Bureau of Local Government Finance Opinion

August 25, 2000 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Tan Concepcion & Bawagan Law Offices Suites 2104-2106 Medical Plaza Ortigas Bldg. San Miguel Ave.,Ortigas Center 1605 Pasig City Attention: Atty. Fe. L. Concepcion Gentlemen : This refers to your letter dated July 4, 2000 in behalf of your client, Fort Bonifacio Medical Center, Inc. (FBMCI) relative to the exemption from transfer tax and registration fees of the conveyance of Bases Conversion and Development Authority (BCDA) of a parcel of land to FBMCI. Representations are made that FBMCI and the BCDA entered into a Deed of Exchange whereby each of the parties conveyed to the other a parcel of land located in Taguig, Metro Manila, both parcels with a similar area of 8,749 square meters. The exchange constitutes two (2) sales transactions, the sale by FBMCI of its property to BCDA and the sale by BCDA of its property to FBMCI. Pursuant to their agreement, FBMCI has undertaken to secure all necessary clearances; to effect registration of the exchange and to secure transfer of titles over the respective properties in the names of the parties. Consequently, the aforesaid Deed of Exchange was presented to the Office of the Municipal Treasurer for the purpose of securing the tax clearance required for registration of title and were informed that the exchange, on the sale of FBMCI to BCDA and vice-versa, shall be subject to the 1/2 of 1% local transfer tax imposed by the Municipality of Taguig pursuant to the local tax ordinance adopted in accordance with RA 7160, otherwise known as the Local Government Code of 1991 (LGC). ISEHTa Likewise, the Registry of Deeds in Taguig, advised that the exchange will be subject to the registration fees imposed under PD No. 1529, otherwise known as the Property Registration Decree. That Office does not dispute that the sale by FBMCI to BCDA is subject to the payment of the transfer tax and registration fee. However, that Office requests confirmation of your opinion that the sale by BCDA of its property to FBMCI is exempt from the payment of the local transfer tax and the registration fee, invoking the provisions of RA 7227 (approved in March 13, 1992),as amended by RA 7917 (approved in February 24, 1995),otherwise known as the Bases Conversion Development Act, Section 8 thereof provides in pertinent parts, as follows: "Section 8. ... "The President is hereby authorized to sell the above lands, in whole or in part, which are hereby declared alienable and disposable, pursuant to the provisions of existing laws and regulations governing sales of government properties. ...However, six (6) months after approval of this Act, the President shall authorize the Conversion Authority to dispose of certain areas in Fort Bonifacio and Villamor as the latter so determines. .... "The provisions of law to the contrary notwithstanding, the proceeds of the sale thereof shall not be diminished and, therefore, exempt from all forms of taxes and fees. " (Emphasis supplied.) Considering, therefore, that RA Nos. 7227 and 7917 having been approved on March 13, 1992 and February 24, 1995, respectively, are later laws, their provisions should prevail over those of the LGC, which took effect on January 1, 1992. In other words, since RA Nos. 7227 and 7917 took effect after the LGC has become effective, then said Code could not have and cannot modify, repeal, amend or revise such tax exemption. On the contrary, the passage of RA Nos. 7227 and 7917 shows the intent of Congress to exempt the proceeds of the sales from all forms of taxes and fees. Accordingly, this Bureau concurs in your stand that the sale by BCDA of its property to FBMCI is exempt from the payment of local transfer tax and the registration fee, while the sale by FBMCI to BCDA is subject to the payment of the herein referred tax and fee. aTcIAS The Municipal Treasurer is being furnished a copy of this letter for his information and guidance. It is hoped that this will help clarify matters. Very truly yours, (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge last visited on October 2, 2013.