Bureau of Local Government Finance Opinion

March 6, 1997 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Peter Lin General Manager P & L Corporation No. 7 Carlo Drive Sta. Maria Industrial Estate Bagumbayan, Taguig Metro Manila S i r : This refers to your letter dated February 11, 1997 relative to your application for exemption from local taxes. It is represented that P & L Corporation was registered with the Board of Investments (BOI) as an existing export producer on a preferred non-pioneer status on September 9, 1996. It is claimed that the Municipality of Taguig advised said corporation that one of the conditions in granting said exemption is to meet all the terms and conditions specified in the registration. Said BOI registration requires P & L Corporation to export at least 70% of its production. However, as of December 1996, its export sales did not meet the condition stipulated in its BOI registration. Hence, the following queries: 1. Is the granting of exemption from paying local government taxes conditional? If so, what are these conditions and please give us the copy of the laws covering these conditions. 2. Does the exemption cover all local taxes and fees (building inspection fee, garbage fee. etc.)? On the basis of existing provisions of law and rules, hereunder are the views of this Bureau: On Query No. 1. Section 133(g) of the Local Government Code of 1991 (LGC) provides as follows: "SEC. 133. Common Limitations on the Taxing Powers of Local Government Units . Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following:" "xxx xxx xxx; "(g) Taxes on business enterprises certified to by the Board of Investments as pioneer or non-pioneer for a period of six (6) and four (4) years, respectively from the date of registration; "xxx xxx xxx." Accordingly, and considering that P & L Corporation is a BOI-registered non-pioneer enterprise, said corporation shall be exempt from the payment of local business taxes from the date of registration which is September 6, 1996 for a period of four years, or until September 5, 2000. cSIHCA On Query No. 2. The exemption is applicable to local taxes only, hence, P & L Corporation shall still be liable to pay the Mayor's permit and other fees and charges for services rendered by the local government unit, such as garbage fees, sanitary inspection fees, electrical inspection fees, and similar others, that the local government unit may have imposed under a duly-enacted local tax ordinance. Very truly yours, (SGD.) ANGELINA M. MAGSINO Deputy Executive Director