Correct Percentage from Tax in Real Property Accruing to the Special Education Fund

June 29, 2010 DILG LEGAL OPINION NO. 114-10 Hon. Alfredo T. Tesalona Vice-Mayor Lubang, Occidental Mindoro Dear Hon. Tesalona : This refers to your letter seeking our legal opinion as to the correct percentage from tax in real property accruing to the Special Education Fund (SEF). Attached to your letter are the photocopies of official receipts issued by the municipal treasurer apparently showing that the amount collected as real property tax accruing to the SEF is equivalent to 100%.However, you were of the impression that the amount to be collected should only be 1% of the real property tax. You now seek our opinion on whether or not the municipal treasurer collects the correct and legal additional tax on real property accruing to the SEF and, if not, on how to rectify it. By way of response, may we advise you to call first the attention of the municipal treasurer on the matter and discuss it with him. Should this fail, you may rather refer the matter to your municipal mayor pursuant to Section 444 (b) (1) (x) of the Local Government Code of 1991 (RA 7160) wherein it is the duty of the Municipal Mayor to ensure that employees of the municipality faithfully discharge their duties and functions as provided by law and this Code. Please be advised to exhaust first the foregoing administrative remedies available before bringing the matter to us for our appropriate action. aSCHIT Thank you and warm regards. Very truly yours, By Authority of the Secretary: (SGD.) ATTY. JESUS B. DOQUE IV Director III Legal Service Department of Interior and Local Government ATTACHMENT Republic of the Philippines Province of Occidental Mindoro MUNICIPALITY OF LUBANG OFFICE OF THE SANGGUNIANG BAYAN HON. ALFREDO T. TESALONA Vice Mayor & Presiding Officer January 21, 2009 SECRETARY RONALDO V. PUNO Department of Interior & Local Government A. Francisco Gold Condominium EDSA corner Mapagmahal Street Quezon City Dear Secretary Puno: Re: Special Education Fund The Rules & Regulations Implementing the Local Government Code of 1991 (Article 184) provides, in part: "(g) Special Education Fund. The proceeds from the additional one percent (1%) tax on real property accruing to the Special Education Fund (SEF) shall be automatically released to the local school boards ..." The DBM Updated Budget Operations Manual for Local Government Units (June 2005) explains on page 222 the legal basis of SEF. To wit: "A. One of the special funds that shall be maintained in every provincial, city or municipal treasury is the Special Education Fund Section 309 (a) of R.A. 7160 provides "that SEF shall consist of the respective shares of the provinces, cities, municipalities and barangays in the proceeds of the additional tax on Real Property to be appropriated for purposes prescribed in Section 272 of R.A. 7160". "Section 272 also provides that proceeds from the additional one percent (1%) tax on real property accruing to the SEF shall be automatically released to the local school board ..." Attached to this letter-inquiry are the following photocopies of official receipts on real property tax payments issued by the Office of the Municipal Treasurer, Municipality of Lubang: TDSICH Official Receipt No. 9811799 (Attachment A) Official Receipt No. 9812191 (Attachment B) The official receipts show that the payment for the Special Education Fund (SEF) collected by the municipal treasurer is equal to one hundred percent (100%),not one percent (1%),of the real property tax. Questions: (1) Is the municipal treasurer collecting the correct and legal additional tax on real property accruing to SEF? (2) If not, how shall the mistake be rectified? MARAMING SALAMAT PO. MABUHAY! Very truly yours, ALFREDO T. TESALONA