NAIA Properties declared not Taxable

Supreme Court finally exempts NAIA from city taxes

By Edu Punay

MANILA, Philippines – The Supreme Court (SC) has cleared the Manila International Airport Authority (MIAA) of over P1 billion in tax liabilities on lands and structures occupied by Ninoy Aquino International Airport (NAIA) in Pasay City for 1992 to 2001.

Voting 14-1, justices of the High Court ruled that the NAIA properties of MIAA in Pasay are exempted from real property tax charged by the city government, reversing decisions of the Court of Appeals in 2002 and 2004.

The SC declared that the MIAA is not a government-owned or controlled corporation but a “government instrumentality” that is not subject to any kind of tax by local governments under Section 133 of Republic Act 7160, the Local Government Code.

“Hence, MIAA is not liable to pay real property tax from the NAIA Pasay properties,” the SC said in the decision penned by Associate Justice Antonio Carpio.

The Court also stressed that the airport lands and buildings of MIAA are properties of public dominion intended for public use and should be exempted from taxes under Section 234 (a) of RA 7160.

The SC also nullified the real property tax assessments, including final notices and real property tax delinquencies, issued by city government in August 2001.

But the High Court clarified in its 12-page ruling that the portions of the NAIA properties in Pasay of the MIAA, which are leased to taxable persons like private parties, are subject to real property tax of the city government.

These were the same grounds raised by the SC in clearing the NAIA properties of MIAA in Parañaque City in 2006.

Chief Justice Reynato Puno and 12 other justices concurred with the decision. Only Associate Justice Consuelo Ynares-Santiago dissented.

The MIAA tax exemption covers some 600 hectares of land, including the runways, the airport tower and airport buildings, which straddles the border of Pasay and Parañaque.

In October 2001, the MIAA asked the CA to stop Pasay from collecting taxes on the properties, but the appellate court denied the petition and classified the MIAA as a government-owned corporation on Oct. 30, 2002.

The MIAA then filed an appeal but the CA also denied the petition on Mar.19, 2004. A petition for review of the CA decision was then filed with the SC.

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