CA: MCIAA should pay taxes to Lapu-Lapu City
In a decision penned by Associate Justices Isaias Dicdican and concurred to by Associate Justice Francisco Acosta and Stephen Cruz, the appellate court said that because the MCIAA is classified as a government-owned and controlled corporation, it is not exempt from paying taxes to the local government where it is located.
The justices said the removal of the blanket of inclusion of instrumentalities and agencies of the national government from the coverage of local taxation is one of the most significant provisions of the LGC apart from the direct authority the code has given local governments to levy taxes, fees and other charges.
The ruling came after MCIAA filed a Petition for Certiorari against Lapu-Lapu Regional Trial Court Judge Benedicto Cobarde for granting the city government’s motion for reconsideration on an earlier ruling that barred the city from collecting taxes from MCIAA.
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The day after MCIAA filed the case, Cobarde issued a 72-hour Temporary Restraining Order in favor of MCIAA. However, after the TRO lapsed, Cobarde denied MCIAA’s petition to extend the same. In the absence of the TRO, the city government auctioned 27 properties occupied by MCIAA on
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In its decision, the appellate court said that MCIAA became taxable “in view of the withdrawal of the realty tax exemption that it previously enjoyed under Section 14 of R.A. No. 6958 of its charter.”
Taxable properties include the airport terminal building, the airfield, runway, taxiway and the lots on which they are situated not exempt from the real estate tax imposed by the city government.
Citing jurisprudence, the CA said, “the removal and withdrawal of tax exemptions previously enjoyed by persons, natural or juridical, are consistent with the state policy to ensure autonomy to local governments and the objective of the Local Government code that they enjoy genuine and meaningful local autonomy to enable them to attain their fullest development as self-reliant communities and make them effective partners in the attainment of national goals.”
But the CA said that while MCIAA is taxable, the
The CA also declared as valid and legal the imposition and collection of the real estate tax, additional levy for the Special Education Fund and the penalty interest. However, pursuant to Section 255 of the Local Government Code, the city government can only collect an interest of two percent per month on the unpaid tax, which total interest shall, in no case, exceed 36 months. – Joeberth M. Ocao/QSB
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