Bureau of Local Government Finance Opinion

July 15, 1998 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 3rd Indorsement Respectfully returned to the Regional Director for Local Government Finance, Department of Finance, Region XI, Helen K. Lee Building, corner Juan Luna and Juan de la Cruz Streets, Davao City. This refers to his 1st indorsement (denominated as 2nd indorsement) dated May 26, 1998 requesting clarification on the attached 1st indorsement dated April 27, 1998 of the In-charge of Office, Office of the Provincial Treasurer, Davao del Norte, relative to the query of the Municipal Treasurer of Kaputian, same province. In his letter dated April 21, 1998, said Municipal Treasurer is seeking legal opinion on whether the provincial share on the real property taxes collected by the municipalities of Babak, Samal and Kaputian from March 8, 1998 shall still be remitted to the province, pursuant to Section 5 of Provincial Tax Ordinance No. 01, series of 1992. It is represented that the Island Garden City of Samal was created as a component city of the province under RA 8471, approved on January 30, 1998 and was ratified in a plebiscite conducted on March 7, 1998. The said newly created city comprises the abovestated municipalities, formerly all from the province of Davao. However, the collection of real property taxes is still based on the abovementioned provincial tax ordinance, a provincial imposition, enacted by the Sangguniang Panlalawigan, prior to the creation of the city. Furthermore, the three municipalities are still operating as separate local government units pending final report and recommendation of the transition committee relative to the final merger of said municipalities. TCDcSE Section 51 of RA 8471, charter of the Island Garden City of Samal, provides: "Sec. 51. Municipal Ordinances Existing at the Time of the Approval of this Act . All municipal ordinances of the municipalities of Babak, Samal and Kaputian existing at the time of the approval of this Act shall continue to be in force within the respective territories wherein these local ordinances originally apply, insofar as they are not inconsistent with the provisions of this Act, until the sangguniang panlungsod shall be ordinance provide otherwise." On the basis of the foregoing provisions of the Act, it is evident that the municipalities concerned shall still collect the real property taxes and remit the corresponding share of the province, based on the existing provincial tax ordinance. It follows, therefore, that there is a need for the Sangguniang Panlungsod of the newly-created city to enact its own city tax ordinances pursuant to the provisions of the Local Government Code of 1991 in order that tax revenues may accrue exclusively to the city government. (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge