Case Digest (G.R. No. 96914)
Facts:
Philippine Fisheries Development Authority (PFDA) took over management and operation of the Lucena Fishing Port Complex (LFPC) in February 1992; LFPC was constructed on reclaimed land of about 8.7 hectares under a national fish-port program and financed by OECF loans in 1978. The City of Lucena issued demand letters in 1999 and 2000 for real property taxes covering 1993–2000; PFDA appealed to the Local Board of Assessment Appeals, then to the Central Board of Assessment Appeals (CBAA), which dismissed its appeal on October 5, 2005, and the Court of Tax Appeals affirmed on May 9, 2007.
PFDA petitioned this Court for review challenging liability for real property tax on LFPC.
Issues:
- Is PFDA liable for the real property tax assessed by the City of Lucena on the Lucena Fishing Port Complex?
Ruling:
The petition was granted. The Court set aside the May 9, 2007 Decision of the Court of Tax Appeals and declared the Lucena Fishing Port Complex exempt from real property tax imposed by the City of Lucena. All real property tax assessments on LFPC were voided except for portions of the complex that PFDA has leased to private parties, which remain taxable.
Ratio:
The Court held that PFDA is a government instrumentality, not a government-owned or controlled corporation, consistent with this Court’s prior rulings; as such, it is generally exempt from local taxation. The exercise of local taxing power is limited by Section 133(o) of the Local Government Code, which bars taxation of the National Government and its instrumentalities. LFPC is a property of public dominion intended for public use as a port, falling within Section 234(a) of the Local Government Code and Article 420 of the Civil Code, and is therefore exempt from real property tax, except where the beneficial use has been granted to a taxable person via lease.
Doctrine:
- PFDA is a national government instrumentality and not a GOCC; instrumentalities of the national government are generally exempt from local taxation.
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