Bureau of Local Government Finance Opinion

October 5, 1998 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully returned to the Regional Director for Local Government Finance, Department of Finance, Region XI, Helen K. Lee Building, corner Juan Luna and Juan de la Cruz Streets, Davao City. This refers to the letter dated September 28, 1998 of that Office posing a query on whether or not the collections made by the City of Tagum and the Island Garden City of Samal from taxpayers availing of the tax amnesty on real property tax penalties for the year 1994 and previous years shall accrue solely to the said cities, or will the proceeds therefrom be based under Section 271(a) of the Local Government Code of 1991. The query is made in view of the attached copy of Resolution No. 744, enacting Provincial Ordinance No. 01-97, both series of 1997, of the Sangguniang Panlalawigan of Davao del Norte, granting tax relief/amnesty to delinquent real property taxpayers of the province covering the period from 1994 and previous years, subject to certain conditions and for other purposes. It is stated that the Island Garden City of Samal and the City of Tagum were created as component cities of the province under Republic Acts Nos. 8471 and 8472, respectively, approved on January 30, 1998 and were ratified in a plebiscite conducted on March 7, 1998. That Office also informed that the City of Tagum has stopped remitting the share of the province from the collection of real property taxes on March 7, 1998, despite the absence of a city ordinance enacting the Real Property Tax Code of the city. DHSCEc Under a 3rd indorsement dated July 15, 1998 of this Bureau, copy attached, it was cited that the collection of real property taxes by the municipalities of Babak, Samal and Kaputian (municipalities comprising the Island Garden City of Samal) is still based on the Provincial Tax Ordinance, a provincial imposition, enacted by the sangguniang panlalawigan, prior to the creation of the city. Furthermore, the three (3) municipalities are still operating as separate local government units, pending final report and recommendation of the transition committee relative to the final merger of said municipalities. In this connection, Section 51 of RA 8471, charter of the Island Garden City of Samal, provides: "Sec. 51. Municipal Ordinances Existing at the Time of the Approval of this Act . All municipal ordinances of the municipalities of Babak, Samal and Kaputian existing at the time of the approval of this Act shall continue to be in force within the respective territories wherein these local ordinances originally apply, insofar as they are not inconsistent with the provisions of this Act, until the sangguniang panlungsod shall by ordinance provide otherwise." On the basis of the foregoing provisions of the Act, creating the Island Garden City of Samal, and considering that allegedly the City of Tagum has not as yet enacted its own local tax ordinance, and considering further that the subject taxes collected (from CY 1994 and below) became due and payable prior to the year the two (2) cities acquired their cityhood, it is evident that they (City of Tagum and the Island Garden City of Samal) shall have to remit the corresponding share of the province of Davao del Norte. It follows, therefore, that the Sangguniang Panlungsod of the newly-created cities concerned may enact their respective city tax ordinances, in order that taxes collected shall exclusively accrue to them. It is hoped that this clarifies matters. aHTcDA (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge