REMEDIES IN TAXATIONRemedies of the

GovernmentLocal Taxation Real Property

TaxationTariff and Customs

CodeNational Internal Revenue Code

1. Government’s Lien - superior to all liens, charges or encumbrances

-extinguished upon full payment of delinquent local taxes, fees, and charges plus surcharge and interest (Section 173, LGC)

- lien on the property subject to tax superior to all liens, charges or encumbrances

- extinguished upon payment of the tax and the related interests and expenses (Section 257, LGC)

- attaches on the goods regardless of the ownership while the goods are still in the custody or control of the government

- applicable only when the importation is neither prohibited nor improperly made

- the proceeds are applied to the tax liability, surcharges and costs of the sale. The excess goes to the taxpayer. Taxpayer is required to make good any deficiency.

General Rule: the lien is beyond the reach of the regular courts.

Exception: when the goods are released and the tax lien is lost, in which case, a judicial action against the importer may be instituted.

2. Distraint - of goods, chattels, or effects, and other personal property including stocks and other securities, debts, credits, bank accounts, and interest in and rights to

- the notice of delinquency shall specify the date upon which the tax became delinquent and shall state that personal property may be distrained to effect

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personal property (Section 174, LGC)

Procedure (Section 175, LGC)1) Seizure – the local

treasurer or his deputy may, upon written notice, seize or confiscate any personal property belonging to the delinquent taxpayer sufficient in quantity to satisfy the tax, fee, or charge

2) Accounting of distrained goods

3) Publication- the officer executing the distraint shall cause a notification to be exhibited in not less than three (3) conspicuous places in the territory of the LGU where distraint is made. The time of sale shall not be less than twenty (20) days after the notice to the owner and the publication and posting of the notice

4) Release of distrained property upon payment prior to sale

5) Sale- If no payment has been made as mentioned in the preceding number, the officer conducting the sale shall sell the goods distrained at public auction to the highest bidder for cash. Within five (5) days after the sale, the local

payment (Section 254[b], LGC)

treasurer shall make report of the proceedings in writing to the local chief executive concerned. Should the said property be not disposed of within 120 days from the date of distraint, the same shall be considered as sold to the LGU concerned

6) Disposition of proceeds- the proceeds shall be applied to the to satisfy the tax plus the surcharges, interest and other penalties incident to the delinquency and the expenses of the distraint and sale. The excess shall be returned to the owner of the property sold

3. Levy - real property and interest in and rights to real property (Section 174, LGC)

Procedure (Sections 176-180, LGC)1) Provincial, city or municipal

treasurer shall prepare a duly authenticated

- after the expiration of the time required to pay the basic real property tax or any other tax, real property subject to such tax may be levied upon through the issuance of a warrant on or before, or simultaneously with, the institution of the civil action for the collection of the delinquent tax (Section 258, LGC)

Procedure (Sections 258-265, LGC)1) Warrant of Levy shall be

issued by the Local Treasurer which has the force of legal execution in

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certificate showing the name of the taxpayer, the tax, fee, or charge due. It shall operate with force throughout the Philippines.

2) Written notice of the levy shall be mailed to or served upon the assessor AND the Register of Deeds of the province or city where the property is located, and to the delinquent taxpayer Note:

a) if delinquent taxpayer is absent from the Philippines, to his agent or the manager of the business in respect to which the liability arose;

b) if no agent or manager, to the occupant of the property in question.

3) If the levy was not issued before or simultaneously with the warrant of distraint of the personal property and the personal property is not sufficient to cover the delinquency, the provincial, city or municipal treasurer shall proceed with the levy within 30 days after execution of the distraint.

4) Publication- Within 30 days after the levy, the local treasurer shall publicly advertise for sale or auction the property to satisfy the claim and the cost of sale. Such advertisement shall

the LGU concerned

2) Warrant shall be mailed to or served upon the delinquent owner. Written notice and warrant of the levy is mailed/served upon the assessor and the Register of Deeds.

3) Thirty (30) days from the service of the warrant, the local treasurer shall advertise sale of the property by posting a notice at main entrance of the LGU hall/ building and in a conspicuous place in the barangay where the property is located AND publication once a week for two weeks in the newspaper of general circulation in the said province or city where the property is located.

4) Owner may stay the proceedings of the sale by paying the delinquent taxes, interests and expenses.

5) If payment was not made as mentioned in the preceding number, sale shall be held at the main entrance of the LGU building/hall or on the property to be sold or any other place specified in the notice.

6) If there is a bidder and the bid is sufficient to cover the

cover 30 days. The notice of advertisement shall be posted at the main entrance of the municipal building or city hall AND in a public and conspicuous place in the barangay where the real property is located, and by publication once a week for three weeks in a newspaper of general circulation in the province, city or municipality where the property is located

5) Sale- held at the main entrance of the of the provincial, city or municipal building, or on the property to be sold, or at any place as determined by the local treasurer conducting the sale

6) Report of the sale- within 30 days after the sale to the sanggunian concerned

7) Delivery of the certificate of sale- local treasurer shall make and deliver the certificate of sale to the purchaser

8) Redemption of property sold- within 1 year from the date of sale, the delinquent taxpayer or his representative shall have the right to redeem the property upon payment of the taxes, fees, and charges

delinquent taxes, interests and costs, the bidder pays and the local treasurer shall report the sale to the sanggunian within 30 days after the sale. The local treasurer shall deliver the certificate of sale to the purchaser. Excess of the proceeds is given back to the owner.NOTE:

Within 1 year from the sale, the owner may redeem the property upon payment of the delinquent tax, interest due, and expenses of sale, and additional of interest of 2% per month

7) If there is no bidder or the bid is insufficient to cover the delinquent taxes, interests, and costs, the local treasurer shall purchase the property in behalf of the LGU.NOTE:

Within 1 year from forfeiture, the owner may redeem the property by paying to the treasurer full amount of tax, interests, cost of sale

8) Levy may be repeated until full amount due, including all expenses, is collected

9) In case of failure to redeem as mentioned in the preceding number, the local treasurer shall execute a deed conveying to the purchaser

NOTE:*Either remedy, distraint or levy, may be used concurrently or simultaneously at the discretion of the LGU (Section 174, LGC)

*The taxpayer may stay the proceedings of sale by paying the taxes, fees, charges, penalties and interests ANY TIME BEFORE the date fixed for the sale. (Section 178, LGC)

*The owner shall not be deprived of the possession of the property and shall be entitled to the rentals and other income until the expiration of the time allowed for redemption (Section 179, LGC)

*The remedies by distraint and levy may be repeated if necessary until the full amount due, including all expenses, is collected (Section 184, LGC)

4. Judicial Action Local taxes, fees, or charges may be collected within five

The LGU concerned may enforce the collection of the

Judicial action (civil and criminal) is normally availed of

(5) years from the date of assessment by administrative or judicial action (Section 194[c], LGC)

basic real property tax by civil action in any court of competent jurisdiction. The civil action shall be filed in accordance with Section 270 of the LGC (Section 266, LGC)

when the tax lien is lost through the release of the goods.

Judicial action and proceedings instituted in behalf of the Government shall be subject to the supervision and control of the Commissioner.

Civil and criminal actions are instituted in the name of the government and shall be conducted by customs officers. No civil or criminal action for recovery of duties nor the enforcement of any fine, penalty or forfeiture shall be filed in court without the Commissioner’s approval (Sec. 2410, TCCP, as amended by RA 9135).

5. Other Remedies - - a. Administrative Fines-applied when the importation is unlawful or involves articles which are prohibited from being imported, including the vessel

General Rule: It may be exercised even when the articles articles are not or no longer in the custody of the customs

Exception: When the importation is merely attempted, in which case, it

may be effected only while the goods are within the customs jurisdiction or in the hands of a person who is aware thereof (Secs. 2531 & 2530, TCCP).

b. Seizure, Search, Arrest (Secs. 2205, 2210, 2211, TCCP).

c. Surcharges (Secs. 2502-2504, TCCP)

d. Fines (Secs. 2505-2529, TCCP).

d. ForfeituresJurisdiction: Bureau of Customs (exclusive and original), from the moment the goods are actually in the possession or control, even as no warrant of seizure or detention had previously been issued by the Collector of Customs in connection with the seizure and forfeiture proceedings (Republic v. CFI, GR No. L-43747).

Note: RTCs are devoid of any competence to pass upon the validity or regularity of seizure and forfeiture proceedings conducted by the BOC and to enjoin or otherwise interfere with these proceedings (SBMA v. Merlino Rodriguez and WIRA International Trading Corp., GR No. 160270, April

23, 2010).

Nature: Administrative and civil, directed against the thing itself. In this proceeding, it is in

legal contemplation the property itself which commits the violation and is treated as the offender, without reference whatsoever to the character or

conduct of the owner (Transglobe International Inc. v. Court of Appeals, G.R. No. 126634, January 25, 1999).

Forfeiture is in rem, whereas a criminal action is in personam.

Conviction in the criminal action is not a bar on

forfeiture. Results of a criminal proceeding on the evidence therein will not necessarily

render judgment in forfeiture proceedings (Commissioner of

Customs v. CTA, GR No. L-31733, September 20, 1985).

Remedies of the Taxpayer

Local Taxation Real Property Taxation

Tariff and Customs Code

National Internal Revenue Code

1. Protest against newly enacted ordinance

To the Secretary of Justice, within 30 days from the effectivity;

Decision of the Secretary of Justice must be rendered within 60 days from the date of the receipt of the appeal;

Taxpayer must file an appropriate action with the Regional Trial Court within

To the Secretary of Justice, within 30 days from the effectivity;

Decision of the Secretary of Justice must be rendered within 60 days from the date of the receipt of the appeal;

Taxpayer must file an appropriate action with the Regional Trial Court within

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30 days from the receipt of the decision of the Secretary of Justice OR after the lapse of the 60-day period to decide

NOTE:*The appeal to the Secretary of Justice shall not suspend the effectivity of the ordinance

30 days from the receipt of the decision of the Secretary of Justice OR after the lapse of the 60-day period to decide

NOTE:*The appeal to the Secretary of Justice shall not suspend the effectivity of the ordinance

2. Declaratory Relief Whenever applicable - -

3. Protest against assessment

Within 60 days from receipt of the notice of assessment, the taxpayer may file a written protest with the local treasurer; otherwise, the assessment shall be final and executor

If the local treasurer finds the protest to be wholly or partially meritorious, he shall issue a notice cancelling, wholly or partially, the assessment.

If the local treasurer finds the assessment to be wholly or partially correct, he shall deny the protest wholly or partially with notice to taxpayer.

The taxpayer shall have 30 days from the receipt of the denial of the protest OR from the lapse of the 60-day period prescribed within

Appeal to the Local Board of Assessment Appeals: Any owner or person having legal interest in the property who is not satisfied with the assessment of the provincial, city, or municipal assessor may, within 60 days from the date of the receipt of the written notice, appeal to the Board of Assessment Appeals of the province or city by filing a petition under oath together with the copies of tax declarations and such affidavits to support the appeal (Section 226, LGC)

Appeal to the Central Board of Assessment Appeals: The owner of the property or the person having legal interest therein who is not satisfied with the decision of the LBAA may, within 30

Availed of when the legality or correctness of the assessment or appraisal is questioned by the importer.

Payment under protest, as well as the payment of the corresponding docket fees is required (Sec. 2308, TCCP).

General Rule: Any importer or interested party, if dissatisfied with the published value, may within 15 days from the date of publication or within 15 days from the date the importer is entitled to refund if payment is rendered erroneous or illegal by events occurring after the payment may file a protest.

Effect of non-filing of protest: The action of the collector shall be final and conclusive against him, except as to matters collectible for manifest clerical error.

which to appeal with the Regional Trial Court (Section 195, LGC)

days after receipt of the decision of LBAA, appeal to the CBAA.

Appeal to the Court of Appeals The party adversely affected by the decision of the CBAA may appeal such decision to the Court of Appeals within 15 from receipt of the CBAA’s decision (Rule 43, Rules of Court)

Exception: No protest is required in seizure cases.

4. Tax Refund or Tax Credit

A written claim for refund or credit shall be filed with the local treasurer within two (2) years from the date of the payment of the tax, fee, or charge OR from the date the taxpayer is entitled to a refund or credit (Section 196, LGC)

When an assessment is found to be illegal or erroneous and the tax is accordingly reduced or adjusted, the taxpayer may file a written claim for the refund or credit for taxes and interest with the provincial or city treasurer within two (2) years from the date the taxpayer is entitled to such reduction or adjustment.The provincial or city treasurer is required to decide within 60 days from the receipt thereof. If the claim is denied or not acted upon within 60 days, the taxpayer may appeal with the regular courts and NOT Court of Tax Appeals (Section 253, LGC)

Drawback (Secs. 1701-1708, TCCP)An allowance made by the government upon the duties due on the imported merchandise when the importer, instead of selling it here, re-exports it or refunding of such duties if already paid. This allowance amounts, in some cases, to the whole of the original duties; in others, to a part only (Black’s Law Dictionary).

5. Right of Redemption The owner/taxpayer has one The owner of the delinquent -

(1) year from the date of the sale or from the date of the forfeiture to redeem

real property or person having legal interest therein, or his representative, shall have the right to redeem the property within one (1) year from the date of the sale upon payment to the local treasurer of the amount of the delinquent tax including interest due thereon, and the expenses of the sale, plus interest of not more than 2% per month on the purchase price (Section 261, LGC)

6. Abatement - - General Rule: No abatement of duties made on account of damage incurred or deterioration suffered during the voyage of importation and duties will be assessed on the actual quantity imported (Sec. 1701, TCCP).

Exceptions:1. When any package or

packages appearing on the manifest or bill of lading are missing, a remission or refund of the duty thereon shall be made if it is shown by proof satisfactory to the Collector that the package or packages in question have not been imported into the Philippines (Sec. 1702, TCCP).

2. If, upon opening any package, a deficiency or absence of any article, or of part of the contents thereof, as called for by the invoice shall be found to exist, such deficiency shall be certified to the Collector by the appraiser; and upon the production of proof satisfactory to the Collector showing that the shortage occurred before the arrival of the article in the Philippines, the proper abatement or refund of the duty shall be made (Sec. 1703, TCCP).

3.  Upon satisfactory proof of the injury, destruction, or loss by theft, fire or other causes of any article as follows:a. While within the

limits of any port of entry prior to unlading under customs supervision

b. While remaining in customs custody after unlading

c. While in transit under bond from the port of entry to

any port in the Philippines.

While released under bond to export, except in case of loss by theft (Sec. 1704, TCCP).

6. Compromise - - Subject to the approval of the Secretary of Finance, the Commissioner of Customs may compromise cases involving the imposition of fines, surcharges, and forfeitures unless otherwise specified by law (Sec. 2316, TCCP).

7. Other Remedies - - a. Settlement of any Seizure by Payment of Fine or Redemption (Sec. 2307, TCCP).

b. Abandonment The renunciation by an importer of all his interests and property rights in imported articles (Sec. 180, TCCP). It can be express (Sec. 1801[a]) or implied (Sec. 1801[b]).

c. Appeal Within 30 days from the receipt of the decision of the Commissioner or the Secretary of Finance to the division of the Court of Tax Appeals (Sec. 2403, TCCP; Sec. 7, RA 1125 as amended by Sec. 9,

RA 9282).Authorized to impose taxes

Provinces, cities, municipalities, and barangays

Provinces, cities, and municipalities (Metro Manila only)

Manner and Time of Payment

Taxes, fees, and charges may be paid in quarterly installments (Section 165, LGC)

General Rule: paid within the first twenty (20) days of January or of each subsequent quarter, as the case may be.

Exception: unless otherwise provided in the Local Government Code

The sanggunian concerned may, for a justifiable reason or cause, extend the time for payment of such taxes, fees, or charges without surcharges or penalties, but only for a period not exceeding six (6) months (Section 167, LGC)

In four (4) equal installments:

- first installment, to be due and payable on or before March Thirty-first (31st);- second installment, on or before June Thirty (30);- third installment, on or before September Thirty (30); and- last installment on or before December Thirty-first (31st) (Section 250, LGC)

Accrual of Tax General Rule: first (1st) day of January of each year

Exceptions:1) unless otherwise provided in the Local Government Code

2) new taxes, fees or

The real property tax for any year shall accrue on the first (1st) day of January (Section 246, LGC)

charges, or changes in the rates thereof, shall accrue on the first (1st) day of the quarter next following the effectivity of the ordinance imposing such new levies or rates (Section 166, LGC)

Statute of Limitations:

1) Assessment

2) Collection

General Rule: within five (5) years from the date they became due (Section 194[a], LGC)

Exceptions:1) within three (3) years from the date they became due those taxes, fees or charges which have accrued before the effectivity of this Code (Section 194[a], LGC)

2) in case of fraud or intent to evade payment, within ten (10) years from the discovery of the fraud (Section 194[b], LGC)

General Rule: within five (5) years from the date of assessment by administrative or judicial action (Section 194[c], LGC)

Exception: within three (3)

No express provision in the Local Government Code regarding the prescriptive period to assess

General Rule: within five (5) years from the date they become due

Exception: within ten (10)

years from the date of assessment for taxes, fees or charges assessed before the effectivity of this Code (Section 194[c], LGC)

years in case of fraud or intent to evade payment (Section 270, LGC)

Grounds for the suspension of the

periods of prescription

1) The treasurer is legally prevented from making the assessment or collection;

2) The taxpayer requests for a reinvestigation and executes a waiver in writing before expiration of the period within which to assess or collect;

3) The taxpayer is out of the country or otherwise cannot be located (Section 194[d], LGC)

1) The local treasurer is legally prevented from collecting tax;

2) The owner of the property or the person having legal interest therein requests for reinvestigation and executes a waiver in writing before the expiration of the period within which to collect;

3) The owner of the property or the person having legal interest therein is out of the country or otherwise cannot be located (Section 270, LGC)

Local Taxation and Real Property Taxation- PatTariff and Customs Code- JmNational Internal Revenue Code- Louise