DOJ Opinion No. 074, s. 1987

DOJ OPINION NO. 074 , s. 1987 2nd Indorsement July 27, 1987 Respectfully returned to the Honorable Secretary of Public Works and Highways, Manila, his within request for opinion on whether or not the payment of building of St. James School is exempted from P.D. No. 1096 (the National permit fees required in light of the following provisions Building Code Institution, which reads of the (illegible portion in the DOS Files) "Charitable institutions, churches and parsonages or convents appurtenant thereto, mosques, non-profit cemeteries, and all lands, buildings and improvements, actually, directly, and exclusively used for religious, charitable, or educational purposes shall be exempt from taxation".(Sec. 28[3],Article VI) "All revenues and assets of non-stock, non- profit educational institutions used actually, directly, and exclusively for educational purposes shall be exempt from taxes and duties ... Proprietary educational institutions, including those cooperatively owned, may likewise be entitled to such exemptions subject to the limitations provided by law including restrictions on dividends and provisions for reinvestment." (Sec. 4[3],Article XIV) prcd The accompanying papers disclose that in connection with its application for the construction of a 4-storey school building at Paraaque, Metro Manila, the St. James School administration requested for the abovesaid exemption from the payment of building permit fees on the ground that the building will be used exclusively for educational purposes; that the Building Official of said municipality denied the request for the reason that the project does not fall under any of the exceptions enumerated in the Implementing Rules and Regulations of P.D. 1096; that St. James School sought reconsideration of the denial, alleging that its request for exemption is based upon the above-quoted provisions of the Charter; that the Building Official treated the request for reconsideration as an appeal and elevated it to that Department, which, in turn, sought the opinion of this Office on the matter. LLjur This Department concurs in the denial by the Building Official of the request for exemption of the St. James School building from payment of building permit fees, not on the ground that the project does not fall under any of the exceptions enumerated in the Implementing Rules and Regulations of P.D. No. 1096, but for the reason that exemption from the payment of taxes does not include exemption from the payment of fees (Manila Electric Co. v. Public Service Commission, 4 SCRA 1200, 1203.) Section 28(3), Article VI and Section 4(3), Article XIV of the Constitution speaks of exemption from taxes and duties. Taxes and duties are impositions to generate revenue. They are burdens or charges imposed by the legislative power upon persons or property to raise money for public purposes (Manila Electric Co. v. Auditor General, 73 Phil 133). A permit fee is different from a tax. It is imposed pursuant to the regulatory power of the state. Generally speaking, taxes are for revenues whereas fees are exactions for purposes of regulation and inspection (Calalang v. Lorenzo & Villar, 97 Phil. 212, 213 [1955]; Ops. of the Sec. of Justice, No. 106, s. 1973; Nos. 114 & 137, s. 1974; No. 71, s. 1981). Moreover, the settled principle of law is that whereas taxes are levied in the exercise of the taxation power, license or permit fees are imposed in the exercise of the police power (Republic vs. Philippine Rabbit, 32 SCRA 211). As explained in another decision of the Supreme Court "The difference between the license and property tax are well established. The license represents the permission conceded to do an act, is not supposed to be imposed for revenue, and is in the main for police purposes. A property tax, on the other hand, is a tax in the ordinary sense, assessed according to the value of the property." (City of Manila vs. Tanquintic, 58 Phil. 297) That the permit fee authorized to be collected pursuant to P.D. No. 1096 is a regulatory fee, and not an exaction fee for revenue could be inferred from the statute itself. Section 102 states that in line with State policy "to safeguard life, health, property and public welfare," the National Building Code was promulgated in order "to provide for all buildings and structures a framework of minimum standards and requirements to regulate and control their location, site, design, quality of materials, construction, use, occupancy and maintenance." Then, Section 203[4] empowers the DWPH Secretary "to prescribe and fix the amount of fees and other charges that the Building Official shall collect in connection with the performance of regulatory functions. To reiterate, it is the opinion of this Office that the exemption from taxes of the St. James School on all its properties, assuming they are exclusively used for educational purposes, under the Constitution, does not include exemption from the building permit fees imposed under P.D. No. 1096. If the intention of the framers of the Constitution were to include permit fees, they could have easily done so. It is presumed that the framers are familiar with the distinction between taxes and fees. prcd The query is thus answered in the negative. (SGD.) SEDFREY A. ORDOEZ Secretary of Justice