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Computation and Procedure

Surcharges and penalties for late tax payments are outlined as follows: 1) A surcharge of no more than 25% of unpaid taxes, fees or charges. 2) A penalty of no more than 2% per month of unpaid amounts including surcharges, until fully paid or up to 36 months, which is a maximum of 72%. 3) Protests against tax assessments must be filed in writing with the local treasurer within 60 days. The treasurer then has 60 days to decide, and taxpayers can appeal an unfavorable decision in court within 30 days.

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50 views

Computation and Procedure

Surcharges and penalties for late tax payments are outlined as follows: 1) A surcharge of no more than 25% of unpaid taxes, fees or charges. 2) A penalty of no more than 2% per month of unpaid amounts including surcharges, until fully paid or up to 36 months, which is a maximum of 72%. 3) Protests against tax assessments must be filed in writing with the local treasurer within 60 days. The treasurer then has 60 days to decide, and taxpayers can appeal an unfavorable decision in court within 30 days.

Uploaded by

Jorge Parker
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© © All Rights Reserved
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Surcharges and penalties for late payments (as per section 168 of RA 7160)

 Surcharge – No more than twenty-five percent (25%) of the amount of taxes, fees or charges not
paid on time
 Penalty – No more than two percent (2%) per month of the unpaid taxes, fees or charges including
surcharges, until such amount is fully paid, but in not to exceed thirty-six (36) months or seventy-two
percent (72%).

Sample Computation

The rate shall be based between the Fair Market Value (FMV) or the Selling Price (SP), whichever is higher.

Residential condominium in Iloilo City with a SP of Php3, 165, 296.88. The existing market value as per Tax
Declaration is unknown because no clearance was given by Filinvest. Let’s assume that the SP is higher, so
we shall use SP to compute the transfer tax:

Iloilo City Transfer Tax Rate: SP x 82.5% of 1%

Transfer Tax = Php3, 165, 296.88 x 1% x 82.5% = Php 26, 113.69

What if you don’t agree with the Treasurer’s computation?

Assuming you disagree with the tax assessment made by a local treasurer, you may file a written protest
thereof pursuant to Section 195 of the LGC, which provides:

“SECTION 195.                 Protest of Assessment. — When the local treasurer or his duly authorized
representative finds that the 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 (60)
period prescribed herein within which to appeal with the court of competent jurisdiction, otherwise the
assessment becomes conclusive and unappealable.”
Taking everything into consideration, personally, unless the difference in tax that you need to pay is really
significant, it would be better to follow the computation of the Treasurer. Filing a case in court would require
filing fees and fees for tax attorneys, not to mention taking up much of your time. If you will not pay the
transfer taxes, you cannot transfer the title to your name and this would lead to problems

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