DOJ Opinion No. 105, s. 1987

DOJ OPINION NO. 105 , s. 1987 October 1, 1987 Hon. Philip Ella Juico Secretary of Agrarian Reform Diliman, Quezon City Sir : This refers to your request for legal opinion regarding the authority of the Secretary of Finance to adopt a graduated scheme of realty tax payments for farmer-beneficiaries under the land reform program. You state that the government has mandated the acceleration of the land transfer program in order that farmer-beneficiaries under Presidential Decree No. 87 shall receive their emancipation patents; that however, issuance of said patents has been hampered by the inability of said beneficiaries to pay the corresponding realty taxes as required for registration of the documents evidencing the transfer of ownership of the lands; that since October 21, 1972, these taxes have been left unpaid and to remedy the situation, your office and the Department of Finance now propose to require farmer-beneficiaries to pay only 10% of the total real property taxes due for purposes of registration and issuance of the patents and that it is your view that this proposal will ease the tax burden of farmer-beneficiaries, a clear manifestation of the strong will and determination of the government to Implement the agrarian reform program. Specifically, your query is whether the Secretary of Finance, pursuant to Section 5 of Presidential Decree No. 1621, has the authority to require farmer-beneficiaries under Presidential Decree No. 27 to pay only 10% of the real property taxes due as a requirement for the registration of the emancipation patent, with the outstanding balance payable after the issuance of said patent. Your query is answered in the affirmative. Section 5 of Presidential Decree No. 1621 in so far as pertinent reads as follows: xxx xxx xxx "SEC. 97-A. Grant of Special Authority to the Minister of Finance . Whenever public interest shall so require, or in special cases of economic dislocation or imbalance arising from natural calamities, the Minister of Finance shall, upon direction or approval of the President of the Philippines, formulate and prescribe a scheme of graduated realty tax payments and/or a system of equalizing real property valuations for taxation purposes, or such remedial measures that would ease the tax burden, subject to such conditions and requirements as may be deemed necessary." It is clear from the aforequoted provision of law that the Secretary (then Minister) of Finance when public interest should so require has the authority to formulate and prescribe "Such remedial measures that would ease the tax burden subject to such conditions and requirements as may be deemed necessary. The proposal of the Department of Finance and your Department to ease the tax burden of farmer beneficiaries is within the above authority. The implementation of the land reform program is indubitable in the public interest. prcd As stated in your letter, rice and corn farmers who are the beneficiaries of the land transfer program encountered problems and suffered economic difficulties due to natural calamities, unstable peace and order situation and depressed prices of agricultural commodities. The payment of the real property taxes on the part of these farmer-beneficiaries has posed a burden on them. One of the objectives of the government in proclaiming the whole country a land reform area in 1972 was to achieve a dignified existence for small farmers free from pernicious institutional restraints and practices which have not only retarded the agricultural development of the country but have also produced widespread discontent and unrest among farmers. To realize said objective, it is imperative for the Secretary of Finance to adopt measures that will enable them to pay their taxes to the government. These measures which are deemed appropriate must pass approval of the President of the Philippines. In your proposal, payment of only 10% of the real property taxes due satisfies the requirement of registration and issuance of the emancipation patent. While the farmer-beneficiaries and eased of their tax burden under the scheme, the government has to be assured that the farmer-beneficiaries still have to pay the remaining balance, after the issuance of the patent. This can be done by including in your proposal the requirement of annotating at the back of the emancipation patent the condition that the outstanding balance or 90% of the taxes due shall be paid on the next transaction affecting the land covered by the patent. The Secretary of Finance with the approval of the President, may under the law, go one step further. He may with the approval of the President, in the public interest, defer payment of the entire amount of taxes due such that the emancipation patent may be issued and registered without the taxes due being first paid. For the protection of the government, however, such taxes which are payable on the registration of the next transaction affecting the land should be considered as lien to be annotated at the back of the emancipation patent. prcd Please be guided accordingly. Very truly yours, (SGD.) SEDFREY A. ORDOEZ Secretary of Justice