Republic of the Philippines
CENTRAL BOARD OF ASSESSMENT APPEALS M a n i l a
ARMED FORCES AND POLICE SAVINGS AND LOAN ASSOCIATION, INC.,
CBAA CASE NO. M-19 -versus-
LOCAL BOARD OF ASSESSMENT APPEALS OF THE CITY OF BUTUAN,
CITY ASSESSOR OF BUTUAN CITY, Respondent-Appellee.
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R E S O L U T I O N
Before us is a motion filed by Petitioner-Appellant herein seeking a
reconsideration of this Board’s Decision dated March 18, 2004 in the above-
entitled case. The envelope containing the said motion was post-marked as
registered mail on May 24, 2004 by the Camp Aguinaldo Post Office in Quezon
City, Metro Manila.
Alleging that it received a copy of said Decision on May 7, 2004,
Petitioner-Appellant raised the following issues, to wit:
WHETHER OR NOT THE HONORABLE BOARD ERRED IN HOLDING THAT THE PETITIONER-APPELLANT IS LIABLE FOR REALTY TAX AS THE BENEFICIAL USER OF THE BUILDING.
WHETHER OR NOT THE HONORABLE BOARD COMMITTED A GRAVE ABUSE OF DISCRETION IN DISMISSING THE INSTANT APPEAL FOR LACK OF MERIT.
Petitioner-Appellant Armed Forces and Police Savings and Loan
Association, Inc. (AFPSLAI) argues that, “even assuming arguenda that the law
applicable on this matter is par. (a) of Section 234 of Republic Act No. 7160 . . .
still, we submit that since AFPSLAI is NOT a taxable person, it follows that it is
nonetheless exempted from paying realty tax for the building although the
beneficial use of the same was granted to it.”
Petitioner-Appellant arrived at this conclusion because, as Petitioner-
Appellant says, Section 234(a) of R.A. 7160 does “not make any distinction as
to who or what is a taxable person and as to what kind of taxes is he liable to
be covered by the exemption. What is clear however is that the beneficial user
or grantee is a taxable person to be liable for realty tax. Thus, what the law
does not distinguish we must not also distinguish.”
Petitioner-Appellant is so obstinate that it still insists that, since it is
exempt from the payment of income tax under the Revised Non-Stock Savings
and Loan Association Act (R.A. 8367), it falls under the category of NON-
TAXABLE persons with respect to any and all taxes including, but not limited to,
real property tax. Petitioner is virtually saying that, since R.A. 8367 does not
say that savings and loan associations are liable to the real property tax, ergo,
Petitioner, being a savings and loan association, should not be so liable.
The “issues” raised by Petitioner-Appellant in this motion for
reconsideration are not new. They were thoroughly discussed, examined and
dissected in this Board’s decision of March 18, 2004.
As stated in our Decision of March 18, 2004, Petitioner-Appellant
admitted the following:
(a) The subject building was constructed on a lot owned and leased by
the Philippine Army to Petitioner; and
(b) The Philippine Army shall own the subject building at the expiration
or termination of the contract of lease over the lot.
It was, therefore, established that, while the contract of lease over the lot
is in force, Petitioner-Appellant is the owner of the subject building, subject to
the real property tax. We even stated that, if we assumed the position of
Petitioner that the subject building were owned by the Philippine Army even
before the expiration of the lease contract over the lot, to which position we
certainly do not subscribe, Petitioner would still be subject to the real property
tax for being the beneficial user of said building. In fact, we stated that
Petitioner was the beneficial user of the lot on which the subject building is built
but we refrained from issuing an order to that effect for the sample reason that
the matter of the lot was not at issue before us.
Petitioner-Appellant seems to be having difficulty in trying to grasp the
meaning of the phrase “taxable person”.
A “person” may be either natural or juridical. A “natural person” is an
individual, a human being. On the other hand, a “juridical person”, such as the
Petitioner-Appellant, is an entity or person created by fiction of law with certain
legal rights and obligations.
Webster’s New World Dictionary defines a “tax” as “a compulsory
payment of a percentage of income, property value, etc. for the support of a
government.” The word “taxable” literally means “subject to a tax.” When used
in a tax statute, the phrase “taxable person” means a person subject to the
payment of the tax created by that statute, in the same way that the phrase
“taxable person” found at the end of Section 234(a) of R.A. 7160 means a
person subject to the real property tax, or one not exempt or not exempted
from the payment of the real property tax.
In relation to a certain kind of tax, a person is either taxable or exempt.
Take the case at bar for example. If the owner and/or user of the subject
building were the Philippine National Police (PNP) or, for that matter, any
political subdivision of the Republic, instead of Petitioner, there would be no
realty tax to talk about since the owner and/or beneficial user, being a part of
the government, would have been exempt from the payment of the real
Exemptions from taxation are highly disfavored, so much so that they
almost could be said to be odious to the law. He who claims an exemption must
be able to point to some positive provision of the law creating the right (Asiatic
Petroleum Co. vs. Llanes, 49 Phil. 466, 472 ). When exemption is
claimed, it must be shown indubitably to exist. At the outset, every presumption
is against it (Farrington vs. Tennessee and County of Shelby, 95 U.S., 679,
Petitioner-Appellant’s claim of exemption is based on the provisions of
the Revised Non-Stock Savings and Loan Association Act (R.A. 8367), under
which law Petitioner-Appellant is supposed to be exempt from the payment of
income tax, Republic Act No. 8367 has nothing to do whatsoever with the real
WHEREFORE, premises considered, the instant Petition for
Reconsideration is hereby DENIED for lack of merit.
Manila, Philippines, July 01, 2004.
(Signed) CESAR S. GUTIERREZ
ANGEL P. PALOMARES Member
(Signed) RAFAEL O. CORTES