Bureau of Local Government Finance Opinion

June 4, 1997 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 2nd Indorsement Respectfully returned, thru the Municipal Treasurer, to the Sangguniang Bayan Secretary, Palapag, Northern Samar. HCacTI This refers to his within letter dated January 30, 1997, addressed to the Officer-in-Charge, Legal Service, Department of the Interior and Local Government, which was referred to this Bureau for comment or appropriate action. It appears that under Ordinance No. 97-001, current series, of the Sangguniang Bayan, a twenty percent (20%) discount was prescribed for advanced prompt payment of the basic real property tax including the additional tax accruing to the Special Education Fund, in accordance with the following prescribed schedule of payments: 1. Payment of the total annual real property tax due on or before the 31st day of March of the current year, and 2. Payments in quarterly installment basis of the total annual real property tax as follows: a. First quarter installment to be due on or before March 31 of the current year; b. Second quarter installment to be due on or before June 30 of the current year; c. Third quarter installment to be due on or before September 30 of the current year; and d. Fourth quarter installment to be due on or before December 31 of the current year. It is noted that a copy of the Ordinance was furnished the Office of the Provincial Treasurer of Northern Samar. In its letter dated January 21, 1997, copy attached, the said Office commented that the power to levy real property taxes is within the jurisdiction of the provinces, cities, and the municipalities within the Metropolitan Manila Area only, as provided, for under Sections 232 and 233 of the Code. As regards the enactment of the abovementioned Ordinance No. 97-001 of that Body, Section 232 of the Code provides: "SEC. 232. Power to Levy Real Property Tax. A province or city, or a municipality within the Metropolitan Manila Area may levy an annual ad valorem tax on real property such as land, building, machinery, and other improvement not hereinafter specifically exempted." It is clear from the foregoing provision of the Code that only provinces, cities, and municipalities within Metropolitan Manila Area are vested with the power to impose the real property tax through an enabling tax ordinance. All other municipalities, meaning those outside of Metro Manila have no power to pass tax ordinances levying real property taxes, as such authority is vested only upon their respective provinces. Corollarily, only provinces, in this case, the province of Northern Samar, would have the authority to grant discounts on real property taxes. The position taken by the Provincial Treasurer on the matter is, therefore, found to be in order. Accordingly, subject Ordinance No. 97-001, current series of the Sangguniang Bayan may be considered as "ultra vires";or beyond the authority of the Sangguniang Bayan to enact and therefore, will not be enforceable. TCcSDE It is hoped that this clarifies matter. (SGD.) LORINDA M. CARLOS Executive Director