Opinion No. 17, 2020 - 2
Opinion No. 17, 2020 - 2
Opinion No. 17, 2020 - 2
30 April 2020
Secretary Carlos G. Dominguez
Department of Finance
Roxas Blvd. cor. P. Ocampo Sr. St.
Manila
Background
In its letter, NABPLO stated that they "are deeply concerned with the
opinion issued by the Bureau of Local Government Finance of the DOF that
states that the function of business tax assessment should be transferred to the
City/Municipal Treasurers because allegedly 'tax assessment is an inherent
function of treasurers."' In its Paper, NABPLO elaborated on its position and
made the following conclusions:
Upon the other hand, it is your Department's view that the LGC specifically
authorizes the local treasurer to assess, collect and audit the payment of local
taxes, fees and charges.
Discussion
The following are the pertinent provisions of the LGC that need to be
considered with respect to the issue presented:
For this purpose, the records of the revenue district office of the Bureau
of Internal Revenue shall be made available to the local treasurer, his
deputy or duly authorized representative. (underscoring supplied)
2
OPINION NO. ------~.?..... ~$,
20~
SECTION 195. Protest of assessment. - When the local
treasurer or his duly authorized representative finds that correct taxes.
fees. or charges have not been paid. he shall issue a notice of
assessment stating the nature of the tax. fee. or charge, the amount of
deficiency, the surcharges. interests and penalties. Within sixty (60)
days from the receipt of the notice of assessment, the taxpayer may
file a written protest with the local treasurer contesting the assessment;
otherwise, the assessment shall become final and executory. The local
treasurer shall decide the protest within sixty (60) days from the time
of its filing. If the local treasurer finds the protest to be wholly or partly
meritorious, he shall issue a notice cancelling wholly or partially the
assessment. However, if the local treasurer finds the assessment to be
wholly or partly correct, he shall deny the protest wholly or partly with
notice to the taxpayer. The taxpayer shall have thirty (30) days from
the receipt of the denial of the protest or from the lapse of the sixty-day
period prescribed herein within which to appeal with the court of
competent jurisdiction otherwise the assessment becomes conclusive
and unappealable. (underscoring supplied)
(iii) Ensure that all taxes and other revenues of the municipality
are collected, and that municipal funds are applied in accordance with
law or ordinance to the payment of expenses and settlement of
obligations of the municipality;
(iv) Issue licenses and permits and suspend or revoke the same
for any violation of the conditions upon which said licenses or permits
had been issued. pursuant to law or ordinance (underscoring supplied)
3
OPINION NO......t.?. ... -::~s~ ioM.
(iii) Ensure that all taxes and other revenues of the city are
collected, and that city funds are applied to the payment of expenses
and settlement of obligations of the city, in accordance with law or
ordinance;
(iv) Issue licenses and permits and suspend or revoke the same
for any violation of the conditions upon which said licenses or permits
had been issued. pursuant to law or ordinance (underscoring supplied)
It is also a basic rule in statutory construction that when the law is clear,
plain and free from ambiguity, it must be given its literal meaning without attempted
interpretation. 3 This plain-meaning rule or verba legis is derived from the maxim
index animi sermo est (speech is the index of intention) and rests on the valid
presumption that the words employed by the legislature in a statute correctly
express its intent and preclude the court from construing it differently. The
legislature is presumed to know the meaning of the words, to have used words
advisedly, and to have expressed its intent by the use of such words as are found
in the statute. Verba legis non est recedendum, or "from the words of a statute
there should be no departure. "4
Guided by these rules, and taking all the relevant provisions of the LGC
together, we reached the conclusion that by express provision of law, the local
treasurer is granted the power to assess (Section 171), collect (Section 170)
and audit (Section 195) the payment of local taxes, fees and charges,
including local business taxes. To rule that the local treasurer does not have the
power to assess local taxes, fees and charges, only to collect and audit their
payment, would render nugatory Section 171 which clearly and expressly
authorizes the local treasurer to examine the books of accounts and pertinent
records of any person, partnership, corporation, or association subject to local
taxes, fees and charges, once for every tax period, in order to assess and collect
the correct amount of the tax, fee, or charge.
1 Maddumba v. Ozaeta, 82 Phil. 345 (1948); Lopez v. El Hagar Filipino, 47 Phil. 249 (1925).
2 JMM Promotions & Management v. NLRC, 228 SCRA 129 (1993).
3 Ang v. Ang, G.R. No. 186993, 22 August 2012.
4 Trade and Investment Development Corporation of the Philippines v. Civil Service Commission,
4
"
OPINlON NO~ ·····~/?. .. ,s. iO.i:B
Assessment of local business taxes
cannot be delegated to the BPLO
With respect to the role of the city or municipal mayors in the collection of
taxes, Sections 444(b)(3)(iii) and 455(b)(3)(iii) of the LGC grant them the authority
to oversee and ensure that all taxes and other revenues of the city or municipality
are collected, so that these revenues can be applied to the payment of the
expenses and settlement of obligations of the city or municipality. This supervisory
authority does not include the power to transfer or delegate the assessment of local
business taxes to the Business Permit and Licensing Office (BPLO) because it
would violate Section 171 of the LGC, which expressly placed the authority to
assess such taxes to the local treasurers.
We note that this power of the local treasurers to assess local taxes, fees
and charges, including business taxes, has been stated as a matter of fact in
several cases, such as in China Banking Corporation v. City of Manila 6 and Jardine
Davies Insurance Brokers, Inc. v. Aliposa. 7 This power is based on Section 171 of
the LGC. Upon the other hand, with respect to the power of local treasurers to
conduct audit under Section 195 of the LGC, we note that the amounts of
delinquent taxes stated in the notices of assessment issued by them have been
the subject also of several cases brought before the Supreme Court, such as in
City of Manila and Office of the City Treasurer of Manila v. Cosmos Bottling
Corporation 8 and Yamane v. BA Lepanto Condominium Corporation. 9 We further
note that the issue in these cases is not the power to assess or issue notices of
assessment by the local treasurers but the amount that they have assessed
against the taxpayer or whether the alleged taxpayer has the obligation to pay
business taxes. With this, it can be said therefore that the power to assess and the
power to audit the payment of local taxes, fees and charges are powers that remain
unquestionable and are taken as a matter of fact before the courts.
With respect to the existence of the powers to assess, collect and audit in
the Offices of the City or Municipal Treasurer, we find that this would not
necessarily violate the doctrine of separation of powers, as raised by NABPLO in
5 Paragraph 6.1.5.1, JMC No. 01, s. 2016, of DILG, DTI and DICT.
6
G.R. No. 204117, 1 July 2015.
7 G. R. No. 118900, 27 February 2003.
8
G.R. No.196681, 27 June2018.
9 G.R. No. 154993, 25 October 2005.
5
6 PINION /7 ~ ·s, 20~.
No. .............. . ·~11l
' '
its Position Paper. This doctrine means that legislation belongs to Congress,
execution to the executive, settlement of legal controversies to the judiciary. 10 This
doctrine allows for a system of checks and balances, such that no one branch of
the government is able to act without the cooperation of at least one of the other
branches. It also prevents the concentration of powers in one branch and thereby
avoid tyranny. 11 The assessment and collection taxes and the audit of delinquent
taxes belong to the Executive Branch. This being so, placing these powers in one
office in the Local Executive Branch, such as in the Offices of the City or Municipal
Treasurer would not violate the doctrine of separation of powers.
We also note that in the national level, as pointed out in your letter, the
powers to assess, collect and audit payment of taxes also belong to one office in
the National Government, i.e., the Bureau of Internal Revenue (BIR) with respect
to national internal revenue taxes and the Bureau of Customs (BOC) with respect
to custom duties, with adequate checks on their powers because taxpayers can
resort to the courts pursuant to the pertinent provisions of the National Internal
Revenue Code and the Customs Modernization and Tariff Act.
Lastly, with respect to the Joint Memorandum Circular (JMC) No. 01, series
of 2016, of the DILG, Department of Trade and Industry (DTI) and Department of
Information and Communications Technology (DICT), entitled "Revised Standards
in Processing Business Permits and Licenses in All Cities and Municipalities", we
find that the Standard Steps provided in paragraph 6.3.1.1 thereof as well as in the
relevant annexes are in accordance with the LGC because Offices of the City or
Municipal Treasurer, as discussed above, have the power and authority to assess
and collect local business taxes under Sections 170 and 171 of LGC, while the role
of the Offices of the City or Municipal Mayor, through the BPLOs, under Sections
444(b)(3)(iv) and 455(b)(3)(iv) of the LGC is the issuance of business permits and
licenses signed by the City or Municipal Mayor. JMC No. 01, s. 2010, entitled
"Guidelines in Implementing the Standards in Processing Business Permits and
Licenses in all Cities and Municipalities" and invoked by NABPLO in its Position
Paper, is no longer controlling, as it has been superseded already by JMC No. 01,
s. 2016.
Conclusion
In sum, it is our opinion that the Offices of the City or Municipal Treasurer
have the power and authority to assess, collect and audit the payment of local
taxes, fees and charges, including local business taxes, as provided in Sections
10 Bernas, The 1987 Constitution of the Republic of the Philippines: A Commentary (1996 ed.), p.
603.
11 /d.
6
I '
1-70, 171 and 195 of the LGC, while the powers of the Offices of the City or
Municipal Mayor under Sections 444(b)(3)(iii) and (iv) and 455(b)(3)(iii) and (iv) of
the LGC pertain only to generally overseeing that all taxes and other revenues of
the city or municipality are collected and the issuance of business permits and
licenses after payment of the required local taxes, fees and charges to the Offices
of the City or Municipal Treasurer.
v~:
MENARDOl.GUEVARRA
Secretary