Republic of the Philippines DEPARTMENT OF THE INTERIOR AND LOCAL GOVERNMENT DILG-NAPOLCOM Center, EDSA corner Quezon Avenue, West Triangle, Quezon City int: lw cig.com ph FEB 07 2020 ARIEL O. IGLESIA DILG OPINION NO. 21 §. 2020, Regional Director Regional Office 6 (Western Visayas) Department of the Interior and Local Government Dear Reg. Dir. Iglesia: This has reference to the Memorandum you sent dated 08 January 2020, requesting for this Department's legal opinion and clarification on the interpretation and application of Section 276 of the Local Government Code of 1991 (LGC). To give a background, the Province of Iloilo experienced a dry spell caused by the El Nifio phenomenon which resulted in severe damage and failure of agricultural crops in various municipalities of the province. Correspondingly, on May 31, 2019 upon the recommendation of the Iloilo Provincial Disaster Risk and Management Council, the Sangguniang Panlalawigan issued a resolution declaring the Province under a state of calamity. Then on August 20, 2019 passed Resolution No. 2019-308 embodying Provincial Ordinance No. 2019-198 granting amnesty to delinquent real property taxpayers and such tax amnesty will be until 31 December 2019. Under the ordinance, the provincial government grants one hundered (100) percent relief on interest and penalties for delinquent real property taxes until 31 December 2019 applicable exclusively to the following: d. real properties which are undeclared and subject to taxes €. real properties which are declared and the real property tax has not been paid f. delinquent properties auctioned by the province and for lack of bidders, were subsequently brought by the Province of Iloilo, the tax declaration of which had not yet been transferred to the Province of Iloilo Not covered by the tax amnesty ordinance are the followin c. real properties of pending cases in court for real property tax delinquencies d. real properties with tax delinquencies which are being paid under a compromiseOn 04 September 2019 the Commission on Audit (COA) issued a Decision which involves the interpretation of Section 276 of Republic Act No. 7160 otherwise known as the “Local Government Code of 1991” (LGC). Under this premise arose the request for clarification as to the interpretation of Section 276 of the LGC on the granting of tax relief to delinquent real property tax payers. At the outset, this Department deems it proper to cite Section 276 of the LGC: SECTION 276. Condonation or Reduction of Real Property Tax and Interest. ~ In case of a general failure of crops or substantial decrease in the price of agricultural or agri- based products, or calamity in any province, city or municipality, the sanggunian concerned, by ordinance passed prior to the first (1st) day of January of any year and upon recommendation of the Local Disaster Coordinating Council, may condone or reduce, wholly or partially, the taxes and interest thereon for the succeeding year or years in the city or municipality affected by the calamity. Under the above-quoted provision, the sanggunian of provinces, cities and municipalities, can condone or reduce real property taxes and penalties through an ordinance passed prior to the first (1st) day of January of any year and upon the recommendation of the Local Disaster Coordinating Council. Such authority can be exercised if their areas of jurisdiction experienced a general failure of crops or substantial decrease in the price of agricultural or agri-based products or in cases of calamities. Relatedly, Section 192 of the LGC is another provision granting tax relief, to wit: SECTION 192. Authority to Grant Tax Exemption Privileges. = Local government units may, through ordinances duly approved, grant tax exemptions, incentives or reliefs under such terms and conditions as they may deem necessary. Tax exemption is a grant of immunity, express or implied, to particular persons or corporations from a tax upon property or excise for which persons and corporations within the same taxing district are obliged to pay. Tax exemption covers future tax liability. On the other hand, tax amnesty is the absolute waiver by the government of the right to collect what is due and to give delinquent tax payers who wish to relent, a chance to start with a clean slate. It is immunity from civil, criminal, administrative liability arising from non-payment of taxes. In addition, tax amnesty Covers past tax liability.In view of the foregoing, this Department is of the considered view that tax condonation of a tax liability under Section 276 of the LGC is equivalent to and is in the nature of a tax exemption as it covers future tax liability, as the condonation is applicable to the taxes and the interest thereon, wholly and partially, only for the succeeding year or years. In addition, this Department concurs with the Commission on Audit Decision No. 2019-401 which explained that the requirements set forth under Section 276 such as the recommendation of the Local Disaster Coordinating Council, existence of calamity in the area, and the condonation covers those interests and penalties of unpaid real property taxes of the succeeding years and not of previous years. Lastly, please be informed that this opinion is without prejudice to the position of the Department of Finance - Bureau of Local Government Finance (DoF-BLGF), the agency which has technical expertise in the subject-matter. We hope to have addressed your concern accordingly. Thank you. COPY FURNISHED: TEODORA P. SUMAGAYSAY, CESO V Provincial Director DILG ~ Province of tloilo MR. NINO RAYMOND B. ALVINA Executive Director DOF-BLGF ~ Central Office 8th Floor, EDPC Building, BSP Complex, Roxas Boulevard, Malate, Manila 1004 ag a