CA upholds Taguig court ruling on BCDA property tax exemption
MANILA, Philippines – The Court of Appeals (CA) has said that the Bases Conversion and Development Authority (BCDA) in Fort Bonifacio, Taguig City is exempted from paying real property taxes because it is a government instrumentality.
But the appellate court's 8th Division agreed with the February 2016 ruling of the Taguig Regional Trial Court (RTC), which said that the tax assessment issued by the Taguig City government is valid over BCDA properties leased or conveyed to private entities.
In its ruling, the CA upheld the RTC decision which partially granted BCDA's petition to declare null and void the P58.71-million tax assessment issued by the Taguig City government.
The CA said that under Section 133 of the Local Government Code, local government units cannot impose taxes on national government instrumentalities. As real properties owned by the government, they are exempt from real property tax.
Additionally, Section 3 of Republic Act 10149 lists BCDA as a government instrumentality. The CA said that when a government instrumentality is vested with corporate powers, it does not become a corporation.
"Many government instrumentalities are vested with corporate powers but they do not become stock or non-stock corporations, which is a necessary condition before an agency or instrumentality is deemed a government-owned or controlled corporation,” the CA said.
But the CA agreed with the Taguig RTC's ruling that the city government's tax assessment is valid over properties leased and conveyed to real-estate developer Megaworld Corporation (8.38 hectares), International School of Manila (69,423 square meters), and Ayala Corporation (9.76 hectares).
“Thus, the portions of the properties which are not leased to taxable entities are exempt from real estate tax while the portions of the properties leased to taxable entities are subject to real estate tax,” the CA said.
The 28-page CA ruling was penned by Associate Justice Celia Librea-Leagogo, with Associate Justices Amy Lazaro-Javier and Pedro Corales concurring. – Rappler.com