UP vs QC govt: Row looms over Ayala-TechnoHub land

HOT, TAXABLE PROPERTY? The commercial side of Ayala-TechnoHub on Commonwealth Ave., Quezon
City. GRIG C. MONTEGRANDE

MANILA, Philippines—The University of the Philippines (UP) has asked the Supreme Court to stop the Quezon City government from auctioning off a property leased to Ayala Land Inc. (ALI) and uphold UP’s exemption from paying real property taxes worth P117.18 million.

Through the Office of the Solicitor General, the UP administration on Monday filed a petition for certiorari and prohibition against the Quezon City Treasurer. It maintained that the state university was exempt from taxes under the law and that it was not informed of the city government’s plan to auction off the UP-Ayala TechnoHub due to unpaid taxes.

The petition asked for a temporary restraining order (TRO) on the scheduled Nov. 20 auction of the 380,630-sqm property, now a research and info-tech hub with an adjoining commercial development on Commonwealth Avenue.

It also sought the annulment of a Statement of Delinquency (issued May 27, 2014) and a Final Notice of Delinquency (issued July 11) that the city government sent to UP to collect real property taxes for the land, which the university leased to ALI starting October 2006.

The notices, UP said, “are void for having been issued with grave abuse of discretion amounting to lack or excess of jurisdiction.” The university was also denied due process and the opportunity to challenge the auction when City Hall set the sale without its knowledge, it added.

The petitioner stressed that UP “is not liable for any real property tax on the property,” based on the UP Charter of 2008 and the Local Government Code.

Reached for comment, Quezon City Treasurer Edgar Villanueva said the UP property became taxable when it started to be used in a proprietary function and not for educational purposes.

“I haven’t received a court order or manifestation from UP regarding that. At any rate, we’re charging UP because our office thinks that they’re taxable, because the property is now being utilized by a private entity which is also taxable,” Villanueva told the Inquirer in an interview.

“According to the Constitution, educational institutions are exempt from payment of real property tax if (the land) is being used directly and specifically for educational purposes,” he said. “We recognize that. But when UP utilized the property in a proprietary function, they stepped into the (category) of an ordinary taxable entity.”

The Bureau of Local Government Finance, an agency under the Department of Finance, had concurred with this position, Villanueva said.

But the local official said that “if the Supreme Court grants the TRO, we will respect that.”

In the petition, UP warned that “unless (the city government) is restrained from proceeding with the sale of the property, UP will suffer irreparable damage incapable of pecuniary estimation as it will be effectively deprived of the opportunity to raise much-needed revenues in support of its mandate.”