Bureau of Local Government Finance Opinion

June 28, 2000 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully referred, thru the Provincial Treasurer of Batangas, Batangas City, to the Municipal Treasurer of Balayan, same province. This refers to the letter dated June 23, 2000 of Atty. Remigio A. Noval of KPMG Laya Mananghaya and Company, for and in behalf of its client, the Steel Corporation of the Philippines (SCP), requesting that instructions be issued to the said Municipal Treasurer "directing to observe the status quo and to accept SCP's payment for the 2nd quarter on the basis of the same computation as applied for the 1st quarter" payment. SCP's counsel also disclosed that the said Municipal Treasurer " was directed to enforce collection of the full amount (of real property tax) based on the Provincial Assessor's assessment plus the contested amount for the 1st quarter." (Emphasis supplied) It is worthwhile to note hereon that, in a letter dated February 2, 2000, this Bureau clarified that: "By express provision of the Code, therefore, the acquisition cost of the properties should be based on the actual cost to the owner of the same. Considering that SCP acquired the subject machinery and equipment in 1997, the actual cost to SCP of the said properties should be based on the acquisition cost of the said properties at the time, converted at the average exchange rate then prevailing. "The determination by the Assessor of the fair market value of the machinery and equipment based on their acquisition cost, converted at the exchange rate prevailing at the time of their installation in 1998, is not supported by any provision of law." In his letter dated February 17, 2000, however, the Provincial Assessor expressed disagreement over the said clarification made by this Bureau under its abovementioned letter dated February 2, 2000 and further contended that "the assessment under ARP No. 034-00438 . . . for (the subject) machinery and equipment of Steel Corporation of the Philippines . . . has become final and executory." It is therefore, very clear that the subject matter, that is, the assessments covering the machineries and equipment of SCP cannot be considered resolved, as this Bureau finds the defiance of the said Provincial Assessor to its directive under the abovementioned letter of February 2, 2000 inappropriate and without basis. Accordingly, the abovementioned request for status quo is deemed to be in order and therefore, SCP's offer to accept its payment for the 2nd quarter on the basis of the same computation applied for the 1st quarter payment should be given due course. DaEcTC Moreover, be reminded, that this Bureau "exercises administrative and technical supervision and coordination over the treasury and assessment operations of local governments" in behalf of the Department of Finance, pursuant to the provisions of R.A. No. 7160 and Executive Order No. 127, particularly Section 43 thereof, which provides in part, thus: "Section 43. Bureau of Local Government Finance . The Bureau of Local Government Finance . . . shall have the following functions: "xxx xxx xxx. "(b) Exercise administrative and technical supervision and coordination over the treasury and assessment operations of local governments;" "xxx xxx xxx. "(b) Exercise line supervision . . . the local treasury and assessment services;" "xxx xxx xxx." Be guided accordingly. (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge