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1. What are the common revenue measures available to LGUs? (Sec
153, 154, 155, LGC)
a. Fees and charges on SERVICES rendered by the LGU
including the operation of public utilities
b. Market fees for the maintenance and operation of market
c. Toll fees for the funding and construction of roads and other
2. In what capacity does an LGU impose fees/rentals for the use of
market stalls?
In its PROPRIETARY CAPACITY and not governmental authority
or governmental capacity. As such, the fee is not subject to the test
of reasonableness unlike taxes. In imposing fees for the use of
market stalls, the LGU is actually leasing out PATRIMONIAL
PROPERTY (private property of the LGU). In doing so, the LGU is free
to charge such sums as it may deem best, and the prospective
lessees are free to enter or not into a lease contract with the LGU.
STALL under license is always subject to police power of the
government. It may be refused or granted for reasons of public
policy and sound public administration.
3. What CONDITIONS must be present before an LGU may impose
fees for the use of roads and other infrastructures?
a. The toll fee is imposed only for the USE of the road or
b. The road or infrastructure must be FUNDED AND
c. The toll fee is NOT in the nature of an IMPORT or EXPORT
d. The LGU must recognize the EXEMPTION of the following:


Post Office personnel delivering mails
Physically handicapped
Disabled citizens who are 65 years or older (Sec.
155 LGC)

4. What is the RESIDUAL TAXING AUTHORITY (RTA) of an LGU? (Sec

186, LGC)
It refers to the power of an LGU to levy taxes, fees, or charges
on any base or subject that is NOT:
a. specifically enumerated in the LGC
b. taxed under the provisions of the NIRC
c. taxed under the provisions of other applicable laws
5. What are the LIMITATIONS on the LGUs RTA? (Sec 186, LGC)
a. The limitations under the LGC must be adhered to
b. The power to levy additional taxes, fees, and charges must
NOT be specifically granted to other LGUs to avoid DOUBLE
c. The levy must be consistent with the FUNDAMENTAL
PRINCIPLES (Section 130 LGC) and not in violation of the
COMMON LIMITATIONS (Section 133 LGC) of local taxation.
d. PROPER PROCEDURE for the enactment of revenue
ordinance must be complied with, including the conduct of
prior public hearing and publication of the proposed
revenue measure.
e. The revenue ordinance must NOT be:

ViolatIve of the constitution or the laws

Unfair or oppressive
Partial or discriminatory
Prohibitive of trade
Inconsistent with public policy

6. May the LGU increase/decrease tax rates?

Yes, but the adjustment should not be made more than once
every five (5) years and the adjusted rates should not exceed ten
(10) percent of the prescribed rates.
If the revision were to
decrease the tax rate, the LGU may do it more often than five (5)
Are the limitations on the increase/decrease of tax rates
applicable to fees, service charges, market fees and stall rentals?
8. What is the PROCEDURE for the approval and effectivity of a
revenue ordinance?

a. Sanggunian ENACTS the ordinance in accordance with its

internal rules.
b. Ordinance is PRESENTED to the local chief executive (LCE).
c. LCE may APPROVE by signing EACH & EVERY PAGE. He
may VETO and return the ordinance to the sanggunian with
his objections.
d. Sanggunian may RECONSIDER the ordinance with the
objections or it may OVERRIDE the veto by 2/3 vote of all its
e. Within 3 days in the case of component cities and
municipalities, or 10 days in the case of barangays, the
secretary of the sanggunian which passed the revenue
ordinance must FORWARD FOR REVIEW to the
sanggunian of the LGU a copy of the approved revenue
f. Within 30 days from receipt, the reviewing sanggunian shall
either EXAMINE the ordinance or TRANSMIT it to the LGU
attorney or LGU prosecutor, as the case may be, for prompt
g. The LGU attorney or LGU prosecutor is given 10 days from
receipt of the ordinance within which to INFORM the reviewing
RECOMMENDATIONS which may or may not be heeded
by the reviewing sanggunian.
h. Reviewing sanggunian may void in whole or in part the
ordinance if it finds the ordinance ultra vires (beyond the
power conferred to the LGU).
i. If no action is taken by the reviewing sanggunian within 30
days after submission of the revenue ordinance, it shall be
presumed consistent with the law.
j. Within ten (10) days from its approval, a certified true copy of
the revenue ordinance must be PUBLISHED in FULL for three
(3) consecutive DAYS in a newspaper of local circulation, OR,
where there are no newspapers of local circulation, the
certified true copy of the revenue ordinance may be POSTED
in at least two (2) conspicuous and publicly accessible places.
(Sec. 188, LGC)
k. Copies of the ordinance must be furnished to the local
treasurer for public dissemination.
9. Before the enactment of a revenue ordinance, a PUBLIC HEARING
must be had. What is the procedure re public hearings?
a. Proposed revenue ordinance is FILED in the sanggunian.
b. Within ten (10) days from filing, the proposed ordinance must
be PUBLISHED for three (3) consecutive days in a

newspaper of local circulation OR POSTED simultaneously in

at least four (4) conspicuous public places within the LGUs
c. Sanggunian sends WRITTEN NOTICES of the proposed
revenue ordinance to interested and/or affected parties
operating or doing business within the LGUs territorial
jurisdiction. The NOTICES shall specify the date or dates and
venue of the public hearing or hearings. The initial hearing
shall be held not earlier than ten (10) days from the sending
out of notice or notices, or the last day of publication, or date
of posting, whichever is later.
d. There can be as many CONTINUANCES of the public
hearing as may be needed to afford all concerned the
opportunity to express their views.
e. The secretary of the sanggunian shall prepare the MINUTES
of such public hearing and shall attach to the minutes the
position papers, memoranda and other documents submitted
by the participants.
What are the ADMINISTRATIVE REMEDIES against a void
revenue ordinance (RO)? A person with proper LEGAL STANDING
a. Assail RO during public hearings.
b. If enacted, assail before the local chief executive who may
veto in whole or in part.
c. If approved, assail before the reviewing sanggunian (if
d. If reviewing sanggunian approves (or if there is no reviewing
sanggunian), appeal to the DOJ - Secretary of Justice within 30
days from the effectivity of the assailed RO. DOJ is given 60
days to decide on the appeal. The DOJ may review only the
legality or constitutionality (but never the wisdom) of the RO.
DOJ can not substitute the RO with a different version.
e. If appeal to the DOJ denied, or if no action is taken by the DOJ
within 60 days, appeal to a court of competent jurisdiction
(REGIONAL TRIAL COURT) within 30 days from denial of appeal
or expiration of the period of 60 days.
f. If RTC decides against the taxpayer, he may elevate the
matter to the SUPREME COURT via petition for review on
certiorari (RULE 41, Section 2[c])
11. Requirements of appeal to the RTC.
a. Must be in the nature of an action for DECLARATORY RELIEF to
determine the constitutionality or legality of a revenue
ordinance if there is no QUESTION OF FACT and BEFORE
BREACH OR VIOLATION of the questioned RO.

b. If there is a breach or violation that takes place before the

final determination of the case, the action will be CONVERTED
into an ORDINARY ACTION and the parties shall be allowed to
file necessary pleadings. If, on the other hand, the person
questioning the RO pays the tax during the pendency of the
case, the issues DO NOT become moot and academic.