Bureau of Local Government Finance Opinion

November 27, 2002 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION The Municipal Assessor and The Municipal Treasurer Claver, Surigao del Sur Messrs : This refers to your letter dated October 3, 2001, in effect requesting opinion on the taxability of the real properties (mining claims and mobile machineries) owned by Taganito Mining Corporation located thereat. Apparently, the same request is embodied under the letter dated July 26, 2001 of the Director, Mines and Geosciences Bureau (MGB), Central Office, Manila, addressed to this Bureau. It also appears that the said corporation together with Hinatuan Mining Corporation filed their appeal before the Central Board of Assessment Appeals (CBAA) concerning the taxability of their mobile machineries as evidenced by the attached copy of the Notice of Appeal dated July 18, 2001. In this connection, please be informed that as per verification made with the Central Records of this Bureau, and the Department of Finance (DOF), the abovementioned letter dated July 26, 2001 of the Director, MGB, has not yet been received. With regard to the issue on the taxability of the mining claims of Taganito Mining Corporation, attention is invited to Sections 218 and 234 of R.A. No. 7160, The Local Government Code of 1991, which read in part, to wit: "SEC. 218. Assessment Levels . The assessment levels to be applied to the fair market values of real property to determine its assessed value shall be fixed by ordinances of the sangguniang panlalawigan, sangguniang panlungsod or sangguniang bayan of a municipality within the Metropolitan Manila Area, at the rates not exceeding the following: "On Lands: "CLASS ASSESSMENT LEVELS" "xxx xxx xxx. "Mineral 50% "SEC. 234. Exemptions from Real Property Tax . The following are exempted from payment of the real property tax: "(a) Real property owned by the Republic of the Philippines or any of its political subdivisions except when the beneficial use thereof has been granted, for consideration or otherwise, to a taxable person ;" Evidently, real properties owned by the Republic of the Philippines become taxable when the beneficial use thereof has been granted to a taxable person. aIcDCT In view hereof, and considering that the ownership of the land of the subject mining claims remains in the name of the Republic of the Philippines, the same is hereby deemed to be taxable for reason that the beneficial use thereof has already been granted to a taxable entity, like the Taganito Mining Corporation. Likewise, as specified in the said Code, a corresponding assessment level not exceeding fifty percent (50%) shall be applied to its fair market value to arrive at its assessed value for real property taxation purposes. As regards the other issue, this Bureau deemed it proper not to render an opinion on the issue of the taxability of the mobile machineries of the said corporation pending the resolution of the aforementioned appeal case filed before the CBAA. Very truly yours, (SGD.) MA. PRESENTACION R. MONTESA Executive Director