Facts
Manila International Airport Authority (MIAA) received Final Notices of Real Property Tax Delinquency from Pasay City for 10 taxable years or from 1992 to 2001. These properties are located inside NAIA Complex in Pasay City. The Mayor of Pasay threatened that it will sell its properties at public auction if they remain unpaid.
MIAA filed with CA to enjoin Pasay City from imposing real property taxes and from public auctioning the NAIA properties. CA dismissed MIAA’s petition and held that Pasay City has power to collect taxes on NAIA real properties because under Section 193 of the LGC, tax exemptions granted to GOCC are withdrawn. In other words, MIAA is a GOCC that must pay realty taxes.
Issue
Is MIAA (which operates NAIA/Manila International Aiport) a GOCC?
Ruling
No.
It is not a GOCC under the Admin Code (Section 2(13), because it is not organized as stock or non-stock corporation, nor a GOCC under the Constitution (Art XII Sec. 16) because MIAA is not required to meet the test of economic viability.
What then is the status of MIAA?
MIAA is a government instrumentality vested with corporate powers and performs essential public services pursuant to Administrative Code (specifically in the Introductory Provisions, Section 2(10))
What is a Government Instrumentality?
Section 2(10): It refers to any agency of the national Government, not integrated within the department framework, vested with special functions or jurisdiction by law, endowed with some if not all corporate powers, administering special funds, and enjoying operational autonomy, usually through a charter. This term includes regulatory agencies, chartered institutions and GOCC.
Which means that a government instrumentality may or may not be a GOCC (under Section 2(10) of Introductory Provisions of the Administrative Code of 1987.)
An instrumentality is a broader concept than GOCC
What is a GOCC?
What is a GOCC then? Section 2(13) of the Introductory Provisions of the Administrative Code of 1987 defines that it is any agency organized as a stock or non-stock corporation, vested with functions relating to public needs whether governmental or proprietary in nature, and owned by the Government directly or through its instrumentalities either wholly, or, where applicable as in the case of stock corporations, to the extent of at least fifty-one (51) percent of its capital stock: Provided , That GOCCs may further be categorized by the department of Budget, the Civil Service Commission, and the Commission on Audit for the purpose of the exercise and discharge of their respective powers, functions and responsibilities with respect to such corporations.
Government instrumentality may include GOCCs. There may be instrumentalities that are not qualified as GOCCs – and MIAA is one of them.
MIAA is a gov instrumentality vested with corporate powers but it is not a corporation because it is not organized as stock or non stock corporation therefore it can exercise the powers of eminent domain, police authority, and levying of fees and charges. At the same time, it can exercise all powers under the Corp Law.
Ruling: MIAA is exempted in paying taxes except for the portions that the Manila International Airport Authority has leased to private parties.
English