LTOM Book 2: LGUs Taxing Powers (Sections 37-47)

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Questions and Answers

What is the maximum timeframe for the Sanggunian Panlungsod to return a document with recommendations after receiving an ordinance?

10 days

30 days (correct)

45 days

20 days

What happens if no action is taken by the Sanggunian Panlungsod within 30 days of receiving an ordinance?

The ordinance is automatically repealed.

The ordinance becomes ineffective.

The ordinance is presumed valid. (correct)

The ordinance is sent back for revision.

Which of the following does NOT fall under the taxing powers of local government units?

Levying taxes imposed by province at prescribed rates

Collecting surcharges on late payments

Levying taxes on business not exceeding 50% of the maximum rate

Levying taxes on personal property (correct)

What is the penalty imposed for late payment of taxes according to the stipulated conditions?

A surcharge of 25% plus 2% monthly interest Signup and view all the answers

When does the TFC accrue according to the regulations provided?

On the 1st day of January Signup and view all the answers

How many consecutive days must a revenue ordinance be published in a local newspaper of general circulation?

3 days Signup and view all the answers

What action is required if a local treasurer wants to implement a new tax rate?

Collect TFC based on new rates Signup and view all the answers

What is the minimum notice period required before a public hearing for interested parties?

10 days Signup and view all the answers

What is required for the Sanggunian to approve an ordinance after the local chief executive's veto?

2/3 votes of its members Signup and view all the answers

How long does the Sanggunian have to review tax ordinances for component cities and municipalities?

30 days Signup and view all the answers

What happens if the Sanggunian does not take action on a resolution within 30 days?

The ordinance is presumed valid Signup and view all the answers

Which document must the Secretary of Sanggunian prepare during a public hearing?

Hearing minutes Signup and view all the answers

What is the publication requirement for tax ordinances after approval by the local chief executive?

Within 10 days Signup and view all the answers

What is the fundamental principle of taxation for LGUs regarding public purposes?

Taxes must be collected for public purposes only. Signup and view all the answers

How often can LGUs adjust tax rates, and what is the maximum increase allowed?

Every five years with a maximum of 10%. Signup and view all the answers

Who has the authority to impose Tax on Fees and Charges (TFC) within a Local Government Unit?

The Sanggunian. Signup and view all the answers

What is one of the restrictions on taxation imposed upon LGUs?

Taxation must not contravene national economic policies. Signup and view all the answers

What role does the Local Treasurer have during the drafting stage of a local revenue measure?

To assist in the preparation of the drafting of the measure. Signup and view all the answers

Which types of businesses are LGUs prohibited from imposing TFC on?

Businesses reserved for provinces. Signup and view all the answers

In terms of revenue sources, how must the local revenues be generated?

From authorized sources as defined by law. Signup and view all the answers

What is the significance of historical data in the drafting stage of a local revenue measure?

To justify the proposed revenue ordinance based on past collections. Signup and view all the answers

Signup and view all the answers

Study Notes

LTOM Book 2, Sections 37-47: Taxing Powers of LGUs

LGUs have power to create revenue sources and levy taxes
Local revenues are generated from sources authorized by law
All monies received by LGUs are accounted for as local funds

Section 38: Fundamental Principles of Taxing and Revenue Raising Power of LGUs

Taxation must be equal and uniform within each LGU
Taxation must be equitable and practicable
Taxes must only be levied for public purposes
Taxes must not be unjust, excessive, or oppressive
Taxes cannot violate national economic policy or trade
Taxes cannot be collected by private individuals
Local taxes cannot be shared with the national government
The taxation system must become progressively more equitable

Section 39: Power of LGUs to Levy TFC

LGUs can levy taxes not covered under the National Internal Revenue Code (NIRC)
Cities and municipalities can levy taxes on businesses, excluding those reserved for provinces

Section 40: Authority to adjust rates

Tax rates can be adjusted every 5 years, but not exceeding 10%.
Retailer tax adjustments must increase by a minimum of 1%

Section 41: Valid Tax Ordinances and Revenue Measures

The Sanggunian has the power to impose taxes
Tax ordinances must conform to local government code provisions

Procedures and Role of Local Treasurers

Drafting Stage: Local Treasurers collate data, prepare historical data on collections, and assist with preparing the revenue ordinance
Deliberation and Refinement Stage: The Sanggunian reviews the ordinance, holds public hearings, and approves it. The Local Treasurer attends to justify the proposed ordinance.
Publication Stage: The ordinance is published for 3 consecutive days in a local newspaper and posted in 2 conspicuous public places (3 consecutive days in a general circulation newspaper, same 2 posting requirements).
Implementation Stage: The approved ordinance is implemented

Procedural Requirements for a Tax Ordinance and Revenue Measures

Written Notice: Notifying affected parties
Public Hearing: Meeting, with minutes taken, to continue until full deliberation
Approval of Ordinances: The approving local chief executive (LCE) signs each page. Veto by LCE is communicated to the Sanggunian within the appropriate timeframe (15 days in province, 10 days in city/municipality)
Publication of Tax Ordinance/Revenue Measures: Publishing within 10 days after approval.
Tax Ordinance Review: Components of cities and municipalities review
Forwarding Approved Ordinance Copies: Sent in 3 days by the Secretary of the Sanggunian to the proper higher-level Sanggunian (panlalawigan or lungsod).

Taxing Powers of Provinces, Cities and Municipalities

Cities: Collect taxes exceeding the province's allowance (without exceeding 50% maximum rate), except for professional/amusement taxes
Municipalities (within Manila Area): - Levy taxes on businesses, not exceeding 50% of the maximum rate prescribed - Municipalities can levy taxes prescribed for the province, but no higher
Common Limitations: cannot levy income tax, documentary stamp tax, or taxes on estates, inheritances, etc.

Section 47: Collection of Taxes

Taxes are paid in quarterly installments by the 20th day of January, with extensions possible up to 6 months.
Surcharge of 25% and 2% monthly interest may apply, capped at 36 months.

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Description

Explore the taxing powers of Local Government Units (LGUs) as outlined in Sections 37-47 of LTOM Book 2. Understand fundamental principles of taxation, revenue raising, and the authority of LGUs to levy taxes not covered by national laws. This quiz delves into the equitable and just nature of local tax systems.