May 22, 2007 Dr. Victor B.

Endriga City Treasurer City Hall Quezon City Sir: This refers to your letter dated November 13, 2006, requesting for an opinion on the proper application of the 5-year prescriptive period in the collection of real property tax under Section 270 of R.A. 7160 or the Local Government Code of 1991, in view of the letter dated November 2, 2006 of Atty. Mario E. Ongkiko, for and in behalf of his client, Mr. Jorge T. Dy for the issuance of a Certificate of Tax Clearance on the improvement of the real property covered by Tax Declaration No. D-122-08716, for the period 1996 to present. Likewise, this refers to the subsequent letter dated May 11, 2007, informing that the Certificate of Tax Clearance was already issued by that Office, subject to the outcome of the request for opinion with this Bureau. Section 270 provides as follows: SEC. 270. Periods within Which To Collect Real Property Taxes. The basic real property tax and any other tax levied under this Title shall be collected within five (5) years from the date they become due. No action for the collection of the tax whether administrative or judicial shall be instituted after the expiration of such period. In case of fraud or intent to evade payment of the tax, such action may be instituted for the collection of the same within ten (10) years from the discovery of such fraud or intent to evade payment. The period of prescription within which to collect shall be suspended for the time during which:

(1) The local treasurer is legally prevented from collecting the tax; (2) The owner of the property or the person having legal interest therein requests for reinvestigation and executes a waiver in writing before the expiration of the period within which to collect; and (3) The owner of the property or the person having legal interest therein is out of the country or otherwise cannot be located. As represented, that Office accepted the payments for back taxes on said property for the periods 2002 to 2006, but its position not to issue the tax clearance was based on the ground that the real property tax for the entire 10 year period 1996 to 2006 must be settled, citing the 3rd sentence of Section 270. Atty. Ongkiko, on the other hand, contended that earlier back taxes assessed in 1996 could not anymore be collected, invoking the 1st and 2nd sentences Section 270. Subsequently, the tax clearance was issued by that Office Subject to the outcome of the instant request for opinion. It may be recalled that in the 4th Indorsement dated September 29, 1995, this Bureau, anent Section 270, opined as follows: x x x Pursuant to Section 270, however, real property taxes shall remain collectible within five (5) years from the date of accrual. For example, those that accrued on January 1, 1992 shall remain collectible up to December 31, 1996. After said date, taxes due for CY 1992 shall be considered as prescribed and, therefore, no longer collectible. The only exceptions are those taxes not collected within the five-year period if covered by subparagraphs 1 to 3 relative to the suspension of the prescription period. It is clear, explicit and mandatory from the provisions of Section 270 that real property tax shall be collected within five (5) years from the date they become due. It is further said that no action for the collection of the tax, that is,

administrative action and/or civil action shall be instituted after the expiration of such period. Accordingly, failure to collect the real property tax within 5 years from the date it becomes due will bar the collection thereof even by administrative or judicial means, unless the 5-year prescriptive period was suspended under the circumstances specified. In the event of fraud or intent to evade payment of real property tax, however, the 3rd sentence of Section 270 provides that the action for the collection of the tax may be instituted within ten (10) years from the date of the discovery of such fraud or intent to evade payment, unless the period is suspended also under the circumstances specified. The action for the collection of the tax refers to the administrative and civil actions. Tersely stated, if fraud or intent to evade payment exists, the real property tax may be collected within the 10-year period by means of administrative action and/or civil action. Please take into account that fraud is a question of fact that must be alleged and proved. It is a serious charge and, to be sustained, it must be supported by clear and convincing proof. (Republic of the Philippines vs. Hon. Feliciano Belmonte, et. al., G.R. No. L-38702, August 9, 1999). Trusting that your query is hereby clarified.

(SGD.) MA. PRESENTACION R. MONTESA Executive Director