Bureau of Local Government Finance Opinion

June 3, 1999 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully returned, thru the City Treasurer, to the City Assessor, both of Cabanatuan City, his within letter dated September 14, 1998 requesting opinion on the taxability of the real properties owned by the Bangko Sentral ng Pilipinas (DSP). It appears that the abovementioned request was prompted by the letter dated August 25, 1998 of Mr. Ruben A. Banog, Manager, Bangko Sentral Regional Unit, same city informing the City Treasurer that under Section 125 of R.A. No. 7653 (the New Central Bank Act), the BSP is exempt from paying all taxes for a period of five (5) years. The said Section 125 of R.A. No. 7653 is quoted in part hereunder: "Sec. 125. Tax Exemptions . The Bangko Sentral shall be exempt for a period of five (5) years from the approval of this Act from all national, provincial, municipal and city taxes, fees, charges and assessments." (Emphasis supplied) A perusal of R.A. No. 7653 reveals that it was approved on June 14, 1993. Mr. Banog cited the opinion of their Deputy Governor and General Counsel, "that although the transfer of the assets from the old Central Bank of the Philippines (CBP) to the new BSP is not yet implemented thru the execution of the necessary transfer instruments, Administrative Order No. 100 dated November 30, 1993 as approved by the President of the Philippines, provided that 'the transfer of assets and liabilities from the former are executed, and the transfer will retroact as of July 3, 1993. . .' and the exemption will start on this date." And therefore, it is not liable for the real property taxes due for the year 1998 since those have already accrued on January 1, 1998, at the time that BSP was still tax exempt under Section 246 of R.A. No. 7160, otherwise known as the Local Government Code of 1991. aESIDH This Bureau finds the subject contention tenable. In fact under our 4th Indorsement dated November 7, 1998, copy enclosed, this Bureau had an occasion to render an opinion pertaining to the same subject matter, the resolving portion thereof reads thus: ". . . In fact, Section 246 of R.A. No. 7160 specifically provides that "(T)he real property tax for any year shall accrue on the first (1st) day of January, "and if the property is exempt on the tax day (January first (1st) ), it is not liable to taxation for the year although it afterwards becomes taxable, in line with Article III(B)(2) of the Manual on Real Property Tax Administration in the Philippines, which provides: "xxx xxx xxx. "Succinctly, the liability of BSP to pay real property taxes shall commence only on January 1, 1999." Be guided accordingly. (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge