Practice question
A municipality awards a private company the right to collect its local taxes in the company's own name and retain collections above a guaranteed municipal payment. The arrangement is genuinely a letting of tax collection, not merely acquisition of software or banking services. Officials say a profitable bid and public use of proceeds cure any problem. What is correct?
- The express Section 130(c) prohibition applies despite the proposed financial benefit
- Every profitable contract overrides the Code
- The collection becomes a national tax automatically
- The company may legislate new taxes
- Public purpose makes all collection arrangements lawful
Legal references
- RA7160, Local Government Code, Sections129–133 and186–188: https://lawphil.net/statutes/repacts/ra1991/ra_7160_1991.html
- 1987 Constitution, ArticleX Section5: https://lawphil.net/consti/cons1987.html
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