Bureau of Local Government Finance Opinion

April 22, 1999 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION The Provincial Assessor of Cavite, Trece Martires City S i r : This refers to your request for opinion/ruling as to whether or not the Andres Soriano, Jr. Training Center located at Amuyong, Alfonso, Cavite, owned and operated by the San Miguel Corporation (SMC), is qualified to be exempt from the payment of real property taxes in line with the provisions of Section 234(b) of R.A. No. 7160, the Local Government Code of 1991. It appears that the abovementioned request is being made in view of the request of Mr. Mardonio Palaypay of SMC for revision of Tax Declaration No. 11506, in view of their contentions, that: a. "The property is being used as Training Center or for educational purposes of all employees of SMC and not for profit, and thus covered under Section 234, letter "B"; and b. The market values of Buildings at the site were reflected in one tax declaration "instead of independent or separate tax declaration per building or for each property." In this connection, and in order to resolve the matter once and for all, this Bureau directed the conduct of an investigation/ocular inspection of the subject real properties, in order to ascertain as to whether or not the assessments made by the Office of the said Provincial Assessor are in order. ETDHaC In a report dated March 31, 1999, copy enclosed, the representatives of this Bureau who conducted the said investigation/ocular inspection, submitted, among others, the following observations, to wit: "Although the Andres Soriano, Jr. Training Center is claimed to be for educational purposes of all employees of SMC,' still, it could not warrant its exemption from payment of the real property taxes in view of the following reasons: "1. The said training center also caters to other private offices who would like to avail of the training courses being offered by SMC; "2. The training courses being offered are not among the regular subjects being offered in schools/universities. "3. To date, the said accreditation from DECS has not yet been received by this Bureau for consideration." In this connection, attention is invited to Section 234(b) of R.A. No. 7160, which provides, as follows: "SEC. 234. Exemption from Real Property Tax . The following are exempted from payment of the real property tax: "xxx xxx xxx. "(b) All charitable institutions, churches, parsonages or convents appurtenant thereto including mosques, nonprofit or religious cemeteries and all lands, buildings, and improvements which are actually, directly and exclusively used for religious, charitable or educational purposes ;" (Emphasis ours) Evidently, all lands, buildings, and improvements which are actually, directly and exclusively used for educational purposes are exempt from payment of the real property taxes. SCaTAc In view of the foregoing, attention is invited to the 3rd Indorsement dated February 9, 1999, copy enclosed, of this Bureau, treating on a similar subject matter, which ruled in part, as follows: "It is informed in this connection, that Section 234(b) of R.A. No. 7160, otherwise known as the Local Government Code of 1991; and Section 28(3) Article VI of the Constitution specifically provides that only lands, buildings, and other improvements actually, directly, and exclusively used from educational purposes are considered exempt from the payment of real property taxes. Although, in this particular case, the subject real properties are, admittedly, owned by an educational institution (DAP), the same (DAP Pasig City) can not be considered exempt from the payment of real property taxes for the reason that, as submitted by the City Assessor, the properties are "not actually, directly, and exclusively used for educational purposes." Similarly, therefore, and as findings warrant, the Andres Soriano, Jr. Training Center is not actually, directly and exclusively used as an educational institution. In view of the foregoing, and considering the length of time that has elapsed since SMC made the commitment for the submission of the said accreditation for consideration, this Bureau finds the assessment made by your Office that Andres Soriano, Jr., Training Center is "Taxable," in order. Likewise, it is recommended that the said training center and the lodging facility be issued separate tax declarations, in order that appropriate assessment levels thereat could be applied. Please be guided accordingly. STECAc Very truly yours, (SGD.) ANGELINA M. MAGSINO Deputy Executive Director Officer-in-Charge