Bureau of Local Government Finance Opinion

February 13, 2006 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Ms. Amelita Dayrit-Go, Ed. D. National President Girl Scouts of the Philippines National Headquarters 901 P. Faura St., Ermita Manila M a d a m : This refers to your letter dated January 12, 2006, requesting exemption from the payment of real property tax on the land owned by the Girl Scouts of the Philippines (GSP) located in Brgy. San Bartolome, Novaliches, that city. The request was made in view of the Five Million Four Hundred Sixty-Nine Thousand Five Hundred Forty Six and 97/100 (P5,469,546.97) real property tax levied by the Quezon City Government on the subject property. In this connection, attention is invited to the 1st Indorsement of even date, copy enclosed, of this Bureau, addressed to the City Assessor and the City Treasurer, both of Quezon City, which reads in part, as follows: "In this connection, and in order that appropriate action can be rendered on the issue, representatives of this Bureau conducted an investigation/ocular inspection pertaining to the subject real property. The Report of the Investigation/Ocular Inspection, copy enclosed, yielded the following observations, to wit: aDSTIC 1) 'The subject land, including the improvements erected thereon, owned by the Girl Scouts of the Philippines (GSP) are actually, directly and exclusively being used for educational purposes. The conduct of religious activities is likewise a part of continuing education of the Center. 2) 'The correct total parcels of land covering CRGNPTC need to be established, considering that as reflected in the Final Notice of Delinquency there are only three (3) tax declarations covering the said center, whereas, there are actually four (4) Transfer Certificates of Title (TCT) embracing the said property of the GSP." "In view hereof, attention is invited to Sections 198 and 217, of R.A. No. 7160, also known as the Local Government Code of 1991, which are quoted below: "SECTION 198: 'SEC. 198. Fundamental Principles . The appraisal, assessment, levy and collection of real property tax shall be guided by the following principles: 'xxx xxx xxx. '(b) Real property shall be classified for assessment purposes on the basis of its actual use .' (Emphasis supplied) "SEC. 217: 'SEC. 217. Actual Use of Real Property as Basis for Assessment. Real Property shall be classified, valued and assessed on the basis of its actual use regardless of where located, whoever owns it, and whoever uses it .' (Emphasis ours) "The aforequoted provisions of law mandate that actual use shall be the basis of taxation, whoever owns it. In G.R. No. L-29770 ( City of Baguio vs. Fernando S. Busuego ), the Supreme Court held that: "where use is the test, ownership is immaterial." "Hence, this Bureau is of the opinion that: "1. The exemption privilege previously enjoyed by GSP under its charter (E.O. No. 267) was already withdrawn upon the passage of the Local Government Code of 1991. "2. However, considering that the "actual use" of the subject property are found to be indeed for educational purposes being recognized by the DepED and not being leased to taxable persons, the subject land owned by GSP, together with the improvements erected thereon are exempt from the payment of real property tax, pursuant to the provision of Section 234 of the same Code, which provides in part, as follows: HCDAcE 'SEC. 234. Exemptions from Real Property Tax. The following are exempted from payment of the real property tax: 'xxx xxx xxx. '(b) All charitable institutions, churches, parsonages or convents appurtenant thereto including mosques, nonprofit or religious cemeteries and all lands, buildings, and improvements which are actually, directly and exclusively used for religious, charitable or educational purposes ; 'xxx xxx xxx.' We trust that we have sufficiently addressed the abovementioned request. TSEHcA Very truly yours, (SGD.) MA. PRESENTACION R. MONTESA Executive Director