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Manila Bulletin devider Philippines devider National devider CTA junks Taguig City's plea vs local business tax refund

CTA junks Taguig City's plea vs local business tax refund

Published May 23, 2025 01:18 pm

The Court of Tax Appeals (CTA) has denied the petition filed by the Taguig City government which pleaded for the reversal of a trial court ruling that granted P624,481.37 refund for local business tax (LBT) to Forbeswood Heights Condominium Association, Inc.

In a decision issued as a full court, the CTA said that the regional trial court (RTC) correctly affirmed the ruling of the metropolitan trial court (MeTC) that ordered the refund of the LBT to Forbeswood Heights since the LBT for 2022 was erroneously collected.

"The Court En Banc (full court) finds no compelling basis to overturn or modify the decision rendered by RTC-Taguig on Feb. 5, 2024," it ruled.

Case records showed that the Taguig City government a billing on Jan. 5, 2022 requiring Forbeswood Heights to pay LBT, environmental impact fee (EIF), and business plate fee of P1,441,858.82 relative to the renewal of its business permit for 2022.

Forbeswood Heights paid the billing on Jan. 10, 2022. But on March 7, 2022, Forbeswood Heights filed with Taguig City its protest letter seeking cancellation of the billing statement and requesting the refund of the LBT it paid.

The plea was denied on May 18, 2022. Forbeswood Heights then filed a case before the MeTC of Taguig City on June 24, 2022. The trial court partially granted the plea and ordered a refund of P624,481.37.

On appeal, the Taguig City RTC upheld the ruling of the MeTC. The city government elevated the case to the CTA and pointed out that there is now law that specifically grants exemptions from LBT to a condominium corporation.

But the CTA found Taguig City’s argument bereft of merit. “To be liable for LBT, a person must be engaged in trade or business," the tax court said.

"In the present case, petitioners (Taguig City) classified respondent as a contractor for the purpose of imposing LBT on its gross receipts for the preceding calendar year," it also said.

Since Forbeswood Heights is a condominium corporation, the CTA cited the Supreme Court (SC) ruling which declared that a condominium corporation "is not engaged in trade or business and, ergo, is not liable for LBT."

The 10-page decision was written by Associate Justice Marian Ivy F. Reyes-Fajardo with the concurrence of Presiding Justice Roman G. Del Rosario and Associate Justices Ma. Belen M. Ringpis-Liban, Catherine T. Manahan, Jean Marie A. Bacorro-Villena, Maria Rowena Modesto-San Pedro, Lanee S. Cui-David, Corazon G. Ferrer-Flores, and Henry S. Angeles.

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