The Supreme Court (SC) has declared its recognition of Baguio’s authority to collect business fees and other taxes from enterprises operating inside Camp John Hay is final and executory.
According to City Legal Officer Althea Alberto on Monday, the SC’s Second Division ruled in February 2023 that Baguio had the authority to tax and regulate businesses in Camp John Hay, a move that was met with a motion for reconsideration from government-owned John Hay Management Corp. (JHMC), a Bases and Conversion Development Authority (BCDA) subsidiary.
However, on July 8 this year, the SC dismissed the motion for reconsideration, making Baguio’s power to tax John Hay businesses final.
Alberto said that following the final ruling, the BCDA and city government are working on a memorandum of agreement that would establish guidelines for the city’s business licensing office and a one-stop shop for John Hay businesses specifically.
Baguio is also collecting its shares from John Hay’s gross revenues, as well as unremitted shares from rent the BCDA was to collect from Camp John Hay Development Corp. (CJHDevco), with an estimated balance of P168 million in unremitted rental shares.
Alberto said that the city government needs to identify all the businesses in John Hay before it can properly start collecting, citing that 2019 data showed 120 businesses in the camp with only 85 having contracts with the BCDA and JHMC.
According to the 2023 decision penned by Senior Associate Justice Marvic Leonen, the laws and executive directives creating the John Hay Special Economic Zone do not explicitly empower BCDA, nor its estate manager, JHMC, “to issue permits or regulate businesses” inside the John Hay property.
“Neither can they invoke the powers granted only to the Philippine Economic Zone Authority. Without an express grant by law, respondent’s (the Baguio government’s) police power prevails. Thus, locators within the John Hay Special Economic Zone not duly registered with the Philippine Economic Zone Authority are liable to pay business permit fees to [the city],” the Supreme Court said.
