individuals engaged in a profession or calling, such as lawyers, doctors, architects, engineers, and others.
• The tax is regulated by the Professional Regulations Commission, Supreme Court, and other government agencies.
• The amount of professional tax shall not exceed Php 300.00, or the rate provided under a duly enacted local ordinance, subject to adjustment not exceeding 10% every 5 years.

Collection and Administration of Professional Tax

• The collection and administration of professional tax shall be guided by the following rules:
• A penalty for failure to issue and execute a warrant of levy within one year from the date of issuance shall be dismissed from the service.
• Levy may be repeated if necessary until the full amount due, including all expenses, is collected.

Action Assailing Validity of Tax Sale

• No court shall entertain any action assailing the validity of any sale at public auction of real property or rights therein until the taxpayer deposits with the court the amount for which the real property was sold, together with interest of 2% per month.
• The amount deposited shall be paid to the purchaser at the auction sale if the deed is declared invalid, but it shall be returned to the depositor if the action fails.
• Neither shall any court declare a sale at public auction invalid by reason of irregularities or informalities in the proceedings unless the substantive rights of the delinquent owner of the real property or the person having a legal interest therein have been impaired.

Taxation Principles

• The taxpayer's ability to pay must be considered, and it cannot be absolute or based on a hard and fast rule.
• Ability to pay is more equated with the progressive system of taxation, that is, the more you earn, the more tax you pay.
• Taxation must be based, as far as practicable, on ability to pay.
• A tax is said to be "equitable" if it is distributed fairly and based on the ability to pay.

Characteristics of a Good Tax System

• A good tax system must be levied and collected only for public purposes.
• The tax should be designed to support the services of the government and the recognized public needs.
• The tax must affect the area as a community rather than as individual.
• The tax must not be unjust, excessive, oppressive, or confiscatory.
• The tax must be reasonable in order not to be unjust or oppressive.

Exemptions and Concessions

• Certain entities, such as Independent Power Producers (IPPs), may be exempt from real property tax and other levies.
• Fees in court actions instituted by the provincial, city, or municipal treasurer under the provisions of the Local Government Code are exempt from the payment of court and sheriff's fees.

Local Treasury Operations

• The Local Treasury Operations Manual (LTOM) provides guidelines for the management of local government finances.
• The LTOM covers topics such as taxing powers of local government units, revenue sources, and taxation principles.