SC: Lapu-Lapu can’t collect property taxes from airport

Mactan airport lots, buildings declared tax-exempt

The Supreme Court has declared properties of the Mactan Cebu International Airport Authority (MCIAA) tax-exempt, upholding the status of its lots and buildings as public dominion and hence “outside the commerce of man.”

The high court’s First Division granted MCIAA’s plea to stop the Lapu-Lapu City government from collecting P246.4 million in real property taxes.

It declared null and void the sale in public auction, forfeiture and purchase of 27 MCIAA properties by the city government.

Also declared void were the Certificates of Sale of Delinquent Property issued by the Lapu-Lapu city government, which ended up purchasing the MCIAA properties due to a lack of interested bidders.

Lapu-Lapu City Mayor Paz Radaza said she hasn’t received a copy of the decision and would issue a statement later.

“We’ll study first how the decision was penned,” Radaza said in a telephone interview.

She denied  having auctioned off the 27 MCIAA properties. The auction may have been held during the previous administration, she said.

MCIAA general manager Nigel Paul Villarete said the board will obey the court ruling.

“We will pay all taxes due, and stop paying what we don’t need to. We will obey whatever order the High Court came up with,” he told Cebu Daily News.

In his  Facebook account yesterday, he posted:  “As a good corporate citizen and an instrumentality of the Republic of the Philippines, we will dutifully pay all the taxes due, in line with the Supreme Court ruling,” he stated.

“We are a part of Lapu-Lapu City. It is our home. We are a part of, 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,” he added.

In a June 15 ruling, the Supreme Court said the MCIAA may not be taxed for lots and buildings “used solely and exclusively for public or governmental purpose.”

Exempted from real property tax are the “airport terminal building, airfield, runway, taxiways and the lots on which they are situated.”

“The airport lands and buildings of MCIAA are properties of public dominion because they are intended for public use. As properties of public dominion, they indisputably belong to the State or the Republic of the Philippines, and are outside the commerce of man,” read the decision penned by Associate Justice Teresita Leonardo-de Castro.

The local government may only demand taxes from MCIAA for its property leased to private parties, it added.

The Lapu-Lapu city government put MCIAA properties under public auction to cover unpaid tax dues amounting to P246.4 million from 1997 to 2002. The airport authority then brought the matter before the courts. /With INQUIRER