Bureau of Local Government Finance Opinion

March 27, 1998 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION The Honorable Commissioner Securities and Exchange Commission EDSA, Greenhills Mandaluyong City S i r : This refers to the request of educational institutions for exemption from the payment of local taxes pursuant to the provision of Section 4 (3), Article XIV of the 198 Constitution, the pertinent portion of which states: " Section 4(3) Article XIV of the Constitution . . . . "(3) All revenues and assets of non-stock, non-profit educational institutions used actually, directly, and exclusively for education purposes shall be exempt from takes and duties. . . ." In addition, Article 283 of the Implementing Rules and Regulations (IRR) implementing Section 193 of the Local Government Code (LGC) of 1991 provides as follows: ART. 283. Withdrawal of Tax Exemption Privileges or Incentives . Unless otherwise provided for in this Rule, beginning January 1, 1992, all local tax exemption privileges or incentives granted to and presently enjoyed by any person, whether natural of juridical, including government-owned or controlled corporations, are considered withdrawn, except the following:" "xxx xxx xxx "(c) Non-stock and non-profit hospitals and educational institutions; "xxx xxx xxx." It appears from the aforequoted provisions of law that an educational institution, to be exempted from taxation, should be an entity that is both non-stock and non-profit. However, there are educational entities which are registered with the SEC as non-stock only. TcICEA In this connection, and inasmuch as the determination of whether said educational institutions are non-stock and non-profit is within the jurisdiction of the SEC, it will be highly appreciated if this Bureau could be favored with the information as to whether or not an educational institution that is registered as "non-stock" should also be considered as "non-profit" and therefore tax exempt. An early reply is requested by this Bureau in resolving queries regarding tax exemption privileges of said institutions. Thank you for your kind attention. Very truly yours, (SGD.) LORINDA M. CARLOS Executive Director