Can Municipal Tax Ordinance Alterations Constitute Falsification?

Introduction

Altering a municipal tax ordinance or council resolution to create an unauthorized business tax exemption may expose the responsible person to criminal liability for falsification of legislative documents. The issue is especially serious when the alteration changes the text approved by the sanggunian and is later used to confer a financial benefit on a business entity.

Under Philippine law, liability depends on the nature of the document, the authority of the person who made the alteration, the materiality of the change, and the accused’s participation in the falsification. A corporation may benefit from the altered ordinance, but the criminal liability of responsible officers, employees, or private participants must be separately established.

What Is Falsification of Legislative Documents?

Article 170 of the Revised Penal Code punishes a person who, without proper authority, alters a bill, resolution, or ordinance enacted or approved, or pending approval, by either House of Congress, a provincial board, or a municipal council.

Article 170 was amended by R.A. No. 10951. The current penalty is prision correccional in its maximum period and a fine not exceeding ₱1,200,000. The amendment increased the fine from the amount stated in the original text of the Revised Penal Code.

Article 170 is directed at unauthorized alterations to legislative documents. It differs from other forms of falsification because the document involved is a legislative enactment or measure, such as an ordinance or resolution of a municipal council.

What Must the Prosecution Establish?

For an Article 170 prosecution involving a municipal tax ordinance, the prosecution must generally show the following:

• There was a bill, resolution, or ordinance enacted, approved, or pending approval by the municipal council;
• The accused altered the document, or participated in causing or procuring the alteration;
• The alteration was made without proper authority; and
• The alteration was material enough to affect the document’s legislative substance, meaning, or legal effect.

The prosecution must still prove the accused’s personal participation and criminal intent or knowledge beyond reasonable doubt. The mere fact that a business later benefited from an altered ordinance does not automatically establish that its officers or shareholders committed falsification.

How Does an Altered Tax Ordinance Create Criminal Exposure?

A typical case may involve an ordinance that originally imposes a business tax, limits an exemption, or requires compliance with specified conditions. After enactment, an unauthorized person may insert language stating that a particular business is exempt, reduce the applicable tax rate, or remove a condition required by the sanggunian.

If the alteration changes the legal effect of the ordinance, it may constitute falsification. In Tadena v. People of the Philippines, G.R. No. 228610, 2019, the Supreme Court held that a municipal mayor is not authorized to alter or intercalate the contents of an ordinance after its enactment. The mayor’s participation is generally limited to approval or veto, and an unauthorized change that alters the ordinance’s meaning may constitute falsification under Article 171(6) of the Revised Penal Code.

The principle in Tadena is relevant to Article 170 cases because it distinguishes a lawful act of approval or veto from an unauthorized alteration of the legislative text. A local chief executive cannot convert the approval process into authority to rewrite an ordinance.

Article 170 and Article 171: What Is the Difference?

Article 170 specifically concerns the unauthorized alteration of a bill, resolution, or ordinance. Article 171 covers falsification by public officers, including making untruthful statements, causing it to appear that persons participated in an act when they did not, and making an alteration or intercalation in a genuine document that changes its meaning.

The appropriate charge depends on the alleged act and the status and authority of the accused. For example, an unauthorized alteration of the text of a municipal ordinance may fall under Article 170. If a public officer, taking advantage of official position, makes it appear that the sanggunian approved language that it never considered, Article 171 may be implicated.

In Regidor, Jr. v. People of the Philippines, G.R. Nos. 166086-92, 2009, the Supreme Court recognized that public officers may be liable where they make it appear that a legislative body deliberated upon, passed, and approved a resolution when the body had not actually taken up the measure.

Similarly, People of the Philippines v. Mondejar, G.R. Nos. 245931-32, 2022, involved allegations that municipal officials falsified session minutes by representing that resolutions had been deliberated upon and acted on when they had not. These cases illustrate the distinction between altering an existing legislative document and fabricating the legislative history or contents of a measure.

When Is a Tax Exemption Unauthorized?

A business tax exemption is unauthorized when it lacks a valid legal basis or was created through an alteration that was not approved through the required legislative process. The following circumstances may indicate an unauthorized exemption:

• The exemption does not appear in the original ordinance approved by the municipal council;
• The exemption was inserted after the ordinance was signed or recorded;
• The alteration was not approved by the sanggunian through the required procedure;
• The supposed exemption conflicts with the Local Government Code or another applicable law;
• The official copy differs from the enrolled, authenticated, or officially recorded version; or
• The alteration was used to cancel, reduce, or avoid an assessed business tax.

The existence of a tax benefit alone does not prove falsification. The prosecution must connect the accused to the alteration and establish that the exemption was created or implemented through an unauthorized and knowing act.

Can a Corporation Be Charged Simply Because It Benefited?

Not necessarily. A corporation’s receipt of a tax exemption or reduced tax assessment does not, by itself, prove that the corporation or its officers participated in falsification. Criminal liability must be based on the applicable statute and on proof of the accused’s own acts, knowledge, and participation.

The officers or employees of a corporation may incur liability if evidence shows that they requested, directed, financed, used, or knowingly relied on the falsified ordinance as part of a fraudulent scheme. A private person who knowingly uses a falsified public or legislative document may also face liability under the applicable provisions of the Revised Penal Code, depending on the charge and the facts established.

The prosecution should therefore identify the specific person who altered the ordinance, the person who authorized or procured the alteration, and the person who knowingly used the altered document. Corporate benefit is circumstantial evidence, but it is not a substitute for proof of individual participation.

Could Anti-Graft Liability Also Apply?

Where the alteration is connected with the grant of an unwarranted tax advantage to a private business, public officers may also face liability under Section 3(e) of R.A. No. 3019. The prosecution must establish that the officer acted with manifest partiality, evident bad faith, or gross inexcusable negligence and gave a private party an unwarranted benefit, advantage, or preference, or caused undue injury to the government or another party.

In People of the Philippines v. Belicena, et al., General Register Nos. 272635/272917-39, 2025, the Court emphasized that liability under Section 3(e) requires proof of the statutory modes of wrongdoing together with fraudulent intent or corrupt motive. Public officers who merely performed their duties under prevailing procedures, without knowledge of or participation in the fraudulent scheme and without gross inexcusable negligence or bad faith, should not be held criminally liable solely because an irregular transaction occurred.

Accordingly, a falsified ordinance and an unauthorized tax exemption may support separate charges, but the elements of Article 170, Article 171, and Section 3(e) of R.A. No. 3019 must each be independently established.

What Evidence Is Important?

Cases involving altered municipal ordinances usually turn on documentary comparison and proof of the legislative process. Important evidence may include:

• The original ordinance or resolution as approved by the municipal council;
• The official journal, session minutes, committee reports, and attendance records;
• Certified copies maintained by the sanggunian secretary or municipal records office;
• The version used by the treasurer, assessor, mayor, or business permit office;
• Tax assessment records and business permit applications;
• Digital metadata, scanning records, transmittal documents, and filing logs; and
• Communications showing who requested, prepared, approved, or used the altered text.

Where the allegation is that a session or approval never occurred, testimony from the sanggunian secretary, members of the council, records custodians, and persons present during the meeting may be material. The absence of a valid legislative record may also support the claim, although the prosecution must still prove the elements of the offense.

What Defenses May Be Available?

A person accused of falsification may raise the following defenses, depending on the evidence:

• Proper authority: The accused was legally authorized to prepare, correct, authenticate, or reproduce the document.
• No material alteration: The change was clerical, non-substantive, or did not alter the ordinance’s meaning.
• No participation: The accused did not prepare, direct, approve, procure, or knowingly use the altered document.
• No knowledge: The accused relied on an apparently official copy without knowledge of falsification.
• Valid legislative approval: The allegedly inserted language was in fact approved through the required legislative process.
• Failure to prove the original: The prosecution cannot establish which version was authentic or when the alteration occurred.

Reliance on subordinates or official records is not automatically a defense. Its significance depends on the accused’s position, duties, access to the document, notice of irregularities, and participation in the resulting tax exemption.

Practical Review for Municipalities and Businesses

Municipal governments should preserve the complete legislative record for every tax ordinance, including drafts, committee reports, session minutes, voting records, signed copies, transmittal documents, and publication records. The official custodian should maintain a controlled version of the ordinance and document every correction or reproduction.

Businesses seeking a tax exemption should request a certified copy of the ordinance and confirm that the exemption appears in the text approved by the sanggunian. The business should also retain the legal basis for the exemption, the relevant tax assessment, and the official communication granting or recognizing the benefit.

Before relying on a reduced tax assessment, counsel should compare the ordinance with the municipal code, the Local Government Code, the approved schedule of taxes, and the official session records. An unusually favorable exemption, especially one granted without a clear legislative basis, warrants immediate verification.

Summary of the Governing Rules

Issue	Applicable rule
Unauthorized alteration of an ordinance	May constitute falsification of legislative documents under Article 170 of the Revised Penal Code.
Alteration by a public officer taking advantage of office	May also fall under Article 171, depending on the specific falsification act.
Tax advantage granted to a private business	May support a separate charge under Section 3(e) of R.A. No. 3019 if all statutory elements are proved.
Corporate benefit	Does not automatically establish the criminal liability of the corporation, its officers, or employees.
Alteration by the mayor after enactment	Approval or veto does not ordinarily authorize rewriting the ordinance’s substance, as explained in Tadena v. People.

Conclusion

Altering a municipal tax ordinance to create an unauthorized business tax exemption may constitute a serious criminal offense. Article 170 applies when a legislative document is altered without proper authority, while Article 171 and Section 3(e) of R.A. No. 3019 may apply when the conduct involves public officers, fabricated legislative proceedings, or an unwarranted benefit to a private business.

The decisive questions are whether the document was materially altered, whether the alteration was unauthorized, and whether the accused knowingly participated in or used the falsification. Municipal officials and businesses should preserve the original legislative record, verify the authenticity of tax exemptions, and obtain legal advice before implementing or relying on a disputed ordinance.

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