Bataan brings tax claim vs PEZA to Supreme Court

MANILA, Philippines - The provincial government of Bataan has brought to the Supreme Court its bid to collect over P110.5 million in real estate taxes from the Philippine Economic Zone Authority (PEZA) for its real properties in Mariveles town.

The capitol, through Gov. Enrique Garcia Jr. and treasurer Emerlinda Talento, asked the High Court to reverse a ruling of the Court ofAppeals that had spared PEZA of real property tax liability on lots covered by the Bataan Economic Zone.

In a petition for review filed last June 5, the provincial government insisted that the state-run corporation is not exempt from payment of real property taxes under R.A.7916 (Philippine Special Economic Zone Act).

The CA, in its Aug.27, 2008 decision, ruled that the predecessor of PEZA, the Export Processing Zone Authority (EPZA), was exempted from paying “all taxes, franchise taxes, realty taxes, and all other kinds of taxes and licenses to be paid to the National Government, its provinces, cities, municipalities” under Presidential Decree 66.

This decree was the blueprint used in drafting of R.A. according to the appeals court.

But petitioners argued that this provision on tax exemption of PEZA does not appear in R.A. 7916, and therefore should no longer be considered.

“Congress removed such tax exemption from PEZA in R.A. 7916. The only logical conclusion that can be derived from the deletion of the exempting provision from the new law is that Congress intended to life the exemption… The legislative intent is clearly to grant tax exemption to EPZA only until such time that it becomes self-sustaining and financially capable under PD 66,” they stressed in the 42-page petition.