Bureau of Local Government Finance Opinion

May 3, 1993 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Felicisimo O. Joson, Jr. Administrator Philippine Overseas Employment Administration Department of Labor & Employment POEA Building, Ortigas Avenue, Cor. EDSA Mandaluyong, Metro Manila S i r : This refers to your letter dated October 23, 1992 requesting exemption from paying the penalty imposed on delayed payment of transfer tax. Enclosed herewith is a copy of the 1st Endorsement of even date of this Department addressed to the Municipal Treasurer of Mandaluyong, Metro Manila, bearing the information that POEA is exempt from the payment of the tax on transfer of real property imposed by LGUs under Section 7 of the Local Tax Code, as amended, and Section 135 of the Local Government Code of 1991. Hence further action on your request for exemption from paying the penalty imposed on delayed payment of the said tax is no longer necessary. Very truly yours, By authority of the Secretary: JUANITA D. AMATONG Undersecretary ANNEX A 1st Indorsement May 3, 1993 Respectfully referred to the Municipal Treasurer, Mandaluyong, Metro Manila. This refers to the letter dated October 23, 1992 of Mr. Felicisimo O. Joson, Jr.,Administrator of Philippine Overseas Employment Administration (POEA) requesting exemption from paying the penalty imposed on delayed payment of transfer tax. It appears that POEA purchased a lot and building from Delta Motors Corporation (DMC),and occupied the same since 1984. To effect the transfer of ownership from DMC to POEA, the latter is being required to pay the transfer tax to that municipality. However, it appears that it took POEA four (4) years to finally obtain from the Department of Budget and Management (DBM) an allocation for payment of said tax, for reason that there has been no appropriation therefore. Hence, the above request. cd i In this connection, attention is invited to Section 5(o) of the Local Tax Code, as amended, the law in force in 1984, which is quoted hereunder: "Sec. 5. Common limitations on the taxing powers of local governments . The exercise of the taxing powers of provinces, cities, municipalities and barrios shall not extend to the imposition of the following: "xxx xxx xxx "(o) Taxes of any kind on the national and local government. "xxx xxx xxx" The above provisions of the Local Tax Code aforementioned is carried over in the Local Government Code of 1991, particularly Section 133(o) thereof which provides that the taxing powers of LGUs shall not extend to the levy of "Taxes, fees or charges of any kind of the National Government, its agencies and instrumentalities, and local government units." According, POEA, being a national agency, is exempt from the payment of the tax on transfer of real property being imposed and collected by that municipality. Therefore, further action on their request for exemption from paying the penalty imposed on delayed payment of the said tax is no longer necessary. Be guided accordingly. By Authority of the Secretary: JUANITA D. AMATONG Undersecretary