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COMMISSIONER OF INTERNAL REVENUE vs. CEBU PORTLAND CEMENT COMPANY and COURT OF TAX APPEALS G.R. No. L-29059 December 15, 1987 FACTS: By virtue of a decision of the Court of Tax Appeals rendered on June 21, 1961, as modified on appeal by the Supreme Court on February 27, 1965, the Commissioner of Internal Revenue was ordered to refund to the Cebu Portland Cement Company the amount of P359,408.98, representing overpayments of ad valorem taxes on cement produced and sold by it after October 1957. On March 28, 1968, following denial of motions for reconsideration filed by both the petitioner and the private respondent, the latter moved for a writ of execution to enforce the said judgment. The motion was opposed by the petitioner on the ground that the private respondent had an outstanding sales tax liability to which the judgment debt had already been credited. In fact, it was stressed, there was still a balance owing on the sales taxes in the amount of P 4,789,279.85 plus 28% surcharge. On April 22, 1968, the Court of Tax Appeals granted the motion, holding that the alleged sales tax liability of the private respondent was still being questioned and therefore could not be set-off against the refund. ISSUE: Whether or not the judgment debt can be enforced against private respondent’s sales tax liability, the latter still being questioned. RULING: The argument that the assessment cannot as yet be enforced because it is still being contested loses sight of the urgency of the need to collect taxes as "the lifeblood of the government." If the payment of taxes could be postponed by simply questioning their validity, the machinery of the state would grind to a halt and all government functions would be paralyzed. The Tax Code provides: Sec. 291. Injunction not available to restrain collection of tax. - No court shall have authority to grant an injunction to restrain the collection of any national internal revenue tax, fee or charge imposed by this Code. It goes without saying that this injunction is available not only when the assessment is already being questioned in a court of justice but more so if, as in the instant case, the challenge to the assessment is still-and only-on the administrative level. There is all the more reason to apply the rule here because it appears that even after crediting of the refund against the tax deficiency, a balance of more than P 4 million is still due from the private respondent. COMMISSIONER OF INTERNAL REVENUE vs. ALGUE and THE COURT OF TAX APPEALS G.R. No. L-28896 February 17, 1988 FACTS: The Philippine Sugar Estate Development Company had earlier appointed Algue as its agent, authorizing it to sell its land, factories and oil manufacturing process. Pursuant to such authority, Alberto Guevara, Jr., Eduardo Guevara, Isabel Guevara, Edith, O'Farell, and Pablo Sanchez, worked for the formation of the Vegetable Oil Investment Corporation, inducing other persons to invest in it. Ultimately, after its incorporation largely through the promotion of the said persons, this new corporation purchased the PSEDC properties. For this sale, Algue received as agent a commission of P126,000.00, and it was from this commission that the P75,000.00 promotional fees were paid to the aforenamed individuals. The petitioner contends that the claimed deduction of P75,000.00 was properly disallowed because it was not an ordinary reasonable or necessary business expense. The Court of Tax Appeals had seen it differently. Agreeing with Algue, it held that the said amount had been legitimately paid by the private respondent for actual services rendered. The payment was in the form of promotional fees. ISSUE: Whether or not the Collector of Internal Revenue correctly disallowed the P75,000.00 deduction claimed by private respondent Algue as legitimate business expenses in its income tax returns. RULING: The Supreme Court agrees with the respondent court that the amount of the promotional fees was not excessive. The amount of P75,000.00 was 60% of the total commission. This was a reasonable proportion, considering that it was
the payees who did practically everything, from the formation of the Vegetable Oil Investment Corporation to the actual purchase by it of the Sugar Estate properties. It is said that taxes are what we pay for civilization society. Without taxes, the government would be paralyzed for lack of the motive power to activate and operate it. Hence, despite the natural reluctance to surrender part of one's hard earned income to the taxing authorities, every person who is able to must contribute his share in the running of the government. C.N. HODGES vs. MUNICIPAL BOARD OF THE CITY OF ILOILO G.R. No. L-18129 January 31, 1963 FACTS: On June 13, 1960, the Municipal Board of the City of Iloilo enacted Ordinance No. 33, series of 1960, pursuant to the provisions of Republic Act No. 2264, known as the Local Autonomy Act, requiring any person, firm, association or corporation to pay a sales tax of 1/2 of 1% of the selling price of any motor vehicle and prohibiting the registration of the sale of the motor vehicle in the Motor Vehicles Office of the City of Iloilo unless the tax has been paid. C. N. Hodges, who was engaged in the business of buying and selling second-hand motor vehicles in the City of Iloilo, is one of those affected by the enactment of the ordinance, and believing that the same is invalid for having been passed in excess of the authority conferred by law upon the municipal board, he filed on June 27, 1960 a petition for declaratory judgment with the Court of First Instance of Iloilo praying that said ordinance be declared void ab initio. The court a quo rendered decision on December 8, 1960 holding that that part of the ordinance which requires the owner of a used motor vehicle to pay a sales tax of 1/2 of 1% of the selling price is valid, but the portion thereof which requires the payment of the tax as a condition precedent for the registration of the sale in the Motor Vehicles Office is invalid for being repugnant to Section 2(h) of Republic Act 2264. Both parties have appealed. ISSUE: Whether or not the ordinance in question is valid even with regard to the portion which requires the payment of the tax as a condition precedent for the registration of the sale in the Motor Vehicles Office of said city. RULING: The City of Iloilo has the authority and power to approve the ordinance in question for it merely imposes a percentage tax on the sale of a second-hand motor vehicle that may be carried out within the city by any person, firm, association or corporation owning or dealing with it who may come within the jurisdiction. The requirement of the ordinance cannot be considered a tax in the light viewed by the court a quo for the same is merely a coercive measure to make the enforcement of the contemplated sales tax more effective. Well-settled is the principle that taxes are imposed for the support of the government in return for the general advantage and protection which the government affords to taxpayers and their property. Taxes are the lifeblood of the government. ASSOCIATION OF CUSTOM BROKERS, INC. vs. MUNICIPAL BOARD G.R. No. L-4376 May 22, 1953 FACTS: The Association of Customs Brokers, Inc., which is composed of all brokers and public service operators of motor vehicles in the City of Manila challenge the validity Ordinance No. 3379 on the ground that (1) while it levies a so-called property tax it is in reality a license tax which is beyond the power of the Municipal Board of the City of Manila; (2) said ordinance offends against the rule of uniformity of taxation; and (3) it constitutes double taxation. The respondents contend on their part that the challenged ordinance imposes a property tax which is within the power of the City of Manila to impose under its Revised Charter [Section 18 (p) of Republic Act No. 409], and that the tax in question does not violate the rule of uniformity of taxation, nor does it constitute double taxation. ISSUE: Whether or not the ordinance is null and void RULING: The ordinance infringes the rule of the uniformity of taxation ordained by our Constitution. Note that the ordinance exacts the tax upon all motor vehicles operating within the City of Manila. It does not distinguish between a motor vehicle for hire and one which is purely for private use. Neither does it distinguish between a motor vehicle registered in the City
of Manila and one registered in another place but occasionally comes to Manila and uses its streets and public highways. This is an inequality which we find in the ordinance, and which renders it offensive to the Constitution. ESSO STANDARD EASTERN, INC v. COMMISSIONER OF INTERNAL REVENUE G.R. Nos. L-28508-9, July 7, 1989 FACTS: In CTA Case No. 1251, Esso Standard Eastern Inc. (Esso) deducted from its gross income for 1959, as part of its ordinary and necessary business expenses, the amount it had spent for drilling and exploration of its petroleum concessions. This claim was disallowed by the Commissioner of Internal Revenue (CIR) on the ground that the expenses should be capitalized and might be written off as a loss only when a "dry hole" should result. Esso then filed an amended return where it asked for the refund of P323,279.00 by reason of its abandonment as dry holes of several of its oil wells. Also claimed as ordinary and necessary expenses in the same return was the amount of P340,822.04, representing margin fees it had paid to the Central Bank on its profit remittances to its New York head office. On August 5, 1964, the CIR granted a tax credit of P221,033.00 only, disallowing the claimed deduction for the margin fees paid on the ground that the margin fees paid to the Central Bank could not be considered taxes or allowed as deductible business expenses. Esso appealed to the Court of Tax Appeals (CTA) for the refund of the margin fees it had earlier paid contending that the margin fees were deductible from gross income either as a tax or as an ordinary and necessary business expense. However, Esso’s appeal was denied. ISSUE: (1) Whether or not the margin fees are taxes. (2) Whether or not the margin fees are necessary and ordinary business expenses. RULING: (1) No. A tax is levied to provide revenue for government operations, while the proceeds of the margin fee are applied to strengthen our country's international reserves. The margin fee was imposed by the State in the exercise of its police power and not the power of taxation. (2) No. Ordinarily, an expense will be considered 'necessary' where the expenditure is appropriate and helpful in the development of the taxpayer's business. It is 'ordinary' when it connotes a payment which is normal in relation to the business of the taxpayer and the surrounding circumstances. Since the margin fees in question were incurred for the remittance of funds to Esso's Head Office in New York, which is a separate and distinct income taxpayer from the branch in the Philippines, for its disposal abroad, it can never be said therefore that the margin fees were appropriate and helpful in the development of Esso's business in the Philippines exclusively or were incurred for purposes proper to the conduct of the affairs of Esso's branch in the Philippines exclusively or for the purpose of realizing a profit or of minimizing a loss in the Philippines exclusively. PROGRESSIVE DEVELOPMENT CORPORATION v. QUEZON CITY G.R. No. L-36081, April 24, 1989 FACTS: On December 24, 1969, the City Council of Quezon City adopted Ordinance No. 7997, otherwise known as the Market Code of Quezon City. Section 3 of said ordinance provides that “privately owned and operated public markets shall submit monthly to the Treasurer's Office, a certified list of stallholders showing the amount of stall fees or rentals paid daily by each stallholder, ... and shall pay 10% of the gross receipts from stall rentals to the City, ... , as supervision fee”. On July 15, 1972, Progressive Development Corporation (Progressive), owner and operator of a public market known as the "Farmers Market & Shopping Center" filed a Petition for Prohibition with Preliminary Injunction against Quezon City on the ground that the supervision fee or license tax imposed by the above-mentioned ordinance is in reality a tax on income which Quezon City may not impose, the same being expressly prohibited by Republic Act No. 2264, as amended, otherwise known as the Local Autonomy Act. In its Answer, Quezon City, through the City Fiscal, contended that it had authority to enact the questioned ordinances, maintaining that the tax on gross receipts imposed therein is not a tax on income. The lower court ruled that the questioned imposition is not a tax on income, but rather a privilege tax or license fee which local governments, like Quezon City, are empowered to impose and collect. ISSUE:
Whether the tax imposed by Quezon City on gross receipts of stall rentals is properly characterized as partaking of the nature of an income tax. RULING: No. The tax imposed in the controverted ordinance constitutes, not a tax on income, not a city income tax (as distinguished from the national income tax imposed by the National Internal Revenue Code) within the meaning of Section 2 (g) of the Local Autonomy Act, but rather a license tax or fee for the regulation of the business in which Progressive is engaged. While it is true that the amount imposed by the questioned ordinances may be considered in determining whether the exaction is really one for revenue or prohibition, instead of one of regulation under the police power, it nevertheless will be presumed to be reasonable. PHILIPPINE AIRLINES, INC. v. EDU G.R. No. L- 41383, August 15, 1988 FACTS: The Philippine Airlines (PAL) is a corporation engaged in the air transportation business under a legislative franchise, Act No. 42739. Under its franchise, PAL is exempt from the payment of taxes. Sometime in 1971, however, Land Transportation Commissioner Romeo F. Elevate (Elevate) issued a regulation pursuant to Section 8, Republic Act 4136, otherwise known as the Land and Transportation and Traffic Code, requiring all tax exempt entities, among them PAL to pay motor vehicle registration fees. Despite PAL's protestations, Elevate refused to register PAL's motor vehicles unless the amounts imposed under Republic Act 4136 were paid. PAL thus paid, under protest, registration fees of its motor vehicles. After paying under protest, PAL through counsel, wrote a letter dated May 19,1971, to Land Transportation Commissioner Romeo Edu (Edu) demanding a refund of the amounts paid. Edu denied the request for refund. Hence, PAL filed a complaint against Edu and National Treasurer Ubaldo Carbonell (Carbonell). The trial court dismissed PAL's complaint. PAL appealed to the Court of Appeals which in turn certified the case to the Supreme Court. ISSUE: Whether or not motor vehicle registration fees are considered as taxes. RULING: Yes. If the purpose is primarily revenue, or if revenue is, at least, one of the real and substantial purposes, then the exaction is properly called a tax. Such is the case of motor vehicle registration fees. The motor vehicle registration fees are actually taxes intended for additional revenues of the government even if one fifth or less of the amount collected is set aside for the operating expenses of the agency administering the program. VILLEGAS v. HIU CHIONG TSAI PAO HO G.R. No. L-29646, November 10, 1978 FACTS: On February 22, 1968, the Municipal Board of Manila passed City Ordinance No. 6537. The said city ordinance was also signed by then Manila Mayor Antonio J. Villegas (Villegas). Section 1 of the said city ordinance prohibits aliens from being employed or to engage or participate in any position or occupation or business enumerated therein, whether permanent, temporary or casual, without first securing an employment permit from the Mayor of Manila and paying the permit fee of P50.00 except persons employed in the diplomatic or consular missions of foreign countries, or in the technical assistance programs of both the Philippine Government and any foreign government, and those working in their respective households, and members of religious orders or congregations, sect or denomination, who are not paid monetarily or in kind. Hiu Chiong Tsai Pao Ho (Tsai Pao Ho) who was employed in Manila, filed a petition with the CFI of Manila to declare City Ordinance No. 6537 as null and void for being discriminatory and violative of the rule of the uniformity in taxation. The trial court declared City Ordinance No. 6537 null and void. Villegas filed the present petition. ISSUE: Whether or not City Ordinance No. 6537 is a tax or revenue measure.
RULING: Yes. The contention that City Ordinance No. 6537 is not a purely tax or revenue measure because its principal purpose is regulatory in nature has no merit. While it is true that the first part which requires that the alien shall secure an employment permit from the Mayor involves the exercise of discretion and judgment in the processing and approval or disapproval of applications for employment permits and therefore is regulatory in character the second part which requires the payment of P50.00 as employee's fee is not regulatory but a revenue measure. There is no logic or justification in exacting P50.00 from aliens who have been cleared for employment. It is obvious that the purpose of the ordinance is to raise money under the guise of regulation.
COMPAÑIA GENERAL DE TABACOS DE FILIPINAS vs. CITY OF MANILA, ET AL G.R. No. L-16619 June 29, 1963 FACTS: Petitioner filed an action in the CFI Manila to recover from City of Manila(City ) the sum of P15,280.00 allegedly overpaid by it as taxes on its wholesale and retail sales of liquor for the period from the third quarter of 1954 to the second quarter of 1957, inclusive, under Ordinances Nos. 3634, 3301, and 3816. Tabacalera's action for refund is based on the theory that, in connection with its liquor sales, it should pay the license fees but not the municipal sales taxes; and since it already paid the license fees aforesaid, the sales taxes paid by it — amounting to the sum of P15,208.00 — under the three ordinances is an overpayment made by mistake, and therefore refundable. The City contends that for the permit issued to it Tabacalera is subject to pay the license fees prescribed by Ordinance No. 3358, aside from the sales taxes imposed by Ordinances Nos. 3634, 3301, and 3816. ISSUE: Whether or not the taxes imposed are valid RULING: Ordinance No. 3358 is clearly one that prescribes municipal license fees for the privilege to engage in the business of selling liquor or alcoholic beverages. On the other hand, it is clear that Ordinances Nos. 3634, 3301, and 3816 impose taxes on the sales of general merchandise, wholesale or retail, and are revenue measures enacted by the Municipal Board of Manila by virtue of its power to tax dealers for the sale of such merchandise. That Tabacalera is being subjected to double taxation is more apparent than real. As already stated what is collected under Ordinance No. 3358 is a license fee for the privilege of engaging in the sale of liquor. On the other hand, what the three ordinances mentioned heretofore impose is a tax for revenue purposes based on the sales made of the same article or merchandise. It is already settled in this connection that both a license fee and a tax may be imposed on the same business or occupation, or for selling the same article, this not being in violation of the rule against double taxation. AMERICAN MAIL LINE, ET AL vs. CITY OF BASILAN, ET AL G.R. No. L-12647 May 31, 1961 FACTS: Appellees are foreign shipping companies licensed to do business in the Philippines, with offices in Manila. Their vessels call at Basilan City and anchor in the bay or channel within its territorial waters. As the city treasurer assessed and attempted to collect from them the anchorage fees prescribed in the aforesaid amendatory ordinance, they filed the present action for Declaratory Relief to have the courts determine its validity. Upon their petition the lower court issued a writ of preliminary injunction restraining appellants from collecting or attempting to collect from them the fees prescribed therein. Appellant contended that, through its city council, it had authority to enact the questioned ordinance in the exercise of either its revenue-raising power or of its police power. The question to be resolved is whether the City of Basilan has the authority to enact Ordinance 180 and to collect the anchorage fees prescribed therein. ISSUE: Is the ordinance valid exercise of taxing power of the City of Basilan.
and TALISAY-SILAY MILLING COMPANY G. 288. President Corazon C.D. Subsequently. MA-AO SUGAR CENTRAL CO. The use of the phrase "in accordance with law" — which. and not channeled to another government objective. a special assessment being a levy upon property predicated on the doctrine that the property against which it is levied derives some special benefit from the improvement. It has been held that the power to regulate as an exercise of police power does not include the power to impose fees for revenue purposes. L-19824.A. It would seem that from the above-quoted ruling.6 RULING: Under paragraph (a) sec. designated as the Oil Price Stabilization Fund (OPSF). means the same as "provided by law" — clearly discloses the legislative intent to limit the taxing power of the City. Appellant city's own contention that the questioned ordinance was enacted in the exercise of its power of taxation. the OPSF was reclassified into a "trust liability account. INC." Petitioner further points out that since "a 'special fund' consists of monies collected through the taxing power of a State." ISSUE: Whether or not the funds collected under PD 1956 is an exercise of the power of taxation RULING: The levy is primarily in the exercise of the police power of the State. or "a specific limit on how much to tax. ISSUE: Is the imposition of special assessment an exercise of the taxing power RULING: .D. 137 expanding the grounds for reimbursement to oil companies for possible cost under recovery incurred as a result of the reduction of domestic prices of petroleum products.. REPUBLIC OF THE PHILIPPINES. it is clear that the City of Basilan may only levy and collect taxes for general and special purposes in accordance with or as provided by law. R. in other words. 632. quantitative restriction..' and that "if a special tax is collected for a specific purpose. While the funds collected may be referred to as taxes.R. but as already discussed. must be treated as a 'SPECIAL FUND. 99886 March 31. 1956. vs. the proceeds thereof may be devoted only to the specific purpose for which the assessment was authorized. Aquino promulgated E. O. the city of Basilan was not granted a blanket power of taxation. OSCAR ORBOS et al G. the petition for prohibition should fail. Nos. as amended. President Ferdinand Marcos issued P. in our opinion.." The Court is cited to this requirement by the petitioner on the premise that what is involved here is the power of taxation. 14. from a decision of the Court of First Instance of Manila finding them liable for special assessments under Section 15 of Republic Act No. makes it obvious that the fees imposed are not merely regulatory.". this is not the case. P. 1956 creating a Special Account in the General Fund. 15 of Republic 632 is a special assessment. It is not a tax measure intended to raise revenues for the Government. What is here involved is not so much the power of taxation as police power. such amounts belong to the State. respondents herein. Although the provision authorizing the ERB to impose additional amounts could be construed to refer to the power of taxation.R. INC. The petitioner argues inter alia that "the monies collected pursuant to . they are exacted in the exercise of the police power of the State. What petitioner would wish is the fixing of some definite. 1993 FACTS: October 10. BACOLOD-MURCIA MILLING CO. the revenue generated therefrom shall 'be treated as a special fund' to be used only for the purpose indicated. . 1984. L-19825 and 19826 July 9. As such.. No. 1966 FACTS: Joint appeal by three sugar centrals. although the use thereof is limited to the special purpose/objective for which it was created. The OPSF was designed to reimburse oil companies for cost increases in crude oil and imported petroleum products resulting from exchange rate adjustments and from increases in the world market prices of crude oil. OSMEÑA vs.' not as a 'trust account' or a 'trust fund. The appellants' thesis is simply to the effect that the "10 centavos per picul of sugar" authorized to be collected under Sec. it cannot be overlooked that the overriding consideration is to enable the delegate to act with expediency in carrying out the objectives of the law which are embraced by the police power of the State. JOHN H.
In other words. by increasing the rates of license taxes as well as the range of graduated schedule of annual output capacity. null and void. but. being levied for the aid and support of the sugar industry exclusively. Plaintiff. Araneta. ANTONIO ARANETA G. J. which in plaintiff's opinion is not a public purpose for which a tax may be constitutioally levied.000. then.00 for sugar centrals. For in this Lutz case. under section 3 of the Act. to be known as the 'Sugar Adjustment and Stabilization Fund. series of 1956. will show that the tax is levied with a regulatory purpose. ISSUE: Was Ordinance No.. for the crop years 1948-1949 and 1949-1950. P40. A quick glance at the big amount of maximum annual tax set forth in the ordinance. in both its sugar central and its sugar refinery located in the Municipality of Victorias comes within these items." Analysis of the Act. series of 1956.R. The disputed ordinance imposed license taxes on operators of sugar centrals and sugar refineries. 1. by increasing the rates of license taxes. The trial court rendered its judgment declaring that the ordinance in question refers to license taxes or fees. L-21183 September 27.40 paid by the estate as taxes. 567 a pure exercise of the taxing power? . Negros Occidental. INC. the act is primarily an exercise of the police power. Plaintiff filed suit below to ask for judgment declaring Ordinance No.666. otherwise known as the Sugar Adjustment Act. WALTER LUTZ vs.00 for sugar refineries. 1. we read in the ordinance nothing which would as much as indicate that the tax imposed is merely for police inspection. 567. Commonwealth Act 567. an exercise of a sovereign power which no private citizen may lawfully resist.7 The Court deemed it relevant to discuss its holding in Lutz v. 1. To say otherwise is to misread the purpose of the ordinance. ISSUE: Is the tax provided for in Commonwealth Act No.R. On the authority of the above case. the plaintifs appealed the case directly to the Supreme Court. and as to sugar refineries. The changes were: with respect to sugar centrals. Inc. of the Municipality of Victorias. that the levy for the Philsugin Fund is not so much an exercise of the power of taxation. supervision or regulation. to provide means for the rehabilitation and stabilization of the threatened sugar industry. the production of plaintiff Victorias Milling Co. And then. alleging that such tax is unconstitutional and void. therefore. THE MUNICIPALITY OF VICTORIAS. series of 1956. 1955 FACTS: This case was initiated in the Court of First Instance of Negros Occidental to test the legality of the taxes imposed by Commonwealth Act No. VICTORIAS MILLING CO.000. vs. For. otherwise known as the Sugar Adjustment Act. 1968 FACTS: This case calls into question the validity of Ordinance No. The ordinance is for raising money. and P40. passed by defendant's municipal council as a regulatory enactment or as a revenue measure? RULING: The present imposition must be treated as a levy for revenue purposes.' and shall be paid out only for any or all of the following purposes or to attain any or all of the following objectives. L-7859 December 22. we find no warrant in logic to give our assent to the view that the ordinance in question is solely for regulatory purpose. No. Given the purposes just mentioned. as may be provided by law. No. all collections made thereunder "shall accrue to a special fund in the Philippine Treasury. the exercise of the police power for the general welfare of the entire country. will readily convince one that the tax is really a revenue tax. We hold that the special assessment at bar may be considered as similarly as the above. The action having been dismissed by the Court of First Instance. It is. and particularly Section 6. Both plaintiff and defendant directly appealed to the Supreme Court. that is. PROVINCE OF NEGROS OCCIDENTAL G. nor the imposition of a special assessment. Plain is the meaning conveyed.. Walter Lutz seeks to recover from the Collector of Internal Revenue the sum of P14. The plaintiff contends that the ordinance is discriminatory since it singles out plaintiff which is the only operator of a sugar central and a sugar refinery within the jurisdiction of defendant municipality.
ISSUE: Are the Coconut Levy Funds raised through the State’s police and taxing powers? RULING: Indeed. in general. EDUARDO M. and BALLARES. not yet constructed. Based on this definition. b) it is imposed by the State by virtue of its sovereignty. . in section 1-C (a) thereof. . . upon the ground that Republic Act No. extension and improvement" of Pasig feeder road terminals. represented by the PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG) vs. and particularly of section 6 will show that the tax is levied with a regulatory purpose. ET AL. coconut levy funds partake of the nature of taxes which. On January 23. . ET AL. COCOFED. approved on June 20. . L-10405 December 29. Respondents moved to dismiss the petition upon the ground that petitioner had "no legal capacity to sue". Rizal" which projected feeder roads "do not connect any government property or any important premises to the main highway". If objective and methods are alike constitutionally valid. contained. petitioner Wenceslao Pascual instituted this action for declaratory relief. Taxation may be made the implement of the state's police power. .000. Taxation is done not merely to raise revenues to support the government. 920. 1953. No. 1954. real or personal. an item (43[h]) of P85. the aforementioned feeder roads were "nothing but projected and planned subdivision roads. REPUBLIC OF THE PHILIPPINES. COJUANGCO JR. The protection and promotion of the sugar industry is a matter of public concern. and c) it is levied for the support of the government." the so-called Coconut Industry Investment Fund companies (CIIF companies) and Private Respondent Eduardo Cojuangco Jr. reconstruction. 2001 FACTS: The PCGG issued and implemented numerous sequestrations. and that the petition did "not state a cause of action". Pasig. which is so affected with public interest as to be within the police power of the State. with injunction. at the time of the passage and approval of said Act.R.8 RULING: Analysis of the Act. THE SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS. but also to provide means for the rehabilitation and the stabilization of a threatened industry. are enforced proportional contributions from persons and properties. ET AL. situated at . it follows that the Legislature may determine within reasonable bounds what is necessary for its protection and expedient for its promotion. no reason is seen why the state may not levy taxes to raise funds for their prosecution and attainment. freeze orders and provisional takeovers of allegedly ill-gotten companies. assets and properties.R. In other words. G. 1960 FACTS: On August 31. within the Antonio Subdivision . WENCESLAO PASCUAL vs. Among the properties sequestered by the Commission were shares of stock in the United Coconut Planters Bank (UCPB) registered in the names of the alleged "one million coconut farmers. exacted by the State by virtue of its sovereignty for the support of government and for all public needs.00 "for the construction. No. 1995. the act is primarily an exercise of the police power. that. namely: a) it is an enforced proportional contribution from persons and properties. 147062-64 December 14. repair. to provide means for the rehabilitation and stabilization of the threatened sugar industry. ISSUE: Should appropriation using public funds be made for public purposes only? RULING: . entitled "An Act Appropriating Funds for Public Works". .. a tax has three elements. and the SANDIGANBAYAN (First Division) G. the trial court rendered its final Decision nullifying and setting aside the Resolution of the Sandiganbayan which lifted the sequestration of the subject UCPB shares.
Aquino promulgated E. VS. Subsequently.A. the OPSF was reclassified into a "trust liability account.D. Municipal Ordinance No. Leyte as null and void. 23 levies and collects from soft drinks producers and manufacturers one-sixteenth (1/16) of a centavo for every bottle of soft drink corked. the revenue generated therefrom shall 'be treated as a special fund' to be used only for the purpose indicated. No. 1993 FACTS: October 10. No. The petitioner argues inter alia that "the monies collected pursuant to .' and that "if a special tax is collected for a specific purpose. and not channeled to another government objective. 27 was enacted. O. P. 1984. under constitutional provisions against taxation except for public purposes and prohibiting the collection of a tax for one purpose and the devotion thereof to another purpose. 1976 FACTS: In February 1963. 1956. NO.D. 99886 March 31. the theory does not apply to municipal corporations. must be treated as a 'SPECIAL FUND." Petitioner further points out that since "a 'special fund' consists of monies collected through the taxing power of a State.” ISSUES: 1. 23 and 24 constitute double taxation and impose percentage or specific taxes? RULING: 1. OSMEÑA VS. such amounts belong to the State. INC. Do Ordinance Nos. and. On the other hand.R.R.D. 1956 creating a Special Account in the General Fund.01) on each gallon of volume capacity. although each advantage to individuals might incidentally serve the public. ORBOS G. . plaintiff commenced a complaint seeking to declare Section 2 of R. designated as the Oil Price Stabilization Fund (OPSF). 2264 (Local Autonomy Act) unconstitutional as an undue delegation of taxing power and to declare Ordinance Nos. no appropriation of state funds can be made for other than for a public purpose.' not as a 'trust account' or a 'trust fund. 137 expanding the grounds for reimbursement to oil companies for possible cost under recovery incurred as a result of the reduction of domestic prices of petroleum products. Municipal Ordinance No. L-31156 February 27. To combat this scheme. 23 and 27 issued by the Municipality of Tanauan. it was a repeal of Municipal Ordinance No. In the . 23 and 27 is denominated as "municipal production tax. MUNICIPALITY OF TANAUAN G. Municipal Ordinance No. The test of the constitutionality of a statute requiring the use of public funds is whether the statute is designed to promote the public interest.". 23. although the use thereof is limited to the special purpose/objective for which it was created. as amended. Is Section 2 of R." ISSUE: Do the powers granted to the ERB under P. as opposed to the furtherance of the advantage of individuals. President Corazon C. 2. 2264 an undue delegation of the power of taxation? 2. Legislative powers may be delegated to local governments in respect of matters of local concern. President Ferdinand Marcos issued P. As such. But as an exception.9 The right of the legislature to appropriate funds is correlative with its right to tax. NO. The tax imposed in both Ordinances Nos. The power of taxation is purely legislative and cannot be delegated to the executive or judicial department of the government without infringing upon the theory of separation of powers. 1956 partake of the nature of the taxation power of the State? RULING: NO. they are exacted in the exercise of the police power of the State. The Municipality of Tanauan discovered that manufacturers could increase the volume contents of each bottle and still pay the same tax rate since tax is imposed on every bottle corked. 27 levies and collects on soft drinks produced or manufactured within the territorial jurisdiction of the municipality a tax of one centavo (P0. The OPSF was established "for the purpose of minimizing the frequent price changes brought about by exchange rate adjustment and/or changes in world market prices of crude oil and imported petroleum products. While the funds collected may be referred to as taxes.A. The OPSF was designed to reimburse oil companies for cost increases in crude oil and imported petroleum products resulting from exchange rate adjustments and from increases in the world market prices of crude oil. PEPSI-COLA BOTTLING COMPANY OF THE PHIILIPPINES.
27 only. No action was however taken.R. Sea-Land filed a claim for refund alleging that the taxes it paid were made in mistake because under the RP-US Military Base Agreement. there was no case of double taxation. Section 29 of the Charter of Bacolod City does not contain any qualification whatsoever in providing for the exemption from real estate taxes of "lands and buildings owned by the Commonwealth or Republic of Philippines. petitioner filed an action in court for the nullification of the court proceedings. Consequently. should be exempt from payment of real estate taxes. Subsequently.5% in accordance with Section 25(a) (2) of the National Internal Revenue Code in relation to Article 9 of the RP-US Tax Treaty.D. INC. military personnel assigned to the Subic Naval Base. Sea-Land paid its corresponding corporate income tax for the taxable year 1984 at the rate of 1. SEA-LAND SERVICE. maintenance. military personnel is not included in the term "construction.R. No. what it intended was a broad and comprehensive application of such mandate. an American international shipping company licensed by the Securities and Exchange Commission to do business in the Philippines entered into a contract with the United States Government to transport military household goods and effects of U. L-35726 July 21. 2001 FACTS: Petitioner Sea-Land Service Incorporated. 1969 and 1970.” Neither could the performance of this service to the U. it is exempt from the payment of taxes. Further. Said lands and buildings were assessed for taxation. P. the parties admitted that the Municipal Treasurer was enforcing Municipal Ordinance No. operation and defense of the bases. The transport or shipment of household goods and effects of U. petitioner wrote the city mayor through the city treasurer seeking reconsideration of the forfeiture proceeding on the ground that it is a government-owned and controlled corporation and as such.S. VS. government be interpreted as directly related to the defense and security of the Philippine territories COMMISSIONER OF INTERNAL REVENUE vs.R.S. In protest. regardless of whether such property is devoted to governmental or proprietary purpose. Laws granting exemption from tax are construed strictissimi juris against the taxpayer and liberally in favor of the taxing power. Whether a government owned and controlled corporation is performing governmental or proprietary function is immaterial. L-54908. SOCIAL SECURITY SYSTEM VS. 24 has amended the Social Security Act of 1954 expressly exempting the SSS from payment of any tax thereby removing all doubts as to its exemption. Petitioner failed to pay the realty taxes for the years 1968.S. when the legislature exempted lands and buildings owned by the government from payment of said taxes. The court ruled that the properties of petitioner are not exempt from the payment of real property tax because these are not one of the exemptions under Section 29 of the Charter of Bacolod City and there is no other law providing for its exemption. 1990 . maintains a five-storey building in Bacolod City occupying four parcels of land. January 22. CITY OF BACOLOD G. No. ISSUE: Does the income that petitioner derived from services in transporting the household goods and effects of U. MITSUBISHI METAL CORPORATION G.10 stipulation of facts. Thereafter. the City of Bacolod levied upon said lands and buildings and declared them forfeited in its favor. 1982 FACTS: Petitioner Social Security System. ISSUE: Should the subject properties maintained by petitioner SSS be exempt from payment of real property tax? RULING: YES. 122605 April 30. military personnel fall within the tax exemption provided in the RP-US Military Bases Agreement? RULING: NO. COURT OF APPEALS G. Hence.S." Hence. No. for operation purposes.
00 in United States currency at the then prevailing exchange rate. No. ISSUE: Whether or not the interest income from the loans extended to Atlas by Mitsubishi is excludible from gross income taxation pursuant to Section 29 of the tax code and. 2001 FACTS: Respondent Marubeni Corporation is a foreign corporation and is duly registered to engage in business in the Philippines. goods. interest payments were made by the former to the latter totaling P13. nor could it legally constitute.000. soldiers. Eximbank had nothing to do with the sale of the copper concentrates since all that Mitsubishi stated in its loan application with the former was that the amount being procured would be used as a loan to and in consideration for importing copper concentrates from Atlas.595. December 18. Taxation is the rule and exemption is the exception. 137377. 33403. the merchants who effected the sales to the Post Exchange are the ones who paid the tax.966.000. ISSUE: Whether or not the petitioner is exempt from the sales tax imposed against its suppliers. is the sole creditor of ATLAS. and civilian employees and their families who are benefited by the post exchange to whom the tax is ultimately shifted.143. RULING: The court ruled in the negative. and by those who do business with the US Army and Navy in the Philippines. Its loan application was approved on May 26. MITSUBISHI. Atlas. Herein. The conclusion is indubitable. cannot secure exemption from taxation for merchants who make sales to the Post Exchange. 1970 in the equivalent sum of $20. and duly remitted to the Government. as amended by Presidential Decree No. COMMISSIONER OF INTERNAL REVENUE vs.11 FACTS: On April 17. Taxes have been collected from merchants who made sales to Army Post Exchanges since 1904 (Act 1189. United States currency. etc. . POSADAS G. Atlas Consolidated Mining and Development Corporation entered into a Loan and Sales Contract with Mitsubishi Metal Corporation for purposes of the projected expansion of the productive capacity of the former's mines in Toledo. 31st INFANTRY POST EXCHANGE vs. A formal protest was lodged by the Exchange. MARUBENI CORPORATION G. The Commissioner collected a sales tax of 1 1/2 % of the gross value of the commodities. the former being the owner of the $20 million upon completion of its loan contract with EXIMBANK of Japan. exempt from withholding tax.00. in turn undertook to sell to Mitsubishi all the copper concentrates produced for a period of fifteen (15) years. RULING: The court ruled in the negative.R.R. a contract of agency. therefore. Mitsubishi thereafter applied for a loan with the Export-Import Bank of Japan (Eximbank) for purposes of its obligation under said contract.000. Under said contract.971. No. The corresponding 15% tax thereon in the amount of P1. Mitsubishi agreed to extend a loan to Atlas 'in the amount of $20. and it is the officers. Similar taxes are paid by those who sell merchandise to the Philippine Government.000. Such an innocuous statement of purpose could not have been intended for. Sometime in November 1985. from the merchants who sold said commodities to the Exchange. the Exchange made many purchases of various and diverse commodities.79 for the years 1974 and 1975. 1970. Pursuant to the contract between Atlas and Mitsubishi. It is settled a rule in this jurisdiction that laws granting exemption from tax are construed strictissimi juris against the taxpayer and liberally in favor of the taxing power. petitioner Commissioner of Internal Revenue issued a letter of authority to examine the books of accounts of the Manila branch office of respondent corporation. in the course of its duly authorized business transactions. 1930 FACTS: The 31st Infantry Post Exchange is a post exchange constituted in accordance with Army regulations and the laws of the United States. September 4. although an agency within the US Army. 131.01 was withheld pursuant to Section 24 (b) (1) and Section 53 (b) (2) of the National Internal Revenue Code. wares and merchandise from various merchants in the Philippines. An Army Post Exchange. Cebu. Section 139). and NOT EXIMBANK.
Reagan claimed that he was exempt as the transaction occurred in Clark Air Base. Neither is it necessarily implied from E. REAGAN vs. No. There is nothing in E. 64 took effect on November 17. Any state may. express or implied. L-26379. respondent filed two (2) petitions for review with the Court of Tax Appeals. No. passed into law RA 7227 entitled "An Act Accelerating the Conversion of Military Reservations Into Other Productive Uses. Reagan sold the car to a certain Willie Johnson Jr.O.O. No. Creating the Bases Conversion and Development . 1986. 41 declaring a one-time amnesty covering unpaid income taxes for the years 1981 to 1985 was issued. 41.) No. On November 17. 64 that it or any of its provisions should apply retroactively. a taxpayer who wished to avail of the income tax amnesty should comply with certain requirements. The law does not look with favor on tax exemptions and that he who would seek to be thus privileged must justify it by words too plain to be mistaken and too categorical to be misinterpreted. 1986. 1986. the scope and coverage of E.O.) No. a Filipino. 64 should be construed strictly against the taxpayer. 64 that provides that it should retroact to the date of effectivity of E.970. 1986.. 1969 FACTS: William Reagan imported a tax-free 1960 Cadillac car with accessories valued at US $ 6. insurance and other charges." The point of reference is the date of effectivity of E. No. 64. No. with the approval of the President.” ISSUE: Whether or not petitioner Reagan was covered by the tax exemption. No. RULING: The court ruled in the negative.R. It may allow another power to participate in the exercise of jurisdictional right over certain portions of its territory. COMMISSIONER OF INTERNAL REVENUE G. No. 41 should be November 17. Cavite for US$ 6. 41 was expanded by Executive Order (E.O. which as he contends is “a base outside the Philippines. on August 2. Under this E. respondent filed its tax amnesty return dated October 30. On September 26. No. 64. contractor's and commercial broker's taxes.O. the Commissioner rendered Reagan liable for income tax in the sum of P2. as an independent and sovereign country. consequently.O.O." to E. 41. 64 including estate and donor's taxes and tax on business. of the US Marine Corps stationed in Sangley Point. After acquiring a permit to sell the car from the base commander of Clark Air Base. No. As a result of the transaction.600. 1986. Petitioner's revenue examiners recommended an assessment for deficiency income. Respondent then received a letter form petitioner assessing respondent several deficiency taxes. In the instant case.O. by its consent. insofar as the taxes in E. December 27. COURT OF APPEALS GR. Reagan has not done so. the original issuance. Reagan was liable for the income tax arising from the sale of his automobile in Clark. 41. No. It excepts from income tax amnesty those taxpayers "with income tax cases already filed in court as of the effectivity hereof. Since Executive Order No. it by no means follows that such areas become impressed with an alien character. submit to a restriction of its sovereign rights. 1999 FACTS: Congress. No. In accordance with the terms of E.443. 127410 January 20. RULING: Section 4 (b) of E. and cannot do so. 41 and 64.12 In the course of the examination. including freight. Clark Air Base is within Philippine territorial jurisdiction to tax. No. branch profit remittance. The areas retain their status as native soil. 27.O. Executive Order (E. 64 are concerned. TIU vs. By doing so.O. the vagueness in Section 4 (b) brought about by E. The Philippines. Johnson sold the same.O.83. 41 is very clear and unambiguous. the date of effectivity referred to in Section 4 (b) of E. however. Respondent questioned this assessment. and thus. on the same day to Fred Meneses. The difficulty lies with respect to the contractor's tax assessment and respondent's availment of the amnesty under E.O. exercises its authority over its entire domain. No.O.O. petitioner found respondent to have undeclared income from two (2) contracts in the Philippines. ISSUE: Whether or not herein respondent's deficiency tax liabilities were extinguished upon respondent's availment of tax amnesty under Executive Orders Nos.O. No. Earlier. The term "income tax cases" should be read as to refer to estate and donor's taxes and taxes on business while the word "hereof. 1986.
97-A. The challenged grant of tax exemption would circumvent the Constitution’s imposition that a law granting any tax exemption must have the concurrence of a majority of all the members of Congress. covered and defined by the 1947 Military Bases Agreement between the Philippines and the United States of America. . It was intended to intelligently guide the sanggunian in determining its position on whether Camp John Hay be declared a SEZ. BCDA entered into a Memorandum of Agreement and Escrow Agreement with Tuntex and Asiaworld. It delineated the exact metes and bounds of the Subic Special Economic and Free Port Zone. that has full power to exempt any person or corporation or class of property from taxation. It is the legislature. The Sangguniang Panlungsod of Baguio City asked BCDA to exclude all the barangays partly or totally located within Camp John Hay from the reach or coverage of any plan or program for its development. No. The sanggunian passed a resolution seeking the issuance by President Ramos of a presidential proclamation declaring an area of 288.1 hectares of the camp as a SEZ. the extension of the same to the John Hay SEZ finds no support therein." Section 12 thereof created the Subic Special Economic Zone and granted there to special privileges. The fundamental right of equal protection of the laws is not absolute. 420. In both. pursuant to Section 12 of RA 7227. . other Special Economic Zones in the areas covered. No. The classification must also be germane to the purpose of the law and must apply to all those belonging to the same class. as amended . BCDA. It also created the Subic Special Economic and Free Port Zone. ISSUE: Whether Proclamation No. the lands occupied by the Subic Naval Base and its contiguous extensions as embraced. 97. President Ramos issued Proclamation No. 119775 October 24. the 'Secured Area' is precise and well-defined as '.A.A. 420 which established a SEZ on a portion of Camp John Hay. Tuntex and Asiaworld executed a Joint Venture Agreement. If the groupings are characterized by substantial distinctions that make real differences. . Respondent Court held that "there is no substantial difference between the provisions of EO 97-A and Section 12 of RA 7227. 7227 set out the policy of the government to accelerate the sound and balanced conversion into alternative productive uses of the former military bases. 2003 FACTS: Republic Act No. Neither does the same grant of privileges to the John Hay SEZ find support in the other laws specified under Section 3 of Proclamation No. . The incentives under R. but rejected or modified the other proposals. its power to exempt being as broad as its power to tax.13 Authority for this Purpose. the nature of most of the assailed privileges is one of tax exemption.A. BCDA GR. President Ramos issued Executive Order No. Tuntex and AsiaWorld agreed to some. which laws were already extant before the issuance of the proclamation or the enactment of R. The Court found real and substantive distinctions between the circumstances obtaining inside and those outside the Subic Naval Base. unless limited by a provision of the state constitution. 420 is constitutional RULING: While the grant of economic incentives may be essential to the creation and success of SEZs. . the grant thereof to the John Hay SEZ cannot be sustained. thereby justifying a valid and reasonable classification. No. 532 was issued by President Ramos. one class may be treated and regulated differently from another.'" ISSUE: Whether or not Executive Order No. The petitioners challenged before this Court the constitutionality of EO 97-A for allegedly being violative of their right to equal protection of the laws. it being of the view that such declaration would exempt the camp’s property and the economic activity therein from local or national taxation. It created Bases Conversion and Development Authority. 97-A violates the equal protection clause of the Constitution RULING: No. BCDA. 7227. specifying the area within which the tax-and-duty-free privilege was operative. 7227 are exclusive only to the Subic SEZ. No. The sanggunian adopted and submitted a 15-point concept for the development of Camp John Hay. clarifying the application of the tax and duty incentives. Proclamation No. The sanggunian requested the Mayor to order the determination of realty taxes which may be collected from real properties of Camp John Hay. They stressed the need to declare Camp John Hay a SEZ as a condition precedent in accordance R. free trade zones and the like. More importantly. JOHN PEOPLES ALTERNATIVE COALITION vs. It expressly gave authority to the President to create through executive proclamation. The President issued Executive Order No. subject to the concurrence of the local government units directly affected. It granted the Subic SEZ incentives. 7227. hence. Providing Funds Therefor and for Other Purposes. This Court referred the matter to the Court of Appeals. but is subject to reasonable classification.
The CSEZ shall have all the applicable incentives in the Subic Special Economic and Free Port Zone under RA 7227. and parsonages or convents appurtenant thereto. charitable. 80. 93-05-034 allowing the tax and duty-free sale at retail of consumer goods imported via Clark for consumption outside the CSEZ.” PROVINCE OF ABRA vs. directly and exclusively used by the Roman Catholic Bishop of Bangued. Inc. 464 before filing such court action. for religious or charitable purposes. executive order or regulation. 7227.R. BCDA G. The CSEZ Main Zone covering the Clark Air Base proper shall have all the investment incentives. petitioner failed to exhaust the administrative remedies available under PD No. There was a denial of a motion to dismiss an action for declaratory relief by Roman Catholic Bishop of Bangued desirous of being exempted from a real estate tax followed by a summary judgment granting such exemption. 97-A." For him then: "The proper remedy of the petitioner is appeal and not this special civil action. without even hearing the side of petitioner. vs. commercial. No. and improvements. Inc. BCDA passed Board Resolution No.” The Court reiterates that the second sentences of paragraphs 1. 7227 that “. it clearly appears that the actuation of respondent Judge Hernando left much to be desired. Under the 1935 Constitution: "Cemeteries. from the Secured Area of the SSEZ. 97-A. No. buildings." ISSUE: Whether or not the properties of respondent Roman Catholic Bishop should be exempt from taxation RULING: Respondent Judge would not have erred so grievously had he merely compared the provisions of the present Constitution with that appearing in the 1935 Charter on the tax exemption of "lands. President Ramos issued Executive Order No. Section 5 of Executive Order No. and all lands. 97. The full incentives in the Clark SEZ Main Zone and the limited incentives in the Clark SEZ Sub-Zone shall be determined by the BCDA. buildings. . L-49336 August 31. Respondent Judge alleged that there "is no question that the real properties sought to be taxed by the Province of Abra are properties of the respondent Roman Catholic Bishop of Bangued. and improvements used exclusively for religious.the Subic Special Economic Zone shall be developed into a self-sustaining. 7227. 93-05-034 are null and void RULING: The Court finds that the setting up of such commercial establishments which are the only ones duly authorized to sell consumer items tax and duty-free is still well within the policy enunciated in Section 12 of Republic Act No. 7227. 7227 was enacted providing for the sound and balanced conversion of the Clark and Subic military reservations and their extensions into alternative productive uses in the form of special economic zones in order to promote the economic and social development of Central Luzon in particular and the country in general. and Section 4 of BCDA Board Resolution No. 2005 FACTS: Republic Act No. even in a limited amount. churches. while the CSEZ Sub-Zone covering the rest of the CSEZ shall have limited incentives. Said Section clearly provides that “exportation or removal of goods from the territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject to customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines." The very next sentence assumed the very point it asked when he categorically stated: "Likewise.14 COCONUT OIL REFINERS ASSOCIATION INC.R. . It was the submission of counsel that an action for declaratory relief would be proper only before a breach or violation of any statute. 80 which declared that Clark shall have all the applicable incentives granted to the Subic Special Economic and Free Port Zone under Republic Act No. “Clarifying the Tax and Duty Free Incentive Within the Subic Special Economic Zone Pursuant to R. HERNANDO G. there is no dispute that the properties including their procedure are actually. or educational purposes . 132527 July 29. No. allowing tax and duty-free removal of goods to certain individuals.” EO 97-A was issued." There is a marked difference.2 and 1. “Further Clarifying the Tax and Duty-Free Privilege Within the Subic Special Economic and Free Port Zone. there being a tax assessment made by the Provincial Assessor on the properties of respondent. financial and investment center to generate employment opportunities in and around the zone and to attract and promote productive foreign investments.” ISSUE: Whether or not Executive Order No. 1981 FACTS: On the face of this certiorari and mandamus petition. are null and void for being contrary to Section 12 of Republic Act No. The President issued EO No.3 of Executive Order No. industrial.A. Moreover.
No. III Secs. On the alleged violation of due process. Whether or not there is violation of the due process clause under Art. RULING: 1. Whether or not there is an impairment of obligation of contracts under Art. SECRETARY OF FINANCE G. Since the law granted the press a privilege. We are told that it is our duty under Art. Otherwise." The present Constitution added "charitable institutions. and improvements. TOLENTINO vs.A. These questioned provisions contain a uniform proviso authorizing the President. and non-profit cemeteries" and required that for the exemption of ":lands." they should not only be "exclusively" but also "actually and "directly" used for religious or charitable purposes. Contracts must be understood as having been made in reference to the possible exercise of the rightful authority of the government and no obligation of contract can extend to the defeat of that authority. While Art.A. upon . 4. titioners ABAKADA GURO Party List. Section 5 imposes a 10% VAT on importation of goods. 2. otherwise known as the Expanded Value-Added Tax Law. What it simply provides is that Congress shall "evolve a progressive system of taxation. 4 and 5 of the Constitution. III Sec. bills of local application.R. It must be duly taken into consideration. 2005 FACTS: Before R.. VI Sec. No. 3.15 shall be exempt from taxation. hardship to taxpayers alone is not an adequate justification for adjudicating abstract issues. No. ISSUES: 1. 9337. the Senate may propose an entirely new bill as a substitute measure. The motions. revenue or tariff bills. Ermita G. 7716. 1 (2) to decide whenever a claim is made that "there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. mosques. 115455 October 30. 24 of the Constitution. 28 (1) of the Constitution.A. bills authorizing increase of the public debt. 2005 questioning the constitutionality of Sections 4. of the National Internal Revenue Code (NIRC)." This duty can only arise if an actual case or controversy is before us. like the VAT. 5 and 6 of R. 2. No. 168056 September 1. respectively. 1 of the Constitution. and Section 6 imposes a 10% VAT on sale of services and use or lease of properties. 5. adjudication would be no different from the giving of advisory opinion that does not really settle legal issues. VI Sec.R. are regressive. The change should not be ignored. III Sec. To subject the press to its payment is not to burden the exercise of its right any more than to make the press pay income tax or subject it to general regulation is not to violate its freedom under the Constitution. The Constitution does not really prohibit the imposition of indirect taxes which. have been filed by the several petitioners in these cases. The VAT is not a license tax. 7716 is violative of press freedom and religious freedom under Art. and private bills must "originate exclusively in the House of Representatives. filed a petition for prohibition on May 27. barter." 4. buildings. lease or exchange of goods or properties or the sale or exchange of services and the lease of properties purely for revenue purposes.A. Sec." it also adds. much less a constitutional right. the law could take back the privilege anytime without offense to the Constitution.A. 7716 did not "originate exclusively" in the House of Representatives as required by Art. Whether or not R. No. The Constitution is worded differently. Whether or not R. "but the Senate may propose or concur with amendments. ABAKADA Guro Party List vs. 10 of the Constitution. 9337 took effect. 3. It is imposed on the sale." In the exercise of this power. No. amending Sections 106. Whether or not there is violation of the rule on taxation under Art. of which there are 10 in all. 5. Section 4 imposes a 10% VAT on sale of goods and properties. No. 24 provides that all appropriation. VIII. 107 and 108. et al. 1995 FACTS: Motions were filed seeking reconsideration of the Supreme Court decision dismissing the petitions for the declaration of unconstitutionality of R. It is not a tax on the exercise of a privilege. VI Sec.
R. is a domestic corporation engaged in the buying and selling of copra in Misamis Oriental. vs. This is constitutionally permissible. 3. in our complex economy that is frequently the only way in which the legislative process can go forward. Congress does not abdicate its functions or unduly delegate power when it describes what job must be done. the Senate was acting within its constitutional power to introduce amendments to the House bill when it included provisions in Senate Bill No. exempt from VAT at all stages of production or distribution. or the amounts to be raised. The former produce and sell copra. effective January 1. and what is the scope of his authority. the kind of property. The petitioner alleges that prior to the issuance of Revenue Memorandum Circular 47-91 on June 11. ISSUES: 1. although both sell copra in its original state. and excise and franchise taxes. Whether or not there is a violation of Article VI. RULING: There is a material or substantial difference between coconut farmers and copra producers. INC. Petitioners argue that the law is unconstitutional. COMMISSIONER OF INTERNAL REVENUE vs. COURT OF APPEALS G. after specified conditions have been satisfied. on the one hand. DEPARTMENT OF FINANCE SECRETARY G. 103(b) of the NIRC ISSUE: Whether there is violation of equal protection clause because while coconut farmers and copra producers are exempt. who must do it. 1 of the Constitution. 103(b) of the National Internal Revenue Code and. therefore. Whether or not there is a violation of the due process and equal protection under Article III Sec. or arbitrariness. 1991. the methods of assessment. 47-91 and enjoin the collection by respondent revenue officials of the Value Added Tax (VAT) on the sale of copra by members of petitioner organization as the classification had the effect of denying to the petitioner the exemption it previously enjoyed when copra was classified as an agricultural food product under Sec. which implemented VAT Ruling 190-90. MISAMIS ORIENTAL ASSOCIATION OF COCO TRADERS. 119761 August 29. percentage. Since there is no question that the revenue bill exclusively originated in the House of Representatives. No.R. 2006. Inc. the latter merely sell copra. Whether or not there is undue delegation of legislative power in violation of Article VI Sec 28(2) of the Constitution. the State’s power is entitled to presumption of validity. Section 24 of the Constitution. There is no undue delegation of legislative power but only of the discretion as to the execution of a law. 2. traders and dealers are not. 1950 amending corporate income taxes. The power of the State to make reasonable and natural classifications for the purposes of taxation has long been established. the rates to be levied.16 recommendation of the Secretary of Finance. the judiciary will not interfere with such power absent a clear showing of unreasonableness. 1994 FACTS: Petitioner Misamis Oriental Association of Coco Traders. 1996 FACTS: . on the other. to raise the VAT rate to 12%. The Constitution does not forbid the differential treatment of persons so long as there is a reasonable basis for classifying them differently. As a rule. 108524 November 10. 2. copra was classified as agricultural food product under Sec. and copra traders and dealers. Petitioner sought to nullify Revenue Memorandum Circular No. No. 3. valuation and collection. Whether it relates to the subject of taxation. discrimination. RULING: 1.
1946. was enacted and became effective on 03 July 1993.R.' 'Hope. About a month after the enactment and two (2) days before the effectivity of RA 7654. 1988 FACTS: The respondent taxpayer. The following day. Tax exemptions have never been deemed violative of the equal protection clause. and of publication should not have been then ignored. The CTA upheld the position of Fortune Tobacco and adjudged RMC No.. COMMISSIONER OF INTERNAL REVENUE vs.334. Inc. RULING: Uniformity means that all property belonging to the same class shall be taxed alike The Legislature has the inherent power not only to select the subjects of taxation but to grant exemptions. and power system in the same municipalities of Pangasinan. in fact and most importantly. . of hearing. while other taxpayers similarly situated were subject to the 5% franchise tax imposed in Section 259 of the Tax Code. LINGAYEN GULF OF ELECTRIC POWER G. The Philippine Patent Office issued to the corporation separate certificates of trademark registration over "Champion. verily.) No.598. RA No. 1954 as prescribed in Section 259 of the National Internal Revenue Code. L-23771 August 4.Pending the hearing of the said cases.A. Charters or special laws granted and enacted by the Legislature are in the nature of private contracts. 1955. The petitioner submits that the said law is unconstitutional insofar as it provides for the payment by the private respondent of a franchise tax of 2% of its gross receipts. operates an electric power plant serving the adjoining municipalities of Lingayen and Binmaley. It amended Section 142(c)(1) of the NIRC. 3843 is unconstitutional for being violative of the "uniformity and equality of taxation" clause of the Constitution. 37-93 as defective. No. the BIR not simply intrepreted the law. under Resolution Nos. a tax equal to two per centum of the gross receipts from electric current sold or supplied under this franchise. particularly considering the circumstances under which it has been issued. convinces us that the circular cannot be viewed simply as a corrective measure or merely as construing Section 142(c)(1) of the NIRC. However.A. RULING: A reading of RMC 37-93. pursuant to the municipal franchise granted it by their respective municipal councils. as amended." and "More" cigarettes. respectively. The initial position of the CIR was to classify 'Champion. the CIR assessed Fortune Tobacco for ad valorem tax deficiency amounting to P9. it legislated under its quasi-legislative authority. Section 10 of these franchises provides that said grantee shall pay 2% of their gross earnings obtained thru this privilege.00. was issued by the BIR. Republic Act (R. granting to the private respondent a legislative franchise for the operation of the electric light. or on 30 July 1993. 14 and 25 of June 29 and July 2.' thereby removing the said brands from the foreign brand category.' and 'More' as foreign brands since they were listed in the World Tobacco Directory as belonging to foreign companies. but has. The due observance of the requirements of notice. been made in order to place "Hope Luxury. 1 963. Pangasinan." "Premium More" and "Champion" within the classification of locally manufactured cigarettes bearing foreign brands and to thereby have them covered by RA 7654. 37-93 ("RMC 37-93") Reclassification of Cigarettes Subject to Excise Tax. They do not constitute a part of the machinery of the general government. thereby discriminatory and violative of the rule on uniformity and equality of taxation. Fortune Tobacco filed a petition for review with the CTA.293. 7654. the grantee shall pay into the Internal Revenue office of each Municipality in which it is supplying electric current to the public under this franchise. No. The request was denied on 29 July 1993.. heat. Revenue Memorandum Circular No.17 Fortune Tobacco Corporation ("Fortune Tobacco") is engaged in the manufacture of different brands of cigarettes. Fortune Tobacco changed the names of 'Hope' to 'Hope Luxury' and 'More' to 'Premium More. instead of the lower rates as provided in the municipal franchises. In so doing. 3843 was passed on June 22. Fortune Tobacco requested for a review." "Hope. ISSUE: Whether or not there is a violation of the due process of law.41 representing deficiency franchise taxes and surcharges for the years 1946 to 1954 applying the franchise tax rate of 5% on gross receipts from March 1. The Court is convinced that the hastily promulgated RMC 37-93 has fallen short of a valid and effective administrative issuance. reconsideration and recall of RMC 37-93. 1948 to December 31. ISSUE: Whether or not Section 4 of R. On 03 August 1993. Section 4 thereof provides that: In consideration of the franchise and rights hereby granted. the Bureau of Internal Revenue (BIR) assessed against and demanded from the private respondent the total amount of P19. On November 21. Lingayen Gulf Electric Power Co.
considering that they arc not fixed rules but rather broad standards. not a doubtful and argumentative implication. It appears that a comprehensive study of the VAT had been extensively discussed by this framers and other government agencies involved in its implementation. and violates the due process and equal protection clauses and other provisions of the 1987 Constitution. RULING: Petitioners have failed to show that EO 273 was issued capriciously and whimsically or in an arbitrary or despotic manner by reason of passion or personal hostility.00. prizes. No. discriminatory or unjust.18 KAPATIRAN NG MGA NAGLILINGKOD SA PAMAHALAAN vs. Petitioners merely rely upon newspaper articles which are actually hearsay and have evidentiary value. the presumption of validity must prevail. Considering that petitioner here would condemn such a provision as void or its face. VILLEGAS vs. for short). "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.R. There must be a factual foundation of such unconstitutional taint. TAN G. (c) royalties. (b) taxable net income. SISON vs. No. to take effect on 1 January 1988. and which amended certain sections of the National Internal Revenue Code and adopted the value-added tax (VAT. Due process was not violated. 1988 FACTS: This petition seeks to nullify Executive Order No. 81311 June 30. for short). Small corner sari-sari stores are consequently exempt from its application. The petitioners have failed to adequately show that the VAT is oppressive. which provides for rates of tax on citizens or residents on (a) taxable compensation income. 135 which further amends Section 21 of the National Internal Revenue Code of 1977. He alleges arbitrariness. even under the past administration. ISSUE: Whether or not EO 273 was enacted by the president with grave abuse of discretion and whether or not such law is unconstitutional. ISSUE: Whether or not BP 135 Sec 1 is violative of due procee and equal protection clause. Absent such a showing. oppressive and capricious in character. discriminatory. there is a need for of such persuasive character as would lead to such a conclusion. (f) adjusted gross income. To justify the nullification of a law. there must be a clear and unequivocal breach of the Constitution. This is merely to adhere to the authoritative doctrine that were the due process and equal protection clauses are invoked. L-29646 November 10. It is imposed only on sales of goods or services by persons engage in business with an aggregate gross annual sales exceeding P200. and other winnings. that the VAT is oppressive. issued by the President of the Philippines on 25 July 1987. as here. L-59431 July 25. A mere allegation.R.000. for being unconstitutional in that its enactment is not alledgedly within the powers of the President. does not suffice. 1978 FACTS: . RULING: The difficulty confronting petitioner is thus apparent. No. 273 (EO 273. 1984 FACTS: Petitioner assailed the validity of Section 1 of Batas Pambansa Blg. Petitioner as taxpayer alleges that by virtue thereof. (e) dividends and share of individual partner in the net profits of taxable partnership. ANCHETA G.R. The disputed sales tax is also equitable. he has not made out a case. He characterizes the above section as arbitrary amounting to class legislation. (d) interest from bank deposits and yield or any other monetary benefit from deposit substitutes and from trust fund and similar arrangements. HUI CHIONG TSAI PAO G. regressive.
etc. that the owners of other classes of buildings in the City of Iloilo do not pay the taxes imposed by the ordinance in question is no argument at all against uniformity and equality of the tax imposition. partly or wholly engaged in or dedicated to business in the streets of J. part time or full time or whether he is a lowly employee or a highly paid executive. imposing license tax fees as follows: 1) tenement house.00 is being collected from every employed alien whether he is casual or permanent. Ordinance No. 3) tenement house. The validity and constitutionality of this ordinance were challenged by the spouses Villanueva. who are not paid monetarily or in kind.M.00 per apartment. 110 which was subsequently amended by Ordinance No. 110 is illegal.00 per apartment.00anually.00 employment permit fee imposed by virtue of Ordinance No. partly or wholly engaged in business in any other streets. CITY OF ILOILO G. of P0.00 except persons employed in the diplomatic or consular missions of foreign countries. This court has ruled that tenement houses constitute a distinct class of property. sect or denomination. 1968 FACTS: The municipal board of Iloilo City enacted Ordinance 86. OF THE PHILIPPINES. and members of religious orders or congregations.” The fact. P25. and those working in their respective households.19 On February 22. P12. No. 1968 FACTS: The City of Butuan enacted Ordinance No. 22814 August 28. It has likewise ruled that taxes are uniform and equal when imposed upon all properties of the same class or character within the taxing authority. 6537 is a violation of the equal protection clause.00 fee is unreasonable not only because it is excessive but because it fails to consider valid substantial differences in situation among individual aliens who are required to pay it. ISSUE: Whether or not the 50. CITY OF BUTUAN G. 2) tenement house. 1968. v. 122. The said city ordinance was also signed by then Manila Mayor Antonio J. without first securing an employment permit from the Mayor of Manila and paying the permit fee of P50. PEPSI-COLA BOTTLING CO. the Municipal Board of Manila passed City Ordinance No. The trial court declared City Ordinance No. No. INC. it is imperative that the classification should be based on real and substantial differences having a reasonable relation to the subject of the particular legislation. temporary or casual. imposes a tax on any person. ISSUE: Does Ordinance 11 violate the rules of uniformity of taxation? RULING: No. whether permanent. The same amount of P50. owners of 4 tenement houses containing 34 apartments.R. Plaintiff maintains that the ordinance is null and void because it is unjust and discriminatory. that the tax imposed is excessive and that it is unconstitutional. Basa. filed a petition with the CFI of Manila to declare City Ordinance No. Iznart Aldequer. 6537 is void because it does not contain or suggest any standard or criterion to guide the mayor in the exercise of the power which has been granted to him by the ordinance. Villegas filed the present petition.R. 26521 December 28. RULING: The P50. association. Section 1 of the said city ordinance prohibits aliens from being employed or to engage or participate in any position or occupation or business enumerated therein. or in the technical assistance programs of both the Philippine Government and any foreign government. Hiu Chiong Tsai Pao Ho (Tsai Pao Ho) who was employed in Manila.10 per case of 24 bottles of PepsiCola and the plaintiff Pepsi-Cola paid under protest. therefore. 110 as amended. 6537. P24. 6537 null and void. Ordinance No. . Villegas (Villegas). 6537 as null and void for being discriminatory and violative of the rule of the uniformity in taxation. VILLANUEVA v. Although the equal protection clause of the Constitution does not forbid classification. The plaintiff filed a complaint for the recovery of the amount paid under protest on the ground that Ordinance No.
v. and a classification is reasonable where 1) it is based upon substantial distinctions. 4 imposing “on any and all productions of centrifugal sugar milled at the Ormoc Sugar Company. Hence. 3) applicable. and 4) the classification applies only to those who belong to the same class. 1968 FACTS: The Municipal Board of Ormoc City passed Ordinance No. The action having been dismissed by the Court of First Instance. 2)germane to the purpose of the ordinance. Section 3 of the said law levies on owners or persons in control of lands devoted to the cultivation of sugar cane and ceded to others for a consideration. LUTZ v. ORMOC SUGAR COMPANY.R. seeks to recover from the Collector of Internal Revenue the sum paid by him as taxes alleging that such tax is unconstitutional and void. TREASURER OF ORMOC CITY G. and 4) applicable equally to all those who belong to the same class. and even if the same exceeded those made by said agents or consignees of producers or merchants established outside the City of Butuan. ISSUE: Whether or not the law in question is constitutional? . 7859 December 22. in Ormoc City a municipal tax equivalent to one per centum (1%) per export sale to USA and other foreign countries. but also to future conditions substantially identical to those present. No.. on lease or otherwise a tax equivalent to the difference between the money value of the rental or consideration collected and the amount representing 12 per centum of the assessed value of such land. not acting for or on behalf of other merchants. Plaintiff Lutz. not only to present conditions. regardless of the volume of their sales. The court rendered a decision that upheld the constitutionality of the ordinance. in his capacity as Judicial Administrator of the Intestate Estate of Ledesma. and none other. INC. filed before the Court of First Instance of Leyte a complaint against the City of Ormoc as well as its Treasurer. which in plaintiff’s opinion is not a public purpose for which a tax may be constitutionally levied. 3) the classification applies not only to present conditions. A perusal of the requisites shows that the questioned ordinance does not meet them. ISSUE: Whether or not constitutional limits on the power of taxation. would be exempt from the disputed tax. by Ormoc Sugar Company. The taxing ordinance should not be singular and exclusive as to exclude any subsequently established sugar central for the coverage of the tax. Inc. this appeal. No. Inc. specifically the equal protection clause and rule of uniformity of taxation. Inc. 1955 FACTS: This case was initiated in the Court of First Instance of Negros Occidental to test the legality of the taxes imposed by Commonwealth Act No. were infringed? RULING: Yes. for it taxes only centrifugal sugar produced and exported by the Ormoc Sugar Company. Ormoc Sugar Company. under protest. Inc. 567 (Sugar Adjustment Act). Municipal Board and Mayor alleging that the ordinance is unconstitutional for being violative of the equal protection clause and the rule of uniformity of taxation. the plaintiffs appealed the case. Sales by local dealers. 2) these are germane to the purpose of the law. being levied for the aid and support of the sugar industry exclusively. Only sales by “agents or consignees” of outside dealers would be subject to the tax.” Payments for said tax were made. Equal protection clause applies only to persons or things identically situated and does not bar a reasonable classification of the subject of legislation. ARANETA G. but also to future conditions substantially identical to those present. These conditions are not fully met by the ordinance in question. 23794 February 17. The classification to be valid and reasonable must be: 1) based upon substantial distinctions.20 ISSUE: Whether or not the ordinance in question is violative of the uniformity required by the Constitution? RULING: Yes.R.
violates and is inconsistent with. EASTERN THEATRICAL CO.The petitioners which is composed of all brokers and public service operators of motor vehicles in the City of Manila. ASSOCIATION OF CUSTOMS BROKERS et al. ISSUE: Whether or not Ordinance No. THEATERS VAUDEVILLE COMPANIES THEATRICAL SHOWS AND BOXING EXHIBITION. That the tax to be levied should burden the sugar producers themselves can hardly be a ground of complaint. At any rate. arbitrary capricious unreasonable oppressive and is contrary to and violation our basic and recognizes principles of taxation and licensing laws. 3992) intends to prevent. 1949 FACTS: Twelve corporation engaged in motion picture business filed a complaint to impugn the validity of Ordinance No. 3379 is valid as held by the CFI of Manila.AN ORDINANCE IMPOSING A FEE ON THE PRICE OF EVERY ADMISSION TICKET SOLD BY CINEMATOGRAPHS. It appears rational that the tax be obtained precisely from those who are to be benefited from the expenditure of the funds derived from it. vs. RULING: . existing national legislation more particularly revenue and tax laws and (c) because it is unfair. to provide means for the rehabilitation and stabilization of the threatened sugar industry. ISSUE: Whether or not Ordinance No. should be exclusively spent in aid of the sugar industry. ET AL. ALFONSO G.R. VICTOR. 1953 FACTS: This is a petition for declaratory relief to test the validity of Ordinance No. municipal corporation already participate in the distribution of the proceeds that are raised for the same purpose of repairing. it is inherent in the power to tax that a state be free to select the subjects of taxation. and it has been repeatedly ruled that “inequalities which result from a singling out of one particular for taxation or exemption infringe no constitutional limitation. maintaining and improving bridges and public highway (section 73 of the Motor Vehicle Law).R. maintenance and improvement of the streets and bridges in said city.21 RULING: Yes. and G. No. (b) because it contravenes. under said Act. 2958 of the City of Manila.” It appears of no moment that the funds raised under the Sugar Stabilization Act. challenge the validity of said ordinance on the ground that (1) while it levies a so-called property tax it is in reality a license tax which is beyond the power of the Municipal Board of the City of Manila. also a public service operator of the trucks in said City. Inc. May 22.. The act is primarily an exercise of the police power. L-1104 May 31. 2958 violated the principle of equality and uniformity of taxation enjoined by the Constitution. THE MUNICIPALITY BOARD of Manila et al. The ordinance in question while it refers to property tax and it is fixed ad valorem yet we cannot reject the idea that it is merely levied on motor vehicles operating within the City of Manila with the main purpose of raising funds to be expended exclusively for the repair.. now in question. Manlapit. L-4376. This is precisely what the Motor Vehicle Law (Act No. 3379 passed by the Municipal Board of the City of Manila on March 24. unjust. RULING: No.. operator of theaters in Manila And distributor of local or imported films impugns Sections 1. Plaintiffs. G. INC. No. It is for this reason that we believe that the ordinance in question merely imposes a license fee although under the cloak of an ad valorem tax to circumvent the prohibition above adverted to. The tax levied is with a regulatory purpose. 1950. a member of said association. since it is that very enterprise that is being protected. 2 and 4 of said ordinance as null and void upon the following grounds: (a) For violation the Constitution more particular the provision regarding the uniformity and equality of taxation and the equal protection of the laws. for the reason that. This prohibition is intended to prevent duplication in the imposition of fees for the same purpose. vs.
billboards. However. and that it is discriminatory. 1940 FACTS: Prior to the filing of these suits. RULING: No. and operates on." This section was subsequently amended by Act No. vaudeville companies. A tax is considered uniform when it operates with the same force and effect in every place where the subject may be found. 2339 imposed an annual tax of P4 per square meter upon "electric signs. 46256. 1189. but these exemptions have never been regarded as disturbing the rules of taxation. and therefore violative of the equal protection clause of the Constitution. makes the law discriminatory and violates the rule of uniformity in taxation ISSUE: Whether or not the said section of the Revised Administrative Code violates the rule on uniformity of taxation. Equality and uniformity in taxation means that all taxable articles or kinds of property of the same class shall be taxed at the same rate. and for a number of years. Nos. even where the fundamental law had ordained that it should be uniform. based entirely upon the opinion of the plaintiffs. The fact that some places of amusement are not taxed while others. formerly under section 111 of Act No. and spaces used for posting or displaying temporary signs. Francis A. YATCO G.S. theaters.R. that alone could have the effect of rendering it violative of the rule of uniformity. ISSUE: Is the tax void for lack of uniformity? RULING: . Plaintiffs assailed that they were gaining lesser profit than what they ought to receive because of the tax imposed by the said law. to P2 per square meter or fraction thereof. as amended. Equality and uniformity of the tax imposition. 80 Law ed. The taxing power has the authority to make reasonable and natural classifications for purposes of taxation. 497. owners of a sign or billboard containing an area of 52 square meters constructed on private property in the city of Manila and exposed to public view. it was proven that there was no attempt on the part of the plaintiffs to raise the advertising rates in order to cope up with the said tax rates. The tax was paid under protest. billboards. In every well-regulated and enlightened state or government. effective by reducing the tax on such signs. 351]. and boxing exhibitions and other kinds of amusements or places of amusement are taxed. and if the National City Bank of New York is exempted from its operation because it is a federal instrumentality subject only to the authority of Congress. CONCEPCION G. applies uniformly to. Appellants stoutly maintain that although the foregoing provision is of general application and operates on all banks of the same kind doing business in the Philippines. such as cinematographs. is no argument at all against the equality and uniformity of the tax imposition. theatrical shows. certain descriptions of property and also certain institutions are exempt from taxation. and the appellants cannot point out what places of amusement taxed by the ordinance do not constitute a class by themselves and which can be confused with those not included in the ordinance. Churchill and Stewart Tait. 46259 and 46277 January 23. 1916 FACTS: Section 100 of Act No. the exemption of the National City Bank of New York from the impositions therein specifically provided (National City Bank of New York v. and all signs displayed on premises not occupied by buildings. 2432. Posadas [296 U. Appellants challenge the constitutionality of the aforesaid section of the Revised Administrative Code. Section 1499 of the Revised Administrative Code.22 No. the plaintiffs-appellants had been paying capital and deposit taxes without protest. CHURCHILL vs. PHILIPPINE TRUST COMPANY vs.. etc. and that the plaintiffs themselves admit that a number of other persons have voluntarily and without protest paid the tax herein complained of. the said Ordinance does not violate the principle of equality and uniformity of taxation. unsupported by actual test. all banks in the Philippines without distinction and discrimination. were taxes thereon P104. L-46255. It will thus be seen that the contention that the rates charged for advertising cannot be raised is purely hypothetical. as amended. and later under section 1499 of the Revised Administrative Code of 1917.R. principally on the grounds that it violates the rule regarding uniformity of taxation. No. 11572 September 22.
means that all property belonging to the same class shall be taxed alike. (CEPALCO) was granted a franchise on June 17. "Uniformity.R. or other special laws. 3 of RA 6020 which exempts CEPALCO. On June 28. alleging that it is exempt from all taxes except the franchise tax required by Republic Act 6020. ISSUE Whether the imposition of a franchise tax under section 2. It was amended by Republic Act 3570 and Republic Act 6020. notwithstanding “any exemption granted by any law.09 of the Laguna Provincial Ordinance No. January 12. May 5. FACTS Manila Electric Company (MERALCO) was granted a franchise from certain municipalities of Laguna. ruled in favor of CEPALCO. The Legislature selected signs and billboards as a subject for taxation and it must be presumed that it. CAGAYAN ELECTRIC POWER AND LIGHT COMPANY G. enjoining loval government units to create their own sources of revenue and to levy taxes.R. Or in other words. MERALCO filed an appeal with the trial court but was dismissed. CEPALCO paid under protest. Pursuant thereto. Thus.” On the basis of such ordinance. consistent with the basic policy of local autonomy. On appeal to the Secretary of Justice. The claim was denied. RULING Yes. ISSUE Whether CEPALCO is exempt from paying the provincial franchise tax. 1961 under Republic Act 3247. the petition. This is provided under Article X of the 1987 Constitution. 1990 FACTS Cagayan Electric Power and Light Company. "the rule of taxation" upon such signs is uniform throughout the Islands.. The rationale for the current rule is to safeguard the viability and self-sufficiency of local government units by directly granting them general and broad tax powers. the Provincial Treasurer sent a demand letter to MERALCO for the tax payment. No. PROVINCE OF LAGUNA and BENITO BALAZO in his capacity as Provincial Treasurer of Laguna G. The Local Government Code of 1991 repealed the Tax Code. CEPALCO refused to pay. Although local governments do not have the inherent power to tax. The phrase. 1999. at a rate of 50% of 1% of the gross annual receipts." as applied to the constitutional provision that all taxes shall be uniform. Pursuant to this Code. otherwise known as the Local Government Code of 1991 was enacted. No. The provincial fiscal upheld the ordinance.23 A tax is uniform. 131359.. L-45355. bill-board. 231 expressly or impliedly amending or repealing sec. On September 13. a formal claim for refund was sent by MERALCO to the Provincial Treasurer claiming that the franchise tax it had paid and continue to pay to the National Government already includes the franchise tax as provided under Presidential Decree 551. subject to the limitations expressed therein. Inc. respondent province enacted a Provincial Ordinance providing that “a tax on business enjoying franchise. there is no provision in PD No. MANILA ELECTRIC COMPANY v. 1991. the Province of Misamis enacted Provincial Revenue Ordinance No. RULING No. The rule is that a special and local statute applicable to a particular case is not repealed by a . xxx (to) impose a tax on business enjoying a franchise. “in lieu of all taxes” have to give way to the peremptory language of the Local Government Code. 01-92 violates the non-impairment clause of the Constitution. when it operates with the same force and effect in every place where the subject of it is found. The province filed a petition with the trial court but was dismissed. First off. It demanded payment. acted with a full knowledge of the situation. the Local Tax Code was promulgated which provides that the province may impose a tax on businesses enjoying franchise. within the constitutional requirement. It explicitly authorizes provincial governments. MERALCO paid under protest. 19. in so doing. wherever found in the Philippine Islands. fees and charges. Thereafter. Republic Act 7160. The statute under consideration imposes a tax of P2 per square meter or fraction thereof upon every electric sign.. etc. THE PROVINCE OF MISAMIS ORIENTAL represented by its PROVINCIAL TREASURER v. such power may be delegated to them either by basic law or by statute. 1973. Thus the petition.
the Certificate of public convenience and the electric plant was transferred to the said partnership. INC v. 9) may only be imposed on companies with franchises that do not contain the exempting clause “in-lieu-of-all-taxes”. requiring petitioner to pay the deficiency for income taxes for 1968-1971. as amended by Act 2620.D. INC v. Local Tax Regulation No. CAGAYAN ELECTRIC POWER AND LIGHT CO. 1969 when its tax exemption was modified. Upon petitioner's contention. under Republic Act 3247 also provide it is subject to the Constitution. 1949. RULING: Yes. Sec. No. Thus. the original grantee and successors-in-interest paid a franchise tax of 2% on the gross earnings. and assessments of whatever authority upon privileges. 1958. September 25. LEALDA ELECTRIC CO. 1947 to October 14. granting its franchise constitute a private contract between the petitioner and the Government and such cannot be amended. has made it crystal clear that the franchise tax provided in the Local Tax Code (P. which increased the franchise tax to 5%.. ISSUE Whether petitioner should pay 5% of his gross earnings. earnings. COMMISSIONER OF INTERNAL REVENUE and COURT OF TAX APPEALS G. alteration. Alfredo. 1969. Thus. 1976. Under its franchise. ISSUE: Whether petitioner's franchise is a contract which can be impaired by an implied appeal. Thus. praying for refund from the period of January 20.24 later statute which is general in its terms. Petitioner filed a petition for review with the tax court which held petitioner responsible only for the period from January 1 to August 3. wires transformers. franchise. Republic Act 5431 withdrew petitioner's exemption but was restored by subsequent enactment. the petitioner was again tax exempted. it is only liable for the period of January 1 to August 3. it is exempted from “taxes. until October 1. . making the petitioner liable for income tax in addition to franchise tax. Such exemption is part of the inducement for the acceptance of the franchise and the rendition of public service by the grantee. L-16428.R. the CIR cancelled the assessments for 1970 but insisted those for 1968 and 1969. On a date undisclosed. petitioner filed a petition for refund contending that on its charter. Petitioner's franchise. The franchise. The CTA dismissed the petition. On June 27. Such electric plant was granted a franchise in the year 1915 to supply electric current to the municipalities of Albay. No. 1968. On August 4. 1969. 231. provisions and application even if the terms of the general act are broad enough to include the cases in the special law unless there is manifest intent to repeal or alter the special law. the petition. Mario and Benjamin Benito formed a partnership to operate an electric plant. Republic Act 5431 amended Section 24 of the Tax Code. 3-75 issued by the Secretary of Finance on June 26. 1963 FACTS: On June 11. and insulators”. The franchise of CEPALCO expressly exempts it from payment of “all taxes of whatever authority” except 3% tax on its gross earnings. income.. and poles. COMMISSIONER OF INTERNAL REVENUE and COURT OF TAX APPEALS G. when section 259 of the National Internal Revenue Code was amended by Republic Act 39. 1985 FACTS: Petitioner Cagayan Electric Power and Light Co. No. The Constitution provides that a franchise is subject to amendment.2475. 1973. The Commissioner of Internal Revenue (CIR) sent a demand letter on February 15. or before the passage of Republic Act 6420 which reiterated its tax exemption. Inc (CEPALCO) is the holder of a legislative franchise. Republic Act 6020 was enacted under which.R. it was liable to pay a franchise tax of 2% and not 5% of its earnings and receipts. thus petitioner filed with the Court of Tax Appeals (CTA) a petition. on the ground that Act No. 1946. April 30. Republic Act 3247 under which. or repeal by Congress when public interest so requires. Congress could impair petitioner's franchise by making it liable for income tax from which heretofore it was exempted by virtue of the exemption provided in its franchise. altered or repealed by Section 259 of the Tax Code. the appeal. L-60126.. As several petitions were not given definite action.
. HORD G. JNO.25 RULING Yes. S. non-stock. the Philippine agency of the American Bible Society has been distributing and selling bibles and/or gospel portions thereof throughout the Philippines and translating the same into several Philippine dialets. the Court found it unnecessary to consider the claim in view of the result at which the Court has arrived. and filed suit questioning the legality of the ordinances under which the fees are being collected. 3473 March 22. together with compromise covering the period from the 4th quarter of 1945 to the 2nd quarter of 1953. non-profit. the Spanish Government. which plaintiff Casanovas paid under protest. the section conflicts with Section 60 of the Act of Congress of 1 July 1902. 3636. missionary corporation duly registered and doing business in the Philippines. the act amending the section must be deemed applied to petitioner. thereby infringing the provisions of Section 5 of the Act of Congress of 1 July 1902. section 259 of the Tax Code became the basic franchise tax to be paid by holders of all existing and future franchises.R. imposed upon these properties the tax mentioned in Section 134. granted J. No. They were so considered by the Collector of Internal Revenue and were by him said to fall within the provisions of Section 134 of Act 1189 (Internal Revenue Act). J. This does not cover franchise holders whose charters did not specify the rate of franchise tax. Casanovas certain mines in the province of Ambos Camarines. As to the allegation that the section violates uniformity of taxation. CASANOVAS vs. or for failure to comply with the conditions prescribed as requisites for their retention in the laws under which they were granted. AMERICAN BIBLE SOCIETY vs. 2475 was enacted.. CITY OF MANILA G. Also. 1907 FACTS: In 1897. RULING: The deed constituted a contract between the Spanish Government and Casanovas. which indicate that concessions can be cancelled only by reason of illegality in the procedure by which they were obtained. Section 259 of the Tax Code merely provided that grantees of franchises should pay on their gross earnings or receipts “such taxes. It was covered under Section 10 of Act No. ISSUE: Whether or not Section 134 of Act 1189 is valid. Petitioner's franchise does not specifically state that the rate of the franchise tax shall be 2% of his gross earnings or receipts. There is no claim in this case that there was any illegality in the procedure by which these concessions were obtained. RULING: . L-9637 April 30.R. religious.as are specified in special charters upon whom franchises are conferred”. Hord. No. The society paid such under protest. The obligation in the contract was impaired by the enactment of Section 134 of the Internal Revenue Law. The defendant Commissioner. Franchise holders did pay the rate of 2% until the rate was increased to 5%. Furthermore. That these were validly perfected mining concessions granted to prior to 11 April 1899 is conceded. It simply provides that the grantee and successors-in-interest shall pay the same franchise tax imposed upon other grantees at the time Act No. of which mines the latter is now the owner. JNO S. In the course of its ministry. in accordance with the provisions of the royal decree of 14 may 1867. nor is there any claim that the plaintiff has not complied with the conditions prescribed in the royal decree of 1867. Consequently. prior to its amendment. 1957 FACTS: Plaintiff-appellant is a foreign. The acting City Treasurer of Manila required the society to secure the corresponding Mayorâ€™s permit and municipal license fees. ISSUE: Whether or not the municipal ordinances violate the freedom of religious profession and worship. Such being the case. The defendant appellee is a municipal corporation with powers that are to be exercised in conformity with the provisions of the Revised Charter of the City of Manila.
BISHOP OF THE MISSIONARY DISTRICT OF THE PHILIPPINE ISLANDS OF THE PROTESTANT EPISCOPAL CHURCH IN THE U. No.R. 39086 June 15. and improvements used exclusively for religious. Said "Notice of Seizure" by respondents Municipal Treasurer and Provincial Treasurer.26 A tax on the income of one who engages in religious activities is different from a tax on property used or employed in connection with those activities. The trial court ruled for the government. was issued for the satisfaction of the said taxes thereon. paragraph 3.A. is a corporation sole duly registered with the Securities and Exchange Commission. charitable or educational purposes. the Missionary District of the Philippine Islands of the Protestant Episcopal Church the U. The use of the school building or lot for commercial purposes is neither contemplated by law. . COMMISSIONER OF INTERNAL REVENUE. L-19445 August 31. filed a complaint to annul and declare void the "Notice of Seizure' and the "Notice of Sale" of its lot and building located at Bangued. Article VI. The parties entered into a stipulation of facts adopted and embodied by the trial court in its questioned decision. ABRA VALLEY COLLEGE. and thus the property is not being used â€œexclusivelyâ€ for educational purposes. AQUINO. buildings. Luke's Hospital in Quezon City.S. The decision of the CFI Abra (Branch I) is affirmed subject to the modification that half of the assessed tax be returned to the petitioner. Judge. Even if religious groups and the press are not altogether free from the burdens of the government. 1965 FACTS: Respondent Bishop of the Missionary District of the Philippines Islands of the Protestant. and another to exact a tax for him for the privilege of delivering a sermon. (hereinafter referred to as Missionary District) is a duly incorporated and established religious society and owns and operates the St. and all lands. a commercial establishment.140. The modification is derived from the fact that the ground floor is being used for commercial purposes (leased) and the second floor being used as incidental to education (residence of the director).A. an educational corporation and institution of higher learning duly incorporated with the Securities and Exchange Commission in 1948.ﾝ Reasonable emphasis has always been made that the exemption extends to facilities which are incidental to and reasonably necessary for the accomplishment of the main purposes. nor by jurisprudence. RULING: Section 22. Court of First Instance. The power to tax the exercise of a privilege is the power to control or suppress its enjoyment. holding that the second floor of the building is being used by the director for residential purposes and that the ground floor used and rented by Northern Marketing Corporation.S. The test of exemption from taxation is the use of the property for purposes mentioned in the Constitution.R. of the then 1935 Philippine Constitution. expressly grants exemption from realty taxes for cemeteries. HON. and THE COURT OF TAX APPEALS G. NO. Stephen's High School in Manila. Abra. On the other hand. Abra G.A. It is one thing to impose a tax on the income or property of a preacher.31. etc. Instead of perfecting an appeal. by filing said petition on 17 August 1974. In the case at bar. petitioner availed of the instant petition for review on certiorari with prayer for preliminary injunction before the Supreme Court.S. ISSUE: Whether or not the lot and building are used exclusively for educational purposes. for non-payment of real estate taxes and penalties amounting to P5. the act of distributing and selling bibles is purely religious and does not fall under Section 27 (e) of the Tax Code (CA 466). INC vs. JUAN P. vs. defendants below. The fact that the price of bibles. Ordinance 2529 and 3000 are not applicable to the Society for in doing so it would impair its free exercise and enjoyment of its religious profession and worship as well as its rights of dissemination of religious beliefs. Episcopal Church in the U. 1988 FACTS: Petitioner. the Brent Hospital in Zamboanga City and the St. the lease of the first floor of the building to the Northern Marketing Corporation cannot by any stretch of the imagination be considered incidental to the purpose of education. churches and parsonages or convents appurtenant thereto. are a little higher than actual cost of the same does not necessarily mean it is already engaged in business for profit.
series of 1958). VI of the Constitution of the Philippines. equipment and other articles intended for use in the construction and operation of the new St.00 in cash to Rev. HERRERA v. QUEZON CITY BOARD OF ASSESSMENT GR. the M. 1960. Mesa Heights. Negros Occidental. the assessment was not on the properties themselves. Crispin Ruiz. the admission of pay patients does not detract from the charitable character of a hospital. if its funds are devoted exclusively to the maintenance of the institution. upon the exercise of the privilege of receiving the properties. buildings. Quezon City (Exhibit "F-1". the donor M. and improvements used exclusively for religious purposes. On or . The exemption is only from the payment of taxes assessed on such properties enumerated. considering the fact that the Constitution exempts petitioner from taxation RULING: Section 22 (3). The total amount was actually spent for the purpose intended.000. On March 3. Estate. ISSUE: Whether or not the assessment for donee’s gift tax was valid. the Director of the Bureau of Hospitals authorized the petitioners to establish and operate the "St. as contra distinguished from excise taxes. 7. It did not rest upon general ownership. Manifestly. BIR rec. On these shipments.). appurtenant thereto. the Missionary District received various shipments of materials. Estate. LLADOC v. what the Collector assessed was a donee's gift tax. sale or hire. RULING: The following requisites must concur in order that a taxpayer may claim exemption under the law (1) the imported articles must have been donated. but which was denied by the Commissioner on the ground that St. the respondent Commissioner of Internal Revenue issued an assessment for donee's gift tax against the Catholic Parish of Victorias. No. Tuazon. Lukeâ€™s Hospital are tax-exempt. A gift tax is not a property tax. 1961 FACTS: On July 24.R. as property taxes. Sta. supplies. exempts from taxation cemeteries. p. and (3) the articles so imported must have been donated for the use of the organization. of Bacolod City. Lukeâ€™s Hospital. 1965 FACTS: Sometime in 1957. donated P10. churches and parsonages or convents. 1952.L-15270 September 30.No. Inc. for the construction of a new Catholic Church in the locality. the Commissioner collected compensation tax. society or institution or for free distribution and not for barter. filed the donor's gift tax return. the imposition of which on property used exclusively for religious purposes. Fr. Catherine's Hospital". gift tax is not within the exempting provisions of the section just mentioned. In the present case.. Commissioner of Internal Revenue G.B. (2) the donee must be a duly incorporated or established international civic organization. religious or charitable society.B. ISSUE: Whether or not the shipments for St. and predecessor of herein petitioner. then parish priest of Victorias. does not constitute an impairment of the Constitution. The Missionary District filed claims for refund. it was an excise upon the use made of the properties. Art. but an excise tax imposed on the transfer of property by way of gift inter vivos. Inc. Lukeâ€™s Hospital was not a charitable institution and therefore was not exempt from taxes because it admits pay patients. 1958. of which petitioner was the priest. Negros Occidental. or institution for civic religious or charitable purposes. Under date of April 29.. As the law does not distinguish or qualify the enjoyment or the exemption (as the Secretary of Finance did in Department Order 18. The petitioner appealed to the Court of Tax Appeals. Petitioner lodged a protest to the assessment and requested the withdrawal thereof. located at 58 D. The protest and the motion for reconsideration presented to the Commissioner of Internal Revenue were denied. L-19201 June 16. and all lands. Thus.27 In 1957 to 1959. the shipments are tax exempt.
PROVINCIAL BOARD OF ILOCOS NORTE G. building and other improvements occupied by the St. building and other improvements comprising the hospital stating that the same was established for charitable and humanitarian purposes and not for commercial gain. alleging that the collection of this tax is illegal. represented by the Bishop of Nueva Segovia. possesses and is the owner of a parcel of land in the municipality of San Nicolas. The building involved in this case is principally used as a hospital. 344 [c] Administrative Code) refers to the home of the parties who presides over the church and who has to take care of himself in order to discharge his duties. and the fact that it admits pay-patients does not bar it from claiming that it is devoted exclusively to benevolent purposes. however. the petitioners sent a letter to the Quezon City Assessor requesting exemption from payment of real estate tax on the lot. BISHOP OF NUEVA SEGOVIA v. The petitioners appealed the assessment to the Quezon City Board of Assessment Appeals. On the north is an old cemetery with two of its walls still standing. on July 3. In other words. the exemption in favor of property used exclusively for charitable or educational purposes is "not limited to property actually indispensable" therefor. that the admission of pay-patients does not detract from the charitable character of a hospital. under protest. the Roman Catholic Apostolic Church. the Quezon City Assessor notified the petitioners that the aforesaid properties were reclassified from exempt to "taxable" and thus assessed for real property taxes. the convent and an adjacent lot used for a vegetable garden. Ilocos Norte.955 square meters. a charitable institution. From this decision. A motion for reconsideration thereof was denied. 1954 and 1955. 1925 the plaintiff paid. which formerly was the cemetery and on the portion where the lower stood. containing an area off 1.L-27588 December 31. Catherine's Hospital is. 1953. . in which there is a stable and a well for the use of the convent. but extends to facilities which are "incidental to and reasonably necessary for" the accomplishment of said purposes. aside from "out-charity patients" who come only for consultation. Within the purview of the Constitutional exemption from taxation. 1927 FACTS: The plaintiff. the exemption from real property taxes was granted effective the years 1953. and the funds derived from payments made by patients able to pay are devoted to the benevolent purposes of the institution. After an inspection of the premises in question and after a careful study of the case. in the sense. which affirmed the decision of the City Assessor. On the south side is a part of the churchyard. therefore. where rendering charity is its primary object. The lower court absolved the defendants from the complaint in regard to the lot adjoining convent and declared that the tax collected on the lot.RNo. if all its funds are devoted "exclusively to the maintenance of the institution" as a "public charity". Both parties appealed from this judgment. In the center is the remainder of the churchyard and the church. include not only the land actually occupied by the church. the mere fact that a profit has been made will not deprive the hospital of its benevolent character" Moreover. the base of which still be seen. the petitioners instituted the instant appeal. was illegal. As required by the defendants. Catherine Hospital are exempt from the real property tax. In therefore must. containing a total area of 8. The plaintiff filed this action for the recovery of the sum paid by to the defendants by way of land tax. which represent almost two-thirds (2/3) of the bed capacity of the hospital.624 square meters.28 about January 3. but also the adjacent ground destined to the ordinary incidental uses of man. it being admitted that the income derived from pay-patients is devoted to the improvement of the charity wards. ISSUE: Whether or not the lot. the land tax on the lot adjoining the convent and the lot which formerly was the cemetery with the portion where the tower stood. RULING: It is well settled. the St. all four sides of which face on public streets. ISSUE Whether or not the lots of petitioner are exempted from land tax RULING The exemption in favor of the convent in the payment of the land tax (sec. Subsequently. and a portion where formerly stood a tower.
the CTA issued this ruling in favor of the YMCA: ISSUE: Whether or not the YMCA is exempted from rental income derived from the lease of its properties RULING Petitioner argues that while the income received by the organizations enumerated in Section 27 (now Section 26) of the NIRC is.No.829. Commissioner of Internal Revenue v.80 from leasing out a portion of its premises to small shop owners. 1989. On June 7. without any special pronouncement as to costs. like restaurants and canteen operators.00 from parking fees collected from non-members. In 1980.29 The judgment appealed from is reversed in all it parts and it is held that both lots are exempt from land tax and the defendants are ordered to refund to plaintiff whatever was paid as such tax. 1998 FACTS: Private Respondent YMCA is a non-stock. both the land and the hospital building of the petitioner were assessed for real property taxes in the amount of P4. which conducts various programs and activities that are beneficial to the public. the CIR denied the claims of YMCA. private respondent earned. for deficiency income tax. LUNG CENTER OF THE PHILIPPINES vs.860 by the City Assessor of Quezon City but the former filed a Claim for Exemption from real property taxes with the City Assessor. ISSUE: Whether or not the petitioner’S real properties are exempted from realty tax exemptions. for canteen and small store spaces. Court of Appeals and YMCA G. On July 2. A big space at the ground floor is being leased to private parties.L-124043 October 14.QUEZON CITY and CONSTANTINO P. exempted from the payment of tax "in respect to income received by them as such. filed a letter dated October 8. 2004 FACTS: The petitioner. educational and charitable objectives. while a big portion on the right side. in the total amount of P415. those portions of its real property that are leased to private entities are not exempt from real property taxes as these are not actually.259. the exemption claimed by the YMCA is expressly disallowed by the very wording of the last paragraph of then Section 27 of the NIRC which mandates that the income of exempt organizations (such as the YMCA) from any of their properties. 1985. the YMCA filed a petition for review at the Court of Tax Appeals (CTA) on March 14. especially the young people.615. Private respondent formally protested the assessment and.R. and P44. as a rule. the commissioner of internal revenue (CIR) issued an assessment to private respondent. direct and exclusive use of the property for charitable purposes is the direct . In the instant case. or from any of their activities conducted for profit. In due course. a non-stock and non-profit entity is the registered owner of a parcel of land where erected in the middle of the aforesaid lot is a hospital known as the Lung Center of the Philippines. RULING: Even as we find that the petitioner is a charitable institution. No. 144104 June 29. real or personal. non-profit institution. real or personal. 1993. ROSAS G. among others. an income of P676. Contesting the denial of its protest. be subject to the tax imposed by the same Code. directly and exclusively used for charitable purposes. What is meant by actual. deficiency expanded withholding taxes on rentals and professional fees and deficiency withholding tax on wages. Almost one-half of the entire area on the left side of the building along Quezon Avenue is vacant and idle. 1984.554. is being leased for commercial purposes to a private enterprise known as the Elliptical Orchids and Garden Center. regardless of the disposition made of such income xxx" We agree with the commissioner. at the corner of Quezon Avenue and Elliptical Road. In reply. as a supplement to its basic protest.R." the exemption does not apply to income derived "xxx from any of their properties. predicated on its claim that it is a charitable institution. pursuant to its religious. and to medical or professional practitioners who use the same as their private clinics for their patients whom they charge for their professional services.01 including surcharge and interest.
R. U. ISSUES: Do Ordinances Nos. firms and corporations exercising the privilege of storing copra within the municipality’s territorial jurisdiction.R.01) on each gallon (128 fluid ounces. 23. levies and collects "from soft drinks producers and manufacturers a tai of one-sixteenth (1/16) of a centavo for every bottle of soft drink corked. O. 23 and 27 is denominated as "municipal production tax. No. is a consolidated corporation of Procter and Gamble Trading Company engaged in the manufacture of soap. A tax on the company’s products is different from the tax on the privilege of storing copra in a bodega situated within the territorial boundary of the municipality. 1823. the Municipal Council of Jagna enacted Ordinance 4. Leyte. 23 and 27 constitute double taxation and impose percentage or specific taxes? RULING: No. Under Section 2 of Presidential Decree No. Such fees imposed do not amount to double taxation. storage fees. In 1954. edible oil. the company paid the municipality. 2264-the Local Autonomy Act.) of volume capacity. 23 and 27. it was 1/16 of a centavo for every bottle corked. Bohol. RULING: The validity of the Ordinance must be upheld pursuant to the broad authority conferred upon municipalities by Commonwealth Act 472 (promulgated 1939). MUNICIPALITY OF TANAUAN." The tax imposed in both Ordinances Nos. 2264] declaring Ordinance Nos. Pepsi-Cola Bottling Company commenced a complaint before the Court of First Instance of Leyte for that court to declare Section 2 of Republic Act No. 27. that it be declared ultra vires and void.S. The difference between the two ordinances clearly lies in the tax rate of the soft drinks produced: in Ordinance No. L-24265 28 December 1979 FACTS: Petitioner Procter and Gamble Philippines Manufacturing Corp. where it stores copra purchased in the municipality and ships the same for its manufacturing and other operations.30 and immediate and actual application of the property itself to the purposes for which the charitable institution is organized. PEPSI-COLA BOTTLING COMPANY OF THE PHILIPPINES." On the other hand. 1962. 1976 FACTS: On February 14. null and void.' The CFI of Leyte rendered judgment "dismissing the complaint and upholding the constitutionality of [Section 2. which was approved on October 28. O. of the municipality of Tanauan. the petitioner does not enjoy any property tax exemption privileges for its real properties as well as the building constructed thereon. Republic Act No. the same should have been among the enumeration of tax exempt privileges under Section 2. ISSUE: Whether the Ordinance is void. 27. No. it is one centavo (P0. as it amounts to double taxation. series of 1962. the plaintiff-appellant. and if not. unconstitutional as an undue delegation of taxing authority as well as to declare Ordinances Nos. The intention of the Municipal .01) on each gallon (128 fluid ounces. Procter and Gamble Philippines Manufacturing Corp. THE MUNICIPAL MAYOR. M. imposing storage fees of all exportable copra deposite in the bodega within the jurisdiction of the municipality of Jagna. margarine and other similar products. vs. in Ordinance No. which was the prevailing law when the Ordinance is actually a municipal license tax or fee on persons. G.) of volume capacity. Municipality of Jagna G. No. it filed suit. No. when it should be taxed but once. allegedly under protest.S. Hence this petition. 23 and 27 legal. The petitioner contends Ordinances Nos. In 1964. L-31156 February 27. 23 and 27 constitute double taxation because these two ordinances cover the same subject matter and impose practically the same tax rate and impose percentage or specific taxes. M. ET AL. levies and collects "on soft drinks produced or manufactured within the territorial jurisdiction of this municipality a tax of ONE CENTAVO (P0. wherein it prayed that the Ordinance be declared inapplicable to it. From 1958 to 1963. vs. If the intentions were otherwise. 23. INC. the Ordinances does not constitute double taxation. Hence. LEYTE. For double taxation to exist. 1963. a claim for exemption from tax payments must be clearly shown and based on language in the law too plain to be mistaken. Petitioner maintains a “bodega” in the municipality of Jagna. U. the same property must be taxed twice.
000. and they must be the same kind or character of tax. respondent Hydro Pipes Philippines. a deed of exchange was executed between lessors Delfin and Pelagia Pacheco and defendant Delpher Trades Corporation whereby the former conveyed to the latter the leased property together with another parcel of land for 2. aggregately containing 43 apartments. It is a well-settled rule that a license tax may be levied upon a business or occupation although the land or property used in connection therewith is subject to property tax.. be declared "invalid for being beyond the powers of the Municipal Council of the City of Iloilo to enact. IAC G. No. with the conformity and consent of lessors Delfin Pacheco and Pelagia Pacheco. Province of Bulacan (now Metro Manila).R. a complaint for reconveyance of Lot. Government. L-26521 December 28. Inc. series of 1960 which taxes those involve in the business of renting apartment houses. 27 is thus clear: it was intended as a plain substitute for the prior Ordinance No. On January 3. ISSUE: Whether or not the "Deed of Exchange" of the properties executed by the Pachecos on the one hand and the Delpher Trades Corporation on the other was meant to be a contract of sale. The lower court's decision was affirmed on appeal by the Intermediate Appellate Court. against the City of Iloilo. January 26. while the other appellees and the same Remedios S. illegal because it imposes double taxation? RULING: There is no double taxation. assigned its rights and obligations under the contract of lease in favor of Hydro Pipes Philippines. On March 30.R. and operates as a repeal of the latter. 1974.1 the lower court rendered judgment declaring the ordinance illegal. vs.. 1960 the municipal board of Iloilo City. Inc. The Court of First Instance of Bulacan ruled in favor of the plaintiff. praying that Ordinance 11. were the owners of 27. 1966. 23.CITY OF ILOILO G. both taxes must be imposed on the same property or subject-matter. during the same taxing period. it had acquired the authority or power to enact an ordinance similar to that previously declared by this Court as ultra vires (taxing tenement houses). within the same jurisdiction or taxing district. that with the passage of Republic Act 2264. In order to constitute double taxation in the objectionable or prohibited sense the same property must be taxed twice when it should be taxed but once. believing. . ISSUE: Is Ordinance 11. No.500 shares of stock of defendant corporation with a total value of P1. Villanueva are owners of five tenement houses. 1095 in its favor.00. and unconstitutional for being violative of the rule as to uniformity of taxation and for depriving said plaintiffs of the equal protection clause of the Constitution. or taxing authority. of the City of Iloilo. enacted Ordinance 11. No. Delpher Trades Corporation vs. Inc. the appellees Eusebio Villanueva and Remedios S. 1964. by the same State. the same property and providing that during the existence or after the term of this lease the lessor should he decide to sell the property leased shall first offer the same to the lessee and the letter has the priority to buy under similar conditions. On August 3. respectively. Villanueva are owners of ten apartments. otherwise known as the Local Autonomy Act." and that the City be ordered to refund the amounts collected from them under the said ordinance. EUSEBIO VILLANUEVA." It has been shown that a real estate tax and the tenement tax imposed by the ordinance. 1968 FACTS: On January 15. series of 1960. 1988. are not of the same kind or character. series of 1960. 1976.31 Council of Tanauan in enacting Ordinance No. ET AL. although imposed by the same taxing authority. for the same purpose. On July 11.500. FACTS: Delfin Pacheco and his sister. L-69259. On the ground that it was not given the first option to buy the property. in the aforementioned court. 1962 and April 24. and an amended complaint. obviously. the plaintiffs-appellees filed a complaint. even without words to that effect.169 square meters of real estate in the Municipality of Polo (now Valenzuela). The said co-owners leased to Construction Components International Inc. Pelagia Pacheco. In Iloilo City. lessee Construction Components International.
FACTS: In 1952 the Collector of Internal Revenue assessed against the petitioner deficiency sales taxes and surcharges for the year 1949 and the first four months of 1950 in the aggregate sum of P89. the Pachecos became stockholders of the corporation by subscription. to sell the Cibeles Building. Vs CIR G. Toda G. The arrangement resorted to does not by itself alone justify the penalty imposed. The assessment for the deficiency was made against the petitioner. in turn. The records do not point to anything wrong or objectionable about this "estate planning" scheme resorted to by the Pachecos. and that the petitioner was not in a financial position to make the importations in question. Toda purportedly sold the property for P100 million to Rafael A. Inc. On 27 January 1995." Heng Tong Textiles Co. ISSUE: Whether or not petitioner was guilty of fraud so as to warrant the imposition of a penalty of 50% on the deficiency. Inc. "The legal right of a taxpayer to decrease the amount of what otherwise could be his taxes or altogether avoid them. whence the case was transferred to the Court of Tax Appeals upon its organization in 1954. Jr. Consequently. who. It is a settled principle that a taxpayer may diminish his liability by any means which the law permits.. CIC authorized Benigno P.32 RULING: We rule for the petitioners. the Estate of Benigno P. No. in exchange for their properties. In the case at bar. These circumstances show nothing but a private arrangement between the petitioner and Pan-Asiatic Commercial. Hence. 253. The assessment was appealed to the Board of Tax Appeals.. The Commissioner dismissed the protest.Asiatic Commercial Co. No. An attempt to minimize one's tax does not necessarily constitute fraud. Inc. received a Notice of Assessment from the CIR for deficiency income tax for the year 1989. On 29 March 1994. the Pachecos acquired 2. the BIR sent an assessment notice and demand letter to the CIC for deficiency income tax for the year 1989.R. formed or to be formed. (RMI) for P200 million. this recourse to the SC. On 15 February 1996. President and owner of 99. represented by special co-administrators Lorna Kapunan and Mario Luza Bautista. the corresponding advance sales tax under section 183(b) of the Internal Revenue Code. In its decision the CTA held that the Commissioner failed to prove that CIC committed fraud to deprive the government of the taxes due it. "The essence of the stock subscription is an agreement to take and pay for original unissued shares of a corporation. Commissioner of Internal Revenues vs.. Hence. 2004 FACTS: On 2 March 1989. speaks of willful neglect to file the return or willful making of a false or fraudulent return. The Estate thereafter filed a letter of protest. September 14.. the CTA declared that the Estate is not liable for deficiency of income tax. cannot be doubted. by means which the law permits. RULING: Petitioner excepts to the conclusion of the Court of Tax Appeals and avers that the importation papers were placed in the name of the petitioner only for purposes of accommodation. On 30 August 1989. L-19737. Heng Tong Textiles Co. The deficiency taxes in question were assessed on importations of textiles from abroad. as amended by Republic Act No. of the Internal Revenue Code.123.58. The Commissioner filed a petition for review with the Court of Appeals.. paragraph 3. It ruled that even assuming that a pre-conceived scheme was adopted by CIC. What they really did was to invest their properties and change the nature of their ownership from unincorporated to incorporated form by organizing Delpher Trades Corporation to take control of their properties and at the same time save on inheritance taxes. 1968. The goods were withdrawn from Customs by Pan.500 original unissued no par value shares of stocks of the Delpher Trades Corporation. the Estate filed a petition for review with the CTA. in the name of the petitioner. on the ground that it was the real importer of the goods and did not pay the taxes due on the basis of the gross selling prices thereof. Three and a half years later Toda died. August 26. The Court of Appeals affirmed the decision of the CTA. Jr. 147188. that is. Toda. . Altonaga.. 1952." In effect. and not tax evasion. the same constituted mere tax avoidance.R. Toda. sold the same property on the same day to Royal Match Inc. which in no way affected the role of the petitioner as the importer. Section 183(a). which paid. the Delpher Trades Corporation is a business conduit of the Pachecos. to introduce the petitioner to textile suppliers abroad.991% of its outstanding capital stock. and there was affirmed in its decision dated February 28.
this petition for review. RULING: Tax evasion connotes the integration of three factors: (1) the end to be achieved. 1983. The sale to him was merely a tax ploy. (2) an accompanying state of mind which is described as being “evil.R. a sham. i. the petitioner the payment of P12. Hence. CIR G. Such scheme is tainted with fraud. is in the nature of a tax exemption. Said oil companies paid the specific taxes imposed on the sale of said products. No. .186 of the National Internal Revenue Code. 1998. “[a] claim of exemption from tax payments must be clearly shown and based on language in the law too plain to be mistaken. July 23. refined and manufactured mineral oils as well as motor and diesel fuels.. and then from Altonaga to RMI cannot be considered a legitimate tax planning. from CIC to Altonaga.825.923. ISSUE: Whether or not petitioner is entitled to the refund of 25% of the amount of specific taxes it actually paid on various refined and manufactured mineral oils.” “willfull. from various oil companies. on the other hand.. RA 1435. representing 25% of the specific taxes actually paid on the above-mentioned fuels and oils that were used by petitioner in its operations as forest concessionaire. In regard to the other purchases. All these factors are present in the instant case. PHILIPPINE ACETYLENE CO. pursuant to the Sec. 117359.. Altonaga’s sole purpose of acquiring and transferring title of the subject properties on the same day was to create a tax shelter.R.e. on account of which the respondent Commission of Internal Revenue assessed against. 1967 FACTS: The petitioner is a corporation engaged in the manufacture and sale of oxygen and acetylene gases. The sales to the NPC amounted to P145. 1982 petitioner purchased. L-19707 August 17. Insisting that the basis for computing the refund should be the increased rates prescribed by Sections 153 and 156 of the NIRC.” in “bad faith. and without business purpose and economic substance. but it computed the refund based on rates deemed paid under RA 1435. FACTS: From July 1. The CTA rendered its decision finding petitioner entitled to a partial refund of specific taxes in the reduced amount of P2. Hence.60 as deficiency sales tax and surcharge. No. COMMISSIONER OF INTERNAL REVENUE and COURT OF TAX APPEALS G. once the tax is unquestionably imposed.15. The Court of Appeals affirmed the CTA Decision. the execution of the two sales was calculated to mislead the BIR with the end in view of reducing the consequent income tax liability. and (3) a course of action or failure of action which is unlawful.866. it must be stressed that petitioner is entitled to a partial refund under Section 5 of RA 1435. the payment of less than that known by the taxpayer to be legally due. Being included in the purchase price of the oil products.” Since the partial refund authorized under Section 5. On January 20. 1980 to January 31. petitioner filed at the CTA a petition for review. The scheme resorted to by CIC in making it appear that there were two sales of the subject properties.”or “deliberate and not accidental”.910. Davao Gulf Lumber Corporation vs. petitioner’s claim of refund on the basis of the specific taxes it actually paid must expressly be granted in a statute stated in a language too clear to be mistaken. it must be construed strictissimi juris against the grantee.e. It made various sales of its products to the National Power Corporation and to the Voice of America an agency of the United States Government.683. INC. and not on the higher rates actually paid by petitioner under the NIRC. Doubtless.70. petitioner elevated the matter to the Court of Appeals. which was enacted to provide means for increasing the Highway Special Fund. RULING: At the outset.33 ISSUE: Whether or not this is a case of tax evasion or tax avoidance. or the non-payment of tax when it is shown that a tax is due. while those to the VOA amounted to P1. i. the specific taxes paid by the oil companies were eventually passed on to the petitioner in this case. A tax cannot be imposed unless it is supported by the clear and express language of a statute.11. vs. Petitioner filed before Respondent CIR a claim for refund in the amount of P120. and demanded from. the CTA granted the claim.
however. as well as unremitted collections of the above tax covering the years 1986. maintenance.R. The Supreme Court held that Ateneo de Manila University is not subject to the contractor’s tax. upon private respondent’s request for reinvestigation. One such auxiliary unit is the Institute of Philippine Culture (IPC). 115349 April 18. and advising it that all its claims for reimbursements from the OPSF shall be held in abeyance pending such remittance. COA . ISSUE: Is Ateneo de Manila University. 1997 FACTS: Ateneo de Manila is an educational institution with auxiliary units and branches all over the Philippines. v. Accordingly its levy on the sales made to tax-exempt entities like the NPC is permissible. private respondent received from petitioner Commissioner of Internal Revenue a demand letter dated June 3. Commission on Audit G. Only sales made "for exclusive use in the construction. Unsatisfied. are not free from the payment of the tax. (CPI) to remit to the Oil Price Stabilization Fund (OPSF) its collection of the additional tax on petroleum products pursuant to P. subject to the three percent contractor's tax levied by then Section 205 of the National Internal Revenue Code? RULING: No. Courts of Tax Appeal. which has no legal personality separate and distinct from that of private respondent. The Court. 1992 FACTS: Respondent Commission on Audit (COA) directed petitioner Caltex Philippines. with interests and surcharges. Inc. Inc.R. such as the VOA. reduced to P46. assessing private respondent the sum of P174.34 The petitioner denied liability for the payment of the tax on the ground that both the NPC and the VOA are exempt from taxation. On July 8.043. ISSUE: Is the petitioner exempt from paying tax on sales it made to the 1) NPC and the 2) VOA because both entities are exempt from taxation? RULING: 1) No. They may however fall as gifts or donations which are tax-exempt" as shown by private respondent's compliance with the requirement of Section 123 of the National Internal Revenue Code providing for the exemption of such gifts to an educational institution. Caltex Philippines. No. SC hold that the tax imposed by section 186 of the National Internal Revenue Code is a tax on the manufacturer or producer and not a tax on the purchaser except probably in a very remote and inconsequential sense. No. 2) No. private foundations and government agencies. It explained that to fall under its coverage. it accepts sponsorships for its research activities from international organizations. are exempt under Article V from taxation. Moreover. et al G. the Court of Tax Appeals accurately and correctly declared that the “funds received by the Ateneo de Manila University are technically not a fee.97 for alleged deficiency contractor's tax the value of which was later on. Occasionally. 1983.516. Private respondent filed in the Court of Tax Appeals a petition for review of the said letter-decision of the petitioner which rendered a decision in its favor and ordered the tax assessment cancelled.41. 1956. or even to the quartermaster but for a different purpose. 1983. 92585 May 8. through its auxiliary unit or branch — the Institute of Philippine Culture — performing the work of an independent contractor and." in a word. Sales of goods to any other party even if it be an agency of the United States. 1987 and 1988. found no evidence that Ateneo's Institute of Philippine Culture ever sold its services for a fee to anyone or was ever engaged in a business apart from and independently of the academic purposes of the university.D. The IPC is a Philippine unit engaged in social science studies of Philippine society and culture. operation or defense of the bases. Commissioner of Internal Revenue vs. only sales to the quartermaster. thus. Section 205 of the National Internal Revenue Code requires that the independent contractor be engaged in the business of selling its services.
spare parts and equipment imported by it and used in the repair and maintenance of its tugboats are exempt from compensating tax. constitute a single vessel. No. 1988 FACTS: Herein petitioner imported various engine parts and other equipment for which it paid. a concern which is within the police power of the State to address. RULING: No. NATIONAL DEVELOPMENT COMPANY vs. The Supreme Court explained that under the definition of tugboat. Its motion for reconsideration of the eventual decision of the COA on the matter having been denied. CPI imputes that respondent commission erred in preventing the former from exercising the right to offset its remittances against the reimbursement vis-à-vis the OPSF. demand. rivers and canals. it concludes that the engines. No. Unable to secure a tax refund from the Commissioner of Internal Revenue. no plausible pretense being entertained to justify non-compliance. No. it filed a Petition for Review with the Court of Tax Appeals in order to be granted a refund. Accordingly. LUZON STEVEDORING CORPORATION vs. ISSUE: Whether or not tugboats are included in the term “cargo vessels” which are exempted from compensating tax under article 190 of the National Internal Revenue Code. 1987 FACTS: National Development Company (NDC) is a domestic corporation with principal offices in Manila. COMMISSIONER OF INTERNAL REVENUE G. It is settled that a taxpayer may not offset taxes due from claims that he may have against the Government. tugboats are not included in the term “cargo vessels” which are exempted from compensating tax under article 190 of the National Internal Revenue Code. COURT OF TAX APPEALS and the HONORABLE COMMISSIONER OF INTERNAL REVENUE G. All that has to be done is to apply it in every case that falls within its terms. It entered into contracts in Tokyo with several Japanese shipbuilding companies for the construction of twelve ocean-going vessels. On the other hand. contract or judgment as is allowed to be set off. ISSUE: Whether or not the amounts due to the OPSF from petitioner may be offset against the latter’s outstanding claims from said fund? RULING: No. it is a cardinal principle of statutory construction that where a provision of law speaks categorically. the need for interpretation is obviated. The Court further ruled that taxation is no longer envisioned as a measure merely to raise revenue to support the existence of the Government. under protest. Taxes cannot be the subject of compensation because the Government and the taxpayer are not mutually creditors and debtors of each other and a claim for taxes is not such a debt. Taxes may be levied for a regulatory purpose such as to provide means for the rehabilitation and stabilization of a threatened industry which is affected with public interest.R. the tugboat and a barge loaded with cargoes with the former towing the latter for loading and unloading of a vessel in part.R. respondent contends that "tugboats" are not "Cargo vessel" because they are neither designed nor used for carrying and/or transporting persons or goods by themselves but are mainly employed for towing and pulling purposes. Thus.” Which clearly do not fall under the categories of passenger and/or cargo vessels. . L-30232 July 29.35 further directed petitioner oil company to desist from further offsetting the taxes collected against outstanding claims for 1989 and subsequent periods. Petitioner contends that tugboats are included in the term “cargo vessels” which are exemped from compensating tax under article 190 of the National Internal Revenue Code. He argues that in legal contemplation. “a diesel or steam power vessel designed primarily for moving large ships to and from piers for towing barges and lighters in harbors. the assessed compensating tax. L-53961 June 30. No.
the NDC remitted to the shipbuilders in Tokyo the interest on the balance of the purchase price. It was the income of the Japanese shipbuilders and not the Republic of the Philippines that was subject to the tax the NDC did not withhold. 484 of the Philippine Commission of 1902 was incorporated in the municipal franchise granted because no admissible copy of Ordinance of the said Board was ever presented in evidence by the petitioner. Fourteen promissory notes were signed for the balance by the NDC and. guaranteed by the Republic of the Philippines. ERNESTO M. Furthermore there is no "plain and unambiguous terms" declaring petitioner MERALCO exempt from paying a compensating tax on its imports of poles. The Collector of Customs. Any doubt concerning this question must be resolved in favor of the taxing power. and insulators. transformers. The last clause of paragraph 9 merely reaffirms. levied and collected a compensating tax for the said importation. The court stated that MERALCO's claim for exemption from the payment of the compensating tax is not clear or expressed. MANILA ELECTRIC COMPANY vs. the imposition of the deficiency taxes on the NDC is a penalty for its failure to withhold the same from the Japanese shipbuilders. remaining payments and the interests thereon were remitted in due time by the NDC to Tokyo. et al. 88291 May 31. No. as Deputy of Commissioner of Internal Revenue. No tax was withheld. Swift and later assumed and taken over by petitioner to construct.. G. ISSUE: Whether petitioner should not be held liable due to the undertaking signed by the Secretary of Finance and because the interest payments were obligations of the Republic of the Philippines and that the promissory notes of the NDC were government securities exempt from taxation under Section 29(b) of the Tax Code as alleged by petitioner. No. JR. Tax exemptions cannot be merely implied but must be categorically and unmistakably expressed. One who claims to be exempt from the payment of a particular tax must do so under clear and unmistakable terms found in the statute. and power system in the City of Manila and its suburbs. as required by the shipbuilders. No. Hence. and insulators for use in the operation of its business. Part Two of Act No. MACEDA vs. and operate an electric light. 9. In two separate occasions. this appeal. RULING: No. wares. therefore. CATALINO MACARAIG.36 Initial payments were made in cash and through irrevocable letters of credit. Commissioner of Internal Revenue G. ISSUE: Whether or not petitioner is exempted to pay compensating tax for its purchase or receipt of commodities. the engaging in an occupation. Tax exemptions are strictly construed against the taxpayer. After the vessels were delivered. heat. transformers. 88291 June 8. 1991 and G. There is nothing in Section 29(b) of the Tax Code exempting the interests from taxes. what has been expressed in the first sentence that petitioner is exempted from payment of property tax.R. A compensating tax is not a property tax but an excise tax imposed on the performance of an act. or the enjoyment of a privilege. the Court is not aware whether or not the tax exemption provisions contained in Par. 1975 FACTS: MERALCO is the holder of a franchise by the Municipal Board of the City of Manila to Mr. Furthermore in the said undertaking. In the case at bar. The petitioner argues that the Japanese shipbuilders were not subject to tax under the Tax Code. L-29987s and L-23847 October 22. Petitioner should be held liable. Petitioner contends that the interest payments were obligations of the Republic of the Philippines and that the promissory notes of the NDC were government securities exempt from taxation under Section 29(b) of the Tax Code. maintain. No. Nos. goods. petitioner has not established a clear waiver therein of the right to tax interests. or merchandise outside the Philippines. No. wires.R. Charles M. It is not the NDC that is being taxed. In effect. 1993 FACTS: . The Commissioner of Internal Revenue held that the interest remitted to the Japanese shipbuilders on the unpaid balance of the purchase price of the vessels acquired by petitioner is subject to income tax under the Tax Code. Thereafter. RULING: No. MERALCO imported copper wires.R. HON. MERALCO claims for a refund alleging that it was exempted from such compensating tax based on paragraph 9 of its franchise.
therefore. cities and municipalities "directly or indirectly. It succinctly exempts NPC from "all forms of taxes. The Commissioner of . the FIRB issued several Resolutions in different occasions restoring the tax and duty exemption privileges of NPC indefinite period due to the restoration of the tax exemption privileges of NPC. In Aid of Legislation." Thereafter. Subsequently.R. Also in G. the Commissioner of Internal Revenue sent a letter of demand to Gotamco demanding payment of for the 3% contractor's tax plus surcharges on the gross receipts it received from the WHO in the construction of the latter's building.55 Billion From the Department of Finance.) Inc.D. 1951. No. the Secretary of Justice. imposts. fees. However P. BIR Commissioner Tan. A bidding was held for the building construction. JOHN GOTAMCO & SONS. 88291 the Supreme Court ruled in favor of exempting NPC to the said taxes. as member of the Philippine Senate introduced as Resolution Directing the Senate Blue Ribbon Committee. The WHO informed the bidders that the building to be constructed belonged to an international organization exempted from the payment of all fees. unconstitutional. charges and restrictions of the Republic of the Philippines. 120 created the NPC as a public corporation to undertake the development of hydraulic power and the production of power from other sources. However. In 1986. No. licenses. No. 88291 the Supreme Court ruled in favor of respondents. Pilipinas Shell and Petrophil. Inc. No. duties. The point is that while these levies were in fact paid to the government. regardless of the period of delivery. 938 amended the tax exemption of NPC by simplifying the same law in general terms. its assets. as of our most recent information. partially or totally. fees. states that all deliveries of petroleum products to NPC are tax exempt. the exemption withdrawn. income and other properties shall be: (a) exempt from all direct and indirect taxes. its provinces. 1987. as well as costs and service fees including filing fees. that "the Organization. No. supersedeas bonds. Which Were Made Possible By Their Availing of the Non-Existing Exemption of National Power Corporation (NPC) from Indirect Taxes.55 B in claims represent amounts for which the oil suppliers and NPC are "out-of-pocket. As a consequence. In G. upon recommendation of the FIRB to restore. NPC applied with the BIR for a "refund of Specific Taxes paid on petroleum products.” The WHO decided to construct a building to house its own offices. particularly Caltex (Phils." the NPC electric power rates did not carry the taxes and duties paid on the fuel oil it used.R. Resulting Recently in Their Obtaining A Tax Refund Totalling P1. should be exempted from any taxes in connection with the construction of the World Health Organization office building because such can be considered as an indirect tax to WHO. However. in any court or administrative proceedings. No. and that therefore their bids "must take this into account and should not include items for such taxes. and THE COURT OF TAX APPEALS G. BIR ruled that the exemption privilege enjoyed by NPC under said section covers only taxes for which it is directly liable and not on taxes which are only shifted to it. Several laws were enacted granting NPC tax and duty exemption privileges such as taxes. imposts. COMMISSIONER OF INTERNAL REVENUE vs. Jr.37 Commonwealth Act No. L-31092 February 27. to conduct a Formal and Extensive Inquiry into the Reported Massive Tax Manipulations and Evasions by Oil Companies. respondents Finance Secretary and the Executive Secretary declared that "NPC under the provisions of its Revised Charter retains its exemption from duties and taxes imposed on the petroleum products purchased locally and used for the generation of electricity. The WHO issued a certification that the bid of John Gotamco & Sons. some P1. as well as the other United Nations offices stationed in Manila. WHO. no part thereof was recovered from the sale of electricity produced. Opinion opined that "the power conferred upon Fiscal Incentives Review Board constitute undue delegation of legislative power and. 1987 FACTS: The World Health Organization (WHO for short) is an international organization which has a regional office in Manila. and taxes. An agreement was entered into between the Republic of the Philippines and the said Organization on July 22..Thereafter. Section 11 of that Agreement provides. No. ISSUE: Whether or not respondent NPC is legally entitled to the questioned tax and duty refunds. (Gotamco for short). There would have to be specific order to the Bureaus concerned for the resumption of the processing of these claims. 1931 withdrew all tax exemption privileges granted in favor of government-owned or controlled corporations including their subsidiaries but empowered the President and/or the then Minister of Finance. inter alia. RULING: Yes. the construction contract was awarded to John Gotamco & Sons. NPC under the provisions of its Revised Charter retains its exemption from duties and taxes imposed on the petroleum products purchased locally and used for the generation of electricity. appeal bonds. Thereafter investigations were made for the refund of the tax payments of the NPC which includes Millions of pesos Tax refund. INC. licenses and other payments to Government agencies. Presidential Decree No. Petitioner. duties." on all petroleum products used by NPC in its operation. On August 6.R.
Commissioner of Internal Revenue G. finding merit in YMCA’s motion for reconsideration . July 23. it is intended or desired. 1995 granting said motion of YMCA by affirming the CTA’s decision in toto. the appellate court reversed itself and promulgated the first assessed resolution dated September 28. pursuant to its religious. the latter can shift its burden on the WHO. . the Court of Appeals denied the Commissioner’s motion for reconsideration. real or personal. Commissioner of Internal Revenue vs. 1985. The Commissioner elevated the case to the Court of Appeals which initially decided in its favor by reinstating the assessment of deficiency fixed. should pay them. which conducts various programs and activities that are beneficial to the public. but a tax that is primarily due from the contractor. filed a letter dated October 8. 1987. While it is true that the contractor's tax is payable by the contractor. 1996. On February 29. the Court is duty-bound to abide strictly by its literal meaning and to refrain from resorting to any convoluted attempt at construction. and thus not covered by the tax exemption agreement ISSUE: Whether or not the said 3% contractor’s tax imposed upon petitioner is covered by the “direct and indirect tax exemption” granted to WHO by the government. Nitafan vs. Thus. Court of Appeals and YMCA G. No. for deficiency income tax. However in the last analysis it is the owner of the building that shoulders the burden of the tax because the same is shifted by the contractor to the owner as a matter of self-preservation. ISSUE: Whether or not the rental income of YMCA on its real estate is subject to tax. it is an indirect tax against the WHO because. as a supplement to its basic protest. contract of Appeals which initially decided in its favor by reinstating the assessment of deficiency fixed. Private respondent formally protested the assessment and. However.R. No. the Commissioner denied the claims of YMCA. in the total amount of P415. contractor’s and income taxes. L-78780. The CTA ruled in favor of the YMCA. 1987 FACTS: The Chief Justice has previously issued a directive to the Fiscal Management and Budget Office to continue the deduction of withholding taxes from salaries of the Justices of the Supreme Court and other members of the judiciary. although it is payable by the petitioner. In reply. This was affirmed by the Supreme Court en banc on December 4.615. especially the young people. October 14. educational and charitable objectives. petitioner cannot be held liable for such contractor’s tax. The Supreme Court explained that direct taxes are those that are demanded from the very person who. RULING: The Court ruled that the exemption claimed by the YMCA is expressly disallowed by the very wording of the last paragraph of then Section 27 of the NIRC which mandates that the income of exempt organizations (such as the YMCA) from any of their properties. non-profit institution. 1998 FACTS: Private Respondent YMCA is a non-stock.38 Internal Revenue contends that the 3% contractor's tax is not a direct nor an indirect tax on the WHO. Hence. be subject to the tax imposed by the same Code. The Commissioner of Internal Revenue issued an assessment to private respondent.01 including surcharge and interest. Because the last paragraph of said section unequivocally subjects to tax the rent income of the YMCA from its real property. The 3% contractor’s tax imposed upon petitioner is covered by the “direct and indirect tax exemption” granted to WHO. YMCA filed a petition for review at the Court of Tax Appeals. deficiency expanded withholding taxes on rentals and professional fees and deficiency withholding tax on wages. 124043. RULING: Yes.R. while indirect taxes are those that are demanded in the first instance from one person in the expectation and intention that he can shift the burden to someone else.
No. The case was remanded to the lower court for a trial on merits. No. Commissioner of Internal Revenue vs. RULING: The 1935 and the 1973 Constitutions differ in language as to the exemption of religious property from taxes as they should not only be “exclusively” but also “actually” and “directly” used for religious purposes. so that if granted. Article VII of the 1973 Constitution. Article VIII of the 1987 Constitution. The Supreme Court granted the petition. Hernando G. 1990 FACTS: Mitsubishi Metal Corporation. and ordered the respondent judge. entered into a Loan and Sale Contract with Atlas Consolidated Mining and Development Coporation whereby Mitsubishi lent $20.R. buildings. their salary shall not be decreased.000. There must be proof of the actual and direct use of the lands. a Japanese corporation licensed to do business in the Philippines. They contend that this constitutes diminution of salary contrary to Section 10. ISSUE: Whether or not the salaries of judges are subject to tax. 1981 FACTS: The provincial assessor made a tax assessment on the properties of the Roman Catholic Bishop of Bangued. from making any deduction of withholding taxes from their salaries. The bishop claims tax exemption from real estate tax based on the provisions of Section 17. respectively. which provides that the salary of the members of the Supreme Court and judges of lower courts shall be fixed by law and that “during their continuance in office. to hear the case on merit. even if it had dealt with the matter administratively. L-49336. set aside the June 19. particularly the installation of a new concentrator for copper . It was followed by a summary judgment granting the exemption without hearing the side of the petitioner. or whoever is acting on his behalf. ISSUE: Whether or not the properties of the Bishop of Bangued are tax-exempt. all with stations in Manila. the deliberations of the 1986 Constitutional Commission negate the contention that the intent of the framers is to revert to the original concept of “non-diminution” of salaries of judicial officers. They seek to prohibit and/or perpetually enjoin the Commissioner of Internal Revenue and the Financial Officer of the Supreme Court. of the RTC. which should have compelled the judge to accord a hearing to the province rather than deciding the case immediately in favor of the Bishop. paragraph 3. the judge accepted at its face the allegation of the Bishop instead of demonstrating that there is compliance with the constitutional provision that allows an exemption. 1978 resolution. National Capital Judicial Region. Mitsubishi Metal Corporation G. Herein. RULING: The salaries of members of the Judiciary are subject to the general income tax applied to all taxpayers. Justices and judges are not only the citizens whose income has been reduced in accepting service in government and yet subject to income tax. and improvements for religious (or charitable) purposes to be exempted from taxation. the Court deemed it best to settle the issue through judicial pronouncement.” With the filing of the petition. August 31. Judge Hernando of the CFI Abra presided over the case.000 for the expansion of the latter’s mines. 54908 and G. The petitioner province filed a motion to dismiss.R. No. 19 and 53. The Supreme Court dismissed the petition for prohibition. it must be strictly construed against the taxpayer. Province of Abra vs. which was denied. based on lack of jurisdiction. David do not apply anymore. Hence. 80041. without costs. Exemption from taxation is not favored and is never presumed. the doctrine in Perfecto v.R. Such is true also of Cabinet members and all other employees. Although such intent was somehow and inadvertently not clearly set forth in the final text of the 1987 Constitution. Meer and Endencia vs. He filed an action for declaratory relief. January 22. There was an allegation of lack of jurisdiction and of lack of cause of action.39 Petitioners are the duly appointed and qualified Judges presiding over Branches 52.
On March 5. It is the WHO that will pay the tax indirectly through the contractor and it certainly cannot be said that 'this tax has no bearing upon the World Health Organization. representing the 3% contractor's tax plus surcharges on the gross receipts it received from the WHO in the construction of the latter's building.595. not on the owner of the building. Inc. it is an indirect tax. with the corresponding 15% tax thereon withheld and remitted to the Government as required by the Tax Code. After inviting bids. petitioner brought the case to the Supreme Court. And it is an indirect tax on the WHO because. a Japanese Government financing institution which financed the loan.40. Inc. Taxation is the rule and exemption is the exception. That claim. undertook to sell to Mitsubishi all of the copper concentrates produced by said machine for 15 years. RULING: No. the Supreme Court affirmed the appealed decision.79. should pay the 3% contractor's tax under Section 191 of the National Internal Revenue Code. it is intended or desired. The burden of proof rests upon the party claiming exemption to prove that it is in fact covered by the exemption so claimed. ISSUE: Whether or not John Gotamco & Sons. Atlas. in favor of Gotamco and reversed the Commissioner's decision. is not required to pay the 3% contractor’s tax under the National Internal Revenue Code. the latter gave interest payments for 1974 and 1975 amounting to P13. the latter can shift its burden on the WHO.01 representing the tax withheld on the interest payment. Commissioner of Internal Revenue vs Gotamco and Sons. Mitsubishi then filed a petition contending that Mitsubishi was a mere agent of Eximbank.970. Accordingly. the Commissioner of Internal Revenue sent a letter of demand to Gotamco demanding payment of P16. When the WHO decided to construct a building to house its own offices in Manila. 1987 FACTS: The World Health Organization (WHO) entered into a Host Agreement with the Republic of the Philippines which provides that "the Organization. it entered into a further agreement with the Government that it may import into the country materials and fixtures required for the construction free from all duties and taxes. Thus. Inc. G. while indirect taxes are those that are demanded in the first instance from one person in the expectation and intention that he can shift the burden to someone else. Hence. Section 32 [B][a]. for the stipulated price of P370. which onus private respondents have failed to discharge. Inc. ISSUE: taxation Whether or not the interest income from the loans extended to Atlas by Mitsubishi is excludible from gross income and thus exempt from withholding tax. not having been acted upon by the BIR. its assets. which later executed a waiver in favor of Atlas.R. income and other properties shall be exempt from all direct and indirect taxes.143. L-31092 February 27. finding no reversible error committed by the respondent Court of Tax Appeals. Since this tax has no bearing upon the WHO. which after trial rendered a decision.000. As agreed upon between Mitsubishi and Atlas. pragmatic analysis” alone without substantial supportive evidence. The contractor's tax is of course payable by the contractor but in the last analysis it is the owner of the building that shoulders the burden of the tax because the same is shifted by the contractor to the owner as a matter of self-preservation.40 production. For this purpose.00. in turn. The taxability of a party cannot be blandly glossed over on the basis of a supposed “broad. 1997 NIRC).966. The CTA granted the tax credit in favor of Mitsubishi. 1976. Such governmental status of Eximbank was the basis of Mitsubishi’s claim for exemption from paying tax on the interest payments pursuant to Section 29 (b) (8) (A) (now. The Supreme Court held that Respondent John Gotamco and Sons. it cannot be deemed an indirect taxation upon it. lest governmental operations suffer due to diminution of much needed funds.972. . Thereafter.Import Bank of Japan (Eximbank) and a consortium of Japanese banks. It explained that direct taxes are those that are demanded from the very person who. the contract was awarded to respondent John Gotamco & Sons. Petitioner maintains the position that the contractor's tax is a tax due primarily and directly on the contractor. Mitsubishi applied for and was granted a loan by the Export. RULING: It is settled that laws granting exemption from tax are construed strictissimi juris against the taxpayer and liberally in favor of the taxing power. should pay them. No. Mitsubishi filed a claim for tax credit of the sum of P1. although it is payable by the petitioner. Respondent Gotamco appealed the Commissioner's decision to the Court of Tax Appeals.
No. 1930 FACTS: Petitioner Thirty-first Infantry Post Exchange is an agency within the United States Army. Court of Appeals G. denied the protest and claim for tax refund of petitioner. 2001 FACTS: . Inc. RULING: No. Nevertheless.985. Respondent City of Davao withheld action on the application pending payment by petitioner of the local franchise tax in the amount of P3. and their families.R. vs. Posadas G. The effect of the demand and collection of taxes was to increase the cost thereof to the plaintiff Exchange. Congress intended it to operate as a blanket tax exemption to all telecommunications entities. Contending that the merchandises are exempted from taxes. (PLDT) applied for a Mayor's Permit to operate its Davao Metro Exchange. All of the goods sold to and purchased by the petitioner are intended for resale to and are in fact resold to the officers. 143867 August 22. privilege. No. Inc.72 for the first to the fourth quarter of 1999. in approving §23 of R. 33403 September 4. No. The Supreme Court ruled that merchandise is not exempted from taxes when it is sold to the Army of the United States for resale. It explained that the acceptance of petitioner's theory would result in absurd consequences. City of Davao G. under the control of the officers of the Army. exemption. Jr. goods. 122605 April 30. have collected from the merchants who made the sales of the commodities. Sea-Land Services. Juan Posadas.681. the Court is not inclined to believe that goods sold to the soldiers and sailors of the Army and Navy. ISSUE: Whether or not merchandise is relieved from said tax when it is sold to the Army or Navy of the United States for resale to individuals by means or through the post exchanges or ship's stores RULING: No. wares. No. ISSUE: Whether or not PLDT is exempted to pay the local franchise tax. even though they be sold through said exchanges by the intervention of officers of the Army and Navy. Petitioner protested the assessment of the local franchise tax and requested a refund of the franchise tax paid by it for the year 1997 and the first to the third quarters of 1998.A. However. soldiers and the civilian employees of the Army. are goods sold directly to the United States Army or Navy for actual use or issue by the Army or Navy.41 31st Infantry Post Exchange vs. respondent Adelaida B. It explained that although The revenue laws at that time provided that "no specific tax shall be collected on any articles sold and delivered directly to the United States Army or Navy for actual use or issue by the Army or Navy. and merchandise to the plaintiff Exchange. PLDT vs. the Supreme Court held that Petitioner PLDT is not exempted from the local franchise tax because it does not appear that. and any taxes which have been paid on articles so sold and delivered for such use or issue shall be refunded upon such sale and delivery. or immunity to all telecommunications entities. the court emphasized that tax exemptions are highly disfavored. City Treasurer of Davao. and his predecessors in that office. petitioner brought the case before the Supreme Court.. favor. Barcelona.R. It is different if Congress enacts a law specifically granting uniform advantages. 7925. Furthermore. Collector of Internal Revenue of the Philippine Islands.R. taxes at the rate of one and one-half per centum on the gross value in money of the commodities. 2001 FACTS: Petitioner Philippine Long Distance Telephone Co.. Petitioner contended that it was exempted from the payment of franchise tax based on an opinion of the Bureau of Local Government Finance (BLGF) citing Section 23 of RA 7925 which provides equality of treatment in the telecommunication industry.
S.D. Pursuant to the provisions of the Code. alteration or repeal by Congress as and when the common good so requires. On 12 September 1991. The Supreme Court held that the petitioner is not included in the tax exemption provided in the RP-US Military Bases Agreement. like its precursor provisions in the 1935 and the 1973 Constitutions. Article XII. military personnel is not included in the term "construction." Neither could the performance of this service to the U. of the 1987 Constitution. maintenance. tax exemptions of this kind may not be revoked without impairing the obligations of contracts. operation and defense of the bases. issued resolutions through their respective municipal councils granting franchise in favor of petitioner Manila Electric Company (“MERALCO”) for the supply of electric light. Section 11. government be interpreted as directly related to the defense and security of the Philippine territories. is explicit that no franchise for the operation of a public utility shall be granted except under the condition that such privilege shall be subject to amendment. MERALCO was likewise granted a franchise by the National Electrification Administration to operate an electric light and power service in the Municipality of Calamba. 1999 FACTS: Province of Laguna by virtue of existing laws then in effect. . The CTA rendered its decision denying SEA-LAND’s claim for refund of the income tax it paid in 1984. RULING: No.5% as required in Section 25 (a)(2) of the National Internal Revenue Code (NIRC) in relation to Article 9 of the RP-US Tax Treaty. maintenance. These contractual tax exemptions. before the said claim for refund could be acted upon by public respondent Commissioner of Internal Revenue. MERALCO contended that the imposition of a franchise tax under Section 2.093. are not to be confused with tax exemptions granted under franchises. Indeed.S. Truly. fees and charges. It explained that although the Military Bases agreement provides that no US national shall be liable to pay income tax in the Philippines in respect of any profits derived under a contract made in the United States with the government of the United States in connection with the construction. On 19 January 1983. “Local Government Code of 1991.42 Petitioner Sea-Land Service Incorporated (SEA-LAND). however.D. 01-92. military personnel falls within the tax exemption provided in Article XII. which then amounted to P19.” was enacted enjoining(directing) local government units to create their own sources of revenue and to levy taxes. respondent province enacted Laguna Provincial Ordinance No. heat and power within their concerned areas. May 5. consistent with the basic policy of local autonomy. ISSUE: Whether or not the income that petitioner derived from services in transporting the household goods and effects of U. under protest. amounting to P870. operation and defense of the bases it is obvious that the transport or shipment of household goods and effects of U. 551 already included the franchise tax imposed by the Provincial Tax Ordinance. petitioner filed a petition for review with the Court of Tax Appeals (CTA) to judicially pursue its claim for refund and to stop the running of the two-year prescriptive period under the then Section 243 of the NIRC. Respondent Provincial Treasurer sent a demand letter to MERALCO for the corresponding tax payment. PROVINCE OF LAGUNA G. However.R. 551. A formal claim for refund was thereafter sent by MERALCO to the Provincial Treasurer of Laguna claiming that the franchise tax it had paid and continued to pay to the National Government pursuant to P.520. 01-92. Claiming that it paid the aforementioned income tax by mistake.09 of Laguna Provincial Ordinance No. No.S.S. paragraph 4 of the RP-US Military Bases Agreement. contravened the provisions of Section 1 of P. RULING: Yes. military personnel assigned to the Subic Naval Base. Laguna.42. SEA-LAND filed with the Bureau of Internal Revenue (BIR) the corresponding corporate Income Tax Return (ITR) and paid the income tax due thereon of 1. A franchise partakes the nature of a grant which is beyond the purview of the non-impairment clause of the Constitution. subject to the limitations expressed therein. insofar as it concerned MERALCO. MANILA ELECTRIC COMPANY VS.628. a written claim for refund was filed with the BIR.12. 131359. an American international shipping company licensed by the Securities and Exchange Commission to do business in the Philippines entered into a contract with the United States Government to transport military household goods and effects of U. ISSUE: Whether or not the tax exemption should be withdrawn to give way to the authoritative language of the Local Government Code specifically providing for the withdrawal of such exemption without violating the Constitutiion. Petitioner MERALCO paid the tax.
7227 granting tax and duty incentives only to businesses and residents within the secured area and excluding the residents of the zone outside of the secured area is discriminatory or not. which is to turn the former military base to productive use for the benefit of the Philippine economy. Petitioners contend that the SSEZ encompasses (1) the City of Olongapo. It has effectively discriminated against them. Since the last paragraph of Section 234 unequivocally withdrew. citing Section 133 of the Local Government Code of 1991 which puts limitations on the taxing powers of local government units. In a Resolution dated June 27. at this time the business activities outside the “secured area” are not likely to have any impact in achieving the purpose of the law. Said Order is not violative of the equal protection clause. 1996 FACTS: Petitioner Mactan Cebu International Airport Authority (MCIAA) was created by virtue of Republic Act No. September 11. 6958. COURT OF APPEALS G. There are substantial differences between the big investors who are being lured to establish and operate their industries in the so-called “secured area” and the present business operators outside the area. No. 120082. demanded payment for realty taxes on several parcels of land belonging to the petitioner. Mr. 127410. However. On the other hand. MARCOS G.R. Eustaquio B. NO. There is. Petitioner objected to such demand for payment as baseless and unjustified. We rule in favor of the constitutionality and validity of the assailed EO. petitioner MCIAA enjoyed the privilege of exemption from payment of realty taxes in accordance with Section 14 of its Charter On October 11. (2) the Municipality of Subic in Zambales. in contravention of the equal protection guarantee. except as provided in the said section. according to them. only local. including government-owned or controlled corporations. this Court referred the matter to the Court of Appeals. mandated to “principally undertake the economical. pursuant to Revised Administrative Circular No. Rather. claiming in its favor the aforecited Section 14 of RA 6958 which exempts it from payment of realty taxes. then. ISSUE: Can the City of Cebu demand payment of realty taxes on several parcels of land belonging to the petitioner? RULING: Yes. a government-owned corporation. It has thereby excluded the residents of the first two components of the zone from enjoying the benefits granted by the law. x x x and such other airports as may be established in the Province of Cebu x x x” (Sec. efficient and effective control. 1994. It was also asserted that it is an instrumentality of the government performing governmental functions. ISSUE: Whether the provisions of Executive Order No. neither is it discriminatory. without reasonable or valid standards. JANUARY 20. upon the effectivity of the LGC. hardly any reasonable basis to extend to them the benefits and incentives accorded in RA 7227. MACTAN CEBU INTERNATIONAL AIRPORT VS. Officer-in-Charge. the economic impact will be national. RULING: No. specifying the area within which the tax-and-duty-free privilege was operative.43 TIU VS. undoubtedly. Office of the Treasurer of the City of Cebu. 3. and the petitioner is. definitely none of such magnitude. 1994. 1-95. 1995. 97-A (EO 97-A). however. Cesa. exemptions from payment of real property taxes granted to natural or juridical persons. RA 6958). Section 12 thereof created the Subic Special Economic Zone and granted thereto special privileges. narrowed down the area within which the special privileges granted to the entire zone would apply to the present “fenced-in former Subic Naval Base” only. On the one hand. . we find real and substantive distinctions between the circumstances obtaining inside and those outside the Subic Naval Base. Even more important. Since the time of its creation. in the second. In the first. 97-A confining the application of R.The President issued Executive Order No. we are talking of billion-peso investments and thousands of new jobs. the petitioners challenged before this Court the constitutionality of EO 97-A for allegedly being violative of their right to equal protection of the laws. thereby justifying a valid and reasonable classification. EO 97-A.A. On October 26. and (3) the area formerly occupied by the Subic Naval Base. 1999 FACTS: Congress passed into law RA 7227. management and supervision of the Mactan International Airport in the Province of Cebu and the Lahug Airport in Cebu City.R.
Basco vs PAGCOR G. has been withdrawn. 70116-19. civilian employees in the U. April 26. of the RP-US Military Bases Agreement of 1947.R. maintenance. government by reason of their employment in the U. and defense. residing in the Philippines by reason of such employment. Bases in the Philippines. No. 1991 . operation.A.R." ISSUE: Whether or not P. 2.44 it necessarily follows that its exemption from such tax granted it in Section 14 of its Charter.S. 1986 FACTS: The question involving this case is the scope of the tax exemption provision in Article XII. maintenance. Military Base in the Philippines in connection with its construction. Government (Art. inclusive of interests and penalties. income or otherwise. as well as fees. (2) of P. 6958. We find no justifiable reason to disturb the findings and rulings of the lower court in its decision. But petitioners contend that P. all laws. No.FRANK ROBERTSON G. They must be referring to Section 13 par. Likewise. amended or modified. Republic vs IAC G. Under its Charter's repealing clause. COMMISSIONER OF INTERNAL REVENUE vs. August 12. executive orders. Its "power to tax" therefore must always yield to a legislative act which is superior having been passed upon by the state itself which has the "inherent power to tax". inconsistent therewith. XII par. "the Charter or statute must plainly show an intent to confer that power or the municipality cannot assume it". 91649. 1869 to enable the Government to regulate and centralize all games of chance authorized by existing franchise or permitted by law. R. as amended.S. L-69344. rules and regulations. The private respondents are citizens of the United States. No. 1869 is violative of the principle of local autonomy. To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines. RULING: The City of Manila. PAGCOR was created under P. decrees. operation or defense. 2 of PI-US Military Bases Agreement of 1947). 1869 constitutes a waiver of the right of the city of Manila to impose taxes and legal fees to PAGCOR.D.D. RULING: The law and the facts of the case are so clear that there is no room left for Us to doubt the validity of private respondents' defense. 1869 constitutes a waiver of the right of the City of Manila to impose taxes and legal fees. The Charter of the City of Manila is subject to control by Congress. that the exemption clause in P. whether National or Local. being a mere Municipal corporation has no inherent right to impose taxes. 1991 FACTS: On July 11. 1983. holders of American passports and admitted as Special Temporary Visitors under Section 9 (a) visa of the Philippine Immigration Act of 1940. ISSUE: Whether or not the public respondent erred in holding that private respondents are exempted from paying Philippine income tax. May 14. and incomes are solely derived from salaries from the U. Par.D.D. charges or levies of whatever nature. Said circumstances are all present in the case at bar. are accordingly repealed." The Court a quo after due hearing. 1869 which exempts PAGCOR. rendered its judgment in favor of respondents cancelling and setting aside the assessments for deficiency income taxes of respondents for the taxable years 1969-1972.S.S. as the franchise holder from paying any "tax of any kind or form.R. Thus. of the bases. and the income derived is from the U. Nos. In order to avail oneself of the tax exemption under the RP-US Military Bases Agreement: he must be a national of the United States employed in connection with the construction.D.
E. No. 1975.117. Consequently. and in this sense. 1995 FACTS: On 22 August 1986. 1052388.45 FACTS: On April 15.71. and a final payment on October 26. 64. Inc.D. respondent R.D. dated 04 November 1986.H. under E. and were granted not merely an exemption. in a communication received by private respondent on 13 August 1986. ISSUE: Whether or not the payment of deficiency income tax under the tax amnesty and its acceptance by the Government operated to divest the Government of the right to further recover from the taxpayer. and paid the corresponding amnesty taxes due. in October 1986 and November 1986. RULING: The period of the amnesty was later extended to 05 December 1986 from 31 October 1986 by E. 1980. RULING: Even assuming that the deficiency tax assessment of P17. its coverage expanded. to include estate and honors taxes and taxes on business. 41 was promulgated declaring a one-time tax amnesty on unpaid income taxes. 23.O. being a general pardon or intentional overlooking by the State of its authority to impose penalties on persons otherwise guilty of evasion or violation of a revenue or tax law.O. even if there was an existing assessment against the latter at the time he paid the amnesty tax.400 or 10% of their reported untaxed income under P. Auto Products Philippines. but an amnesty. 41. had construed the amnesty coverage to include only assessments issued by the Bureau of Internal Revenue after the promulgation of the executive order on 22 August 1986 and not to assessments theretofore made. 108358. They contended that they had availed of the tax amnesty under P. later amended to include estate and donor's taxes and taxes on business. for their past tax failings. E. the Republic of the Philippines.O.08 against the Pastor spouses were correct.20 or 20% of the reported untaxed income under P. partakes of an absolute forgiveness or waiver by the Government of its right to collect what otherwise would be due it.117. dated 17 November 1986.O.157. through the Bureau of Internal Revenue. Prior to this availment. the law could have simply so provided in its exclusionary clauses. The request was denied by the Commissioner. Availing itself of the amnesty. A tax amnesty. .O.D. and it is that the executive order has been designed to be in the nature of a general grant of tax amnesty subject only to the cases specifically excepted by it. January 20. as the Commissioner argues. prejudicial thereto. but the motion was denied. 213. 41. On August 2. petitioner Commissioner of Internal Revenue.08 for income tax deficiency but denying liability therefor. filed. If. The conclusion is unavoidable. It did not.D.O. who wish to relent and are willing to reform a chance to do so and thereby become a part of the new society with a clean slate.'s Nos. 54.410. the Government is in estoppel to demand and compel further payment of income taxes by them. since the latter have already paid almost the equivalent amount to the Government by way of amnesty taxes under P. the Government is estopped from collecting the difference between the deficiency tax assessment and the amount already paid by them as amnesty tax. 213 and 370 and had paid the corresponding amnesty taxes amounting to P10. P2. assessed the latter deficiency income and business taxes for its fiscal years ended 30 September 1981 and 30 September 1982 in an aggregate amount of P1. respectively. 370 evidenced by the Government's Official Receipt No..D. its Tax Amnesty Return and Supplemental Tax Amnesty Return. ISSUE: Whether or not the position taken by the Commissioner coincides with the meaning and intent of E. implementing E. The Pastors filed a motion to dismiss the complaint. The taxpayer wrote back to state that since it had been able to avail itself of the tax amnesty. commenced an action to collect from the spouses Antonio Pastor and Clara Reyes-Pastor deficiency income taxes for the years 1955 to 1959. they filed an answer admitting there was an assessment against them of P17.R. the deficiency tax notice should forthwith be cancelled and withdrawn. 23. on the ground that Revenue Memorandum Order 4-87. particularly to give tax evaders. 213.O. No. 1973 under P. for the taxable years 1981 to 1985. Commissioner of Internal Revenue vs CA G. 41 had not been intended to include 1981-1985 tax liabilities already assessed (administratively) prior to 22 August 1986.951. and.
Misamis Oriental Association of Coco Traders. 47-91 is violative of the equal protection clause because while coconut farmers and copra producers are exempt. It is not true that oil millers are exempt from VAT. February 6.837.46 Hilado vs Collector of Internal Revenue GR L-9408. It provided that losses of property which occurred in World War II from fires. on the one hand. G. Petitioner claims that RMC No. Department of Finance Secretary G. the latter merely sell copra. No. which implemented VAT Ruling 190-90. Pursuant to § 102 of the NIRC. As of the end of 1945. traders and dealers are not. Inc. Court of Appeals and Alhambra Industries. through the Collector. the amount would be at most a proper deduction of his 1950 gross income (not on his 1951 gross income) as the last installment and notice of discontinuation of payment by the War Damage Commission was made in 1950. 117982. Petitioners add that oil millers do not enjoy tax credit out of the VAT payment of traders and dealers. The petitioner alleges that prior to the issuance of Revenue Memorandum Circular 47-91 on June 11. The Constitution does not forbid the differential treatment of persons so long as there is a reasonable basis for classifying them differently. 47-91 on various grounds. The former produce and sell copra. ISSUE: Whether or not Hilado can claim compensation for destruction of his property during the war under the laws in effect at that time. The reclassification had the effect of denying to the petitioner the exemption it previously enjoyed when copra was classified as an agricultural food product under §103(b) of the NIRC. copra was classified as agricultural food product under $ 103(b) of the National Internal Revenue Code and. ISSUE: Whether RMC No. the payment of claims by the War Damage Commission depended upon its discretions non-payment of which does not give rise to any enforceable right. Subsequently.R. vs. RULING: Philippines Internal Revenue Laws are not political in nature and as such were continued in force during the period of enemy occupation and in effect were actually enforced by the occupation government. Petitioner challenges RMC No. The argument has no merit. storms. Commissioner of Internal Revenue vs. shipwreck or other casualty. RULING: The court ruled in the negative. He is claiming a deductible item of P12. there was no law which Hilado could claim for the destruction of his properties during the battle for the liberation of the Philippines. October 31. and copra traders and dealers. Under the Philippine Rehabilitation Act of 1948. although both sell copra in its original state.65 from his gross income under the General Circular V-123 issued by the Collector of Internal Revenue. the deductions were disallowed. exempt from VAT at all stages of production or distribution. 1994 FACTS: Petitioner Misamis Oriental Association of Coco Traders. Such tax laws are deemed to be laws of the occupied territory and not of the occupying enemy. Under Sec. Inc. 108524. or from robbery. the sale of agricultural food products in their original state is exempt from VAT at all stages of production or distribution. the Secretary of Finance. theft. are engaged in the buying and selling of copra in Misamis Oriental.R. 1956 FACTS: Emilio Hilado filed his income tax return for 1951 with the treasurer of Bacolod City. inc. they are subject to 10% VAT on the sale of services. 103(b) of the NIRC. 1997 FACTS: . 47-91 is discriminatory and violative of the equal protection clause of the Constitution. therefore. individually or collectively. November 10. is a domestic corporation whose members. 1991. Thereafter. or embezzlement are deductible in the year of actual loss or destruction of said property. No. There is a material or substantial difference between coconut farmers and copra producers. on the other. issued General Circular V-139 which revoked and declared void Circular V-123. Assuming that the loss (deductible item) represents a portion of the 75% of his war damage claim.
the appeal to the respondent Court of Tax Appeals. 142 (d) of the Tax Code. (2) Whether or not the respondent taxpayer is liable for the fixed and deficiency percentage taxes in the amount of P3. 1958 to the petitioner Commissioner. 3843) exempted the grantee from all kinds of taxes .025. Inc. nature or description levied. is the applicable law in the instant case as it specifically applies to the manufacturer's wholesale price of cigar and cigarette products and not Sec. Private respondent filed a protest against the proposed assessment with a request that the same be withdrawn and cancelled. Inc.293. and August 9. Lingayen Gulf Electric Power Co. The dispute arose from the discrepancy in the taxable base on which the excise tax is to apply on account of two incongruous BIR Rulings: (1) BIR Ruling 473-88 dated 4 October 1988 which excluded the VAT from the tax base in computing the fifteen percent (15%) excise tax due. On 7 May 1991 private respondent received a letter dated 26 April 1991 from the Commissioner of Internal Revenue assessing it deficiency Ad Valorem Tax (AVT) in the amount P 488. Republic Act (R.) No. L-23771. On November 21. the application of Sec. The private respondent requested for a reinvestigation of the case on the ground that instead of incurring a deficiency liability. the private respondent was liable to pay only the 2% franchise tax.96 for the period before the approval of its municipal franchises. Accordingly. the legislative franchise (R. 1958. In his letters dated July 25 and August 28. As to the second issue.. municipal. 3843 was passed on June 22.. In its letters dated July 2. by virtue of R. both in the province of Pangasinan. August 4.. any provision of law to the contrary notwithstanding. now or in the future . is a domestic corporation engaged in the manufacture and sale of cigar and cigarette products.396. a general provision of law insofar as the imposition of the ad valorem tax on cigar and cigarettes is concerned. Commissioner of Internal Revenue vs. (2) BIR Ruling 017-91 dated 11 February 1991 which included back the VAT in computing the tax base for purposes of the fifteen percent (15%) ad valorem tax. ISSUE: Whether Sec. 3843. Inc G. and power system in the same municipalities of Pangasinan and comes with it a tax equal to two per centum of the gross receipts from electric current sold or supplied under this franchise. effective from the date the original municipal franchise was granted. No. it made an overpayment of the franchise tax. shall be collected. or national. ISSUES: (1) Whether or not the 5% franchise tax prescribed in Section 259 of the National Internal Revenue Code assessed against the private respondent on its gross receipts realized before the effectivity of R. RULING: Sec.62. No." Thus..A. No. provincial. 3843 is collectible.No. 1955. the Commissioner denied the request of the private respondent. 127 (b). established. 127 (b) of the Tax Code which applies in general to the wholesale of goods or domestic products. or collected by any authority whatsoever. 1988 FACTS: The respondent taxpayer. rules and regulations promulgated by the Commissioner of Internal Revenue would have no retroactive application if to so apply them would be prejudicial to the taxpayers. 127 (b) to the wholesale price of cigar and cigarette products for purposes of computing the ad valorem tax is patently erroneous.. well-entrenched is the rule that rulings and circulars.. The BIR is now ordered to refund private respondent of the collected taxes form the latter.A. 142 (d) of the Tax Code. which provides for the inclusion of the VAT in the tax base for purposes of computing the 15% ad valorem tax. 142 being a specific provision applicable to cigar and cigarettes must prevail over Sec. and. 1 963. granting to the private respondent a legislative franchise for the operation of the electric light. Pending the hearing of the said cases. "in lieu of any and all taxes and/or licenses of any kind. heat..R.A. 3843 provided that the private respondent should pay only a 2% franchise tax on its gross receipts. Thus.No. pursuant to the municipal franchise granted it by their respective municipal councils. Lingayen Gulf Electric Power Co. RULING: R.41 representing deficiency franchise taxes and surcharges for the years 1946 to 1954 applying the franchise tax rate of 5% on gross receipts. operates an electric power plant serving the adjoining municipalities of Lingayen and Binmaley. BIR Ruling 473-88 is void ab initio as it contravenes the express provisions of Sec.47 Alhambra Industries. and effective further upon the date the original franchise was granted. Petitioner denied such protest.A. the Bureau of Internal Revenue (BIR) assessed against and demanded from the private respondent the total amount of P19.A. Consequently. However. the private respondent protested the said assessment and requested for a conference with a view to settling the liability amicably. no other tax and/or licenses other than the franchise tax of two per centum on the gross receipts .
PBcom suffered losses so that when it filed its Annual Income Tax for the year. No. Pending investigation of the BIR. The exemption. or three years after 1968. therefore. did not cover the period before the franchise was granted. RULING: Rulings or circulars promulgated by the Commissioner have no retroactive application where to so apply them would be prejudicial to taxpayers. the Commissioner issued General Circular V-334.e. Section 230 of the National Internal Revenue Code of 1977 provides for the two year period for filing a claim for refund or credit. January 28. No.98 for the period from January 1. On 27 June 1908. In implementing Section 4(b) of the Tax Code. The assessment and demand on petitioner to pay deficiency withholding income tax was also made three years after 1968 for a period of time commencing in 1965. The last year that the company withheld taxes pursuant to the Circular was in 1968. Court of Tax Appeals G.” In 1971. Subsequently. 016. the last year that petitioner had withheld taxes under General Circular No. Petitioner also earned rental income for both 1985 and 1986 and the corresponding tax thereof was with held and remitted by the lessees to the BIR. that is from January 1. revoking General Circular V-334.ended December 31. Hence. the Commissioner issued a letter of assessment and demand for deficiency withholding income tax for years 1965 to 1968. as pointed out by the respondent court in its findings. 1946 to December 31. Petitioner contended that the two year period has been changed to ten years upon a memorandum issued by the Commissioner of Internal Revenue. may be retroactively applied. L-52306. 1999 FACTS: Petitioner PBcom paid its quarterly income tax for the first and second quarters of 1985 totalling to Php5. where the Commissioner did not act upon. during the period covered by the instant case. The relaxation of revenue regulation by a memorandum issued by the BIR is not warranted as it disregards the two year period set by law. petitioner corporation was engaged in the business of telecasting local as well as foreign films acquired from foreign corporations not engaged in trade or business within the Philippines for which petitioner paid rentals after withholding income tax of 30%of one-half of the film rentals.R. to “gross income. the company does not fall under any of them.36. 1961. The company requested for reconsideration. the private respondent paid the amount of P34. V-334. i.025. Philippine Bank of Commerce (PBcom) v. before February 24. 1981 FACTS: During the period pertinent to this case. When the Acting Commissioner of Internal Revenue issued a memorandum changing the prescriptive period of two years to ten years. vs. etc. PBcom filed for a tax refund. RA 5431 amended Section 24 (b) of the Tax Code increasing the tax rate from 30% to 35% and revising the tax basis from “such amount” referring to rents. such circular created a clear inconsistency with the provision of . which was very much more than the amount rightfully due from it. It was issued only in 1971. ISSUE: Did the CTA erred in denying the plea for tax refund on the ground of prescription? RULING: No.00. The Court of Appeal affirmed in toto the ruling of the CTA. On August 7. the private respondent should no longer be made to pay for the deficiency tax in the amount of P3. ABS-CBN Broadcasting Corp. 1948. 112024.184. The company was no longer in a position to withhold taxes due from foreign corporations because it had already remitted all film rentals and had no longer control over them when the new circular was issued. Herein . ABS-CBN Broadcasting Corp. 1987 or after more than two years from payment of taxes. Commissioner of Internal Revenue (CIR) G. ISSUES: Whether Revenue Memorandum Circular 4-71.954. 1946 to February 29. 1986. petitioner filed a petition for review with the Court of Tax Appeals. The CTA denied the tax refund on the ground that application for refund must be made within two years from the payment of tax as provided by the National Internal Revenue Code. dutifully withheld and turned over to the BIR 30% of ½ of the film rentals paid by it to foreign corporations not engaged in trade or business in the Philippines. Insofar as the enumerated exceptions are concerned.48 other than the 2% tax from the date the original franchise was granted.R. However. October 12. it reported a net loss and declared no tax payable for the year. 1948. Pursuant thereto.the prejudice the company of the retroactive application of Memorandum Circular 4-71 is beyond question.
rather it legislated guidelines contrary to the statute passed by the congress. Nos. private respondent filed a petition for review before the Court of Tax Appeals (CTA) which favoured the tax credit. L-68252. April 26.A. Private respondent. . where the rental does not exceed Php300. The Board of tax Assessment Appeals considered the assessment valid and the same was affirmed by the Central Board of Assessment appeals. Almonzor G. It is unquestionable that both the Comparable Sales Approach and the Income Approach are generally acceptable methods of appraisal for taxation purposes. 6359 which prohibits an increase in monthly rentals of dwelling unit or land on which another’s dwelling is located. that it failed to prove that it did not realize any receipt from its charter agreement and it suppressed evidence when it did not present its charter agreement. Due to the failure of petitioner to act promptly on the matter. petitioners herein are precluded from increasing monthly rentals and in ejecting the lessees. it is conceded that the proprietary of one. filed a claim for tax credit before the petitioner Commissioner of Internal Revenue for erroneous payment. Consequently. Nasutra chartered M/V Gardenia to load raw sugar in the Philippines. the vessel found no sugar for loading. The Clearance Vessel to a Foreign Port issued by the District Collector of Customs support such finding. as against the other would depend on several factors. Commissioner of Internal Revenue v. In so doing. the BIR examiner and its appellate division both recommended the approval of private respondent’s claim of tax refund. as early as 1923. the BIR did not simply interpret the law. The act also suspended article 1673 of the Civil Code thereby disallowing ejectment of lessees. inequitable. hence this petition. upon arrival. therefore. These prohibitions were made absolute by the filing of Presidential Decree 20. Petitioner filed a motion for reconsideration.R. confiscatory and unconstitutional considering that the tax imposed upon them is greater than the annual income derived from the property. ISSUE: Did the board err in adopting the comparable sales approach in fixing the assessed value of the properties? RULING: The petition is impressed with merit.00. it has been stressed that the assessors . Reyes v. hence this petition contending that private respondent has the burden of proof to support its claim of refund. May 26.LTD G. They also argued that the income approach should have been used in determining the land values instead of the comparable sales approach. Moreover. 1995 FACTS: Private Respondent is a foreign corporation represented in the Philippines by Soriamont Steamship Agencies. but it was denied by the CTA. Hence. This entailed an increase in the tax rates prompting petitioners to file a Memorandum of Disagreement with the Board of Tax Assessment Appeals averring that the reassessment was excessive. in finding the value of the property. ISSUE: Whether or not private respondent failed to prove that it derived no receipt from its charter agreement. Soriamont Agency paid the required income and common carrier taxes for its transaction with Nasutra. 1991 FACTS: The National legislature enacted R. Incorporated. However. hence. have to consider all the circumstances and elements of value and must exercise a prudent discretion in reaching conclusions. unwarranted. not entitled to a refund. It owns and operates tramper vessel M/V Gardenia. RULING: We find no merit in the petition. L-49839 – 46. Tokyo Shipping Co. No.49 Section 230 of NIRC. However. The respondent Court of Tax Appeals held that sufficient evidence has been adduced by private respondent proving that it derived no receipt from its charter agreement with Nasutra.R. The respondent city assessor of Manila reassessed the value of the petitioners’ properties based on the scheduled market value thereof.
a 125 square meter portion of Francia's property was expropriated by the Republic for the sum of P4. 1977. Thus. 1988 FACTS: On January 14. seeking the cancellation of TCT and the issuance in his name of a new certificate of title. his property was sold at public auction pursuant the Real Property Tax Code in order to satisfy a tax delinquency of P2. received a letter from the petitioner assessing it a delinquency income tax for the year 1958 and 1959. On March 20. the private respondent. Francia discovered that a Final Bill of Sale had been issued in favor of Ho Fernandez by the City Treasurer on December 11. The finding of respondent court is in accordance with the provision of the Tax Code on deductions from gross income. INTERMEDIATE APPELLATE COURT G. Upon verification through his lawyer.00 in dispute shall be considered as deductible from income it being in the form of promotional expense and contrary to petitioner’s contention that it was not an ordinary and reasonable business expense. in the light of public policy.116.00 has been extinguished by legal compensation is correct claiming that the government owed him P4. contract or judgment as is allowed to be set-off under the statutes of set-off. 000. Francia filed a complaint to annul the auction sale. Algue filed a letter of protest which was stamped and received by the petitioner.00 when a portion of his land was expropriated on October 15. February 17. Thelower court rendered a decision against his favor. hence. A claim for taxes is not such a debt. A person cannot refuse to pay a tax on the ground that the government owes him an amount equal to or greater than the tax being collected. and the Court of Tax Appeals G. ENGRACIO FRANCIA vs.400. ISSUE: Whether or not the contention of Francia that his tax delinquency of P2. 1977. on December 5. 1979. Ho Fernandez was the highest bidder for the property. No. to exclude the remedy in an action or any indebtedness of the state or municipality to one who is liable to the state . Hence. The private respondent has proved this. Francia received a notice of hearing “In re: Petition for Entry of New Certificate of Title" filed by Ho Fernandez.. The CTA ruled in favour of Algue holding that the Php75. Algue. RULING: This principal contention of the petitioner has no merit. 1977. 4739 (37795) by the Register of Deeds. a domestic corporation engaged in engineering.00. After four days from its receipt. L – 28896. ISSUE: Did the Collector of Internal Revenue correctly disallow the deduction claimed by private respondent Algue as legitimate business expense in its Income Tax Return? RULING: We agree with respondent court that the amount of promotional fee was not excessive and was reasonable. construction and other allied activities. The amount in dispute was necessary and reasonable in the light of the efforts of the respondent corporation to induce investors.400. The solicitor general is correct in saying that the burden to prove the validity of claimed deduction is on the tax payer. private respondent received a warrant of distraint and levy. L-67649. which are construed uniformly. The collection of a tax cannot await the results of a lawsuit against the government. On March 3. demand. 1978. June 28. 1965. Francia failed to pay his real estate taxes. 1979.116. We have consistently ruled that there can be no off-setting of taxes against the claims that the taxpayer may have against the government. this petition for review. allowing the deduction of the disputed amount in the Income Tax Return of private respondent.R.00. The auction sale and the final bill of sale were both annotated at the back of TCT No. Algue refused to receive it on the ground of pending protest until it was finally informed that the BIR was not taking any action on the protest. The Intermediate Appellate Court affirmed the decision of the lower court in toto. Despite the protest.50 Commissioner of Internal Revenue v. Inc. No. Francia was not present during the auction sale since he was in Iligan City at that time helping his uncle ship bananas.R. Since 1963 up to 1977 inclusive. 1988 FACTS: Engracio Francia is the registered owner of a residential lot and a two-story house located in Pasay City. It therefore filed a petition for review of the decision of the Commissioner of Internal Revenue (CIR) with the Court of Tax Appeals. On October 15.
charges and penalties. MELECIO R. if not yet refunded. 1961. it deducted the said amount from the tax that it had to pay.00. On May 17. DOMINGO vs. its income tax return for the fiscal year 19591960.512. the taxpayer was entitled to a refund of any amount due as tax. L-18994.41. The basis for such an assessment was the absence of legal right to deduct said amount before the refund or tax credit thereof was approved by petitioner Commissioner of Internal Revenue. On February 14. The petition was. G. special proceedings No. now the petitioner. for which it paid on the same day. COMMISSIONER OF INTERNAL REVENUE vs. amounting to P40.83 as 1% monthly interest on the aforesaid amount of P13. reporting therein a net loss of P331. INC.20 from January 16. 1962. RULING: The petition to set aside the above orders of the court below and for the execution of the claim of the Government against the estate must be denied for lack of merit.55. There is no question respondent was entitled to a refund. Moscoso. GARLITOS G. to the court below for the execution of the judgment.310.155. entitling respondent to refund. to hold that petitioner should not repose an interest on the aforesaid sum of P13. L-25299. petitioner filed an amended income tax return.R. Inc.155." In order to enforce the claims against the estate the fiscal presented a petition dated June 21. No.345.R. 1962. 1962 to December 31.20 "which after all was paid to and received by the government even before the incidence of the tax in question. however. 1960. filed its income tax return for the fiscal year 1960-1961.155. Hence this petition for review. "unfair and unjust" to do so.512. this Court declared as final and executory the order for the payment by the estate of the estate and inheritance taxes. The National Internal Revenue Code provides that interest upon the amount determined as a deficiency shall be assessed and shall be paid upon notice and demand from the Commissioner of Internal Revenue at the specified. January 30. June 29. may be deducted from the tax to be paid. denied by the court which held that the execution is not justifiable ISSUE: Whether or not the petitioner has the clear right to execute the judgment for taxes against the estate of the deceased Walter Scott Price. 1963 FACTS: This is a petition for certiorari and mandamus against respondent judge seeking to annul certain orders of the court and for an order in this Court to direct respondent to execute the judgment in favor of the Government against the estate of Walter Scott Price for internal revenue taxes. however. is for the claimant to present a claim before the probate .33. Judge S. such amount.83 as 1% monthly interest for delinquency in the payment of income tax for the fiscal year 1960-1961.51 or municipality for taxes. Inc. 14 entitled "In the matter of the Intestate Estate of the Late Walter Scott Price. Hon. 1969 FACTS: Respondent Itogon-Suyoc Mines. the amount of P13. according to the Court of Tax Appeals. 0n December 18. 1961." It would be. 1962. 1961. filed on January 13. LORENZO C. in an earlier provision found in the same section that if in any preceding year. ISSUE: Whether or not the Court of Tax Appeals erred when it absolved respondent corporation "from liability to pay the sum of P1. C. It declared a taxable income of P114. That it had a right to do according to the law.20 as the first installment of the income tax due. Instead of waiting for the sum involved to be delivered to it. respondent Itogon-Suyoc Mines.155. ITOGON-SUYOC MINES.04 and a tax due thereon amounting to P26.R.707. No. but deducting the amount of P13. setting forth its income tax liability to the tune of P97.368. The ordinary procedure by which to settle claims of indebtedness against the estate of a deceased person. HON.20 representing alleged tax credit for overpayment of the preceding fiscal year 19591960.” RULING: It could not be error for the Court of Tax Appeals. L-14674. as an inheritance tax. petitioner Commissioner of Internal Revenue assessed against the respondent the amount of P1. Such an assessment was contested by respondent before the Court of Tax Appeals which ruled in its favor. Neither are they a proper subject of recoupment since they do not arise out of the contract or transaction sued on. It appears that in Melecio R. issued by the Court of First Instance of Leyte in. It is made clear. No. considering the admitted fact of overpayment. July 29. G.058. Domingo vs. It thus sought a refund from the Commissioner of Internal Revenue.
therefore. The reason on which the general rule is based.52 court so that said court may order the administrator to pay the amount thereof.127. Note that there is nothing in the law which requires that the amount collected as reforestation charges should be used exclusively for the reforestation of the area covered by the license of a licensee or concessionaire.37. RULING: The court find defendants claim devoid of any merit. ET AL. cut out and removed from any public forest for commercial purposes.200.127. Act No. after learning about the sale. the Province was able to negotiate with respondent Ortigas & Co. Though such liabilities are admitted it interposed the defense though exhibits that from July 31.177 square meters of land to the Province at P110. The general rule. the complaint alleged that the Province violated one of the terms of its contracts . The projected construction. ISSUE: Whether or not the sum of P9. is that taxes are not in the nature of contracts between the party and party but grow out of a duty to. The total amount of the reforestation charges paid by Mambulao Lumber Company is P9. 1948 to December 29. based on grounds of public policy is well-settled that no set-off is admissible against demands for taxes levied for general or local governmental purposes.200 has already been appropriated for the purpose by a corresponding law (Rep. The Anti-Graft League of the Philippines.52 for 'reforestation charges' and for the period commencing from April 30. therefore. that the petitioner has no clear right to execute the judgment for taxes against the estate of the deceased Walter Scott Price.. 2700). however. It is clear.00 per square meter or a total of P134. Ltd.50. 1948..50 on each cubic meter of timber. in addition to the regular forest charges provided under Section 264 of Commonwealth Act 466 known as the National Internal Revenue Code. 1947 to June 24. No. and are the positive acts of the government. the amount of P0. San Juan G. and it is the contention of the defendant that since the Republic of the Philippines has not made use of those reforestation charges collected from it for reforesting the denuded area of the land covered by its license. 1956. 97787. L-17725. Pasig. if it cannot be refunded. in accordance with the provisions of Articles 1279 and 1290 of the Civil Code. Compensation. takes place by operation of law.802.R.08 to the Republic of the Philippines for 'reforestation charges'. 1996 FACTS: Acting upon an authority granted by the Office of the President.523. The said property was eventually sold to Valley View Realty Development Corporation (Valley View) for P700.00. the personal consent of individual taxpayers is not required.R. No. MAMBULAO LUMBER COMPANY. and that if not so used. Under the above circumstances. the same should be refunded to him. or. 1975. 1962 FACTS: There are three causes of action in this case in which the defendants admitted all these three liabilities with an aggregate amount of P4. at least it should be compensated with what Mambulao Lumber Company owed the Republic of the Philippines for reforestation charges.00 per square meters. and both debts are extinguished to the concurrent amount. Ortigas filed before Branch 151 of the Regional Trial Court of Pasig an action for rescission of contract plus damages with preliminary injunction against the Province. Another ground for denying the petition is the fact that the court having jurisdiction of the estate had found that the claim of the estate against the Government has been recognized and an amount of P262. whereby Ortigas transferred its ownership over a total of 192. Docketed as Civil No.. both the claim of the Government for inheritance taxes and the claim of the intestate for services rendered have already become overdue and demandable is well as fully liquidated.37 as forest charges due and owing from defendant to plaintiff. REPUBLIC OF THE PHILIPPINES vs. the Republic of the Philippines should refund said amount. February 28. said defendant paid P927. These reforestation were paid to the plaintiff in pursuance of Section 1 of Republic Act 115 which provides that there shall be collected. of which 30 million was given as downpayment. to the making and enforcing of which. The said property was eventually sold to Valley View Realty Development Corporation (Valley View) for P700. August 1. Three deeds of absolute sale were executed on April 22 and May 9.00 per square meter. G.50 paid by defendant company to plaintiff as reforestation charges from 1947 to 1956 may be set off or applied to the payment of the sum of P4. 1988. never materialized because of the decimation of the Province’s resources brought about by the creation of the Metro Manila Commission (MMC) in 1976. (Ortigas) for the acquisition of four parcels of land located in Ugong Norte. 55904. On May 10.900. 802. defendant Mambulao Lumber Company paid to the Republic of the Philippines P8. Inc v.
G. These paintings legally belongs to the foundation or corporation or the members thereof.T. When..R. signed the Consignment Agreement with Christie's of New York. as a taxpayer. Aquino. No. Similarly. however. concerning the scheduled sale on 11 January 1991 of eighty-two (82) Old Masters Paintings and antique silverware seized from Malacañang and the Metropolitan Museum of Manila alleged to be part of the ill-gotten wealth of the late President Marcos. They lack basis in fact and in law. Jr. On 9 August 1990. that public funds are disbursed by a political subdivision or instrumentality and in doing so. although the public has been given the opportunity to view and appreciate these paintings when they were placed on exhibit. L-59068 January 27. petitioner has absolutely no cause of action. as in the case at bar. a law is violated or some irregularity is committed.al. vs. PCGG. disbursement of public funds was only made in 1975 when the Province bought the lands from Ortigas at P110. A taxpayer's suit can prosper only if the governmental acts being questioned involve disbursement of public funds upon the theory that the expenditure of public funds by an officer of the state for the purpose of administering an unconstitutional act constitutes a misapplication of such funds. On 14 August 1990.R. COMELEC G. representing the Government of the Republic of the Philippines. an occasion personal to them Not every action filed by a taxpayer can qualify to challenge the legality of official acts done by the government. Lozada vs. Manson and Woods International. as alleged in the petition. through former Executive Secretary Catalino Macaraig. petitioner would somehow be adversely affected by an illegal use of public money. On 15 August 1990. no such unlawful spending has been shown. which may be enjoined at the request of a taxpayer. In the case at bar. and consequently no locus standi. then President Aquino. wrote then President Corazon C. namely. then Chairman of PCGG. Inc. Joya et.53 with Ortigas by selling the subject lots which were intended to be utilized solely as a site for the construction of the Rizal Technological Colleges and the Rizal Provincial Hospital. Caparas. through Chairman Caparas. the pieces of antique silverware were given to the Marcos couple as gifts from friends and dignitaries from foreign countries on their silver wedding and anniversary. 1993 FACTS: All thirty-five (35) petitioners in this Special Civil Action for Prohibition and Mandamus with Prayer for Preliminary Injunction and/or Restraining Order seek to enjoin the Presidential Commission on Good Government (PCGG) from proceeding with the auction sale scheduled on 11 January 1991 by Christie's of New York of the Old Masters Paintings and 18th and 19th century silverware seized from Malacañang and the Metropolitan Museum of Manila and placed in the custody of the Central Bank. Mateo A. In other words. his relatives and cronies.00 per square meter in line with the objectives of P. petitioner. and that the petitioner is directly affected by the alleged ultra vires act. PCGG. authorized Chairman Caparas to sign the Consignment Agreement allowing Christie's of New York to auction off the subject art pieces for and in behalf of the Republic of the Philippines. ISSUE: Can petitioners as taxpayer’s challenge the validity of the acts of the PCGG? RULING: No. even as a taxpayer. requesting her for authority to sign the proposed Consignment Agreement between the Republic of the Philippines through PCGG and Christie. two requisites must be met. ISSUE: Is the present action a taxpayer’s suit? RULING: Petitioner and respondents agree that to constitute a taxpayer’s suit. 1983 FACTS: . 96541 August 24. in the instant case. No. cannot question the transaction validly executed by and between the Province and Ortigas for the simple reason that it is not privy to said contract.D. 674. Undeniably.
. that petitioners lack standing to file the instant petition for they are not the proper parties to institute the action ISSUE: As taxpayers. petitioners may not file the instant petition. The respondent COMELEC. Lozada and Romeo B. as is allegedly its ministerial duty under the constitutional provision above cited. and therefore.54 This is a petition for mandamus filed by Jose Mari Eulalio C. he has standing to petition by mandamus the calling of a special election as mandated by the 1973 Constitution. substantially. Igot as a representative suit for and in behalf of those who wish to participate in the election irrespective of party affiliation. opposes the petition alleging. Metro Manila. may the petitioners file the instant petition? RULING: As taxpayers. while petitioner Romeo B. for nowhere therein is it alleged that tax money is being illegally spent. involves the illegal expenditure of public money that the so-called taxpayer suit may be allowed. as a taxpayer. Igot alleges that. to compel the respondent COMELEC to call a special election to fill up existing vacancies numbering twelve (12) in the Interim Batasan Pambansa. involves no expenditure of public funds. Petitioner Lozada claims that he is a taxpayer and a bonafide elector of Cebu City and a transient voter of Quezon City. represented by counsel. which may include a legislative enactment or statute. who desires to run for the position in the Batasan Pambansa. The act complained of is the inaction of the COMELEC to call a special election. It is only when an act complained of.
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