DOJ Opinion No. 176, s. 1989

DOJ OPINION NO. 176 , s. 1989 September 1, 1989 Hon. Quintin E.L. Paredes, Jr. Provincial Prosecutor Office of the Provincial Prosecutor Province of Surigao del Norte Surigao City Sir : This has reference to your request for opinion as to whether the Hinatuan Mining Corporation (HMC) a firm registered with the Board of Investments as a non-pioneer export producer of nickel ore is exempt from paying the business taxes to the Municipality of Taganaan, Province of Surigao del Norte. You state that on the basis of a tax ordinance of Taganaan, Surigao del Norte, the Hinatuan Mining Corporation paid the 1988 business tax imposed there-under; that in 1989, the said corporation refused to pay the said tax despite demand by that Office, on the basis of your opinion that said corporation does not fall within the exemption provided for in Section 39(h) of the Omnibus Investments Code. Hinatuan Mining Corporation on the other hand, claims (1) that the tax ordinance enacted pursuant to the Local Tax Code (P.D. No. 231) is contrary to the "national economic policy" (Section 2[e], supra); (2) that the municipality has no power to levy taxes on the business of mining corporations and minerals by mining operators, citing the limitations on the taxing power of the municipalities (Section 5[i][l] and [m], Local Tax Code); and (3) that the tax ordinance is not among those that the municipality can impose. We regret to inform you that this Office is constrained to refrain from rendering the opinion being sought. The Secretary of Justice does not render opinion for local governments and the officials thereof. This is why, pursuant to well established practice and precedents, this Department has declined to review the opinions rendered by Provincial fiscals (prosecutors) in their capacities as legal advisers of their respective local governments. (Secretary of Justice Opinion No. 182, s. 1979). Moreover, your query involves a determination of the tax-exempt status of the Hinatuan Mining Corporation which is a matter that properly pertains to the Department of Finance, a coordinate and co-equal department over which this Department has no revisory authority (Secretary of Justice Op. No. 66, s. 1987, No. 1, s. 1983, No. 123, s. 1980 and Nos. 39 and 149, s. 1976). We further note that the grounds relied upon by the corporation against the tax ordinance in question are the same grounds provided for in Section 44 of the Local Tax Code, viz; the tax or fee levied or imposed is not among those that the particular local government may impose in the exercise of its power in accordance with the Local Tax Code , and the tax ordinance is contrary to declared national economic policy , and which under Section 45 of the same Code, are grounds for filing a "formal protest against a tax ordinance" with the Secretary of Finance (and not with the Secretary of Justice) who is thereby vested with jurisdiction to decide such formal protest (Secretary of Justice Op. No. 15, s. 1975). The Secretary of Justice may pass upon questions or issues raised against the legality of tax ordinances on appeal from the Provincial or City Fiscal's (now Provincial/City Prosecutor) opinion only on grounds other than those mentioned in Section 44 thereof (Secretary of Justice Op. No. 57, s. 1977), which, in any case, could only be done by this Department if the same is raised on appeal by the party concerned. Please be guided accordingly. Very truly yours, (SGD.) SEDFREY A. ORDOEZ Secretary of Justice