Bureau of Local Government Finance Opinion

June 26, 2003 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully referred, thru the Provincial Assessor of Sarangani, to the Municipal Assessor of Maitum, same province, for full comment and/or appropriate action, the within undated letter of Rev. Jaime A. Julian, Chairman, Christian Mission in the Far East, Inc. (CMFEI), Malate, Manila, in effect requesting opinion as to whether or not properties owned by CMFEI which are allegedly used for the operation of its Christian Schools, Gethsemane Children's Home (Orphanages), Philippine Bible Institute and Churches are exempt from the payment of real property tax. Representation is being made that CMFEI is a corporation existing under the laws of the Philippines and duly registered with the Securities and Exchange Commission (SEC) under SEC registration No. ANO 92-000353, and primarily organized as a religious institution. Representation is likewise made that properties of CMFEI located in other local government units have been granted exemptions from payment of real property tax. A reading of the attached Articles of Incorporation reveals that CMFEI is indeed a religious corporation whose only purpose is to administer the affairs, properties and temporalities of CMFEI. Section 234(b) of the Local Government Code of 1991 (R.A. No. 7160), which substantially reproduced Section 28(3) Article VI of the 1987 Constitution, provides as follows: "Section 234. Exemptions from Real Property Tax . The following are exempted from payment of the real property tax: "(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. (Emphasis ours) "xxx xxx xxx." Obviously, properties owned by religious institutions which are actually, directly and exclusively used for, among others, religious purposes, are not subject to real property tax. Conversely, if the same properties are used other than its intended purpose, the same shall not be entitled to the real property tax exemption granted under the abovequoted provision of law. In view thereof, and subject to the determination of that Office that the subject properties owned by CMFEI located in Maitum, Sarangani Province are indeed being used actually, directly and exclusively for religious purposes, the same should be dropped from the roll of taxable properties and entered in the exempt roll of real properties. cAIDEa Be guided accordingly. (SGD.) MA. PRESENTACION R. MONTESA Executive Director