The Court of Tax Appeals (CTA) has junked the petition filed by DOLE Philippines, Inc.-Stanfilco Division against the Davao City council, then City Mayor Sara Z. Duterte, now vice president, and City Treasurer Erwin P. Alparaque challenging the P3.32 million “environmental tax” imposed in 2018.
The dismissed DOLE petition filed on Dec. 22, 2022 challenged the decision dated July 4, 2022 and resolution dated Nov. 22, 2022 issued by the CTA’s first division which denied the petition for lack of jurisdiction.
Case records showed that the “environmental tax” was imposed by the Davao City local government under Ordinance No. 0310-07 or the "Watershed Code" enacted by the city council Jan. 23, 2007.
DOLE told the CTA as a full court that the tax court’s first division erred in holding that the "environmental tax" is a regulatory fee and not a tax, and that the CTA committed a mistake in not considering the other "substantive issues" it raised.
The CTA en banc disagreed. It ruled: "After a thorough evaluation of the factual antecedents of the present case, the arguments presented, as well as the relevant laws and jurisprudence on the matter, the Court En Banc finds that the present Petition for Review must be denied for lack of merit.”
"The Court En Banc finds no compelling reason to disturb the Court in Division's findings in the assailed decision and resolution that this Court has no jurisdiction over the present case," it added.
It pointed out that the court’s division correctly found that the P3.32 million is in the nature of a regulatory fee and not a tax, so it has lack of jurisdiction over it.
"A textual reading of the provision evidently shows that the sole purpose for the collection of the 'environmental tax' is not for the generation of revenue but for the 'implementation’ of [the Watershed] Code, the operational expenses of the Watershed Management Council and all instrumentalities and for watershed protection, conservation, and management programs and projects," it explained.
Thus, it said, the court in division cannot be faulted for making an inquiry as to the nature of the exaction imposed by the Watershed Code and in ultimately ruling that it lacked jurisdiction over the case.
The 19-page decision was written by Associate Justice Ma. Belen M. Ringpis-Liban with the concurrence of Presiding Justice Roman G. Del Rosario and Associate Justices Jean Marie A. Bacorro-Villena, Maria Rowena Modesto-San Pedro, Marian Ivy F. Reyes-Fajardo, Lanee S. Cui-David, Corazon G. Ferrer-Flores, and Henry S. Angeles.