Some airport properties get exempted from taxes

CEBU, Philippines – The Lapu-Lapu City government is still trying to figure out whether to file a motion for reconsideration after the Supreme Court issued a ruling exempting from tax some Mactan airport properties for public use.

City attorney Yuri Beluan said they can only determine which action to take as soon as they receive a copy of the ruling, which Supreme Court released last Friday.

The ruling, handed down by the SC First Division, reportedly exempts runways, taxiways, terminal buildings and airfield at the Mactan-Cebu International Airport from being subjected to taxes.

"Di pa gyud mi sigurado kung mao na (to file a motion for reconsideration) among buhaton since we have not received a copy of the ruling yet," Beluan said.

Beluan, however, said the SC decision will not affect the tax payments already made by the MCIA Authority to the city government since these payments, he said, were for properties used for commercial activities.

In defense, he said the city government's move to tax all the properties of the MCIAA was based on a 1996 decision of the Supreme Court.

Friday’s ruling also granted the petition filed by MCIAA to annul all real property tax assessments made on lots used exclusively for public or governmental purpose. The payments were reportedly made for real properties used for commercial purposes.

Last year, the MCIAA paid Lapu-Lapu City government P200 million in real property taxes, said city treasurer Elenita Catagcatag.

In March this year, MCIA paid the city P50 million in business taxes and P22 million in real property taxes. The P22 million payment in real property tax brought airport’s total payment to P200 million, and reduced its reported property tax debt to P1.3 billion.

It is not yet clear how much of the P1.3 billion is going to be affected by the SC’s most recent decision.

Meanwhile, in its recent ruling, the SC also declared "null" the sale MCIAA’s 27 properties, which were bid out by the city so the MCIAA can pay its realty tax obligations.

Based on the city's assessment of MCIAA properties from 1997 to 2002, the MCIAA owed the city P246.4 million in real property taxes. Because of the lack of bidders, the city government ended up acquiring the properties.

However, Beluan said the city government was unable to take ownership of the properties because the Court of Appeals said the MCIAA cannot dispose of its properties unless consent is given by the president of the Republic of the Philippines, as provided in the MCIAA Charter.

MCIAA general manager Nigel Villarete, on Facebook, said they will "dutifully pay" all the taxes due in line with the SC ruling.

"We are a part of Lapu-Lapu City. It is our home. We are a part of, and a contributor to, as well as a recipient of the fruits of, its development. We have to do our share in nation-building, as well as that of the city where we are located," Villarete wrote in a post.