Bureau of Local Government Finance Opinion

July 17, 2000 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 5th Indorsement Respectfully returned to the City Treasurer, Makati City the herein preceding indorsement relative to the instructions of this Bureau to recompute the assessed tax delinquency of Tupperware Phils., Inc. (TPI). In a 3rd indorsement dated June 14, 2000 of this Bureau, it was held that TPI should not suffer the imposition of penalties for late payment of its 1999 accounts for there was no deliberate attempt to avoid paying the same, as reflected in the application for Mayor's Permit (Annex B) filed by TPI on January 13, 1999. However, that Office informed that based on the certified true copy of the computerized assessment of the Permit Division, and the certified xerox copy of the application of TPI as newly started business filed last January 16, 1999, the said Company did not declare any gross sales, resulting in the non-assessment of the initial tax, which upon discovery of non-payment, a revised reassessment was made, including the imposition of corresponding penalty as provided by law, which in all indications, contradicted the allegation of TPI that it paid their taxes honestly within the time required by the Local Government Code of 1991 (LGC). cHaICD It must be pointed out that under the letter dated April 5, 2000, TPI made representations that on January 13, 1999, TPI filed an application for the renewal of Mayor's Permit with a corresponding declaration of the Company's gross sales in the amount of P117,623,078 (Annex B). However, concerned personnel from the License Division of that City allegedly did not accept TPI's application and was advised to revise the said application since it is just a new corporation and does not have a Financial Statement yet. Thus, TPI was provided with a new computation (computerized) and on the basis of which a revised application was filed without a declared gross sale or receipts. TPI was made to pay the amount of P4,240.00. In this connection, that office should look into the allegation regarding the concerned personnel from the License Division and make verification as to the veracity of the said allegation. In addition, in order to ascertain and collect the correct amount of tax, fee or charge, and to identify accountability and avoid the commission of irregularities, attention is invited to Article 258 of the Implementing Rules and Regulations (IRR) Implementing Section 170 of the LGC which provide as follows: "Article 258. Collection of Local Revenues by Treasurer. All taxes, fees and charges authorized under this rule to be imposed by LGUs may only be collected by the provincial, city, municipal, or barangay treasurer or their duly authorized deputies. . . . ." It is clear from the aforequoted provision of the law that only local treasurers or their deputies may collect local taxes. In relation thereto, it may be stated that in taxation, "assessment means the determination of the amount of the tax base, or basis for the computation of the tax due." Thus, where the annual business tax levied is based on the gross sales realized in the preceding year, first step in the determination of the tax is to determine the amount of such gross sales then the process of assessment, after which the tax due is computed accordingly. In view of the foregoing, it may be emphasized that the assessment of business tax is an inherent function of the Treasurer's Office not the Permit Division. cEaCAH Accordingly, the directives embodied in the 3rd Indorsement dated June 14, 2000 is hereby reiterated. Report of action taken hereon is requested. (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge <http://www.blgf.gov.ph/downloads/opinion/localtax/2000/a2000-0712.pdf> last visited on October 2, 2013.