COA: Mactan Cebu airport owes Lapu-Lapu City P1.7B in back taxes

Mactan Cebu International Airport. CDN FILE PHOTO

MANILA, Philippines — The Commission on Audit has directed the Lapu-Lapu City government in Cebu province to demand the payment of P1.727 billion in back taxes that the Mactan Cebu International Airport Authority (MCIAA) has not paid in the last 20 years.

In its audit report on the Lapu-Lapu City government released last week, the COA questioned why local officials did not include this massive collectible from MCIAA in its books solely on the  MCIAA’s insistence that it was not  liable to pay any taxes.

MCIAA, which operates the second busiest airport in the country, claims that under its charter, Republic Act 6958,  it is exempted from paying real estate  taxes as long as it does not grant tax exemptions to any subsidiary.

“The same line of argument was used by MCIAA when it stopped paying their real property taxes with the City of Cebu where it owned parcels of land located at the old Lahug airport. However, the Supreme Court ruled (in 1996) in favor of the latter requiring the former to pay its real property taxes. This SC decision may now be used by the city to strengthen its case against the MCIAA,” said the COA.

The COA said MCIAA owed the local government a total of P928.123 million in unpaid real estate taxes from 1992 to 2012, excluding P582 million in accumulated penalties.

MCIAA not only declined to pay real estate taxes, commercial establishments operating in the airport have also stopped paying their taxes. These business concerns have accumulated a total of P217.220 million from 1998 to 2012.

The COA has ordered the local government to conduct an extensive tax mapping campaign in MCIAA’s facility to compel them to pay their tax dues.