Bureau of Local Government Finance Opinion

May 15, 2001 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 2nd Indorsement Respectfully returned, thru the In-Charge of Office, Office of the Regional Director for Local Government Finance, Department of Finance, Region I, 2nd Floor, Mabanag Justice Hall Building, Governor Luna Street, San Fernando City, La Union, to the In-Charge of Office. Provincial Assessor's Office of La Union, the within preceding Indorsement dated March 27, 2001 of that Office, relative to the letter dated January 29, 2001 of the Municipal Assessor of Naguilian, requesting opinion concerning the taxability of the real property (building) declared in the name of Naguilian Learning Center located at Imelda, said municipality. EScIAa It appears that the subject real property was declared as taxable under Tax Declaration No. 003-00808 by the Municipal Assessor of the same municipality. Ms. Virginia A. Rivera, President of the said Learning Center, in her letter dated January 16, 2001 to the Municipal Treasurer of the same municipality contends that the subject real property is exempt from the payment of real property taxes under the provision of Article XIV, Section 4(3) of the 1987 Constitution. ISEHTa In this connection, attention is invited to Sections 2 and 3 of Joint Local Treasury/Assessment Regulations No. 1-88 dated May 4, 1988 of the Department of Finance, which are quoted hereunder: "Sec. 2. Considering that the real property tax is an annual tax that accrues yearly on the first day of January, all lands, buildings, and improvements actually, directly, and exclusively used for religious, charitable or educational purposes shall, effective as of January 1, 1988, be declared as "Exempt" as provided for under Section 28(3), Article VI, of the New Constitution. The exemption shall apply to both the basic real property tax and the additional 1% tax accruing to the Special Education Fund (SEF), except however as provided for herein." "Sec. 3. The exemption from real property taxes, however, shall not include "machineries" even if these are actually, directly and exclusively used for religious, charitable or educational purposes." Moreover, the said tax exemption privileges is hereby reiterated under Section 234(b) of R.A. No. 7160 otherwise known as the Local Government Code of 1991 which provides as follows: "Sec. 234. Exemption from Real Property Tax . The following are exempted from payment of the real property tax: ETHIDa "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." Clearly, therefore, all lands, buildings and improvements actually, directly and exclusively used for educational purposes are exempt from the payment of real property taxes. Be guided accordingly. (SGD.) BENJAMIN A. GERONIMO Executive Director