Fundamental Principle of Local Government Taxation

1. Uniformity

Generally, uniformity and equitableness means one and the same

However, in LGT the rule is different

Because equitableness in the view point of LGT, is a geographical concept

It is a comparison of rates, not a comparison of subject or object

Since equitableness is a comparison between two subjects and objects, and therefore the
meaning of equitableness in LGT is that subject and object which are similarly situated shall be
subject to the same burdens, rights and privileges, without any discrimination whatsoever

So if it is about general principles, uniformity and equitableness can be treated as one and the
same

2. Equitableness of taxation

3. Public purpose
(1) For general meaning of taxation, the money collected shall be devoted only for the
benefit of the community in general

But if it is LGT, and it will be benefitting only that particular local community that
imposes the tax

So if it is the city which imposes tax, it should benefit only the city and not other local
government units

4. The tax law should not be unjust, oppressive and confiscatory

What it means is that when we talk about the common limitation of the local government unit,
if the tax is already imposed by the national government, then the local government cannot
anymore impose the tax. Otherwise, it will be unjust, oppressive and confiscatory
 5. The local tax ordinance must not be contrary to law, public policy, and to the declared
national economic policy

It is a declared economic policy to promote exports

That is why LGU are not allowed to impose tax generally upon exported products

6. LET principles

It means that the power of the LGT shall not be delegated to the private sector

In short, the power to assess, collect, and refund shall be left only to the exercise of the local
government unit concerned, and not to be delegated to the private sector

7. The local government taxes should not be in restraint of trade

(1) LGU are not allowed to impose taxes on goods that are passing through, leaving or
entering the territorial jurisdiction of the local government unit

8. The revenue collected must inure solely to the benefit of the local government unit

If the local government unit that collected the tax is a municipality, then only the municipality
must be benefitted. It should not benefit other local government units

9. Local government units adopt a progressive system of taxation

Questions asked in the bar

1. What are the requisites of a municipal taxation?

2. Double taxation

Asked in 2013, 2014, 2015

3. Personal and additional exemption

Asked in 2011, 2012, 2014, 2015

4. Recognition of income

Asked in 2009, 2010, 2011 (multiple choice, 2012)

5. Tax exemption on revenues

Asked in 2000, 2001

6. Compromise
Asked in 2004, repeated in 2005

7.

1975, 1976
8.
9.