Bureau of Local Government Finance Opinion

January 10, 2003 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 2nd Indorsement Respectfully returned to the City Assessor, Pasig City his within preceding Indorsement dated November 5, 2002, relative to the letter of Mr. Michael James Williams, Business Administrator/Treasurer of the General Council of the Assemblies of God, Inc., requesting opinion regarding the application for real property tax exemption on the properties of the said council, located at Raffles Corporate Center, Emerald and Garnet Road, Antonio, Pasig City. That Office made representation that the subject properties (commercial building) declared under TD Nos. 001-17707 and 001-17708 (copies attached), in the name of the General Council of the Assemblies of God, Inc. (GCAG for short), are used as offices of the International Correspondence Institute, a sister company of the GCAG, hence, the same is allegedly not actually, directly and exclusively used for religious purposes. The applicable law on the matter is Section 234(b) of the Local Government Code of 1991 (R.A. No. 7160), which is quoted hereunder: "SECTION 234. Exemption from Real Property Tax . "xxx xxx xxx. "(b) All charitable institutions, churches, parsonages or convents appurtenant thereto, including mosques, nonprofit or religious cemeteries and all lands, buildings, and improvements which are actually, directly and exclusively used for religious, charitable or educational purposes." (Emphasis ours) Evidently, in order to qualify for exemption from the payment of real property tax, all lands, buildings, and improvements should be actually, directly and exclusively used for either educational, charitable or in this case, religious purposes. Please be informed, in this regard that the required exclusive, actual and direct use of lands, buildings and improvements had been adequately discussed by the Supreme Court (G.R. No. L-49336), in the case of the Province of Abra vs. the Hon. Harold M. Hernancio , dated August 31, 1981 and was cited in our 4th Indorsement dated July 17, 1995 (copy enclosed). The pertinent portion of the said Decision is hereunder quoted: CDHaET "Respondent Judge would not have erred so grievously had he merely compared the provisions of the present Constitution with that appearing on the 1935 Charter on tax exemption of lands, buildings, and improvements. There is a marked difference. Under the 1935 Constitution Cemeteries, churches and parsonages or convents appurtenant thereto, and all lands, buildings, and improvements used exclusively for religious, charitable, or educational purposes shall be exempt from taxation. The present Constitution added charitable institutions, mosques, and nonprofit cemeteries and required that for the exemption of lands, buildings and improvements, they should not only be exclusively but also actually and directly used for religious or charitable purposes. The Constitution is worded differently. The changes should not be ignored. It must be duly taken into consideration. Reliance on past decisions would have sufficed were the words actually as well as directly not added. There must be proof therefore of the actual and direct use of the lands, buildings, and improvements for religious or charitable purposes to be exempt from taxation. . . (Emphasis supplied) In view of the representation made by that office that the subject properties are used as offices of the International Correspondence Institute, the required actual, direct and exclusive use of the properties for religious purposes, as mandated under Section 234(b) of the Local Government Code of 1991 which was substantially reproduced under Section 28(3), Article VII of the 1987 Constitution, is deemed not complied with. This Bureau, therefore believes that inasmuch as the properties of the General Council of the Assemblies of God, Inc., are not actually, directly and exclusively used for religious purposes, GCAG is subject to real property tax in pursuance of the 1987 Constitution, the Local Government Code of 1991, and the abovecited Supreme Court Decision. Be guided accordingly. (SGD.) MA. PRESENTACION R. MONTESA Executive Director