Bureau of Local Government Finance Opinion

July 6, 2001 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mrs. Yolanie A. Casipe School Administrator Lanie Casipe Learning Center No. 12 Meleguas St. De Castro Subdivision Brgy. St. Lucia, Pasig City M a d a m : This refers to your fax letter with enclosures, requesting exemption from the payment of real property taxes on the real properties of Lanie Casipe Learning Center, allegedly a non-stock/non-profit educational institution and recognized by the Department of Education Culture and Sports (DECS) and the Securities and Exchange Commission (SEC). In reply, please be informed that Section 28 (3) Article VI of the 1987 Constitution, and Section 234 (b) of the Local Government Code of 1991 (R.A. No. 7160), mandate that real properties owned by educational institutions, which are actually, directly and exclusively used for educational purposes, shall be exempt from the payment of real property taxes. The same likewise provide that non-stock and non-profit educational institutions shall continue to enjoy tax exemption, hence, local government units cannot impose business tax and Mayor's Permit fees, except regulatory fees, such as, but not limited to, sanitary inspection and electrical inspection fees, as provided for under Article 244 of the Implementing Rules and Regulations (IRR) implementing Section 153 of the Code. This exemption from real property tax, however, shall not extend to machineries owned by educational institutions, even if these machineries are actually, directly and exclusively used for educational purposes, pursuant to Section 3 of the Joint Local Treasury and Assessment Regulations (JLTAR) No. 1-88 dated May 4, 1988 of the Department of Finance. ETIDaH Attached is the ruling of this Bureau dated May 4, 2001 addressed to the Administrator, Academia de Sta. Martha, treating on a similar subject matter, for your information. Very truly yours, (SGD.) BENJAMIN A. GERONIMO Executive Director