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.
See full case digest HERE.