Bureau of Local Government Finance Opinion

August 3, 2001 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Mitsuru Tanaka President Coresteel Industrial Pilipinas Incorporated Phividec Industrial Authority Phividec Industrial Estate Sta. Cruz, Tagoloan Misamis Oriental S i r : This refers to your letter dated June 7, 2001, requesting that your machineries be no longer subject to the payment of real property tax effective April 30, 2001, the date of its total shutdown of operations. In this connection, enclosed is a copy of our letter of same date, addressed to the Administrator, Phividec Industrial Authority-Phividec Industrial Estate-Misamis Oriental (PIA-PIE-MO), treating on a similar request concerning your subject machineries. Very truly yours, (SGD.) BENJAMIN A. GERONIMO Executive Director August 3, 2001 Mr. Gabriel B. Evangelista Administrator Phividec Industrial Authority Phividec Industrial Estate Sta. Cruz, Tagoloan Misamis Oriental S i r : This refers to your letter dated June 15, 2001, requesting that the machinery owned by Coresteel Industrial Pilipinas Incorporated (CORESTEEL, for brevity) located within the Phividec Industrial Authority-Phividec Industrial Estate-Misamis Oriental (PIA-PIE-MO) no longer be subject to the payment of real property tax effective April 30, 2001, the date of its total shutdown of operations. In this connection, attention is invited to the 1st Indorsement dated April 4, 1997, copy enclosed, of this Bureau, treating on a similar subject matter, which ruled in part, as follows: "Accordingly, the aforecited ruling that: 'when machineries are no longer actually used for its purpose by reason of closure or cessation of production, the same should be transferred from the Taxable Roll to the Exempt Roll and not be subjected to the payment of real property taxes during the period of non-use,' is hereby maintained. "xxx xxx xxx In view of all the foregoing, the said Provincial Assessor is hereby instructed to drop the subject machineries of MARCOPPER from the "Taxable Roll" of real properties beginning the 2nd quarter of 1996. The same should remain under that status until such time that the company shall again be allowed to continue its mining activity/operations, in which case the said machineries should then be assessed as taxable real properties effective on the first day of January of the year immediately following its resumption of mining operations." We trust that this clarifies matters. Very truly yours, (SGD.) BENJAMIN A. GERONIMO Executive Director