Bureau of Local Government Finance Opinion

January 15, 2001 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Ms. Eleanor G. Algerre Authorized Representative Eagle Cement Corporation 2229 Alegria Bldg. Pasong Tamo Street Makati City Madam : This has reference to your letter dated October 12, 2000 requesting opinion on the transfer tax liability of EAGLE CEMENT CORPORATION (ECC). AcIaST It is represented that ECC purchased a lot located in Baguio City from the Presidential Commission on Good Government (PCGG). However, ECC is being requested to settle the real estate taxes, one of which is the tax on the transfer of real property ownership. In this connection, attached is a letter dated December 11, 2000 of Ms. Thelma B. Manaois, City Treasurer of Baguio City, copy attached, wherein she invokes Section 135 of R.A. 7160, otherwise known as the Local Government Code (LGC) of 1991: "SEC. 135. Tax on Transfer of Real Property Ownership . . . . "It shall be the duty of the seller, donor, transferor, executor or administrator to pay the tax herein imposed within sixty (60) days from the date of the execution of the deed or from the date of the decedent's death." On the other hand, Section 133 of the same Code provides: "SEC. 133. Common Limitations on the Taxing Power of Local Government Units . Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and barangays shall not extend to the levy of the following: "xxx xxx xxx. (o) Taxes, fees or charges of any kind on the National Government, its agencies and instrumentalities and local government units." On the basis of the aforequoted provision of Section 135 of the Code, it is very clear that the seller (PCGG) is liable for the payment of the transfer tax due thereon. However, since PCGG is considered as one of the National Government instrumentalities under Section 133 of the same Code, it is deemed exempt from payment of taxes, in this case the transfer tax. It is hoped that this will help clarify matters. ESITcH Very truly yours, (SGD.) BENJAMIN A. GERONIMO Executive Director <http://www.blgf.gov.ph/downloads/opinion/localtax/2001/a2000-1214.pdf> last visited October 23, 2013.