Bureau of Local Government Finance Opinion

July 28, 1998 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Ricarido Ma. Navales Hinunangan, Leyte S i r : This refers to your letter dated May 25, 1998, posing the following queries: a) Is a municipal treasurer legally in a position to collect an annual tax of 1% on the assessed value of real property; b) Are illegally collected taxes refundable in favor of the taxpayers concerned; and, c) If so, what possible means could these taxes be refunded. In this connection, it is informed that this Bureau acts only on queries based on actual cases. Be that as it may, and in order to enlighten you on the matter, hereunder are our answers on the above queries. On query letter a, Sections 232, 233 and 235 of the Local Government Code of 1991 (RA 7160) are quoted hereunder: "SEC. 232. Power to Levy Real Property tax . A province, city, or municipality within Metropolitan Manila Area may levy the annual ad valorem tax on real property such as land, buildings, machinery, and other improvements not hereinafter specifically exempted. HTAIcD "SEC. 233. Rates of Levy . A province . . . shall fix a uniform rate of basic real property tax applicable to their respective localities as follows: (a) In the case of a province, at the rate not exceeding one percent (1%) of assessed value of real property: xxx xxx xxx." "SEC. 235. Additional Levy on Real Property for the Special Education Fund (SEF) . A province, or city, or a municipality within Metropolitan Manila Area, may levy and collect an annual tax of one percent (1%) on the assessed value of real property which shall be in addition to the basic real property tax. The proceeds thereof shall exclusively accrue to the Special Education Fund (SEF)." The taxes on real property pursuant to the abovequoted Sections of the Code is provincial imposition, hence, the ordinance levying the subject tax must be enacted by the sangguniang panlalawigan. However, considering that municipalities in MMA are not under or belonging to any province, they are authorized to enact ordinance levying taxes imposed by the province as provided for under Article 236 of the Implementing Rules and Regulations, implementing Section 144 of the Code which provides: "ART. 236. Rates of Tax within the Metropolitan Manila Area . (a) The municipalities within the MMA may levy taxes on businesses enumerated in Article 232 of this Rule at rates which shall not exceed by fifty percent (50%) the maximum rates prescribed for said businesses. (b) Said municipalities, pursuant to Article 274 of this Rule, may levy and collect the taxes which may be imposed by the province under Article 224, 225, 226, 227, 228, 229, and 230 of this Rule at rates not exceeding those prescribed therein." IaTSED On the other hand, the municipal treasurers of the municipalities within a province are in turn, delegated to collect the realty tax, pursuant to Section 247 of RA 7160, quoted below: "SEC. 247. Collection of Tax . The collection of the real property tax with interest thereon and related expenses, and the enforcement of the remedies provided for in this Title or any applicable laws, shall be the responsibility of the city or municipal treasurer concerned. xxx xxx xxx". As regards issues b and c, attention is invited to Section 253 of the same Code, also quoted below: "SEC. 253. Repayment of Excessive Collections . When an assessment of basic real property tax, or any other tax levied under this Title, is found to be illegal or erroneous and the tax is accordingly reduce or adjusted, the taxpayer may file a written claim for refund or credit for taxes and interests with the provincial or city treasurer within (2) years from the date the taxpayer is entitled to such reduction or adjustment. The provincial or city treasurer shall decide the claim for tax refund or credit within sixty (60) days from receipt thereof. In case the claim for tax refund or credit is denied, the taxpayer may avail of the remedies as provided in Chapter 3, Title II, Book II of the Code." Very truly yours, (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge