DOJ Opinion No. 164, s. 1985

DOJ OPINION NO. 164 , s. 1985 December 16, 1985 The Cabinet Standing Committee Executive House Manila Sir : Referred to this Office for comments and recommendations is Resolution No. 42-A of the Sangguniang Bayan of Malalag, Davao del Sur, requesting authority to purchase a piece of land with an area of more or less 9,548 square meters located at Baybay, Malalag, Davao del Sur, in the amount of P50,000.00, for sale on installment basis to occupants thereof, and for exemption from the payment of capital gains tax. I take it that the referral is made in view of the ban on the acquisition of land sites contained in LOI 981 exceptions to which are subject to approval by the Cabinet Standing Committee on a case to case basis. We understand that after the zonification of Barangay Baybay, Malalag, Davao del Sur, 53 families occupying a private property in said barangay were found to have no residential lots; that the said families cannot afford to buy the lots occupied by them on a cash basis; that to enable the 53 families to acquire their own residential lots the municipality of Malalag, proposed to purchase subject piece of land for resale to the occupants thereof at a low price on installment basis; that per certification of the municipal treasurer, the amount of P50,000.00 is now ready and available for the purchase of subject piece of land. It is believed that the proposed acquisition by the municipality of Malalag, Davao del Sur, of the above-mentioned piece of land is within its power. Although there is no showing that the purchase of subject land by the municipality is a project undertaken pursuant to the provisions of the Slum Improvement and Resettlement Program of the Government pursuant to LOI Nos. 555 (Instituting a Nationwide Slum Improvement and Resettlement Program [SIP], 686 (Implementation of the Slum Improvement and Resettlement [SIR] Program) or LOI No. 1204 (The National Bliss Program for Communities in Landed Estates, February 27, 1982) because the property involved herein is not among the slum or blighted areas identified under such program, it is believed that a municipalities may properly invoke the general welfare clause of Section 7 and 149 of the Local Government Code which, respectively, provide as follows: "SEC. 7. Governmental Powers on General. Every local government unit shall exercise the powers expressly granted, those necessarily implied therefrom, as well as powers necessary and proper for governance such as to promote health and safety, enhance prosperity, improve morals, and maintain peace and order in the local government unit, and preserve the comfort and convenience of the inhabitants therein." "SEC. 149. Powers and Duties. The Sangguniang Bayan shall: (a) Enact such ordinance and issue such regulations as may be necessary to carry out and discharge the responsibilities conferred upon it by law, and such as shall be necessary and proper to provide for the health, safety, comfort and convenience, maintain peace and order, improve public morals, promote the prosperity and general welfare of the municipality and the inhabitants thereof, and insure the protection of the property therein. xxx xxx xxx It is settled that the general welfare clause is to be given a liberal interpretation so as to give more power to local governments in promoting the economic condition, social welfare and material progress of the people in the community. The general welfare clause is elastic and must be responsible to various social conditions; it is not confined within the narrow circumscription of precedents resting on past conditions that which may at one time be regarded as not within such power may, at another time, by reason of changed conditions, be recognized as legitimate exercise of power. (Philippine Long Distance Company vs. City of Davao, et al., 122 Phil. 478 [1965]). Anent the request for exemption from the payment of capital gains tax it is suggested that the matter be referred to the Bureau of Internal Revenue which is the agency charged with the collection of the capital gains tax pursuant to Section 3 of the National Internal Revenue Code which provides as follows: prcd "SECTION 3. Powers and duties of the Bureau . The powers and duties of the Bureau of Internal Revenue shall comprehend the collection of all national internal revenue taxes, fees, and charges, and the enforcement of all forfeitures, penalties, and fines connected therewith . . .." Very truly yours, (SGD.) ESTELITO P. MENDOZA Minister of Justice