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Published by: Jhing Guzmana on Sep 23, 2013
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EXEMPTION OF GOVERNMENT AGENCIES & INSTRUMENTALITIES (C) Capital Gains from Sale of Shares of Stock not Traded in the Stock Exchange. - The provisions of Section 39(B) notwithstanding, a final tax at the rates prescribed below is hereby imposed upon the net capital gains realized during the taxable year from the sale, barter, exchange or other disposition of shares of stock in a domestic corporation, except shares sold, or disposed of through the stock exchange. Not over P100,000……………………………........ 5% On any amount in excess of P100,000………… 10% -----------EXECUTIVE ORDER NO. 93


WHEREAS, there is a need to further delineate and streamline the specific roles and responsibilities of and operating procedures to be observed by the Project Monitoring Committees at the regional, provincial and municipal levels in view of the implementation of the Local Government Code of 1991; WHEREAS, there is a need to expand the membership of Project Monitoring Committees in the national, regional, provincial, city and municipal levels to promote greater non-governmental organization (NGO) participation in and transparency of government programs; and WHEREAS, there is a need to establish a Project Monitoring Committee at the national level to address and coordinate various RPMES matters, to act on implementation issues and problems and to orchestrate RPMES activities and concerns in the regions. Section 1. The third and fourth paragraphs of Section 2 of Executive Order No. 376 (hereinafter referred to as “Order”) are hereby amended to read as follows: “At the regional level, the projects to be monitored shall include all foreign assisted projects (loan or grant funded), interprovincial projects, area development projects, nationality-funded projects, and other projects considered critical by the Office of the President and the Regional Development Councils/Planning Boards, which are implemented in the region. “At the provincial, city and municipal levels, the scope of monitoring shall include all foreign and nationality-funded projects, including development projects funded from the Internal Revenue Allotment (IRA) share of LGUs or supported by funds released directly to the province/city/municipality, and projects funded from locally-generated resources, which are implemented within their respective areas.” Sec. 2. Sec. 3 of said October is hereby amended to read as follows: “SECTION 3. Organization. — The RPMES shall be implemented by the development counsels/planning boards at the various levels (RDC, PDC, CDC and MDC). A Regional Project Monitoring Committee (RPMC) shall be established under the RDC in addition to the Project Monitoring Committees (PMCs) created through Memorandum Order No. 175, as amended, and/or the Local Government Code of 1991. At the national level, a National Project Monitoring Committee (NPMC) shall be established to oversee implementation of the RPMES, with NEDA serving as its Secretariat. “The Presidential Management Staff (PMS) shall, corollary to the efforts of the RPMCs, focus on monitoring the President’s commitments in the various regions. “The extensive participation of Non- Governmental Organizations (NGOs) and People’s Organization (POs) as project monitors shall be advocated at all levels, NGO/PO membership in the provincial, city and municipal levels shall include, but not limited to representatives from civic and/or religious groups.

are hereby withdraw. The National Project Monitoring Committee (NPMC) is hereby authorized. Department of the Interior and Local Government (DILG). and PMS/OP shall compose the NMPC. 5. which shall include the granting of financial incentives to NGO monitors as well as training. 3. thus disturbing the equity feature of the tax system. ------------PRESIDENTIAL DECREE NO. capability-building and other administrative costs. CDC. The Chairman shall be appointed by the local Chief Executive from among the PMC members. city. Sec. portions of the Regional Development Fund for monitoring and evaluation may be allotted to a local PMC to augment its budget. partially or totally. fees. there is need for government-owned or controlled corporations and all other units of government enjoying tax privileges to share in the requirements of development. 4 of said Order. WHEREAS. 1931 . taxes. The responsibilities of the Office of the Cabinet Secretary as provided under Sec. 1177 has already expressly repealed the grant of tax privileges to any government-owned or controlled corporation and all other units of government.” Sec. “At the regional level. PDC. to update and make revisions to the manual of Operations implementing the RPMES. The funds for RPMES at these levels shall be administered by the RCDs concerned. “The PMCs created at the provincial. of the RPMC. 6.” Sec. imposts and other charges heretofore granted in favor of government-owned or controlled corporations including their subsidiaries. Sec. The Neda Regional Office shall serve as the Secretariat of the RPMC. respectively. shall be provided in the General Appropriations Act under the Regional Development Fund. As the RPMC may deem essential. Funding. Section 2. “The funding requirements of the RPMES at the regional. WHEREAS. PDC. taxes and other charges due from them. CDC. The subtitle “Development Councils (RDC. designated officials from the National Economic and Development Authority (NEDA). and WHEREAS. city and municipal levels. from time to time. 4. respectively. the DILG official assigned in the locality and two (2) NGO/OP representatives. — Funds needed to implement the RPMES. fees. (LGUs) concerned shall serve as Secretariat to the Local PMCS. the exemptions . The other four members of the PMC shall be appointed by the Local Chief Executive From among five nominees of the Local Development Council. at least one (1) of whom shall be drawn from the NGO representatives in the Regional Development Council (RDC). The respective planning and development offices of the local government units. The provisions of special or general law to the contrary notwithstanding. MDC)” under Sec. government-owned or controlled corporations as well as entities performing quasi-governmental functions are still enjoying exemptions from duties. particularly the initial operations of the NPMC shall be made available from sources to be recommended by the DBM. Section 1. and municipal levels will have. PMS/OP and three (3) NGO/OP representative. WHEREAS. such privileges make more difficult the accomplishment of the overall program for economic development in general and compete with private industries to a great extent. 4 of said Order is hereby transferred to and shall be assumed by the Presidential Management Staff (PMS). taxes. Subsequent funding requirements of the RPMES at the national level shall be provided in the General Appropriations Act by the DBM. these duty and tax exemption privileges have resulted in serious tax base erosion and distortions in the tax treatment of similarly situated enterprises. by paying the duties. as mandatory members.DIRECTING THE RATIONALIZATION OF DUTY AND TAX EXEMPTION PRIVILEGES GRANTED TO GOVERNMENT-OWNED OR CONTROLLED CORPORATIONS AND ALL OTHER UNITS OF GOVERNMENT WHEREAS. The other members of the RPMC shall be the DILG. 776. upon the recommendation of the Fiscal Incentives Review Board created under Presidential Decree No. imposts and other charges despite the fact that they are able to earn profits or pass on these duties and taxes to other parties with whom they transact business. Department of Budget and Management (DBM). is hereby empowered to restore. with the approval of the President.“At the national level. MDC). The President of the Philippines and/or the Minister of Finance.” Sec. fiscal or otherwise. 7 of said Order is hereby amended to read as follows: “SECTION 7. the NEDA and DBM Regional Directors shall act as Chairman and Co-Chairman. The funds for RPMES operations at the national level shall be administered by the NEDA Secretariat. all exemptions from the payment of duties. is hereby reworded to read “Development Councils/Planning Boards (RDC. with the NEDA and DBM representatives as Chairman and Co-Chairman. Presidential Decree No.

A claim of exemption from tax payment must beclearly shown and based on language in the law too plain to be mistaken. municipalities in the Metropolitan Manila Area may impose the realproperty tax except on. regulations or parts thereof which are inconsistent with this Decree are hereby repealed. cooperatives duly registered under R. Moreover. except as provided therein. The latterproviso could refer to Section 234. "taxes. even as the realproperty is owned by the Republic of the Philippines. 1177 as well as all other laws. they are withdrawn upon the effectivity of the LGC. taking into account.efficient and effective control. Petitioner objected invoking its tax exemption. Section 193 of the LGC prescribes the generalrule. agencies. since taxation is the rule and exemption is the exception. mandated to "principally undertake the economical. its agencies and instrumentalities and LGUs. or are the lifeblood of the nation. viz. The provisions of Presidential Decree No. so that security against its abuse is to be found only in theresponsibility of the legislature which imposes the tax on the constituency who are to pay it. and LGUs". This Decree shall take effect immediately after promulgation. and unless otherwise provided in the LGC.including government-owned and controlled corporations. amended or modified accordingly. Butthe last paragraph of Section 234 further qualifies the retention of the exemption in so far as the realproperty taxes are concerned by limiting the retention only to those enumerated there-in. andinstrumentalities. cities. It also asserted that it is aninstrumentality of the government performing governmental functions. No. Section133 of the LGC prescribes the common limitations on the taxing powers of LGUs: (o) Taxes. except upon the effectivity of the LGC. aslaid down in Secs 133 the taxing powers of LGUs cannot extend to the levy of inter alia. 232 and 234 of the LGC.pursuant to Sec 232. There can be no question that under Section 14 RA 6958 the petitioner is exempt from the paymentof realty taxes imposed by the National Government or any of its political subdivisions. fees. levels. fees or chargesof any kind on the national government. andcharges of any kind of the National Government. Section 234 of LGC provides for the exemptions from paymentof GOCCs. Section 6. or otherwise revise the scope and coverage of any applicable tax and duty.except those granted to local water districts. Nevertheless.Since the last . and in the event one or more of such provisions are declared unconstitutional. agencies andinstrumentalities. the LGC authorizes LGUs to grant tax exemptionprivileges."As to tax exemptions or incentives granted to or presently enjoyed by natural or juridical persons. On the other hand. executive orders. the exemption is withdrawn if the beneficial use of such property hasbeen granted to taxable person for consideration or otherwise. the exemptionmay thus be withdrawn at the pleasure of the taxing authority. Since taxesare what we pay for civilized society. et alPonente: Davide JrFacts: Petitioner was created by virtue of RA6958. Among the "taxes"enumerated in the LGC is real property tax. Article X of the constitution provides for the exercise byLGUs of their power to tax.. the validity of the other provisions shall not be affected. which enumerates the properties exempt from real property tax. or served. The Ministry of Finance shall promulgate the necessary rules and regulations to effectively implement the provisions of this Decree. -----------------Mactan Cebu International Airport Authority vs MarcosDate: September 11.However. 1996Petitioner: Mactan Cebu International Airport AuthorityRespondents: Hon. however. all others notincluded in the enumeration lost the privilege upon the effectivity of the LGC. enacted pursuant to Section 3. its agencies and instrumentalties. The city refused insisting that petitioner is a GOCCperforming proprietary functions whose tax exemption was withdrawn by Sections 193 and 234 of the LGC.A. inter alia. Reading together Section 133. the power to tax is an incident of sovereignty and is unlimited in its range.withdrawn by Section 1 above. the scope thereof or its limitations. The LGC. or any of its political subdivisions covered by item (a)of the first paragraph of Section 234. administrative orders. The provisions of this Decree are hereby declared to be separable. management and supervision of the Mactan International Airport in theProvince of Cebu and the Lahug Airport in Cebu City.Petitioner filed a declaratory relief before the RTC. citing section 133 of the LGC whichputs limitations on the taxing powers of LGUs. effort. Under Section 1: The authority shall be exempt fromrealty taxes imposed by the National Government or any of its political subdivisions. effect contribution of the the on of activity greater the in the corporation which national the to relative the corporation interest revenue is to price generation engaged be in. among others. provinces. decrees. "real property owned by the Republic of the Philippines or any of itspolitical subdivisions except when the beneficial used thereof has been granted to a taxable person. any or all of the following: 1) The 2) The 3) The 4) In relative nature general. The trial court dismissed the petitioner rulingthat the LGC withdrew the tax exemption granted the GOCCs. the law frowns against exemptionsfrom taxation and statutes granting tax exemptions are thus construed strictissimi juris against thetaxpayers and liberally in favor of the taxing authority. and the exemption from taxation.acknowledging in its very nature no limits. Section 4. City of Cebu. we conclude that as a general rule. 6938. Section 5. Issue:WON the City of Cebu has the power to impose taxes on petitionerH e l d : Y e s Ratio: As a general rule. Ferdinand Marcos. the Officer of the Treasurer of Cebu City demanded payment for realty taxes on parcels of land belonging to petitioner. Section 3. non stockand non-profit hospitals and educational institutions. rules.

The Philippines renounces war as an instrument of national policy. Furthermore. 159. activity. A treaty engagement is not a mere obligation but creates a legally binding obligation on the parties. Exemptions. and cralaw (2) Transient visitors when their stay in the Philippines does not exceed three (3) months. equality. and later. The Supreme Court gave due respect to an equal department in government. From 1959 to 1972. LIMITATION OF INTERNATIONAL COMITY Section 2. the flow of wealth should share the burden of supporting the government.” The Senate. or service that produced the income.The following are exempt from the community tax:chanrobles virtual law library (1) Diplomatic and consular representatives.Warner Barnes & Co. --SEC. the constitutional policy of a “self-reliant and independent national economy” does not necessarily rule out the entry of foreign investments. it recognizes the need for business exchange with the rest of the world on the bases of equality and reciprocity and limits protection of Filipino interests only against foreign competition and trade practices that are unfair. Article XII. and thus. On December 14. cooperation. services. 1994. ensures that international airlines are taxed on their income from .cralaw ------------Tanada v. Qantas Airways . This is a petition assailing the constitutionality of the WTO agreement as it violates Sec 19. in relation to PD 1355. Art II. upon the effectivity of the LGC. 97 is not unconstitutional. 97 ratifying the WTO Agreement is unconstitutional Ruling The Supreme Court ruled the Resolution No. except as ---------------------D. goods and services. Held: The source of an income is the property. enjoying the protection accorded by the Philippine government. the Constitution did not intend to pursue an isolationalist policy. Resolution No. . Herein. after deliberation and voting. --------CIR vs. It contemplates neither “economic seclusion” nor “mendicancy in the international community. . While the constitution mandates a bias in favor of Filipino goods. the sale of tickets in the Philippines is the activity that produced the income. including GOCCs. and Sections 10 and 12. As a result. gave its consent to the WTO Agreement thereby making it “a part of the law of the land”. BOAC had no landing rights for traffic purposes in the Philippines and thus. The situs of the source of payments is the Philippines. Angara Facts On April 15. 1994. justice. constitute income of BOAC from Philippine sources. the Philippine Government represented by its Secretary of the Department of Trade and Industry signed the Final Act binding the Philippine Government to submit to its respective competent authorities the WTO (World Trade Organization) Agreements to seek approval for such.exemptions from real property taxes granted to natural or juridical persons. and amity with all nations. and accordingly taxable. British Overseas Airways Corporation (BOAC) Facts: British Overseas Airways Corp (BOAC) is a 100% British Government-owned corporation engaged in international airline business and is a member of the Interline Air Transport Association. it is sufficient that the income is derived from activity within the Philippines. adopts the generally accepted principles of international law as part of the law of the land and adheres to the policy of peace.paragraph of Section 234 unequivocally withdrew. Issue Whether or not the Resolution No. freedom. it operates air transportation services and sells transportation tickets over the routes of the other airline members.which was responsible for selling BOAC tickets covering passengers and cargoes. In other words. providing for the development of a self reliant and independent national economy. Issue: Whether the revenue derived by BOAC from ticket sales in the Philippines. The Commissioner of Internal Revenue assessed deficiency income taxes against BOAC. The tickets exchanged hands here and payment for fares were also made here in the Philippine currency. Ltd. A state which has contracted valid international obligations is bound to make its legislations such modifications as may be necessary to ensure the fulfillment of the obligations undertaken. the ratification of the WTO Agreement limits or restricts the absoluteness of sovereignty. In consideration of such protection. labor and enterprises. at the same time. PD 68. 97 was adopted by the Philippine Senate to ratify the WTO Agreement. For the source of income to be considered as coming from the Philippines. providing for the “Filipino first” policy. Article II. and occurred within Philippine territory. It presumes its actions as regular and done in good faith unless there is convincing proof and persuasive agreements to the contrary. did not carry passengers and/or cargo to or from the Philippines but maintained a general sales agent in the Philippines . The flow of wealth proceeded from.

The 2 1/2% tax on gross billings is an income tax." As provided by this Court." When the problem of classification became of issue..it suffices that the laws operate equally and uniformly on all persons under similar circumstances. L-59431. The taxing power has the authority to make reasonable and natural classifications for purposes of taxation. 25 July 1984 Facts: Section 1 of BP Blg 135 amended the Tax Code and petitioner Antero M. Held: The petition is without merit. -----------SECTION 1 No person shall be deprived of life. He characterizes said provision as arbitrary amounting to class legislation. On due process . oppressive and capricious in character. the Court said: "Equality and uniformity in taxation means that all taxable articles or kinds of property of the same class shall be taxed the same rate. Petitioner alleges arbitrariness but his mere allegation does not suffice and there must be a factual foundation of such unconsitutional taint. Sison vs Ancheta GR No.it is undoubted that it may be invoked where a taxing statute is so arbitrary that it finds no support in the Constitution.this requirement is met when the tax operates with the same force and effect in every place where the subject may be found. On the matter that the rule of taxation shall be uniform and equitable . where "the differentation" complained of "conforms to the practical dictates of justice and equity" it "is not discriminatory within the meaning of this clause and is therefore uniform. or property without due process of law. it would have been placed under Title V of the Tax Code covering taxes on business. because this is hardly unattainable. Sison. An obvious example is where it can be shown to amount to the confiscation of property from abuse of power. Issue: Whether or not the assailed provision violates the equal protection and due process clauses of the Constitution while also violating the rule that taxes must be uniform and equitable." Also. If it had been intended as an excise tax or percentage tax." . alleges that "he would be unduly discriminated against by the imposition of higher rates of tax upon his income arising from the exercise of his profession vis-a-vis those which are imposed upon fixed income or salaried individual taxpayers. liberty. :the rule of uniformity does not call for perfect uniformity or perfect equality.. It therefore violates both the equal protection and due process clauses of the Constitution as well asof the rule requiring uniformity in taxation. both in the privileges conferred and the liabilities imposed. as taxpayer.Philippine sources. On equal protection . nor shall any person be denied the equal protection of the laws.

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