RPT not a prerequisite to LBT payment
By: Atty. Kaeth Louis C. Estrada on April 23,2026
BUSINESSES frequently face challenges when applying for business permits and paying local business taxes (LBT). Before a local government unit issues or renews permits or accepts LBT payments from a business, it will require the submission of specific documents.
In the case of Municipality of Pagbilao vs. Team Energy Corporation, the Sangguniang Panlalawigan of Quezon Province issued Resolution 2007-359, which required all business permit applicants to present a municipal treasurer’s certification that their real property tax payments are updated before the permit is issued.
The province also issued Resolution 2016-244, which approved Provincial Ordinance 2016-60, otherwise known as “The 2016 Revenue Code of the Province of Quezon.” The municipality of Pagbilao used these resolutions as basis to refuse LBT payments by the respondent corporation.
In this case, the corporation declared its gross receipts for 2017, with 70 percent attributable to Pagbilao, in relation to its annual LBT payment. The assistant municipal treasurer issued a statement of account for 2018, that imposed LBT to be paid quarterly. The corporation tendered its payments, but these were refused by the municipal treasurer. Throughout 2018, the corporation made repeated attempts to pay the quarterly installments. However, the municipal treasurer repeatedly refused to accept these payments, thereby resulting in the imposition of surcharges and penalties.
According to the municipality, it was proper to refuse the payments because the corporation failed to present proof of updated RPT payments under Resolutions 2007-359 and 2016-244 or the 2016 Provincial Revenue Code. They alleged that, based on these resolutions, they may refuse an LBT payment when there is no proof that the RPT was paid.
The corporation maintained that the refusal of the municipality, which resulted in the imposition of surcharges and penalties, was unwarranted and without legal basis. It argued that the resolution pertained to the issuance of business permit (or Mayor’s permit) and not LBT payment.
The CTA Division, in its ruling, held that the Local Government Code of 1991, as amended, Resolution 2007-359 and the 2016 Provincial Revenue Code yielded no requirement that RPT is a prerequisite to the payment of LBT, or vice versa. It is a settled rule of statutory construction that the express mention of one person, thing, act or consequence excludes all others, expressed in the familiar maxim “expressio unius est exclusio alterius.” The court further held that an examination of Resolution 2007-359, and the provincial revenue code revealed no explicit provision authorizing the outright refusal of LBT payments solely on account of unpaid RPT.
The CTA Division invoked the ruling in Cynthia S. Bolos v. Danilo T. Bolos, wherein the Supreme Court discussed the “verba legis” maxim: “As the statute is clear, plain and free from ambiguity, it must be given its literal meaning and applied without attempted interpretation. This is what is known as the plain-meaning rule or verba legis.”
Resolution 2007-359 reveals the necessity of presenting a certification of updated RPT payments as a prerequisite to the issuance of a business permit only. It does not authorize the suspension of the processing of LBT payments in instances where the taxpayer fails to present a certification of updated RPT payment. Neither does it contain any language that reasonably indicates such an intent.
The court concluded that the municipality’s refusal to accept the respondent’s LBT payments on the sole ground of its alleged failure to present proof of RPT payment could not be upheld. Hence, the imposition of surcharges and penalties lacked sufficient legal basis and was invalid.
Kaeth Louis C. Estrada is an Associate of Mata-Perez, Tamayo & Francisco (MTF Counsel). This article is for general information only and is not a substitute for professional advice where the facts and circumstances warrant. If you have any question or comment regarding this article, you may email the author at info@mtfcounsel.com or visit MTF website at www.mtfcounsel.com