DOJ OPINION NO. 048, s.

2000
June 16, 2000

Hon. Federico C. Pascual

President and General Manager
Government Service Insurance System
Financial Center, Pasay City 1308

Sir :

This Department is requested to render an opinion on "whether the Government Service Insurance
System (GSIS) is liable to pay local transfer tax and registration fee, respectively, in connection with its
purchase from Fort Bonifacio Development Corporation (FBDC) of a parcel of land (Lot 4, Block 7) locate
in the Global City".

The query, it appears, is raised in connection with the provisions of the "Deed of Absolute Sale"
executed by and between the FBDC and GSIS over the subject parcel of land material portions of which
provide, to wit:

"1.3 The documentary stamp taxes, local transfer tax, registration fees, fees for the execution and
notarization of this Contract and other related sales or transfer documents and all other expenses in
connection with the transfer of title to the Lot from the SELLER to the BUYER shall be for the account of
the BUYER, subject to any exemptions enjoyed by the BUYER under applicable law, Presidential Decrees
and Issuances."

It is stated that following the delivery by FBDC of its owner's duplicate transfer certificate of title to GSIS,
two employees of the GSIS went to the Office of the Registry of Deeds of the Province of Rizal to register
the transaction. However, aside from making it known that a corresponding registration fee shall be
assessed and paid for the registration of the Deed of Absolute Sale, the Register of Deeds of Rizal also
required the submission of, among others, the original receipt of the transfer tax payment issued by the
Municipal Treasurer's Office of Taguig.

Quoting pertinent provisions of Section 39 of Republic Act No. 8291, otherwise known as the "GSIS Act
of 1997", which it asserts to be too plain and categorical, GSIS avers that Congress did not only "decree
the exemption of the GSIS' 'assets', 'revenues' and 'benefits' from 'all taxes', 'assessments', 'fees',
'charges', or 'duties' of all kinds, but it altogether insulate GSIS as an entity, from the plenary taxing
power of the state" as the legislative intent to grant a comprehensive taxes and fees exemption to GSIS
is "very clear."

Commenting specifically on local transfer tax, GSIS believes that it is exempt from payment of local taxes
and registration fees, citing, in support of said position, this Department's Opinion No. 33, s. 1996,
stating that the [then] GSIS Charter (i.e. P.D. No. 1146) makes no distinction between national taxes and
local taxes, and No. 165, s. 1994, confirming GSIS' exemption from all taxes, assessments, fees, charges
and duties of all kinds under Section 33 of its Charter despite the provisions of Section 234 of the Local
Government Code which withdrew the exemption of government-owned or controlled corporations
from real property tax.
The enactment of R.A. No. 8291, otherwise known as "The Revised Government Service Insurance
System Act of 1997", should have settled any issue relating to the exemption of GSIS funds from all
forms of taxes, fees, charges or duties. Section 39 of the said law, which reiterated the provisions of
Section 33 of the Revised GSIS Act of 1977, pertinently states:

"SECTION 39. Exemption from Tax, Legal Process and Lien. — It is hereby declared to be the policy of
the State that the actuarial solvency of the funds of the GSIS shall be preserved and maintained at all
times and that contribution rates necessary to sustain the benefits under this shall be kept as low as
possible in order not to burden the members of the GSIS and their employers. Taxes imposed on the
GSIS tend to impair the actuarial solvency of its funds and increase the contribution rate necessary to
sustain the benefits of this Act. Accordingly, notwithstanding any laws to the contrary, the GSIS, its
assets, revenues including accruals thereto, and benefits paid, shall be exempt from all taxes,
assessments, fees, charges or duties of all kinds. These exemptions shall continue unless expressly and
specifically revoked and any assessment against the GSIS as of the approval of this Act are hereby
considered paid. Consequently, all laws, ordinances, regulations, issuances, opinions or jurisprudence
contrary to or in derogation of this provision are hereby deemed repealed, superseded and rendered
ineffective and without legal force and effect.

Moreover, these exemptions shall not be affected by subsequent laws to the contrary unless this section
is expressly, specifically and categorically revoked or repealed by law and a provision is enacted to
substitute or replace the exemption referred to herein as an essential factor to maintain or protect the
solvency of the fund, notwithstanding and independently of the guaranty of the national government to
secure such solvency or liability.

xxx xxx xxx." (Emphasis supplied)

It is a basic rule in the interpretation of statutes that when the law speaks in clear and categorical
language, there is no room for interpretation, there is only room for application (Pascual vs. Pascual-
Bautista, 207 SCRA 561, citing cases; Secretary of Justice Opinion No. 114, s. 1999). Evidently, there is
nothing to construct and interpret as the above-quoted provisions of R.A. No. 8291 are clear and
categorical in stating that notwithstanding any laws to the contrary, the GSIS, its assets, revenues
including accruals thereto, and benefits paid, shall be exempt from all taxes, assessments, fees, charges
or duties of all kinds.

It likewise bears stressing that the legislature used the words "taxes" and "fees" without any distinction.
Ubi lex non distinguit nec nos distinguere debemos. Where the law does not distinguish, we must not
distinguish (Ruben E. Agpalo, Statutory Construction [Third Edition], p. 152, citing cases). Neither should
any other person be allowed to make a distinction. Corollarily, this Department has previously ruled that
the GSIS Charter (P.D. No. 1146) makes no distinction between national taxes and local taxes (see
Secretary of Justice Op. No. 33, s. 1996).

Moreover, emphasis must be given to the fact that R.A. 8291 is a special law while the Local
Government Code of 1991 is a general law. Hence, Section 39 of the GSIS Act of 1997 (Section 33 of the
Revised GSIS Charter), granting exemption to GSIS funds from all taxes, fees, charges or duties, prevails
over the provisions of Section 243 of the Local Government Code of 1991 which withdrew the
exemption of government-owned or controlled corporations from real property tax. This is because a
"special act is intended to constitute an exception to the general act, as the legislature is not presumed
to have intended a conflict" (Ibid., p. 215, citing Garcia vs. Pascual, 113 Phil. 632). In addition, R.A. No.
8291 is a later law and it is axiomatic that as between two laws on the same subject matter, which are
irreconcilably inconsistent the later law prevails, the same being the latest expression of legislative will
(Lopez vs. Commissioner of Customs, 37 SCRA 327 [1971]). This is specially true since the later law used
the word "all", a word which connotes "comprehensiveness" and means "the whole collectively
considered; the complete totality" (see Moreno, Philippine Law Dictionary, pp. 52-53, citing cases).

This Department has previously confirmed GSIS' exemption from real property tax under Presidential
Decree No. 1146 despite section 234 of the Local Government Code, which withdrew the exemption of
government-owned and controlled corporations from real property tax. In Opinion No. 165, s. 1994 it
was rules that:

". . . the Local Government Code of 1991 (R.A. No. 7160), a general law has not expressly and explicitly
revoked Section 33 of the GSIS Charter which is a special law, nor is there in the aforesaid Local
Government Code of 1991, a provision on the substitution of the declared state policy on tax exemption
of the System.

Accordingly, this opinion officially confirms that the exemption of the GSIS from the payment of all
taxes, assessments, fees, charges and duties of all kinds under Section 33 of its Charter has not been
superseded by the Local Government Code of 1991." (Emphasis supplied)

Needless to say, the exemption of GSIS funds from all forms of taxes, fees, charges or duties is necessary
in order that the policy of the State to ensure that the actuarial solvency of the funds of the GSIS are
"preserved and maintained at all times" and that "contribution rates . . . are kept as low as possible in
order not to burden the members of the GSIS and their employers", may be attained. To hold otherwise
would defeat the purpose and spirit behind the enactment of R.A. No. 8291, that is to guarantee all the
benefits due to government employees.

Please be guided accordingly.

Very truly yours,

(SGD.) ARTEMIO G. TUQUERO

Acting Secretary