7. NO APPROPRIATION FOR RELIGIOUS PURPOSES

Tax exemption of properties for religious, charitable and educational purposes.

Charitable institutions, churches, parsonages, or convents appurtenant thereto, mosques, and non-profit cemeteries, and all lands, buildings and improvements actually, directly and exclusively used for religious, charitable, or educational purposes shall be exempt from taxation (Sec.28 (3), Art. III,1987 Constitution).

Important principles in tax exemption of properties:

a. Exemption of religious, charitable and educational institutions apply to real property tax only. The test is usage, not ownership.

b. The exemption extends to facilities which are incidental to and reasonably necessary for the accomplishment of said purposes, such as school for training nurses, nurses' home, and recreational facilities (Herrera vs. QC Board of Assesment Appeals, 3 SCRA 186).

Prohibition against appropriation of proceeds of taxation for the use, benefit, or support of any church

Section 29, Article VI, Constitution

1. No money shall be paid out of the Treasury except in pursuance of an appropriation made by law.

2. No public money or property shall be appropriated, applied, paid, or employed directly or indirectly, for the use, benefit, or support of any church, denomination, sectarian institution or system of religion, or of any priest, preacher, minister or other religious teacher, or dignitary as such except when such priest, preacher, minister or dignitary is assigned to the armed forces, or to any penal institution, or government orphanage or leprosarium.

3. All money collected on any tax levied for a special purpose shall be treated as a special fund and paid out for such purpose only. If the purpose for which a special fund was created has been fulfilled or abandoned, the balance, if any, shall be transferred to the general funds of the government.