DOJ Opinion No. 030, s. 1984

DOJ OPINION NO. 030 , s. 1984 2nd Indorsement February 27, 1984 Respectfully returned to Commissioner Cesar C. Marquez, Human Settlements Regulatory Commission, Makati, Metro Manila, the within request of the National Power Corporation for exemption from payment of locational clearance fees. cdlex The National Power Corporation (NAPOCOR) claims that it is exempt from payment of the abovementioned fee on the basis of Section 10 of P.D. No. 938 (amending Section 13 of R.A. No. 6395, the NAPOCOR Character), which provides as follows: "SEC. 10. Section 13 of the same Act is hereby further amended to read as follows: "Sec. 13. Non-profit Character of the Corporation: Exemption from All Taxes, Duties, Fees, Imposts and Other Charges by the Government and Government Instrumentalities . The corporation shall be non-profit and shall devote all its returns form its capital investment as well as excess revenues from its operation for expansion. To enable the Corporation to pay its indebtedness and obligations and in furtherance and effective implementation of the policy enumerated in Section One of this Act, the Corporation, including its subsidiaries, is hereby declared exempt from the payment of all forms of taxes, duties, fees, imposts as well as costs and service fees including filing fees, appeal bonds, supersedeas bonds, in any court or administrative proceedings '." (Emphasis supplied) However, doubt has arisen whether the exemption contained in the aforequoted provision may still be invoked by the NAPOCOR in view of the provision of Section 23 of P.D. No. 1177 ("Budget Reform Decree of 1977") which provides: LexLib "SEC. 23. Tax and Duty Exemptions . All units of government, including government-owned or controlled corporations, shall pay income taxes, customs duties and other taxes and fees as are imposed under revenue laws : Provided, That organizations otherwise exempted by law from the payment of such taxes/duties may ask for a subsidy from the General Fund in the exact amount of taxes/duties due: Provided, further, That a procedure shall be established by the Secretary of Finance and the Commissioner of the Budget whereby such subsidies shall automatically be considered as both revenue and expenditure of the General Fund". (Emphasis ours) Subject to the extended discussion hereinbelow given, it is believed that the NAPOCOR may claim exemption from payment of locational clearance fees on the basis broad exemption under Section 10 of P.D. No. 938, notwithstanding the provision of Section 23 of P.D. No. 1177 withdrawing the tax and duty exemption of all government entities. Pursuant to Section 10 of P.D. No. 938, the NAPOCOR is "declared exempt from the payment of all forms of taxes, duties, fees, imposts as well as costs and service fees including filing fees, appeal bonds, supersedeas bonds, in any court or administrative proceedings". The intent is clear to relieve the NAPOCOR of the burden of any imposition by the government or its agencies and instrumentalities, whether in the form of taxes and duties for revenue purposes, or of fees for services rendered. As we see it, therefore, while Section 23 of P.D. No. 1177, which provides that "all units of government, including government-owned or controlled corporations, shall pay income taxes, customs duties and other taxes and fees as are imposed under revenue laws " may have withdrawn the tax and duty exemption of the NAPOCOR under revenue laws (see Opinion No. 133, s. 1977), its exemption from payment of fees which are not collected for revenue purposes, but for services rendered is deemed retained. The term "revenue laws" refer to such laws as are made for the direct and avowed purpose of creating and securing revenues or public funds for the services of the Government. It refers to any law which provides for the assessment and collection of tax to defray the expenses of the government (H.A. Thierman Co., vs. Commonwealth, 97 S.W. 366; People's United States Bank vs. Goodwin, 162 P. 937, cited in Words and Phrases, Vol. 37 A p. 276). Evidently, locational clearance fees, which are imposed by the HSRC under its own administrative issuance, are not taxes for raising revenue, but are in the nature of administrative or service fees collected by government agencies to defray the cost of services rendered. LexLib (SGD.) RICARDO C. PUNO Minister of Justice