AN ANALYSIS OF SECTION 195 OF
THE LOCAL GOVERNMENT CODE
(Providing appeal to the court as remedy
for denial of protest by local government treasurer)
By Judge Teodoro C. Fernandez
Autonomy of local government units is one of the fundamental state policies enshrined in the Constitution (1987 Constitution, Art. II, Sec. 25). Thus, the Constitution directed Congress to "to enact a local government code which shall (a) provide for a more responsive and accountable local government structure instituted through a system of decentralization with effective mechanisms of recall, initiative and referendum, (b) allocate among the different local government units their powers, responsibilities, and resources, and (c) provide for the qualifications, election, appointment and removal, term, salaries, powers and functions and duties of local officials, and all other matters relating to the organization and operation of the local units." (Constitution, Section 3, Article X).
Pursuant to the said constitutional mandate, Congress enacted Republic Act No. 7160, otherwise known as the Local Government Code of 1991. It was signed into law by President Corazon C. Aquino on October 10, 1991.
The Code is divided into four books, Book II of which covers the local taxation and fiscal matters, which include the imposition of local business taxes, as well as taxpayer’s remedies in contesting an assessment.
The goal of this study is to propose an amendment to Section 195 of the Local Government Code (LGC) in the matter appealing a denial of protest of assessment by the local treasurer or his duly authorized representative to the court of competent jurisdiction.
II. STATEMENT OF THE PROBLEM
Under Section 195 of the Local Government Code which is quoted hereunder, a taxpayer who disagrees with a tax assessment made by a local treasurer may contest an assessment by filing a written protest thereof: SECTION 195. Protest of Assessment. – When the local treasurer or his duly authorized representative finds that the correct taxes, fees, or charges have not been paid, he shall issue a notice of assessment stating the nature of the tax, fee, or charge, the amount of deficiency, the surcharges, interests and penalties. Within sixty (60) days from the receipt of the notice of assessment, the taxpayer may file a written protest with the local treasurer contesting the assessment; otherwise, the assessment shall become final and executory. The local treasurer shall decide the protest within sixty (60) days from the time of its filing. If the local treasurer finds the protest to be wholly or partly meritorious, he shall issue a notice cancelling wholly or partially the assessment. However, if the local treasurer finds the assessment to be wholly or partly correct, he shall deny the protest wholly or partly with notice to the taxpayer. The taxpayer shall have thirty (30) days from the receipt of the denial of the protest or from the lapse of the sixty-day (60) period prescribed herein within which to appeal with the court of competent jurisdiction, otherwise the assessment becomes conclusive and unappealable. (Underscoring supplied).
This section provides that if the local treasurer denies the protest of assessment wholly or partly, the taxpayer may appeal such denial with the court of competent jurisdiction. However, it does elaborate how an appeal is to be made from the denial of the protest. Resultantly, this has caused confusion on how “appeal” is to be exercised and on how “appeal” should be treated. A misstep in the application of this confusing remedy could result to an injustice to a taxpayer who could lose his case by sheer technicality.
III. D I S C U S S I O N:
A. Contesting an Assessment.
Restating the steps in contesting an assessment under Section 195 of the LGC: “a) A taxpayer may contest an assessment issued by a local...
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