18 January 2018

Office of the Taguig City Treasurer

City Government of Taguig
Taguig City Hall, Gen. A Luna St, Taguig,
1637 Metro Manila

Attention: Atty. J. Voltaire L. Enriquez

OIC- City Treasurer’s Office

Subject: Letter of Protest against Local Business Tax (LBT)

Assessment for CY 2017

Dear Sir/Madam,

We are writing this letter to formally protest the assessment of business tax for ______________
(hereinafter the Corporation), in the amount of One Hundred Sixty Nine Thousand Five Hundred
Twenty Nine and Ninety Four Cents (Php 169,529.94).

It is our opinion that there is an error in the assessment of business tax due from the Corporation. As
indicated in the Billing Statement (attached as Annex A), the gross amount earned by the
Corporation or tax base is Php 20,427,081.02. However, in the Affidavit of Gross Receipts (attached
as Annex B) submitted to your good office, the Corporation’s gross receipt from January 1, 2017 to
December 31, 2017 is only Php 9,742,094.34, more or less.

To note, the amount of Php 20,427,081.02, is the Corporation’s gross receipts for 2016, as seen in
the Business Permit for 2017 (attached as Annex C) and Billing Statement for 2017 (attached as
Annex D).

Under Section 143 in relation to Section 151 of the Local Government Code (LGC), Taguig City can
only assess and collect LBT based on the taxpayer’s gross sales/receipts of the preceding calendar
year. For this purpose, gross receipts is defined under Section 131 of the LGC, as follows:

“xxx xxx xxx

(n) Gross Sales or Receipts include the total amount of money or its equivalent
representing the contract price, compensation or service fee, including the
amount charged or materials supplied with the services and the deposits or
advance payments actually or constructively received during the taxable quarter
for the services performed or to be performed for another person excluding
discounts if determinable at the time of sales, sales return, excise tax, and value-
added tax (VAT); (Emphasis ours)
xxx xxx xxx”

In addition, Sec. 143 (e) of the LGC provides that the tax to be imposed on

“xxx xxx xxx

 (e) contractors and other independent contractors, in accordance with the following
schedule:

With gross receipts for the preceding calendar year in the amount of: (Emphasis ours)

xxx xxx xxx”

In view of the foregoing, the assessment of the local business tax for the Corporation was not made
in accordance with the provisions of the LGC. Local business tax is assessed based on the gross
receipts of the preceding calendar year. There is no mention under the law that the local business
tax to be collected shall be subject to have a 20% increase from previous year’s declaration, as
stated in Memorandum Order No. 01-10, issued by the City of Taguig.

Following this, we are of the opinion that we should only pay the amount due using the tax base of
Php 9,742,094.34, which is the declared gross receipts of the Corporation for 2017.

Accordingly, demand is hereby made upon the City of Taguig to rectify the error and to properly
assess the business tax to be paid by the Corporation.

Very truly yours,

____________________________________
Corporate Secretary, Name of Company