SC rules Philippine Reclamation Authority not subject to Parañaque property tax

The Supreme Court has ruled that as a "government instrumentality" the Philippine Reclamation Authority (PRA) is exempt from paying real property tax. The ruling is the latest development in a dispute over tax payment between the PRA and the Parañaque City government, which held a public auction of the PRA's reclaimed properties in the city in 2003 for tax delinquencies. In its ruling, the SC declared void all real estate tax assessments, the auction sale, and the certificate of sale issued by Parañaque City Treasurer Liberato M. Carabeo over the PRA's property. The reclaimed properties include several portions of foreshore and offshore areas of Manila Bay that are in Parañaque, which were taxed for the years 2001 and 2002. "An essential public service" The court declared that the PRA is "a government instrumentality vested with corporate powers and performing an essential public service pursuant to Section 2(10) of the Introductory Provisions of the Administrative Code." However, it continued, the PRA could not be classified as a government-owned and -controlled corporation because it is neither a stock nor non-stock corporation and did not operate commercially. Neither, it said, does the PAR need to meet the test of economic viability required for tax exemption since it performs public services for the common good. These services included PRA's task to carry out coordinated, economical, and efficient reclamation of lands and the administration and operation of lands belonging to the government with the object of maximizing their utilization and hastening their development. The 21-page decision penned by Associate Justice Jose Mendoza unanimously granted the petition for review against a Regional Trial Court of Parañaque ruling that upheld Carabeo's tax assessment. — BM/VS, GMA News