Bureau of Local Government Finance Opinion

February 26, 1993 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION The Municipal Secretary Pagudpud, Ilocos Norte S i r : This refers to Resolution No. 92-258, series of 1992, passed by the Sangguniang Bayan thereat, inquiring on whether or not local governments could collect real property taxes due from Cooperatives. In this connection, attention is invited to the letter dated December 29, 1992 of the Department of Finance, which ruled that: "all real property owned by cooperatives duly registered with the Cooperative Development Authority (CDA), with a maximum accumulated reserves and undivided net savings of Ten Million Pesos (P10,000,000.00), are exempt from payment of real property." in view of the specific provisions of Article 62 of Republic Act No. 6938, otherwise known as the Cooperative Code of the Philippines and Section 234 (d) of Republic Act No. 7160, also known as the Local Government Code of 1991, which read as follows: cd Article 62, R.A. 6938 "Art. 62. Tax and Other Exemptions . Cooperatives transacting business with both members and non-members shall not be subject to tax on their transactions to members. Notwithstanding the provisions of any law or regulation to the contrary, such cooperatives dealing with non-members shall enjoy the following tax exemptions: (1) Cooperatives with accumulated reserves and undivided net savings of not more than Ten Million Pesos (10,000,000.00) shall be exempt from all national, city, provincial, municipal or barangay tax of whatever name and nature." Section 234 (d) R.A. 7160: "Sec. 234. Exemptions from Real Property Taxes. The following are exempted from payment of the real property tax: "(d) All real property owned by duly registered cooperatives as provided for under R.A. No. 6938." Moreover, it is worth mentioning that the above mentioned letter of this Department also ruled that electric cooperatives "are exempt from the payment of real property tax when they are duly registered with the Cooperative Development Authority (CDA), pursuant to R.A. 6938 with certain limitations therein specified." Very truly yours, By Authority of the Secretary: LORINDA M. CARLOS Executive Director