The most common defense for the “Team Patay” tarpaulins is that the San Sebastian Cathedral is private property. This is not exactly the case. Because the Diocese of Bacolod is registered as a religious organization, it does not pay property taxes. The public actually subsidizes the façade on which the tarpaulins are posted.
The diocese is taking for granted the fact that even religious organizations—like all charitable organizations—are regulated. This is what happened in 2004 to the Lung Center of the Philippines.
Like the Catholic Bishops’ Conference of the Philippines, the Lung Center is registered as a charitable institution. It is also entitled to tax privileges in exchange for participating in charitable activities—primarily the treatment of patients with lung-related ailments.
But the Quezon City assessor discovered that the Lung Center also operated for profit. Because of this, the assessor taxed both the land and the hospital. The Lung Center made an appeal, claiming that as a charitable institution, it is exempted from paying real property taxes. It appealed to four other courts—and lost. Eventually, it brought the case to the Supreme Court.
It’s important to understand the arguments used by the Lung Center because they are the same ones that the defenders of the Team Patay tarpaulins will likely use.
The Lung Center argued that the profit gained from leasing out space (a profitable activity) is used to fund its primary purpose—attending to charity patients, reducing the incidence of lung-related ailments, etc.
Defenders of the diocese could argue that posting political tarpaulins fulfills their primary purpose, which is ultimately religious.
Essentially, the Lung Center and the defenders of the diocese are both saying that although they also participate in noncharitable activities, these activities are performed to further their primary goals. And since their primary goals are still charitable in nature, the organization still qualifies as a charitable institution exempted from paying real property taxes. But is this defense valid?
The Supreme Court decided that those parts of the Lung Center leased out for profit are not exempted from taxation. It doesn’t matter whether the profits are used to fund the Lung Center’s main goals. The fact that a noncharitable activity was done at all automatically disqualifies a property from tax exemption.
How does this translate to the Diocese of Bacolod? The “Team Buhay”-Team Patay tarpaulin is without question a political poster, which is why it caught the attention of the Commission on Elections. The diocese can argue that although it is a political poster, it is primarily meant to convey a religious message.
But how much politics can a religious poster include before the diocese becomes liable for taxation? To answer this question, let’s review why the Supreme Court decided to tax the Lung Center.
Before 1973, the arguments of the Lung Center (and the CBCP) would have worked. But since the 1973 Constitution took effect, replacing the 1935 Constitution, their defense is no longer valid. What’s the difference?
Under the 1935 Constitution, properties exclusively used for charitable purposes are exempted from taxation. Under the 1973 Constitution (and our present version), properties must not only be used for charitable purposes exclusively, but actually and directly as well.
What does this mean? Here’s a section of the Supreme Court decision:
What is meant by actual, direct and exclusive use of the property for charitable purposes is the direct and immediate and actual application of the property itself to the purposes for which the charitable institution is organized. It is not the use of the income from the real property that is determinative of whether the property is used for tax-exempt purposes.
In other words, it doesn’t matter what the Lung Center uses the money for. The fact that it made money at all is enough to disqualify it from tax exemption.
A property is liable for taxation the moment a noncharitable activity is performed—even if it ultimately serves an institution’s charitable purpose.
In the case of the Diocese of Bacolod, it doesn’t matter whether a political tarpaulin is posted to ultimately fulfill a religious purpose. The fact that a political poster is posted at all is enough to disqualify a church from tax exemption.
The diocese can argue that the poster only occupies a small part of the church façade. Would it be fair to tax the entire property when only a small part is used politically? Here the Supreme Court ruling is also relevant:
If real property is used for one or more commercial purposes, it is not exclusively used for the exempted purposes but is subject to taxation. The words “dominant use” or “principal use” cannot be substituted for the words “used exclusively” without doing violence to the Constitutions and the law. “Solely” is synonymous with “exclusively.”
So in the same way that a single lease can disqualify a hospital from tax exemption, a single political poster can disqualify a church from tax exemption.
The Diocese of Bacolod—or any other diocese, for that matter—does not have the right to post political propaganda on its properties. At least not while it is registered as a tax-exempt charitable institution.
If it wants to continue to campaign using church façades—not to mention pulpits during sermons—it must register as a political institution and pay its dues. Otherwise, it’s just evading taxes. What’s worse, this illegal politicking is funded indirectly by every Filipino, even those who do not want to subsidize the Church’s bigotry.
Red Tani is the founder of The Filipino Freethinkers organization.