Bureau of Local Government Finance Opinion

January 22, 2002 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION 1st Indorsement Respectfully referred, thru the Regional Director for Local Government Finance, Department of Finance, Region IV, People's Mansion Compound, Batangas City, to the Provincial Assessor and the Provincial Treasurer, both of Batangas, Batangas City. This refers to the attached letter dated November 16, 2001 of Atty. Remegio A. Noval, Tax Partner, Laya Mananghaya and Co., requesting in behalf of their client, the Steel Corporation of the Philippines (STEELCORP), the confirmation of a ruling issued by the Bureau of Local Government Finance (BLGF), under the letter dated February 2, 2000, which in part reads: "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 (STEELCORP) acquired the subject machinery and equipment in 1997, the actual cost to the SCP of the said properties should be based on the acquisition cost of the said properties at that time, converted at the average (dollar 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 (dollar) exchange rate prevailing at the time of their installation in 1998, is not supported by any provision law." In this connection, attention is invited to the attached letter dated January 19, 2002, of this Department, "upholding the opinion of the Bureau of Local Government Finance, contained in a letter of Deputy Executive Director and Officer-In-Charge, Atty. Angelina M. Magsino dated February 2, 2000". Consequently, all rules, regulations and policy statements inconsistent therewith are hereby deemed or modified to this extent. EDSHcT Accordingly, the Provincial Assessor is hereby left without any other legal option but to make the necessary correction of the assessment covering the subject machineries and equipment of the SCP pursuant to the February 2, 2000 letter of the BLGF. For his part, the said Provincial Treasurer is hereby given instructions to recompute the real property tax liabilities of STEELCORP on the subject real properties, based solely on the abovementioned corrected assessments. The BLGF Regional Director thereat is hereby given notice of this confirmation of the February 2, 2000 ruling of the BLGF and instructions to the abovementioned Provincial Treasurer and Provincial Assessor, in order that the same shall be implemented properly and efficiently. (SGD.) JOSE ISIDRO N. CAMACHO Secretary