CA declares Rizal tourism tax void

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THE Court of Appeals has upheld the ruling of the Regional Trial Court (RTC) of Pasig City nullifying an ordinance of Rizal provincial government that imposed tourism tax on fast-food restaurants.

In a 19-page decision penned by Associate Justice Priscilla Baltazar-Padilla and concurred in by Associate Justices Mario Lopez and Socorro Inting, the appellate court’s Special Fourth Division affirmed the decision of the Pasig City RTC that declared null and void Rizal Provincial Ordinance No. 98-01.

On January 19, 1998, the Sangguniang Panlalawigan (Provincial Board) of Rizal enacted the ordinance establishing the Rizal Tourism Promotion and Development Fund.

Under the ordinance, a 1.0-percent tourism tax was imposed on the gross sales of hotels, restaurants, night clubs, discos and beer houses, and similar establishments in the province.


Jollibee Foods Corporation, through its franchisees Lyns Foods Services Inc. and Jabelle Foods Services Inc., filed an action for Protest of Assessments under Local Government Code’s (LGC) Section 195 and for declaration of nullity of the ordinance with the RTC.

The local court found that the tax ordinance was enacted without complying with the mandatory requirements laid down in Section 186 of the LGC as it declared null and void the same, among others.

The RTC also ordered the provincial government of Rizal to withdraw and cancel the Assessment Notices issued to the fast-food chains and to cease and desist from assessing and collecting tourism taxes from them, prompting the province to seek redress with the appellate court.

In its June 1, 2015, the appellate court held that the Rizal government “did not comply with the mandatory requirements of posting and publication considering that the newspaper they submitted reveals that the proposed ordinance was published only after the lapse of almost a year after its approval.”

“[The said ordinance] must be declared void. A void and ineffective ordinance could not vest upon respondents-appellants the power to levy the assailed tourism tax,” it added.

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2 Comments

  1. Gerry Avorque on

    Operative Fact View Doctrine should apply in this case. The presumption of regularity should be observed, thus, no refund or tax credit be given to those who have paid the tax. The Provincial Government on the other hand should comply with the requirement under the LGC of 1991, after all, they are still allowed to re-enact the same ordinance provided they comply the required publication. This is only my humble opinion and I do not claim to be correct in this case.

  2. Ireneo M. Panopio on

    NOW:
    THE ESTABLISHMENTS SHOULD BE GIVEN TAX CREDITS FOR ALL THAT THEY HAVE ALREADY PAID… and apply this to Current Tax Obligations to the province. To make this effective, the subject establishments should organize as one for class action