Bureau of Local Government Finance Opinion

April 13, 2000 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Honorable Raul M. Molintas Provincial Governor La Trinidad, Benguet S i r : This refers to your letter dated February 16, 2000, requesting this Bureau "not to give due course on the request of Philex Mining Corporation (PHILEX)," particularly the application of the "yearly depreciation of their capital assets as provided by existing (provision of) laws (Section 225, R.A. No. 7160);" and Section 2.1 of Joint Local Treasury/Assessment Regulations No. 2-88. It is the contention of that Office that the Bureau of Local Government Finance and, ultimately, the Department of Finance, "have no jurisdiction to entertain the subject of the letter-request" of PHILEX and that it is only the Local Board of Assessment Appeals which has the "authority to act on issues regarding assessment of real property taxes." In this connection quoted hereunder are the provisions of Section 201 of R.A. No. 7160 and Article 291 of its Implementing Rules and Regulations, viz: Section 201 of R . A . No . 7160 : "Section 201. Appraisal of Real Property . All real property, whether taxable or exempt, shall be appraised at the current and fair market value prevailing in the locality where the property is situated. The Department of Finance shall promulgate the necessary rules and regulations for the classification, appraisal, and assessment of real property pursuant to the provisions of this Code." Article 291, Implementing Rules and Regulations of R . A . No . 7160 : "ART 291. Administration of the Real property Tax . The provinces and cities, including municipalities within the MMA, shall be primarily responsible for the proper, efficient and effective administration of the real property tax subject to the rules and regulations governing the classification, appraisal and assessment of real property issued by the DOF." "Accordingly, DOF and provincial governments shall exercise the authority to review and examine on continuing basis property, assessment, and real property tax records to ensure the proper implementation of this Rule and determine compliance with existing laws and regulations." Clearly, it is the Department of Finance that sets the rules on the appraisal and assessment of real properties and, as a consequence, the abovecited Article 291 of the Implementing Rules and Regulations of the Code authorized the DOF to principally "exercise the authority to review and examine on continuing basis property, assessment and real property tax records to ensure the proper implementation . . . and determine compliance with existing laws and regulations." It is worthwhile to note hereon that in the letter dated September 5, 1997 addressed to the Secretary of the Department of the Interior and Local Government, the Secretary of Finance clarified/emphasized that: "In order, therefore, that similar situations where our Departments have conflicting views on issues brought to our attention by local government officials may be avoided in the future, it will be appreciated if matters pertaining to the administration of the real property tax, the respective duties and functions of provincial, city and municipal assessors, as well as the classification, appraisal and assessment of real property for taxation purposes could be referred instead to this Department for appropriate action." With all due respect, the contention, that "the Bureau of Local Government Finance and, ultimately, the Department of Finance have no jurisdiction to entertain the subject request of PHILEX," is therefore deemed unfounded. Hence, we are furnishing you herewith a copy of our 4th Indorsement dated February 28, 2000, in response to the abovecited request of PHILEX under its subjoined letters dated October 29, 1999 and January 26, 2000, for your information. Very truly yours, (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge