THE 1987 Constitution empowers local government units (LGUs) to create their own revenues, as well as to impose taxes, fees and charges, subject to the guidelines and limitations set forth in the Local Government Code of 1991 (LGC). The LGC defines the extent and limitations of the taxing powers of LGUs, consistent with the State’s policy of upholding genuine local autonomy.
While LGUs have the extensive power to impose taxes, the LGC allows a taxpayer to avail of the remedy of protest in the case of an erroneous assessment by the LGU (Section 195) or the remedy of refund in the event of an erroneous payment of tax (Section 196). Pursuant to Section 195, the taxpayer, when erroneously assessed, can file a written protest against the notice of assessment before the local treasurer within 60 days of receiving the notice and later file an appeal in court within 30 days after the decision, or within the lapse of 60 days in case of inaction.
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