Tuesday, February 19, 2019

[CASE SUMMARY] PROVINCIAL ASSESSOR OF AGUSAN DEL SUR vs. FILIPINAS PALM OIL PLANTATION, INC. (G.R. No. 183416)

October 5, 2016

Ponente: Leonen, J.

Topic: Common Limitations on the Taxing Powers of LGUs

SUMMARY

Filipinas Palm Oil Plantation, Inc. leased a 7,000-hectare property owned by the NDC-Guthrie Plantations, Inc. - NDC-Guthrie Estates, Inc. (NGPI-NGEI) Cooperatives. The company was later assessed by the Provincial Assessor of Agusan del Sur of real property taxes over the leased land, the roads constructed therein, as well as the company’s road equipment and mini haulers, which the Provincial Assessor considered as machineries subject to real property tax. 

The SC held that Filipinas cannot be assessed with real property taxes over the land because under Section 133(n) of the LGC, the taxing power of local government units shall not extend to the levy of taxes, fees, or charges on duly registered cooperatives under the Cooperative Code. Nor can Filipinas be assessed for the roads constructed within the leased property because said roads are owned by the government by right of accession, and all properties owned by the government, without any distinction, are exempt from taxation. 

Nonetheless, the SC held that the Provincial Assessor can properly assess real property taxes against Filipinas over the latter’s road equipment and mini haulers because these movables fall under the definition of machineries subject to real property tax under Section 199(o) of the LGC.


DOCTRINE

The exemption from real property taxes given to cooperatives applies regardless of whether or not the land owned is leased. This exemption benefits the cooperative’s lessee. The characterization of machinery as real property is governed by the Local Government Code and not the Civil Code.

See full case digest HERE