RA 7160, the Local Government Code of 1991, grants local government units (LGUs) the authority to impose specific taxes, including franchise tax, professional tax, and amusement tax.

Franchise Tax

• Definition: A tax imposed on businesses granted special privileges to operate within a specific territory.
• LGU Authority: LGUs can impose franchise taxes on businesses operating within their jurisdiction.
• Basis: The franchise tax is typically based on the gross receipts or income of the business.

Professional Tax

• Definition: A tax imposed on individuals engaged in professions, occupations, or callings within a specific territory.
• LGU Authority: LGUs can impose professional taxes on professionals and individuals practicing their profession within their jurisdiction.
• Basis: The professional tax is usually based on the income bracket or the nature of the profession.

Amusement Tax

• Definition: A tax imposed on persons paying admission to places of amusement or recreation.
• LGU Authority: LGUs can impose amusement taxes on establishments providing amusement or recreation services within their jurisdiction.
• Basis: The amusement tax is typically based on the admission price or the gross receipts of the amusement establishment.

Collection of Taxes

LGUs are empowered to establish their own tax collection systems, including:

• Creating tax assessment offices
• Issuing tax receipts
• Implementing tax delinquency procedures
• Enforcing tax collection through legal means

Tax Remedies

To ensure compliance and collect unpaid taxes, LGUs have the authority to:

• Impose penalties and interest on delinquent taxpayers
• File tax liens on properties of delinquent taxpayers
• Conduct tax audits and investigations
• Initiate tax delinquency cases in court

Key Points to Remember:

• The specific rates, exemptions, and procedures for these taxes vary among LGUs.
• LGUs must comply with national tax laws and regulations when imposing and collecting local taxes.
• The collection of local taxes is crucial for LGUs to generate revenue for essential services.