Community Tax: Rates, Deadlines, Penalties, and Cedula Use

The community tax in the Philippines is a small annual levy that cities and municipalities collect from adult residents and businesses under Republic Act 7160, the Local Government Code of 1991. Individuals pay a ₱5.00 basic tax plus ₱1.00 for every ₱1,000 of prior-year income, capped at ₱5,005 total. Corporations pay a ₱500 basic tax plus amounts tied to property and receipts, capped at ₱10,500. The receipt you get after paying is the Community Tax Certificate, better known as the cedula, and you’ll need it for notarizations, permits, and most other transactions with the government.

Who Has to Pay

You owe the community tax if you are at least 18 years old and meet any one of these conditions:

You have been regularly employed on a wage or salary basis for at least 30 consecutive working days during the calendar year
You are engaged in any business or occupation
You own real property with a total assessed value of ₱1,000 or more
You are required by law to file an income tax return

One trigger is enough. A salaried employee who rents still owes the tax; a retiree with land assessed above ₱1,000 does too. Married couples are assessed on their combined property and combined gross receipts or earnings rather than on each spouse’s share separately.¹

Every corporation doing business in the Philippines also owes the tax, whether it is domestically incorporated or a resident foreign entity, and regardless of how it was created or organized.²

If you are not liable, you can still get a Community Tax Certificate by paying ₱1.00. That option is useful for people under 18, retirees who don’t hit any trigger, or anyone else who needs the certificate for a government transaction but falls outside the mandatory categories.³

How Much You Pay

Individuals

The individual tax has two parts. Everyone liable pays a flat ₱5.00 basic tax. On top of that, you owe ₱1.00 for every ₱1,000 of income from the preceding year, whether from business, a profession, or property. The additional portion is capped at ₱5,000 no matter how much you earn.¹

Someone who earned ₱300,000 last year owes ₱5 plus ₱300, for a total of ₱305. Someone who earned ₱10 million hits the cap and pays ₱5,005. For most salaried workers, the bill is a few hundred pesos.

Corporations

Corporations pay a ₱500 basic tax plus an additional amount based on the preceding year:

₱2.00 for every ₱5,000 of assessed real property value in the Philippines
₱2.00 for every ₱5,000 of gross receipts or earnings from Philippine operations

The combined additional tax for corporations is capped at ₱10,000, so no corporation pays more than ₱10,500.²

When to Pay and What Happens If You’re Late

The tax accrues on January 1 and must be paid no later than the last day of February. After that, interest of 24% per annum runs on the unpaid amount from the due date until you pay.³ Local treasurers often post that rate as roughly 2% per month on unpaid balances.⁴

Special timing rules apply if you turn 18 or newly become liable during the year. If you reach 18 or lose an exemption on or before June 30, you owe the tax for that year. If that happens on or before March 31, you get 20 days to pay without penalty. If you turn 18 or lose your exemption on or after July 1, you owe nothing for that year. Corporations follow a parallel rule: those established on or before June 30 owe the tax that year, while those established on or after July 1 do not.³

Where and How to Pay

Individuals pay in the city or municipality where they live. Corporations pay where the principal office is located.³

The usual venue is the City or Municipal Treasurer’s Office. Many LGUs deputize barangay treasurers to collect the tax, so you can often pay at the barangay hall without traveling to city hall.³ Some cities have moved online: Manila, for example, runs a portal for individual community tax certificate applications.⁵ Other LGUs use satellite payment centers or accept payments at designated banks or retail outlets. Check your LGU’s website for the current list of authorized channels.

What to Bring

Requirements vary a bit between LGUs, but individuals should generally prepare the following:

A Community Tax Declaration Form, available at the Treasurer’s Office or sometimes downloadable from the LGU website. It asks for name, address, occupation, and a breakdown of annual income or property values.
A valid government-issued ID such as a driver’s license or passport to verify identity and age.
Proof of income, typically BIR Form 2316 (Certificate of Compensation Payment/Tax Withheld) or recent pay slips, used to compute the variable portion.⁶
Your previous year’s cedula, if you have one. It speeds up the process.

Corporate filers need audited financial statements and records of gross receipts from the preceding year, plus documentation of real property holdings and assessed values.

Once the clerk verifies your figures and processes payment, you get your Community Tax Certificate on the spot. The certificate carries a unique number, the date and place of issuance, and the amount paid. Hang on to it. You’ll be asked for it more often than you’d expect.

When You’ll Need Your Cedula

The Local Government Code requires you to present a current cedula in a broad range of situations:

Acknowledging any document before a notary public
Taking the oath of office for any government position
Receiving any license, certificate, or permit from a public authority
Paying any tax or fee to the government
Receiving money from any public fund
Transacting any other official business with the government
Receiving any salary or wage

The office or company handling the transaction is required to ask for your current-year cedula before completing it. Voter registration is the one explicit exception. A cedula cannot be required there.³

There is a practical grace period built into the law. From January 1 through April 15, the previous year’s cedula is still accepted. After April 15, only the current year’s certificate is valid.³

In everyday practice the cedula also turns up as a requirement for business permit applications, BIR registration, and as a supporting ID when dealing with SSS, PhilHealth, or Pag-IBIG. One boundary worth knowing: under the 2004 Rules on Notarial Practice, the cedula alone does not count as competent evidence of identity for notarization because it has no photograph or signature. Notaries are supposed to verify identity through a photo-bearing ID or credible witnesses, though many still record cedula details out of long-standing habit.

1
Chan Robles Virtual Law Library. The Local Government Code of the Philippines
2
Supreme Court E-Library. An Act Providing for a Local Government Code of 1991
3
Bureau of Fisheries and Aquatic Resources. Local Government Code of the Philippines – RA 7160
4
Municipality of Bacolor. Issuance of Community Tax Certificate
5
City of Manila Community Tax Office. Community Tax Certificate (Individual) – Online Application
6
Bureau of Internal Revenue. BIR Form No. 2316 – Certificate of Compensation Payment/Tax Withheld