Bureau of Local Government Finance Opinion

October 30, 2003 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Ms. Leif Maypa Bayawan City 6221 M a d a m : This refers to your letter-complaint dated February 20, 2003, regarding the appraisal and assessment made by the City Assessor of Bayawan City on the agricultural improvements as reflected under Tax Declaration No. 99-08-0002-A. Relative thereto, attention is invited to the letter dated May 13, 2003 of the City Assessor, that city, in response to our 1st dated April 15, 2003, with the following information: 1. That Sangguniang Panlalawigan Resolution No. 119 dated February 20, 1998 (copy attached), adopted among others, the Revised Schedule of Base Unit Market Values of Lands, Perennial Trees or Plants located in the twenty two (22) Municipalities of the Province of Negros Oriental for the 1998 General Revision of Real Property Assessments and Property Classification, pursuant to Section 219 of Republic Act 7160, effective January 1, 1999; 2. That the applied Unit Schedule of Value was for the year 1999. Consequently, the contested appraisal of the agricultural Improvements is within the bounds of law, being fair and just; and 3. The imposition of real property tax by the City of Bayawan cannot be compared with that of Dumaguete City as they might have also adopted a different recommendation from the City Assessor. STIcEA Notwithstanding the above explanation of the City Assessor, this Bureau believes that agricultural improvements (plants and trees) should not be appraised separately from the land as they are an integral part thereof. Attached is a copy of the letter of the same date addressed to the City Assessor of Bayawan City, for his information and appropriate action. Very truly yours, (SGD.) MA. PRESENTACION R. MONTESA Executive Director ATTACHMENT October 30, 2003 THE CITY ASSESSOR Bayawan City S i r : This is to acknowledge receipt of your letter dated May 13, 2003, in response to our 1st Indorsement dated April 15, 2003, informing us of the action taken on the letter complaint of Ms. Leif Maypa of Bayawan City, regarding the appraisal and assessment made by your Office on the agricultural improvements as reflected under Tax Declaration No. 99-08-0002-A. Please be informed in this regard that the value of improvement such as plants and trees shall be considered in the preparation of the Schedule of Values for agricultural lands. However, although these plants and trees could be considered improvements to the agricultural land, they should not be appraised separately from the land as they are an integral part thereof. This finds support in the Supreme Court Decision entitled " Manila Railroad Company vs. Aguilar " (35 Phil. 118), where it said that "when the land preferably intended for the raising of a given crop or for the planting of trees of a certain kind, although these or the crop be deemed improvements of the land they should not be appraised apart from the land as they are an integral part thereof." Moreover, the Local Government Code of 1991, R.A. No. 7160, no longer provides for the separate appraisal and assessment of Plants and Trees. Further, attention is invited to the letter dated April 18, 1997 of the Department of Finance (DOF), as reiterated under the 1st Indorsement dated July 1, 2003, treating on a similar subject matter, which, likewise ruled among others, that: "xxx xxx xxx." "From the foregoing, it is evident that 'forest and timber lands' include not only the land itself but also all the vegetation found therein, in keeping with the intention of the law to promote forest management, protection and management . The law reflects the pronouncement of the Supreme Court in the case of ` Manila Railroad Co. vs. Maria Aguilar, et al ., . . . .' (Emphasis supplied) "xxx xxx xxx." Accordingly, appropriate action is requested on the herein letter of Ms. Maypa based on the above information. CIAHaT Be guided accordingly. Very truly yours, (SGD.) MA. PRESENTACION R. MONTESA Executive Director