Bureau of Local Government Finance Opinion

August 12, 1997 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION The Acting Municipal Mayor Samal, Bataan Thru the Provincial Treasurer Balanga, Bataan S i r : This refers to your letters dated February 26, 1997 and March 3, 1997, both addressed to the Director, Legal Affairs Office, Department of Finance, which were referred to this Bureau for appropriate action. In your letter dated February 26, 1997, you requested information on whether the municipality of Samal could claim its share from the real property tax of the Bayview Subdivision, located in that municipality, which was purchased by the province of Bataan for want of a bidder after the said property was advertise for auction sale pursuant to Section 263 of the Local Government Code of 1991 (RA 7160). You stated that the Provincial Treasurer informed that the province will only give the municipal and barangay shares of the tax after the property has been resold to a taxable person pursuant to Section 264 of the same Code. Regarding your letter dated March 3, 1997, you requested information on whether the directive of the Provincial Treasurer thereat requiring all Municipal Treasurers of Bataan to remit weekly their real property tax collections to the Provincial Treasurer's Office is legal. You alleged that this requirement of the Provincial Treasurer contravenes the provisions of Articles 338 and 362 of the Implementing Rules and Regulations of the Code, which provided that the collection of the real property tax is the responsibility of the Municipal Treasurer, among others, and that the remittance of barangay shares from said tax shall be released directly to the barangay treasurers without the need of any further action. In the connection, attention is invited to the pertinent provisions of the Code, quoted as follows: "SEC. 200. Administration of the Real Property Tax . The provinces and cities including municipalities within the Metropolitan Manila Area, shall be primarily responsible for the proper, efficient, and effective administration of the real property tax." "Section 263. Purchase of Property By the Local Government Units for Want of Bidder . In case there is no bidder for the real property advertised for sale as provided herein, of if the highest bud is for an amount insufficient to pay the real property tax and the related interest and costs of sale, the local treasurer conducting the sale shall purchase the property in behalf of the local government unit concerned to satisfy the claim within (2) days thereafter a report of his proceedings which shall be reflected upon the records of his office. It shall be the duty of the Registrar of Deeds concerned upon registration with his office of any such declaration of the forfeiture to transfer the title of the forfeited property to the local government unit concerned without the necessity of an order from a component court. Within one (1) year form the date such forfeiture, the tax payer or any of his representative, may redeem the property by paying the local treasurer the full amount of the real property tax and the related interest and the costs of sale. If the property is not redeemed as provided herein, the ownership thereof shall be fully vested on the local government unit concerned ." "Section 264. Resale of Real Estate Taken for Taxes, Fees, of Charges . The sanggunian concerned may, by ordinance duly approved, and upon notice of not less than twenty (20) days, sell and dispose of the real property acquired under the preceding section at public auction. The proceeds of the sale shall accrue to the general fund of the local government unit concerned. "Section 271. Distribution of Proceeds . The proceeds of the basic real property tax, including of the basic real property tax, including interest thereon, and proceeds from the use, lease or disposition, sale or redemption of property acquired at a public auction in accordance with the provisions of this Title, by the province or city or a municipality within the Metropolitan Manila Area shall be distributed as follows: (a) In case of provinces: (1) Province Thirty-five percent (35%) shall accrue to the general fund; (2) Municipality Forty percent (40%) to the general fund of the municipality where the property is located; and (3) Barangay Twenty-five percent (25%) shall accrue to the barangay where the property is located . . . (d) The share of each barangay shall be released, without need of any further action, directly to the barangay treasurer on a quarterly basis within five (5) days after the end of each quarter and shall not be subject to any lien or holdback for whatever purpose." (Emphasis supplied) In answer, therefore, to the query under your letter dated February 26, 1997. Its is clear from the above stated provisions of Section 263 of the Code, that there being no bidder for the real property advertised for public auction, the local treasurer, in the instant case the Provincial Treasurer of Bataan conducting the sale, shall purchase the property in behalf of the local government unit concerned, which is the province of Bataan. For the reason that the owner of the property failed to redeem the same within one year from the date of purchase by the province, the ownership thereof has been fully vested upon/transferred to the province. For obvious reasons, the province cannot impose the real property tax upon itself and, therefore, inasmuch as no real property tax was collected, there are no municipal and barangay shares to speak of. The resale of the property acquired by the province of Bataan under Section 263 of the Code is a prerogative of the Sangguniang Panlalawigan, which shall be exercised through an enabling ordinance enacted for the purpose, pursuant to Section 264 of the Code. Being so, the municipality of Samal and the barangays involved need to wait for their respective shares from the proceeds of the resale of the said property pursuant to section 264 of the Code. Regarding the query in your letter of March 31, 1997, on the basis of the aforequoted provisions of Section 200 of the Code, it is evident that the real property tax is a provincial imposition. Accordingly, the Provincial Treasurer of Bataan has the authority to require all Municipal Treasurers of the province, which includes the Municipal Treasurer of Samal, to remit to the province, according to a prescribed schedule, their respective real property tax collections for proper recording in the books of accounts of the province and for subsequent apportionment and distribution of the shares of the municipalities and the barangays pursuant to Section 271 of the Code. In view of the foregoing, we suggest that a dialogue be held with the Provincial Treasurer of Bataan for the purpose of effecting a regular release of the shares of the municipality of Samal and the barangays from real property tax collections, including the proceeds of the sale of the Bayview Subdivision upon its re-sale to a private person or entity. We trust that this will help clarify matters. Very truly yours, (SGD.) LORINDA M. CARLOS Executive Director