SECTIONS 133, 193, 232, and 234 of RA 7160

Page 1 of 5
SECTIONS 133, 193, 232, and

234 of RA 7160
Section 133. Common Limitations on the Tax Powers of Local
Government Units. Unless otherwise provided herein1, the exercise
of the taxing powers of provinces, cities, municipalities, and
barangays shall not extend to the levy of the following:
(a) Income tax, except when levied on banks and other financial
institutions;
(b) Documentary stamp tax;
(c) Taxes on estates, inheritance, gifts, legacies and other

acquisitions mortis causa, except as otherwise provided
herein; (See Section 135 Tax on Transfer of Real Property
Ownership [1/2 of 1% fmv])
(d) Customs duties, registration fees of vessel and wharfage on

wharves, tonnage dues, and all other kinds of customs fees,
charges and dues except wharfage on wharves constructed
and maintained by the local government unit concerned;
(e) Taxes, fees and charges and other impositions upon goods
carried into or out of, or passing through, the territorial
jurisdictions of local government units in the guise of charges
for wharfage, tolls for bridges or otherwise, or other taxes, fees
or charges in any form whatsoever upon such goods or
merchandise;
(f) Taxes, fees or charges on agricultural and aquatic products

when sold by marginal farmers or fishermen;
(g) Taxes on business enterprises certified to by the Board of

Investments as pioneer or non-pioneer for a period of six(6)
and four(4) years, respectively from the date of registration;
(h) Excise taxes on articles enumerated under the National Internal

Revenue Code, as amended, and taxes, fees or charges on
petroleum products;
(i) Percentage or value-added tax (VAT) on sales, barters or

exchanges or similar transactions on goods or services except
as otherwise provided herein;
(j) Taxes on the gross receipts of transportation contractors and

persons engaged in the transportation of passengers or freight
by hire and common carriers by air, land or water, except as
provided in this Code;
(k) Taxes on premiums paid by way of reinsurance or retrocession;
1 Meaning there is an exception.

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(l) Taxes, fees or charges for the registration of motor vehicles

and for the issuance of all kinds of licenses or permits for the
driving thereof, except tricycles;
(m) Taxes, fees, or other charges on Philippine products actually

exported, except as otherwise provided herein;
(n) Taxes, fees, or charges on Countryside and Barangay Business

Enterprises and cooperatives duly registered under R.A. No.
6810 and Republic Act numbered Sixty-nine hundred thirty-
eight (R.A. No. 6938) otherwise known as the “Cooperatives
Code of the Philippines” respectively; and
(o) Taxes, fees or charges of any kind on the National

Government, its agencies and instrumentalities, and local
government units.
Section 193. Withdrawal of Tax Exemption Privileges. Unless

otherwise provided in this Code, tax exemptions or incentives
granted to, or presently enjoyed by all persons, whether natural or
juridical, including government-owned or controlled corporations
except local water districts, cooperatives duly registered under R.A.
No. 6938, non-stock and non-profit hospitals and educational
institutions, are hereby withdrawn upon the effectively of this Code.
The ruling on NAPOCOR vs. RTC 190 SCRA 477 (1990) stating NPC
is not exempt from paying real property tax is no longer true.
In MIAA v. CA, City of Paranaque et al., G.R. No. 155650 July

20, 2006, the Supreme Court En Banc, ruled:
A government instrumentality like MIAA falls under Section 133(o)
of the Local Government Code, which states:
SEC. 133. Common Limitations on the Taxing Powers of Local

Government Units. – Unless otherwise provided herein, the
exercise of the taxing powers of provinces, cities, municipalities,
and barangays shall not extend to the levy of the following:
x x x x
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(o) Taxes, fees or charges of any kind on the National

Government, its agencies and instrumentalities and local
government units.(Emphasis and underscoring supplied)
Section 133(o) recognizes the basic principle that local governments

cannot tax the national government, which historically merely
delegated to local governments the power to tax. While the 1987
Constitution now includes taxation as one of the powers of local
governments, local governments may only exercise such power
"subject to such guidelines and limitations as the Congress may
provide."18
When local governments invoke the power to tax on national

government instrumentalities, such power is construed strictly
against local governments. The rule is that a tax is never presumed
and there must be clear language in the law imposing the tax. Any
doubt whether a person, article or activity is taxable is resolved
against taxation. This rule applies with greater force when local
governments seek to tax national government instrumentalities.
PRESUMPTIONS IN LOCAL TAXATION:
1. When local governments invoke the power to tax on national

government instrumentalities, such power is CONSTRUED
STRICTLY AGAINST LOCAL GOVERNMENTS;
2. The rule is that a tax is never presumed and there must be clear
language in the law imposing the tax. Any doubt whether a
person, article or activity is taxable is resolved against taxation.
This rule applies with greater force when local governments seek
to tax national government instrumentalities.
Another rule is that a tax exemption is strictly construed against the

taxpayer claiming the exemption. However, when Congress grants an
exemption to a national government instrumentality from local
taxation, such exemption is construed liberally in favor of the
national government instrumentality. As this Court declared in
Maceda v. Macaraig, Jr.:
The reason for the rule does not apply in the case of exemptions
running to the benefit of the government itself or its agencies. In
such case the practical effect of an exemption is merely to reduce
the amount of money that has to be handled by government in the
course of its operations. For these reasons, provisions granting
exemptions to government agencies may be construed liberally, in
favor of non tax-liability of such agencies.19
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As far as Real Property Taxation-

There is no dispute that a government-owned or controlled
corporation is not exempt from real estate tax. However, MIAA is not
a government-owned or controlled corporation. Section 2(13) of the
Introductory Provisions of the Administrative Code of 1987 defines a
government-owned or controlled corporation as follows:
Section 234. Exemptions from Real Property Tax. The following are
exempted from payment of the real property tax:
(a) Real property owned by the Republic of the Philippines or any

of its political subdivisions except when beneficial use thereof
has been granted, for consideration or otherwise, to a taxable
person;
(b) Charitable institutions, churches, parsonages or convents,

appurtenant thereto, mosques, nonprofit or religious
cemeteries and all lands, buildings, and improvements
actually, directly and exclusively used for religious, charitable
or educational purposes;
(c) All machineries and equipment that are actually, directly and
exclusively used by local water districts and gocc engaged in
the supply an distribution of water and/or generation and
transmission of electric power;
(d) All real property owned by duly registered cooperatives as

provided for under RA 6938;
(e) Machinery and equipment used for pollution control and

environmental protection.
Except as provided herein, any exemption from payment of real

property tax previously granted to, or presently enjoyed by all
persons, whether natural or juridical , including gooc are hereby
withdrawn upon the effectivity of this Code.
Section 234 of the LGC provides for the exemptions from payment of real
property taxes and withdraws previous exemptions therefrom granted to natural
and juridical persons, including government-owned and controlled corporations,
except as provided therein.
x x x x
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These exemptions are based on the ownership, character, and use of the
property. Thus:
(a) Ownership Exemptions. Exemptions from real property taxes on the basis
of ownership are real properties owned by: (i) the Republic, (ii) a province, (iii)
a city, (iv) a municipality, (v) a barangay, and (vi) registered cooperatives.
(b) Character Exemptions. Exempted from real property taxes on the basis of
their character are: (i) charitable institutions, (ii) houses and temples of prayer
like churches, parsonages or convents appurtenant thereto, mosques, and
(iii) non-profit or religious cemeteries.
(c) Usage exemptions. Exempted from real property taxes on the basis of the
actual, direct and exclusive use to which they are devoted are: (i) all lands,
buildings and improvements which are actually directly and exclusively used
for religious, charitable or educational purposes; (ii) all machineries and
equipment actually, directly and exclusively used by local water districts or by
government-owned or controlled corporations engaged in the supply and
distribution of water and/or generation and transmission of electric power;
and (iii) all machinery and equipment used for pollution control and
environmental protection.

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SECTIONS 133, 193, 232, and 234 of RA 7160

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Page 1 of 5

SECTIONS 133, 193, 232, and

(b) Documentary stamp tax;

(c) Taxes on estates, inheritance, gifts, legacies and other

(d) Customs duties, registration fees of vessel and wharfage on

(f) Taxes, fees or charges on agricultural and aquatic products

(g) Taxes on business enterprises certified to by the Board of

(h) Excise taxes on articles enumerated under the National Internal

(i) Percentage or value-added tax (VAT) on sales, barters or

(j) Taxes on the gross receipts of transportation contractors and

(k) Taxes on premiums paid by way of reinsurance or retrocession;

1 Meaning there is an exception.

(l) Taxes, fees or charges for the registration of motor vehicles

(m) Taxes, fees, or other charges on Philippine products actually

(n) Taxes, fees, or charges on Countryside and Barangay Business

(o) Taxes, fees or charges of any kind on the National

Section 193. Withdrawal of Tax Exemption Privileges. Unless

In MIAA v. CA, City of Paranaque et al., G.R. No. 155650 July

SEC. 133. Common Limitations on the Taxing Powers of Local

(o) Taxes, fees or charges of any kind on the National

Section 133(o) recognizes the basic principle that local governments

When local governments invoke the power to tax on national

PRESUMPTIONS IN LOCAL TAXATION:

1. When local governments invoke the power to tax on national

Another rule is that a tax exemption is strictly construed against the

As far as Real Property Taxation-

(a) Real property owned by the Republic of the Philippines or any

(b) Charitable institutions, churches, parsonages or convents,

(d) All real property owned by duly registered cooperatives as

(e) Machinery and equipment used for pollution control and

Except as provided herein, any exemption from payment of real

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