Bureau of Local Government Finance Opinion

February 7, 2000 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 2st Indorsement Respectfully returned to the Municipal Assessor, Taguig, Metro Manila, his within preceding indorsement dated October 7, 1999, relative to the letter dated September 7, 1999 of Miss Elizabeth L. Dooma, School Principal, Mt. Moriah Christian Academy (MMCA) situated in Bagumbayan, that municipality, requesting that the real properties of the subject Academy be declared exempt from the payment of real property taxes. Ms. Dooma submits that, aside from being a non-stock, non-profit educational institution, Mt. Moriah Christian Academy is exempt from realty taxation pursuant to the provision of Article VI, Section 28(3) of the 1987 Constitution which provides as follows: "Charitable institutions, churches and parsonages or convents appurtenant thereto, mosques, non-profit cemeteries, and all lands, buildings and improvements actually, directly and exclusively used for religious, charitable, or educational purposes shall be exempt from taxation ." (Emphasis supplied) However, that Office, in its abovementioned 1st Indorsement, informed that the said educational institution is not a "free school" and "is asking matriculation fee from its students and therefore operating for profit." It is informed that this Bureau has consistently ruled that the exemption of, among others, educational institutions from payment of real property tax is very explicit. Firstly, it is provided in the Constitution, the fundamental law of the land. Secondly, this provision in the Constitution was copied almost verbatim in the Local Government Code of 1991, (R.A. No. 7160). Section 234(b) thereof provides as follows: "Sec. 234. Exemptions from Real Property Tax . The following are exempted from payment of real property tax: "xxx xxx xxx. "(b) Charitable institutions, churches, parsonages or convents appurtenant thereto, mosques, nonprofit or religious cemeteries and all lands, buildings, and improvements actually, directly and exclusively used for religious charitable or educational purposes; (Emphasis supplied) "xxx xxx xxx." It appears from the attached "Government Permit" from the Department of Education Culture and Sports (DECS), that the Association of Christian Education of the Philippines, Inc. (ASCEP), from which Mt. Moriah Christian Academy is a bonafide member, was granted authority to operate as a non-stock educational corporation which shall offer Pre-Elementary, Elementary and Secondary Education Program. SDECAI Additionally, the Articles of Incorporation of the subject Academy provides the following purposes for which the same was incorporated, viz : "1. To offer educational services through courses in the Pre-School, Primary, Elementary and Secondary levels of education. "2. To develop and implement short-term modular courses and developmental program in the art technology, Gen. Literacy, computer and professional. "3. To develop and implement socio-cultural programs that would enhance community living. "4. To train and develop learning to grow in their Christian lives and to build them up for the Lord." It may be worth mentioning that this Bureau fully understands the desire of that Office to raise the much needed revenues for that particular LGU. However, we nevertheless cannot deny the fact that, indeed, there is basis for the request, even if those schools are collecting matriculation fees from its students. Under our 3rd Indorsement dated February 9, 1999, copy attached, we emphasized that educational institutions in order to be granted exemption from payment of real property taxes, should be actually, directly and exclusively used for educational purposes, regardless of whether or not these institutions are charging tuition/matriculation fees. In view thereof, this Bureau believes and so holds that Mt. Moriah Christian Academy is exempt from the payment of real property taxes pursuant to the provision of Article VI, Section 28(3) of the New Constitution, as reiterated under Section 234(b) of the Local Government Code of 1991 (R.A. No. 7160), regardless of the information that it (Mt. Moriah) charges matriculation fees from its students, for so long as the subject real property is actually, directly and exclusively used for educational purposes. However, this exemption shall not extend to machineries of the subject Academy, pursuant to Section 3 of Joint Local Treasury/Assessment Regulations No. 1-88 dated May 4, 1988, "even if these are actually, directly and exclusively used for religious, charitable or educational purposes." Be guided accordingly. (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge