Tuesday, September 15, 2015

On the validity of Quezon City's Socialized Housing Tax and Garbage Fee

The Validity of a Tax may be Determined by other Statutes
In Ferrer, Jr. v. Bautista,[1] the Supreme Court upheld the Socialized Housing Tax (SHT) of Quezon City. The City imposed a Socialized Housing Tax equivalent to 0.5% on the assessed value of land in excess of Php100,000.00. The Court held that this special assessment is the same tax referred to in Republic Act No. 7279 or the Urban Development and Housing Act of 1992. The SHT is one of the sources of funds for urban development and housing program.[2] The Court explained that:
...Aside from the specific authority vested by Section 43 of the UDHA, cities are allowed to exercise such other powers and discharge such other functions and responsibilities as are necessary, appropriate, or incidental to efficient and effective provision of the basic services and facilities which include, among others, programs and project for low-cost housing and other mass dwellings.  The collections made accrue to its socialized housing programs and projects. The tax is not a pure exercise of taxing power or merely to raise revenue; it is levied with regulatory purpose. The levy is primarily in the exercise of the police power for the general welfare of the entire city. It is greatly imbued with public interest. Removing slum areas in Quezon City is not only beneficial to the underprivileged and homeless constituents but advantageous to the real property owners as well. The situation will improve the value of the then property investments, fully enjoying the same in view of an orderly, secure and safe community, and will enhance the quality of life of the poor, making them law-abiding constituents and better consumers of business products.
In the same case, the Supreme Court struck down Quezon City’s “garbage fee” saying that, among other reasons, it was inconsistent with Republic Act No. 9003 or the Ecological Solid Waste Management Act of 2000. The Court held that under that law:
...it is clear that the authority of a municipality or city to impose fees is limited to the collection and transport of non-recyclable and special wastes and for the disposal of these into the sanitary landfill. Barangays, on the other hand, have the authority to impose fees for the collection and segregation of biodegradable, compostable and reusable wastes from households, commerce, other sources of domestic wastes, and for the use of barangay MRFs. This is but consistent with Section 10 of R.A. No. 9003 directing that segregation and collection of biodegradable, compostable and reusable wastes shall be conducted at the barangay level, while the collection of non-recyclable materials and special wastes shall be the responsibility of the municipality or city.
In this case, the alleged bases of Ordinance No. S-2235 in imposing the garbage fee is the volume of waste currently generated by each person in Quezon City, which purportedly stands at 0.66 kilogram per day, and the increasing trend of waste generation for the past three years. Respondents did not elaborate any further. The figure presented does not reflect the specific types of wastes generated — whether residential, market, commercial, industrial, construction/ demolition, street waste, agricultural, agro-industrial, institutional, etc. It is reasonable, therefore, for the Court to presume that such amount pertains to the totality of wastes, without any distinction, generated by Quezon City constituents. To reiterate, however, the authority of a municipality or city to impose fees extends only to those related to the collection and transport of non-recyclable and special wastes.[3]



[1] G.R. No. 210551, June 30, 2015.
[2] Section 43 of the law provides:
Sec. 43. Socialized Housing Tax. — Consistent with the constitutional principle that the ownership and enjoyment of property bear a social function and to raise funds for the Program, all local government units are hereby authorized to impose an additional one-half percent (0.5%) tax on the assessed value of all lands in urban areas in excess of Fifty thousand pesos (50,000.00).
See Ferrer, Jr. v. Bautista, G.R. No. 210551, June 30, 2015.
[3] Ferrer, Jr. v. Bautista, G.R. No. 210551, June 30, 2015.

No comments: