REMEDIES OF THE LOCAL GOVERNMENT UNITS ----------------------------
I. CIVI CIVIL L RE REME MEDI DIES ES to Efe fect ct Coll Collec ecti tion on o Taxes axes:: A. Local Government’s Lien Section !"# o t$e Local Government Co%e &'LGC(&). Loca Locall tax taxes, es, fees fees,, char charge ges s and and othe otherr reven evenue ues s const constit itut ute e a lien lien,, superior to all liens, charges or encumbrances in favor of any person, enforceable by appropriate administrative or judicial action, not only upon any property or rights therein which may be subject to the lien but but also also upon upon prop proper erty ty used used in busi busine ness, ss, occu occupat patio ion, n, prac practi tice ce of profession or calling, or exercise of privilege with respect to which the lien is imposed. How local government lien is extinguished? (last sentence of Section !" of Local #overnment $ode% &he lien may only be extinguished upon full payment of the delin'uent local taxes fees and charges including related surcharges surcharges and interest. •
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*. Civil Reme%ies *+ a%ministrative action t$ro,-$ %istraint o ersonal roert+ an% lev+ ,on ersonal roert+ Section !"/ o t$e Local Government Co%e). !. Distraint& any personal property belonging to the taxpayer or subject to the lien (Section !, L#$% Ill,stration !. 0rocess in Distraint +elin'uency
ssessment (within -/ years from when when the the tax taxes, es, fees fees or char charge ges s 0ssu 0ssuan anc ce of cer certi1c ti1cat ate e show showin ing g the the fact act of deli delin' n'ue uenc ncy y (ser (serve ves s as war warrant rant22 with within in -/ -/ Sei3ure or con1scation of assets su4cient to satisf )ublication )osting )osting of 5otice of sale at public ccounting of +istrained 6eport 6eport of the proceeding to tha Local $hief +isposition of the proceeds of the sale by application of such proceeds to the delin'uency )age *
6eturn 6eturn of the 7alance to the owner (if there
1ote: Section !- of the L#$ provides that at any time prior to the consummation of the sale, the taxpayer may pay the proper charges. 2$en is ersonal roert+ consi%ere% sol% to LG34 Section !-(e% of the L#$ provides that should the distrained property be not disposed of within 8/ days, the same shall be considered as sold to the L#9. 2ill In5,nction lie a-ainst Collection o Local taxes4 9nli:e the 506$, the local &ax $ode does not contain any speci1c provision prohibiting courts from enjoining collection of &axes. Such statutory lapse or intent may have allowed preliminary injunction where local taxes are involved. 7ut it cannot negate the procedural rules and re'uirements under 6ule ;< of the 6ules of $ourt . (Valley Trading Co. vs. CFI of Isabela GR No. 49529, Mar! "# #9$9%. 6. Lev+&any real property belonging to the delin'uent taxpayer (Section !;=
+elin'uency ssessment(within -/ years from when the taxes, fees or charges became due(Sec. >, )reparation of certi1cate (operates with force and eect legal execution throughout the Levy of of a real property (before, simultaneous or after distraint of personal property2 within - years from @ritten 5otice to (a% ssessor, (b% 6egistrar of +eeds for annotation dvertisement for sale or auction of the property levied for "/ days (posting and publication.% Sale 6eport of the sale to the +isposition of the proceeds of the sale by application of such proceeds to the tax 6eturn to the taxpayer of any excess in the
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Axecution of the 1nal deed to the purchaser after the lapse of the one (% year redemption period (in case
1ote: t any time before the date 1xed for the sale, the taxpayer may stay the proceedings by paying the proper charges. Instances 2$en t$e LG3 ma+ ,rc$ase t$e real roert+ a%vertise% or sale.
. &here is no highest bidder2 8. &he highest bid is for an amount insu4cient to pay the real property tax, fees, charges, surcharges, interests or penalties. (Section < L#$% 7,rt$er Distraint an% Lev+: &he remedies of distraint and levy may be repeated if necessary until the full amount due including all expenses is collected. 0roerties Exemt rom Distraint an% Lev+ Section !89 LGC) &he following property shall be exempt from distraint and the levy, attachment or execution thereof for delin'uency in the payment of any local tax, fee or charge, including the related surcharge and interestB
(a% &ools and implements necessarily used by the delin'uent taxpayer in his trade or employment2 (b% Cne (% horse, cow, carabao, or other beast of burden, such as the delin'uent taxpayer may select, and necessarily used by him in his ordinary occupation2 (c% His necessary clothing, and that of all his family2 (d% Household furniture and utensils necessary for house:eeping and used for that purpose by the delin'uent taxpayer, such as he may select, of a value not exceeding &en thousand pesos ()/,///.//%2 (e% )rovisions, including crops, actually provided for individual or family use su4cient for four (% months2 (f% &he professional libraries of doctors, engineers, lawyers and judges2 (g% Cne 1shing boat and net, not exceeding the total value of &en thousand pesos ()/, ///.//%, by the lawful use of which a 1sherman earns his livelihood2 and (h% ny material or article forming part of a house or improvement of any real property. II. ;,%icial Action &he local government unit concerned may enforce the collection of delin'uent taxes, fees, charges or other revenues by civil action in any court of competent jurisdiction within 1ve (-% years from the date the taxes, fees and surcharges became due.
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@here there is fraud or intent to evade payment of taxes, fees or charges it shall be ten (/% years from discover of such fraud or intent to evade. ;,ris%iction&
Co,rt o Tax Aeals&En *anc &))ella*e . +ecisions or resolutions over petitions for review of the $ourt in +ivisions in the exercise of its exclusive appellate jurisdiction over local taxes decided by the 6egional &rial $ourt (6&$% in the exercise of their original jurisdiction. 8. Cver petitions for review of judgments, resolutions or orders of the 6egional &rial $ourt (6&$% in the exercise of their appellate jurisdiction over tax collection cases originally decided by the Detropolitan &rial $ourts, Dunicipal &rial $ourts, Dunicipal $ircuit &rial $ourts and Dunicipal &rial $ourts in $ities in their respective territorial jurisdiction. S,reme Co,rt &))ella*e 9nder 6ule - of the 6ules of $ourt on cases decided by the $ourt of &ax ppeals or the 6egional &rial $ourt on pure 'uestions of law. )age *
(1ote: Since it is an ordinary civil action for collection, the 6ules of $ourt apply regarding the reglementary periods and other provisions pertaining to a civil suit%
TAXPAYER’S REMEDIES FROM ASSESSMENT OF LOCAL TAXES OTHER THAN REAL PROPERTY TAXES (Under the Lo!" Go#ern$ent Code% --------------------------------------
Local treasurer assesses local taxes within 1ve (-% years from date they become due or ten (/% years from discovery of fraud or intent
Local treasurer issues notice of
&axpayer 1les written protest within ;/ days from receipt of
0f the protest is made within the prescribed period, the local treasurer decides within ;/ days.
0f Local &reasurer does not decide within ;/ days, taxpayer appeals to $ourt of competent jurisdiction (regular courts% within "/ days from lapse of ;/ days. 0f local treasurer issues notice cancelling partially or wholly the assessment or if Local &reasurer does not grant protest, same procedure as lapse of ;/ day TAX REMEDIES OF TAXPAYER ----------------------------------------
ppeal to $ourt of &ax ppeals ($&% division but if the decision is from a 6egional &rial $ourt (6&$% exercising appellate jurisdiction, appeal should be )age * 0f +ivision decides against taxpayer, Dotion for 6econsideration within - days with same +ivision. 0f the Dotion for 6econsideration is denied, petition for review with $& en banc. ppeal to the Supreme $ourt if still decided against
I.
ADMI1ISTRATIVE REMEDIES: A. *eore assessment !. =,estion t$e constit,tionalit+ or le-alit+ o tax or%inance or reven,e meas,res on aeal: i. @ithin "/ day from eectivity thereof, 1le an appeal to the Secretary of Eustice2 ii. &he decision of the Secretary of Eustice must be rendered within ;/ days from the date of the receipt of the appeal2 iii. &axpayer must 1le an appropriate action within "/ days fromB a. &he receipt of the decision of the Secretary of Eustice, or b. Lapse of the ;/=day period to decide. iv. Such appeal shall not have the eect of suspending the eectivity of the ordinance and the accrual and payment of the tax. 6. Declarator+ relie >$enever alica?le. *. Ater assessment !. 0rotest: i. 0F &HA6A 0S )6C&AS& F0LA+B @ithin ;/ days from receipt of notice of assessment, 1le a written protest with the local treasurer. )ayment under
Local &reasurer shall have ;/ days from the date of 1ling of the protest to decide 0f the Local treasurer 1nds the protest meritorious in wholes or in part, he shall issue a notice cancelling wholly or partly the
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0F 5C )6C&AS& F0LA+B the assessment shall become 1nal and executory.
0f not meritorious in whole or in part, he shall deny the protest wholly or partly with notice to the taxpayer. &axpayer shall have "/ days from receipt of the denial of the protest or from the lapse of ;/ day period to decide within which to appeal with the court of competent jurisdiction2 otherwise, the assessment becomes
6. Claim or re,n% or tax cre%it: a. Dust 1le a written claim for refund or credit of tax, fee or charges erroneously or illegally collected. b. @ithin two wee:s from payment or date entitled to such refund or credit.
C&HA6@0SA, no case or proceeding shall be maintained in any court. 1ote: unli:e in internal revenue taxes, the supervening cause applies in local taxation because the period for the 1ling of claims for refund or credit of local taxes is counted not necessarily from the date of payment but from the date the taxpayer is entitled to a refund or credit. #. Ri-$t o re%emtion: Cne year from the date of sale or from the date of forfeiture. 1ote: the owner shall not be deprived of possession and to rentals or income thereof until the expiration of the time allowed for its redemption.
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;3DICIAL REMEDIES: A. Co,rt action: . @ithin thirty days after receipt of decision or lapse of sixty days in case of Secretary of EusticeGs inaction. 8. @ithin thirty days from receipt when protest of assessment is denied or lapse of sixty days in case of local treasurerGs inaction. ". 0f no action is ta:en by the treasurer in refund cases and the two=year period is about to lapse. . 0f remedies available does not provide plain, speedy and ade'uate remedy. *. Action or %eclarator+ relie. C. In5,nction& if irreparable damage would be caused to the taxpayer and no ade'uate remedy is available.
PRESCRIPTIVE PERIODS FOR THE ASSESSMENT AND COLLECTION OF LOCAL TAXES -------------------------------------------
0RESCRI0TIVE 0ERI
. Local taxes, fees or charges= 1ve (-% years from the date they became due. 8. @hen there is fraud or intent to evade the payment of taxes, fees, or charges= ten (/% years from discovery of the fraud or intent to evade the payment. 0RESCRI0TIVE 0ERI
. &he treasurer is legally prevented from the assessment or collection of the tax2 8. &he taxpayer re'uests for a reinvestigation and executes a waiver in writing before the expiration of the period within which to assess or collect2 and ". &he taxpayer is out of the country or otherwise cannot be located.
T!&'!er’) Re$ed*e) In#o"#*n+ Co""et*on o, Re!" Pro'ert T!& (Lo!" Go#ern$ent Code% ------------------------------------
ssessor submits assessment roll to Local &reasurer on or before the "st of +ecember each year (+e. 24$,GC%
)osting of notice of deadline for payment at a conspicuous place at the L#9 hall C6 publish the same in a newspaper of general circulation in the L#9 once a wee: for two consecutive wee:s. (+e. 249,GC% Local &reasurer collects the tax starting Ean of calendar year
&axpayers pay the tax then 1les a protest within "/ days from payment of the tax with the treasurer who shall decide within ;/ days from receipt (+e. 252-a,GC%
)rotest decided in favour of the taxpayer, the amount or portion of the )age * <
tax protested shall be refunded or )rotest applied as tax creditis denied or upon the lapse of ;/ days period in which the treasurer (+e. 252-,GC% must decide, taxpayer may appeal with the Local 7oard of ssessment ppeals (+e.220,GC% who shall decide the appeal within 8/ days from receipt (+e.229,GC%0f Local 7oard of ssessment ppeals rejects the protest, the owner may appeal to the $entral 7oard of ssessment ppeals within "/ days from receipt of decision of Local 7oard of ssessment ppeals (+e.229-,GC%
0f $entral 7oard of ssessment ppeals rejects protestrefund, owner may appeal to $ourt of &ax ppeals en banc within "/ days from receipt of decision (R.. 92$2%
0f denied by $ourt of &ax ppeal, then appeal to Supreme $ourt within days
Proedre ,or Le# ,or Pr'o)e) o, S!t*),*n+ Re!" Pro'ert T!&e) Lo!" Go#ern$ent Code --------------------------------
&ax constitutes a lien on the property superior to all liens and may only be extinguished upon payment of the tax and charges (+e.25/,GC%
&ime for payment of real property tax expires (+e.25$,GC%
@arrant of Levy issued by Local &reasurer, which has the force of legal execution in the Local #overnment 9nit concerned (+e.25$,GC%
@arrant mailed to or served upon the delin'uent owner. @ritten notice of levy and warrant is mailedserved upon the assessor and the 6egister of +eeds of the Local #overnment 9nit (+e.25$,GC%
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"/ days from service of warrant, Local &reasurer shall advertise sale of property (+e.201,GC% 7yB )osting notice at main entrance of L#9 hallbuilding and in a conspicuous place in the barangay where the property is located 5+ publication once a wee: for two wee:s
7efore the date of sale the owner may stay the proceedings by paying the delin'uent tax, interest and expenses of sale (+e.201,GC%
Sale is held (+e.201,GC% t the main entrance of the L#9 building C6 on the property to be sold C6 any other place Speci1ed in the notice.
0f there is a bidder 5+ highest bid is su4cient to pay real property tax and related interests and costs, bidder pays and treasurer reports sale to sanggnian "/ days after the sale. Local &reasurer will deliver to purchaser the certi1cate of sale. )roceeds of sale in excess of delin'uent tax, interest, expenses of sale remitted to owner. @ithin one year from sale, owner may redeem upon payment of the delin'uent tax, interest due, expenses of sale (from date of delin'uency to date of sale%, and additional interest of 8 per month on the purchase price from date of sale to date of redemption. +elin'uent owner retains possession and right to the fruits. )rice paid plus interest of 8 per month shall be returned to the buyer. 0f not redeemed deed of conveyance shall be issued to the purchaser. (+e.202,GC%
0f there is no bidder C6 highest bid is insu4cient to pay real property tax and related interests and costs, Local &reasurer shall purchase the property in behalf of the Local #overnment 9nit. 6egistrar of +eeds shall transfer the title of forfeited property to Local #overnment 9nit without need of court order. @ithin one year from forfeiture owner may redeem property by paying to &reasurer full amount of tax, interest, costs of sale (+e.20",GC% Sanggunian concerned may, by ordinance selldispose by public auction of property ac'uired by forfeiture. (+e.204,GC%
Levy may be repeated until full amount due2 including expenses is collected (+e.205,GC%
Re$ed*e) Lo!" T!&!t*on #). Re!" Pro'ert T!&!t*on ---------------------------------
Reme%ies #overnmentGs
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Local Taxation . #overnmentGs lien
Real 0roert+ Taxation . #overnmentGs lien
6emedies
&axpayerGs 6emedies
8. $ivil 6emediesB a. administrative action = +istraint = Levy b. judicial action for tax collection
8. $ivil 6emediesB a. administrative action =levy of real property b. judicial action for tax collection
. Iuestioning the $onstitutionality ofthe ordinance before the Secretaryof Eustice. 8. )rotest against the assessment ". $laims for refund or tax credit
. Iuestioning the $onstitutionality of the ordinance before the Secretaryof Eustice. 8. )rotest against the assessment to L7, then to$7. ". $laims for refund or tax credit.
1ote: )ayment under protest is not necessary.
1ote: )ayment under protest is generally necessary.
T!& Re$ed*e) o, the Go#ern$ent --------------------------
I.
A%ministrative:
A. Local Governments Lien &he basic real property tax and any other tax levied under collection of real property tax constitutes a lien on the property subject to tax, superior to all liens, charges or encumbrances in favor of any person, irrespective of the owner or possessor thereof, enforceable by administrative or judicial action, and may only be extinguished upon payment of the tax and the related interests and expenses. (Section 8-!, L#$% *. Lev+ on Real 0roert+ fter the expiration of the time re'uired to pay the basic real property tax or any other tax levied under collection of real property tax, real property subject to such tax may be levied upon through the issuance of a warrant on or before, or simultaneously with, the institution of the civil action for the collection of the delin'uent tax. &he provincial or city treasurer, or a treasurer of a municipality within the Detropolitan Danila rea, as the case may be, when issuing a warrant of levy shall prepare a duly authenticated certi1cate showing the name of the delin'uent owner of the property or person having legal interest therein, the description of the property, the amount of the tax due and the interest thereon. &he warrant shall operate with the force of a legal execution throughout the province, city or a municipality, within the Detropolitan Danila rea. &he warrant shall be )age *
mailed to or served upon the delin'uent owner of the real property or person having legal interest therein, or in case he is out of the country or cannot be located, the administrator or occupant of the property. t the same time, written notice of the levy with the attached warrant shall be mailed to or served upon the assessor and the 6egistrar of +eeds of the province, city or municipality within the Detropolitan Danila rea where the property is located, who shall annotate the levy on the tax declaration and certi1cate of title of the property, respectively. &he levying o4cer shall submit a report on the levy to the sanggunian concerned within ten (/% days after receipt of the warrant by the owner of the property or person having legal interest therein. (Section 8-<, L#$% @ithin thirty ("/% days after service of the warrant of levy, the local treasurer shall proceed to publicly advertise for sale or auction the property or a usable portion thereof as may be necessary to satisfy the tax delin'uency and expenses of sale. &he advertisement shall be eected by posting a notice at the main entrance of the provincial, city or municipal building, and in a publicly accessible and conspicuous place in the barangay where the real property is located, and by publication once a wee: for two (8% wee:s in a newspaper of general circulation in the province, city or municipality where the property is located. &he advertisement shall specify the amount of the delin'uent tax, the interest due thereon and expenses of sale, the date and place of sale, the name of the owner of the real property or person having legal interest therein, and a description of the property to be sold. t any time before the date 1xed for the sale, the owner of the real property or person having legal interest therein may stay the proceedings by paying the delin'uent tax, the interest due thereon and the expenses of sale. &he sale shall be held either at the main entrance of the provincial, city or municipal building, or on the property to be sold, or at any other place as speci1ed in the notice of the sale. @ithin thirty ("/% days after the sale, the local treasurer or his deputy shall ma:e a report of the sale to the sanggunian concerned, and which shall form part of his records. &he local treasurer shall li:ewise prepare and deliver to the purchaser a certi1cate of sale which shall contain the name of the purchaser, a description of the property sold, the amount of the delin'uent tax, the interest due thereon, the expenses of sale and a brief description of the proceedingsB )rovided, however, &hat proceeds of the sale in excess of the delin'uent tax, the interest due thereon, and the expenses of sale shall be remitted to the owner of the real property or person having legal interest therein. &he local treasurer may, by ordinance duly approved, advance an amount su4cient to defray the costs of collection thru the remedies provided for in this &itle, including the expenses of advertisement and sale. (Section 8;/, L#$% @ithin one (% year from the date of sale, the owner of the delin'uent real property or person having legal interest therein, or his representative, shall have the right to redeem the property upon payment to the local )age * 8
treasurer of the amount of the delin'uent tax, including the interest due thereon, and the expenses of sale from the date of delin'uency to the date of sale, plus interest of not more than two percent (8% per month on the purchase price from the date of sale to the date of redemption. Such payment shall invalidate the certi1cate of sale issued to the purchaser and the owner of the delin'uent real property or person having legal interest therein shall be entitled to a certi1cate of redemption which shall be issued by the local treasurer or his deputy. From the date of sale until the expiration of the period of redemption, the delin'uent real property shall remain in possession of the owner or person having legal interest therein who shall be entitled to the income and other fruits thereof. &he local treasurer or his deputy, upon receipt from the purchaser of the certi1cate of sale, shall forthwith return to the latter the entire amount paid by him plus interest of not more than two percent (8% per month. &hereafter, the property shall be free from lien of such delin'uent tax, interest due thereon and expenses of sale. (Section 8;, L#$% 0n case the owner or person having legal interest fails to redeem the delin'uent property as provided herein, the local treasurer shall execute a deed conveying to the purchaser said property, free from lien of the delin'uent tax, interest due thereon and expenses of sale. &he deed shall brieJy state the proceedings upon which the validity of the sale rests. (Section 8;8, L#$% II.
;,%icial: &he local government unit concerned may enforce the collection of the basic real property tax or any other tax levied under collection of real property tax by civil action in any court of competent jurisdiction. (Section 8;;, L#$% &he basic real property tax and any other tax levied under collection of real property tax shall be collected within 1ve (-% years from the date they become due. 5o action for the collection of the tax, whether administrative or judicial, shall be instituted after the expiration of such period. 0n case of fraud or intent to evade payment of the tax, such action may be instituted for the collection of the same within ten (/% years from the discovery of such fraud or intent to evade payment. (Section 8!/, L#
%$Re$ed*e) o, the T!&'!er --------------------------
I.
A%ministrative:
A: Aeal to t$e Secretar+ o ;,stice re-ar%in- ne>l+ enacte% tax or%inance.
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)ublic hearings shall be conducted for the purpose prior to the enactment of tax and revenue measures and any 'uestion on the constitutionality or legality of tax ordinances or revenue measures may be raised on appeal within thirty days from the eectivity of tax and revenue measures to the Secretary of Eustice who shall render a decision within sixty days from the date of receipt of the appeal. &he appeal shall not have the eect of suspending the eectivity of the ordinance and the accrual and payment of the tax, fee, or charge levied therein. @ithin thirty days after receipt of the decision or the lapse of the sixty=day period without the Secretary of Eustice acting upon the appeal, the aggrieved party may 1le appropriate proceedings with a court of competent jurisdiction. (Section
reduced or adjusted, the taxpayer may 1le a written claim for refund or credit for taxes and interests with the provincial or city treasurer within two (8% years from the date the taxpayer is entitled to such reduction or adjustment. &he provincial or city treasurer shall decide the claim for tax refund or credit within sixty (;/% days from receipt thereof. (Section 8-", L#$%. E. Reme%ies rom %enial o t$e rotest an% re,n% 0n case that the protestrefund is denied or upon the lapse of the sixty day period prescribed the taxpayer may appeal within ;/ days from receipt of noticelapse of ;/ days to the Local 7oard of ssessment ppeals. Cn which the Local 7oard of ssessment ppeals must decide within 8/ days from receipt of appeal. 0f Local 7oard of ssessment ppeals rejects the protest, the owner may appeal to the $entral 7oard of ssessment ppeals within "/ days from receipt of decision of Local 7oard of ssessment ppeals. (+e.229-,GC%. 7. Re%emtion o 0roert+ Sol% @ithin one (% year from the date of sale, the owner of the delin'uent real property or person having legal interest therein, or his representative, shall have the right to redeem the property upon payment to the local treasurer of the amount of the delin'uent tax, including the interest due thereon, and the expenses of sale from the date of delin'uency to the date of sale, plus interest of not more than two percent (8% per month on the purchase price from the date of sale to the date of redemption. Such payment shall invalidate the certi1cate of sale issued to the purchaser and the owner of the delin'uent real property or person having legal interest therein shall be entitled to a certi1cate of redemption which shall be issued by the local treasurer or his deputy. From the date of sale until the expiration of the period of redemption, the delin'uent real property shall remain in possession of the owner or person having legal interest therein who shall be entitled to the income and other fruits thereof. &he local treasurer or his deputy, upon receipt from the purchaser of the certi1cate of sale, shall forthwith return to the latter the entire amount paid by him plus interest of not more than two percent (8% per month. &hereafter, the property shall be free from lien of such delin'uent tax, interest due thereon and expenses of sale. (Sec. 8;, L#
%$II.
;,%icial
A. Co,rt Action: . 0f $entral 7oard of ssessment ppeals rejects protestrefund, owner may appeal to $ourt of &ax ppeals en banc within "/ days from receipt of decision. (R.. 92$2% )age * -
8. 0f denied by $ourt of &ax ppeal, then appeal to Supreme $ourt within - days. *. S,it assailin- t$e vali%it+ o t$e tax sale +eposit of amount for which the real property was sold together with interest of 8 per month from date of sale to the time of institution of action.
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