NFA not exempt from real property tax, CTA rules

Published October 17, 2021, 1:14 PM

by Jun Ramirez

Lots owned by the National Food Authority (NFA) are subject to the real property tax (RPT) imposed and collected by local government units (LGUs), the Court of Tax Appeals (CTA) said in a decision.

The decision of the court’s Second Division affirmed the decision of the the Regional Trial Court (RTC) of Ligao City, Albay in April 2019.

The RTC dismissed the petition of the NFA to nullify the the more than P642,000 deficiency RPT issued by the city government for its lot and warehouse in Barangay Calzada, Ligao City

The NFA argued that agency is a government “instrumentality” exempt from RPT under the Local Government Code (LGC).

The court, however, stated that the NFA is a government owned and controlled corporation (GOCC) which tax exemption privilege was scrapped when the LGC was enacted in 1992.

It explained that GOCC is a stock or non-stock corporation while government instrumentality may be vested with corporate powers but does not necessarily become a corporation like the Government Service Insurance System.

Associate Justice Jean Marie Bacorro-Villena, who wrote the 27-page decision, stated that the “LGUs’ power to tax is the most effective instrument to raise needed revenues to finance and support the delivery of services to the people.”

 
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