Professional Documents
Culture Documents
COURT OF
APPEALS, et al. GR No. 155650, 20 July 2006, Carpio, J. (En
Banc)
Section 243(a) of the Local Government Code (LGC)
exempts from real estate tax any real property owned by
the Republic of the Philippines. This exemption should be
read in relation with Sec. 133(o) of the LGC, which
provides that the exercise of the taxing powers of local
governments shall not extend to the levy of taxes, fees or
charges of any kind on the National Government, its
agencies and instrumentalities. The rule is that a tax is
never presumed and there must be clear language in the
law imposing the tax. This rule applies with greater force
when local governments seek to tax national government
instrumentalities. Moreover, a tax exemption is construed
liberally in favor of national government instrumentalities.
When the law vests in a government instrumentality
corporate powers, the instrumentality does not become a
corporation. Unless the government instrumentality is
organized as a stock or non-stock corporation, it remains a
government
instrumentality
exercising
not
only
governmental but also corporate powers. Also, when the
law makes a government instrumentality operationally
autonomous, the instrumentality remains part of the
National Government machinery.
The Manila International Airport Authority (MIAA) operates
the Ninoy Aquino International Airport (NAIA) Complex in
Paranaque City under Executive Order No. 903 (MIAA
Charter), as amended. As such operator, it administers the
land, improvements and equipment within the NAIA
Complex. In March 1997, the Office of the Government
Corporate Counsel (OGCC) issued Opinion No. 061 to the
effect that the Local Government Code of 1991 (LGC)
withdrew the exemption from real estate tax granted to
MIAA under Section 21 of its Charter. Thus, MIAA paid
some of the real estate tax already due. In June 2001, it
received Final Notices of Real Estate Tax Delinquency from
the City of Paranaque for the taxable years 1992 to 2001.
The City Treasurer subsequently issued notices of levy and
warrants of levy on the airport lands and buildings.