Bureau of Local Government Finance Opinion

November 7, 1998 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 4th Indorsement Respectfully returned to the Regional Director for Local Government Finance, Department of Finance, Region XI, Helen K. Lee Building, corner Juan Luna-Juan dela Cruz Streets, Davao City, his within proceeding indorsement, requesting clarification as to the date the real property tax exemption of the Bangko Sentral ng Pilipinas (BSP) on its real properties located thereat, should be lifted in view of Section 125 of R.A. No. 7653, the New Central Bank Act, which reads in part, as follows: "SEC. 125. Tax exemptions . The Bangko Sentral shall be exempt for a period of five (5) years from the approval of this Act from all national, provincial, municipal and city taxes, fees, charges and assessments." (Emphasis supplied) A perusal of R.A. No. 7653 reveals that it was approved on June 14, 1993. It appears that the abovementioned request was prompted by the attached letter dated July 23, 1998 of the Manager III of the Bangko Sentral ng Pilipinas Regional Office in Davao City, contending, on account of the Memorandum dated June 17, 1998 of the Deputy Governor and General Counsel of BSP, that "it (BSP) is not liable for the real property taxes for the year 1998 since these have already accrued on January 1, 1998," when BSP was still considered exempt. We find the abovementioned contention tenable. In fact, Section 246 of R.A. No. 7160 specifically provides that "(T)he real property tax for any year shall accrue on the first (1st) day of January," and if the property is exempt on the tax day (January first (1st), it is not liable to taxation for the year although it afterwards becomes taxable, in line with Article III(B)(2) of the Manual on Real Property Tax Administration in the Philippines, which provides: "(2) Day as of which exemption determined If property is not exempt on the tax day, it is liable to taxation for the (fiscal) year although it afterwards becomes exempt . For instance, it has been decided that where land has become liable for taxes, it remains so for that year although subsequently acquired for purposes rendering it exempt." (Emphasis ours) ITSaHC Succinctly, the liability of BSP to pay real property taxes shall commence only on January 1, 1999. Be guided accordingly. (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge