Professional Documents
Culture Documents
For the information and guidance of all concerned, quoted hereunder in toto
is the opinion/ruling rendered by this Bureau as embodied in its letter dated
October 27, 2004, copy attached, addressed to Mr. Peter D. Baluyan,
OIC-Regional Director, BLGF Regional Office, Region I, re. request of Honorable
Commissioner Guillermo L. Parayno, Jr., Bureau of Internal Revenue (BIR),
Quezon City, to issue a directive concerning the issuances made by Mr. Orlando
Mina (then OIC-Regional Director of Region I), that "Tax Declaration can be
issued immediately without necessarily requiring the payment of Capital Gains
Tax, upon compliance/submission of other reasonable requirements in order to
facilitate collection of real property taxes," to wit:
"1. There is no dispute that as a matter of civil law, the payment of the
capital gains tax is not a pre-requisite to the transfer of ownership
from the seller to the buyer. But that does not mean that the taxes
attendant to that transfer will no longer be paid or that the
government officials involved in the process of transfer of
ownership no longer ensure the collection of taxes;
"2. P.D. No. 1529 provides that no deed, conveyance, mortgage, lease
or other voluntary instruments affecting untitled lands shall be
valid, except as between the parties, unless the instrument shall
have been entered in the Primary Entry Book and the Registration
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Book for properties covered by Act 3344 of the Registry of Deeds.
"Relatedly, the BLGF under the 2nd Indorsement dated May 26,
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1993, copy enclosed, treating on a similar subject matter, made the
following clarification.
'1. That the real property taxes due on the subject lot be
fully paid;
"In view hereof, and although this Office recognizes the good
intentions of Mr. Mina, of facilitating the immediate collection of local
taxes, i.e., real property taxes, as expressed under your letter dated June
23, 2004 addressed to Atty. Jose Mario C. Bunag, Deputy Commissioner,
Legal and Inspection Group, BIR, we believe that the issuance of tax
declarations on the basis of deeds of conveyance not registered with the
Registry of Deeds and without prior payment of the capital gains tax is
BEREFT OF ANY LEGAL BASIS.
"We would like to remind that internal revenues which include the
capital gains tax being collected by the BIR are the very sources of the
Internal Revenue Allotment (IRA) to which a great majority of the LGUs
rely heavily. A considerable decline in the collection efficiency of the BIR
will surely affect the IRA allocation of LGUs.
ATTACHMENT
Sir:
This refers to the letter dated June 15, 2004 of Honorable Commissioner
Guillermo L. Parayno, Jr., Bureau of Internal Revenue (BIR), Quezon City, requesting
the Bureau of Local Government Finance (BLGF) to issue a directive concerning the
letters both dated April 29, 2004, of Mr. Orlando Mina (then OIC-Regional Director
thereat), addressed to the OIC-Provincial Assessor of Ilocos Sur for dissemination to all
Municipal Assessors within his jurisdiction, and to the City Assessor of Urdaneta City,
wherein he quoted the Decision of the Supreme Court (SC) Case promulgated on April 9,
2003, entitled Chua vs. Court of Appeals, G.R. No. 119255, which is reproduced
hereunder:
Based on the foregoing portion of the SC Decision, Mr. Mina made the following
directive to the Provincial Assessor of Ilocos Sur:
Relatedly, and in compliance with the same directive he issued, the Provincial
Assessor of La Union issued a memorandum dated May 27, 2004 to all the Municipal
Assessors under his jurisdiction, directing them, that: "effective immediately, all
transactions on unregistered properties involving transfer shall be acted upon with
dispatch without the need of requiring Certificate Authorizing Registration (CAR) from
the BIR nor registration with the Registry of Deeds."
Evidently, after the sale of real estate, depending on the agreement between the
buyer and the seller, it is necessary to pay the corresponding capital gains tax to the BIR
for the issuance of the Certificate Authorizing Registration (CAR) for presentation to and
as a requirement of the Register of Deeds for the transfer of the title of the subject
property from the former owner to the new owner. HICcSA
Relatedly, the BLGF under the 2nd Indorsement dated May 26, 1993, copy
enclosed, treating on a similar subject matter, made the following clarification:
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"It is understood that the . . . requirements . . ., should likewise be
complied with, viz:
In view hereof, and although this Office recognizes the good intentions of Mr.
Mina, of facilitating the immediate collection of local taxes, i.e., real property taxes, as
expressed under your letter dated June 23, 2004 addressed to Atty. Jose Mario C. Bunag,
Deputy Commissioner, Legal and Inspection Group, BIR, we believe that the issuance of
tax declarations on the basis of deeds of conveyance not registered with the Registry of
Deeds and without prior payment of the capital gains tax is BEREFT OF ANY LEGAL
BASIS. EDHCSI
We would like to remind that internal revenues which include the capital gains tax
being collected by the BIR are the very sources of the Internal Revenue Allotment (IRA)
to which a great majority of the LGUs rely heavily. A considerable decline in the
collection efficiency of the BIR will surely affect the IRA allocation of LGUs.
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The Honorable Commissioner
Bureau of Internal Revenue
Quezon City
Sir:
This refers to your letter dated June 15, 2004, requesting this Bureau to issue a
directive to Dir. Orlando L. Mina, OIC-Regional Director, BLGF Regional Office,
Region I, San Fernando City, La Union, concerning his letters both dated April 29, 2004,
addressed to the OIC-Provincial Assessor of Ilocos Sur for dissemination to all Municipal
Assessors within his jurisdiction, and to the City Assessor of Urdaneta City, re. payment
of Capital Gains Tax as contained under the Supreme Court (SC) Decision entitled Chua
vs. Court of Appeals, G.R. No. 119255.
In this connection, enclosed is a copy of our letter of same date, addressed to Mr.
Peter D. Baluyan, current OIC-Regional Director of Region I, which reads in part, as
follows:
". . .
"In view hereof, and although this Office recognizes the good intentions of
Mr. Mina, of facilitating the immediate collection of local taxes, i.e., real property
taxes, as expressed under your letter dated June 23, 2004 addressed to Atty. Jose
Mario C. Bunag, Deputy Commissioner, Legal and Inspection Group, BIR, we
believe that the issuance of tax declarations on the basis of deeds of conveyance
not registered with the Registry of Deeds and without prior payment of the capital
gains tax is BEREFT OF ANY LEGAL BASIS.
"We would like to remind that internal revenues which include the capital
gains tax being collected by the BIR are the very sources of the Internal Revenue
Allotment (IRA) to which a great majority of the LGUs rely heavily. A
considerable decline in the collection efficiency of the BIR will surely affect the
IRA allocation of LGUs.
"In view of the foregoing, you are hereby ADVISED TO RECALL the
abovementioned letters dated April 29, 2004 and other similar issuances in this
regard of the then OIC-Regional Director; and TO ORDER the Provincial
Assessor of La Union, San Fernando City TO DESIST from implementing the
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subject Memorandum dated May 27, 2004."
Cordial regards.
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