The Court of Tax Appeals has ruled that the real property of the Metro Rail Transit along the Epifanio de los Santos Avenue is owned by the government and cannot be subject to real property tax by a local government unit.
“(T)he republic, as the owner of the EDSA MRT III real properties has a clear and unmistakable right to protect the same from being taxed for RPT and from being sold in a public auction,” the CTA en banc said in its 21-page decision dated December 4 written by Associate Justice Maria Rowena Modesto-San Pedro.
The decision affirmed the ruling of the tax court’s first division dated Sept. 18, 2018, against the Mandaluyong City government which in 2001 and 2003 demanded RPT from the Metro Rail Transit Corp. amounting to P769.79 million.
The RPT had been assessed on the MRT-3 real properties by the Mandaluyong City Assessor’s Office which fixed the market value of the railways, train cars, three stations among others at the time at P4.78 billion.
Ruling against the city, the tax court said that the arrangement between the national government and MRTC is more of a financing mechanism whereby the Republic is obligated to amortize payments to MRTC, which, in turn, would be sourced from the operations of the MRT-3.
“These arrangement makes the republic not just a mere possessor of the real properties in question but also the beneficial owner of the same,” the CTA said.
It added that considering that the MRT-3 real properties are intended for and devoted to public use, “the same are recognized under Philippine laws as properties of the public dominion and, therefore, are owned by the State or the republic.”
“The properties cannot be the lawful subject of an auction sale,” the tax court further said.