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Tax Remedies On Local Taxation

The document outlines the remedies available to taxpayers under the Local Government Code when they believe an assessment of local taxes is erroneous or unjust. It details the assessment process, the timeline for filing protests, and the steps for administrative and judicial remedies, including the 60-60-30 rule for filing and appealing protests. Taxpayers are not required to pay the assessed amount before protesting, allowing them to challenge the legality of the assessment before collection is enforced.

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Jenay Cuaro
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6 views4 pages

Tax Remedies On Local Taxation

The document outlines the remedies available to taxpayers under the Local Government Code when they believe an assessment of local taxes is erroneous or unjust. It details the assessment process, the timeline for filing protests, and the steps for administrative and judicial remedies, including the 60-60-30 rule for filing and appealing protests. Taxpayers are not required to pay the assessed amount before protesting, allowing them to challenge the legality of the assessment before collection is enforced.

Uploaded by

Jenay Cuaro
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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TAXPAYER'S REMEDIES

Protest of Assessment under the Local Government Code

Local Government Units (LGUs) have the power to assess and collect local taxes, fees,
and charges. However, taxpayers are protected under the law through specific remedies when
they believe an assessment is erroneous, illegal, or unjust.

Assessment – refers to the process by which a local treasurer or their duly authorized
representative determines the amount of local taxes, fees or charges due from a taxpayer. It
involves:
1. Evaluation of the taxpayer's records, business operations or real property
2. The computation of the correct tax liabilities, including any deficency, surcharges interest
or penalties.

Notice of Assessment- is the formal written document issued to a taxpayer by the local treasurer.
It serves to:
1. Notify the taxpayer of the result of the assessment
2. Specify the nature and legal basis of the tax, the exact amount due and the applicable
penalties or interest.
3. Trigger the period within which the taxpayer may file a written protest.

A. Administrative Remedy (Section 195 of the LGC)

Section 195 of the Local Government Code (LGC)


- a local treasurer or their authorized representative may issue a notice of assessment if
they find that the correct taxes, fees, or charges have not been paid. This assessment must
clearly state the nature of the tax, the amount of deficiency, surcharges, interests,
and penalties.

- The taxpayer is granted 60 days from receipt of the assessment to file a written protest
with the local treasurer. Failure to do so renders the assessment final, executory, and
unappealable. A written protest is mandatory, as held in Jardine Davies Insurance
Brokers v. Aliposa, G.R. No. 118900 (2003).

In National Power Corporation v. Province of Pampanga, the assessment merely quoted


ordinance provisions without stating the exact nature and amount of the tax or penalties due.
The Court ruled that the assessment was invalid for failing to inform the taxpayer of the
precise legal and factual bases for liability.
B. Judicial Remedies

When Can a Taxpayer Go to Court?


A taxpayer may resort to judicial remedies in either of these situations:
 The local treasurer explicitly denies the protest; or
 The local treasurer fails to act within 60 days from the protest’s filing.
 In both cases, the taxpayer is allowed to elevate the matter to the proper court to seek
legal relief.

60-60-30 RULE

1. First 60 Days – Filing the Protest


 The taxpayer must file a written protest within 60 days from receipt of the assessment
notice.
 If no protest is filed within this period, the assessment becomes final and
unappealable.
 This protest is submitted to the local treasurer as part of the required administrative
process.

2. Second 60 Days – Treasurer’s Action Period


 The local treasurer must act on the protest within 60 days from its filing.
 If the treasurer denies or fails to act within this period, it is considered a denial by
inaction.

3. Final 30 Days – Judicial Appeal


a. The taxpayer must then file an appeal to the court within 30 days from either:
b. Receipt of the denial, or
c. Lapse of the 60-day action period without any response from the treasurer.
d. Failure to file within 30 days renders the assessment final.

 No Need to Pay Before Protesting

Under this process, the taxpayer is not required to pay the assessed amount prior to filing
a protest. This means the taxpayer can challenge the assessment based on its legality or
correctness before any collection is enforced.
1. Receipt of Assessment

An assessment is issued by the Local Treasurer (LT) to the taxpayer, stating the
deficiency, surcharges, penalties, and interest. The moment of receipt by the taxpayer
triggers the running of the 60-day period for protest.

2. Protest Stage (60 Days)


• If the taxpayer files a written protest within 60 days from receipt:
 The protest must clearly challenge the assessment and be addressed to the LT.
 Failure to file within 60 days makes the assessment final, executory, and
unappealable.

• If no protest is filed within 60 days:


 The taxpayer loses the right to contest.
 The tax obligation becomes final and demandable.xz

3. Action by the LT (60 Days from Protest)


• If the LT finds merit:
 A notice of cancellation is issued.
 The cancellation may be full or partial.

• If the LT finds no merit:


 A formal denial of protest is issued.

• If the LT fails to act within 60 days:


 It is deemed a denial of the protest by law.

4. Appeal to Court (30 Days)


1. From the receipt of denial (or lapse of 60-day inaction), the taxpayer has 30 days to
file an appeal with a court of competent jurisdiction:
 MTC/MeTC/MCTC – if assessment is below ₱300,000 (outside NCR) or ₱400,000
(within NCR).
 RTC – if the assessment exceeds those amounts.

2. Appeal to RTC or CTA en banc under Rule 43 if from quasi-judicial agencies or


when appropriate.

3. From CTA Division:


 File Motion for Reconsideration (MR) within 15 days.
 If MR is denied, file Petition for Review with CTA en banc.

4. From CTA en banc: Appeal to Supreme Court on questions of law.

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