The Court of Tax Appeals (CTA) has doused cold water over the joint resolution of four Metro Manila cities to impose real property tax (RPT) on the light transit system that traversed the entire length of EDSA.
The CTA en banc upheld the verdict of its First Division that dismissed the motion for reconsideration filed by Mandaluyong City to require the Metro Rail Transit (MRT) Corporation, a foreign company, to pay the tax.
The petitioner together with the cities of Quezon, Makati and Pasay had signed an accord for the purpose of collecting the tax from MRT which they claimed a private entity and the operator of the elevated railway.
The MRT constructed the railway system based on build-lease-transfer agreement with the Department of Transportation in 1997.
In a 21-page decision, the full court explained that the MRT is only the builder and the transport system is owned by the national government which real properties are not subject to RPT under Article 240 of the Civil Code.
It added that Section 113 of the Local Government Code does not allow local government units from collecting the said tax from properties owned by the national government.