Bureau of Local Government Finance Opinion

March 28, 2000 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 3rd Indorsement Respectfully returned to the Provincial Assessor of Tarlac, Tarlac City, her within preceding 2nd Indorsement dated February 9, 2000 relative to the letter dated January 10, 2000 of Mr. Antonio C. Causing, DM, Team Leader, Project Team Bulkan, Technology and Livelihood Resource Center (TLRC) requesting opinion concerning the taxability of the real properties owned by TLRC. The abovementioned request was prompted by the Notice of Delinquency sent by the Municipal Treasurer of Concepcion, said province, demanding the payment of real property taxes due on the real properties of TLRC from 1993 up to 1999 amounting to P4,301,600.00 including penalties. Mr. Causing claims that the subject real properties of TLRC located at Barangay Alfonso, is exempt from the payment of real property taxes under Section 12 of Presidential Decree No. 1097 which reads as follows: "Sec. 12. Exemption from Taxes . Any donation, contribution, bequest, subsidy or financial aid which may be made to the Center shall be exempt from taxes of any kind, and shall constitute allowable deductions in full from the income of the donors or givers for income tax purposes. " The Center, its assets, acquisitions , income and its operations and transactions shall be exempt from any and all taxes , fees, charges, imposts, licenses and assessments, direct or indirect, imposed by the Republic of the Philippines or any of its political subdivision or taxing authority thereof, except import taxes, duties and fees."(Emphasis supplied) It is evident from the abovequoted provisions of said Decree that the Center (TLRC), its assets and acquisition are exempt from all taxes and assessments imposed by the Republic of the Philippines or any of its political subdivisions. Furthermore, attention is also invited to the provision of Section 9 of the same Decree which reads as follows: "Section 9. Founding Institutions . The founding institutions of the Technology Resource Center shall be the National Science and Development Board (NSDB), the Metro Manila Commission (MMC), and the Human Settlements Commission (HSC). Each of the founding institutions is hereby authorized to make contributions to the Center in the amount of P5 million which shall be an additional appropriation to their respective budgets for the fiscal year 1977. In addition, the sum of P5 million is hereby appropriated in lump sum for the operation of the Center out of any funds in the National Treasury not otherwise appropriated. Thereafter, such amount as necessary to carry out the provisions of this Decree shall be included in the Annual General Appropriations Decree. It can be gleaned from the abovecited provision of said Decree that TLRC is funded by the identified regular government agencies. ICHcaD Moreover, the attached copy of R.A. No. 8745, also known as the General Appropriations Act (January 1, December 31, 1999) clearly supports the fact that TLRC is a regular agency of the national government under the "Other Executive Offices", having a total new appropriations of P110,567,000.00. In this connection, it is informed that under Section 234(a) of R.A. No. 7160, otherwise known as the Local Government Code of 1991, real properties owned by the government, such as the TLRC, are exempt from the payment of real property tax, except when the beneficial use of said real properties are granted, for consideration or otherwise, to a taxable person. Subject Section 234(a) reads as follows: "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;" "xxx xxx xxx Be guided accordingly. (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge