NFA is exempt from real property tax — SC

The Supreme Court (SC) has ruled that the properties of the National Food Authority (NFA) are exempt from real property tax.

In a 40-page decision promulgated in May, the SC En Banc granted a petition and declared void the notices of delinquency issued by the Tagum City Treasurer against the NFA amounting to P2.6 million in real property taxes.

“The NFA is a government instrumentality exempt from real property taxes in accordance with Section 133(o) and 234(a) of the Local Government Code of 1991,” the SC said.

According to the SC, the NFA received seven notices of delinquency from the Tagum City Treasurer in 2016. The NFA then challenged the notices before a regional trial court (RTC), arguing that it is exempt from paying real property tax.

The RTC, however, ruled in favor of the local government and held that the NFA is a government-owned and controlled corporation and is subject to real property tax.

This was affirmed by the Court of Tax Appeals (CTA) Second Division and the CTA En Banc, prompting the NFA to file a petition with the High Court.

In granting the NFA’s petition, the SC cited Section 133(o) of the Local Government Code, which states that local governments cannot tax the national government.

Meanwhile, under Section 234(a), properties owned by the government or any of its political subdivisions are exempted from real property tax, except when beneficial use has been granted to taxable private entities.

“NFA, which is mandated to maintain sufficient rice buffer stock from local farmers to be used for emergencies and calamities, performs essential public service,” the SC said.

Aside from this, the Court said that NFA operates autonomously from the Department of Agriculture even while under its supervision and control.

“As a government instrumentality, NFA’s properties are of public dominion intended for public use or service. Without evidence that their beneficial use belongs to a taxable person, they are exempt from real property tax,” it said. — RSJ, GMA Integrated News