GR No. 210551 dated June 30, 2015
FACTS: The LGU of QC enacted ordinances where one imposes socialized housing tax (SHT) based on the assessed value of the real property, to be paid by landowners. The other imposes a garbage fee (GF) to be paid by landowners based on the floor area or land area of their property.
Ferrer, a co-owner of residential property in QC, wants to question the validity of these two (2) ordinances.
ISSUE: Whether the SHT tantamounts to a penalty on realty owners?
HELD: No. Property ownership bears a social function. Also, the SHT will improve the status of property owners by increasing investment, raising land value, etc., after the relocation of informal settlers. The foundation is police power.
ISSUE: Is the SHT violative of the equal protection, considering that those who occupy land illegally or informally do not pay while legitimate owners of land are made to pay?
HELD: No, equal protection admits of exception. As long as there is a real and substantial distinction, which is germane to the purpose of the law, it does not violate the principles of equal protection. The difference between informal settlers and property owners is very clear and unmistakable. Again, the foundation is police power, that power that allows the State to regulate life, liberty, and property in order to promote the welfare of the people.
ISSUE: Does the LGC allow the imposition of SHT, considering there is already property tax?
HELD: Yes, the LGC allows this. The LGC, under the general welfare clause, provides local governments the power to enact measure that will benefit the people. Moreover, SHT has another basis in law: RA 7279 or the Urban Development and Housing Act. Again, the foundation is police power.
ISSUE: Is GF a tax or a fee?
HELD: It is a fee, not a tax. The main purpose is to regulate, not to raise revenue. The power of LGUs to collect fees in order to manage wastes is recognized and conferred by RA 9003. How can LGUs do something without the means to do it?
ISSUE: Is GF valid, considering that it imposes a fee based on land or floor area?
HELD: No, GF in not valid. Substantive due process requires reasonable means and reasonable purpose. Although the purpose of the GF is reasonable and admirable, the means employed is unreasonable and oppressive. Rather than basis on actual waste output or estimate garbage use, the ordinance uses as a yardstick the people’s land or floor area which has nothing to do with how much waste they produce.