FRANCISCO I.
CHAVEZ, vs. JAIME B. ONGPIN, in his capacity as Minister of Finance and
FIDELINA CRUZ, in her capacity as Acting Municipal Treasurer of the
Municipality of Las Piñas, respondents, REALTY OWNERS ASSOCIATION OF THE
PHILIPPINES, INC.
G.R. No 76778
Doctrine:
To continue collecting real property taxes based on valuations arrived at several years ago, in disregard of the increases in the value of real properties that have occurred since then, is not in consonance with a sound tax system. Fiscal adequacy, which is one of the characteristics of a sound tax system, requires that sources of revenues must be adequate to meet government expenditures and their variations.
Facts:
Chavez, the petitioner, seeks to declare unconstitutional EO 73 of Pres Cory Aquino titled “PROVIDING FOR THE COLLECTION OF REAL PROPERTY TAXES BASED ON THE 1984 REAL PROPERTY VALUES, AS PROVIDED FOR UNDER SECTION 21 OF THE REAL PROPERTY TAX CODE (PD 464), AS AMENDED.”
Chavez, as a taxpayer and an owner of three parcels of land. He alleges the following:
1. that EO 73 accelerated the application of the general revision of assessments thereby mandating an excessive increase in real property taxes;
G.R. No 76778
Doctrine:
To continue collecting real property taxes based on valuations arrived at several years ago, in disregard of the increases in the value of real properties that have occurred since then, is not in consonance with a sound tax system. Fiscal adequacy, which is one of the characteristics of a sound tax system, requires that sources of revenues must be adequate to meet government expenditures and their variations.
Facts:
Chavez, the petitioner, seeks to declare unconstitutional EO 73 of Pres Cory Aquino titled “PROVIDING FOR THE COLLECTION OF REAL PROPERTY TAXES BASED ON THE 1984 REAL PROPERTY VALUES, AS PROVIDED FOR UNDER SECTION 21 OF THE REAL PROPERTY TAX CODE (PD 464), AS AMENDED.”
Chavez, as a taxpayer and an owner of three parcels of land. He alleges the following:
1. that EO 73 accelerated the application of the general revision of assessments thereby mandating an excessive increase in real property taxes;
2. that
sheer oppression is the result of increasing real property taxes at a period of
time when harsh economic conditions prevail; and
3. that
the increase in the market values of real property as reflected in the schedule
of values was brought about only by inflation and economic recession.
Chavez argues further that the unreasonable increase in real property taxes brought about by EO No. 73 amounts to a confiscation of property repugnant to the constitutional guarantee of due process.
The intervenor Realty Owners Association of the Philippines, Inc. (ROAP) joins Chavez in his petition to declare unconstitutional EO 73, but additionally alleges the following: that Presidential Decree No. 464 is unconstitutional insofar as it imposes an additional one percent (1%) tax on all property owners to raise funds for education, as real property tax is admittedly a local tax for local governments and does not meet the requirements of due process.
ISSUE: W/N the assailed EO is unconstitutional.
RULING:
Chavez argues further that the unreasonable increase in real property taxes brought about by EO No. 73 amounts to a confiscation of property repugnant to the constitutional guarantee of due process.
The intervenor Realty Owners Association of the Philippines, Inc. (ROAP) joins Chavez in his petition to declare unconstitutional EO 73, but additionally alleges the following: that Presidential Decree No. 464 is unconstitutional insofar as it imposes an additional one percent (1%) tax on all property owners to raise funds for education, as real property tax is admittedly a local tax for local governments and does not meet the requirements of due process.
ISSUE: W/N the assailed EO is unconstitutional.
RULING:
NO.
The revision of the assessments in EO 73 does not
impose new taxes nor increase taxes but changed the date of implementation of
the increase from January 1988 to January 1, 1987.
***There was an EO No. 1019 passed deferring the increase of tax. The original date of increase was supposed to be on 1985, and was moved to 1988. But with the issuance of EO 73, instead of 1988, gihimo ug 1987.
The Assessment for General Revision in 1984 was based on Section 21 of Presidential Decree No. 464.
Thus, the court agrees with the Office of the Solicitor General that the attack on Executive Order No. 73 has no legal basis as the general revision of assessments is a continuing process mandated by Section 21 of Presidential Decree No. 464.
Also the change of date of increase was justified in the Whereas Clause of EO 73 which states:
WHEREAS, the collection of real property taxes based on the 1984 real property values was deferred to take effect on January 1, 1988 instead of January 1, 1985, thus depriving the local government units of an additional source of revenue;
WHEREAS, there is an urgent need for local governments to augment their financial resources to meet the rising cost of rendering effective services to the people;
Court agrees with the observation of the Office of the Solicitor General that without EO 73, the basis for collection of real property taxes win still be the 1978 revision of property values. Certainly, to continue collecting real property taxes based on valuations arrived at several years ago, in disregard of the increases in the value of real properties that have occurred since then, is not in consonance with a sound tax system. Fiscal adequacy, which is one of the characteristics of a sound tax system, requires that sources of revenues must be adequate to meet government expenditures and their variations.
***There was an EO No. 1019 passed deferring the increase of tax. The original date of increase was supposed to be on 1985, and was moved to 1988. But with the issuance of EO 73, instead of 1988, gihimo ug 1987.
The Assessment for General Revision in 1984 was based on Section 21 of Presidential Decree No. 464.
Thus, the court agrees with the Office of the Solicitor General that the attack on Executive Order No. 73 has no legal basis as the general revision of assessments is a continuing process mandated by Section 21 of Presidential Decree No. 464.
Also the change of date of increase was justified in the Whereas Clause of EO 73 which states:
WHEREAS, the collection of real property taxes based on the 1984 real property values was deferred to take effect on January 1, 1988 instead of January 1, 1985, thus depriving the local government units of an additional source of revenue;
WHEREAS, there is an urgent need for local governments to augment their financial resources to meet the rising cost of rendering effective services to the people;
Court agrees with the observation of the Office of the Solicitor General that without EO 73, the basis for collection of real property taxes win still be the 1978 revision of property values. Certainly, to continue collecting real property taxes based on valuations arrived at several years ago, in disregard of the increases in the value of real properties that have occurred since then, is not in consonance with a sound tax system. Fiscal adequacy, which is one of the characteristics of a sound tax system, requires that sources of revenues must be adequate to meet government expenditures and their variations.
Other issues:
Intervention of ROAP is not proper to be resolved in
the present petition. The issue here is limited to the constitutionality of EO
73. Intervention is not an independent proceeding, but an ancillary and
supplemental one which, in the nature of things, unless otherwise provided for
by legislation (or Rules of Court), must be in subordination to the main
proceeding, and it may be laid down as a general rule that an intervention is
limited to the field of litigation open to the original parties.ROAP, who questioned PD 464, cannot assail it in his intervention since Chavez, original complainant, did not objected PD 464.
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