The constitutional basis for local government taxation (revised text)
The right of local government units to collect taxes due must always be upheld to avoid severe tax erosion. This is consistent with the State policy to guarantee the autonomy of local governments and the objective of the Local Government Code “that they enjoy genuine and meaningful local autonomy to empower them to achieve their fullest development as self-reliant communities and make them effective partners in the attainment of national goals.” [1] The power to tax, said the Supreme Court, “is the most potent instrument to raise the needed revenues to finance and support myriad activities of the local government units for the delivery of basic services essential to the promotion of the general welfare and the enhancement of peace, progress, and prosperity of the people.” [2] As the Court explained in another case: …Local government units were faced with the same problems that hamper their capabilities to participate effectively in the national developmen...