1. Vera vs.

Fernandez 89 SCRA 199 Facts: A Motion for allowance of claim and for payment of taxes was filed on june 3, 1969 representing the claim of indebtedness of the late Luis D. Tongoy for deficiency of income taxes. The administrator opposed the motion on the ground that the claim was barred under Section 5, Rule 86 of the Rules of Court. Respondent judge Fernandez dismissed the claim. On September 18, 1969, a motion for reconsideration was filed, which was thereafter denied.

Issue: Whether the claim for the payment of taxes is barred under Rule 86 of the Rules of Court

Held: No, the claim for the payment of taxes is not barred. In the case of Commissioner of Internal Revenue vs. Ilagan Electric & Ice Plant, it was held that the prescription of taxes are governed by the NIRC and not by other provisions of law. Also, in the case of Pineda vs. CFI of Tayabas, it was pointed out that the court may direct the payment of taxes upon motion showing that the taxes have been assessed against the estate. Claims for taxes may be collected even after the estate has been distributed among the heirs. The reason for the liberal treatment of claims for taxes as exception from the statute of non-claims is that taxes are the lifeblood of the Government and their prompt and certain availability are imperious need. To safeguard the interest of the people, neglect or omission to collect such should not be allowed to detriment other people.

case  5  CIR  v.  CTA    234  SCRA  348  

FACTS: A petition for review of the decision of the BIR denying the tax refund of Citytrust was filed with the CTA. It was submitted for decision based solely on the pleadings and evidence submitted by Citytrust. CIR could not present any evidence by reason of the repeated failure of the Tax Credit/Refund Division of the BIR to transmit the records of the case, as well as the investigation report thereon, to the Solicitor General. The CTA rendered its decision ordering BIR to grant a refund to Citytrust in the amount of P13,314,506.14. The CA affirmed the judgment of the CTA.
Issue:    Whether  or  not  Citytrust  is  entitled  to  a  refund.  

HELD: It is a long and firmly settled rule of law that the government is not bound by the errors committed by its agents. In the performance of its government functions, the State can not be estopped by the neglect of its agents and officers. Although the government may generally be estopped through affirmative acts of public officers acting within their authority, their neglect or omission of public duties as exemplified in this case will not and should not produce that effect. Nowhere is the aforestated rule more true than in the field of taxation. It is axiomatic that the government cannot and must be estopped particularly in matters involving taxes. Taxes are the lifeblood of the nation through which the government agencies continue to operate and with which the State effects its functions for the welfare of its constituents. The errors of certain administrative officers should never be allowed to jeopardize the government's financial position, especially in the case at bar where the amount involves millions of pesos the collection whereof, if justified, stands to be prejudiced just because of bureaucratic lethargy. Judgment of the CA is SET ASIDE and the case is REMANDED to the CTA for further proceedings and appropriate action.

Case #6 - Commissioner vs. Algue, 158 SCRA 9 Facts: The Philippine Sugar Estate Development Company (PSEDC). Appointed Algue Inc. as its’ agent. Algue received a commission of 125,000.00 and it was from their commission that it paid organizers of VOICP 75,000.00 in proportional fees. He received an assessment from the CIR. He filed a letter of protest or reconsideration. The CIR contends that the claimed deduction was properly disallowed because it was not an ordinary, reasonable or necessary expense. Issue: Is the CIR correct? Ruling: No. Taxes are the lifeblood of the government and should be collected without unnecessary hindrance. Every person who is able to pay must contribute his share in the running of the government. The government for its’ part is expected to respond in the form of tangible and intangible benefits intended to improve the lives of the people and enhance their moral and material values. This symbiotic relationship is the rationale of taxation and should dispel the erroneous notion that is an arbitrary method of exaction by those in the seat of power. On the other hand, such collection should be made in accordance with law as any arbitrariness will negate the very reason for government itself.

" the exemption does not apply to income derived ". educational and charitable objectives." Because taxes are the lifeblood of the nation. YMCA earned income from leasing out a portion of its premises to small shop owners. and (2) the income it seeks to be exempted from taxation is used actually. and exclusively for educational purposes. . in the total amount of P415. the claimed exemption "must expressly be granted in a statute stated in a language too clear to be mistaken. real or personal. COURT OF APPEALS. educational. respondents. However. PANGANIBAN. like restaurants and canteen operators. YMCA formally protested the assessment and. non-profit institution. as a rule.01 including surcharge and interest. par. exempt from income taxation." The Court reiterate that private respondent is exempt from the payment of property tax. but not income tax on the rentals from its property. The CIR denied the claims of YMCA. Furthermore. the Court has always applied the doctrine of strict in interpretation in construing tax exemptions. non-profit educational institution whose revenues and assets are used actually. Thus. . . pursuant to its religious." Private respondent also invokes Article XIV. petitioner. for deficiency income tax. even if such income [is] exclusively used for the accomplishment of its objectives. . regardless of the disposition made of such income . COURT OF TAX APPEALS and YOUNG MEN'S CHRISTIAN ASSOCIATION OF THE PHILIPPINES. deficiency expanded withholding taxes on rentals and professional fees and deficiency withholding tax on wages. directly. which conducts various programs and activities that are beneficial to the public. it must prove with substantial evidence that (1) it falls under the classification non-stock. non-profit educational institution is insufficient to justify its exemption from the payment of income tax. established as a welfare. Issue: Whether or not the income derived from rentals of real property owned by YMCA. Section 4. the Court notes that not a scintilla of evidence was submitted by private respondent to prove that it met the said requisites. claiming that the YMCA "is a nonstock. [is] not. and charitable non-profit corporation.case 7 COMMISSIONER OF INTERNAL REVENUE. J. Held: The SC agree with the CIR that while the income received by the organizations enumerated in Section 27 (now Section 26) of the NIRC is.615. vs. or from any of their activities conducted for profit. INC.: Facts: Private Respondent YMCA is a non-stock. . from any of their properties. The bare allegation alone that it is a non-stock. 3 of the Constitution. especially the young people. a claim of statutory exemption from taxation should be manifest. Hence. and unmistakable from the language of the law on which it is based. exempted from the payment of tax "in respect to income received by them as such.. for the YMCA to be granted the exemption it claims under the aforecited provision." The CIR adds that "rental income derived by a tax-exempt organization from the lease of its properties. Laws allowing tax exemption are construed strictissimi juris. non-profit educational institution. directly and exclusively for educational purposes so it is exempt from taxes on its properties and income. is subject to income tax under the NIRC and the Constitution. The commissioner of internal revenue (CIR) issued an assessment to private respondent. . real or personal. therefore. and from parking fees collected from non-members.

COMMISSIONER OF INTERNAL REVENUE. Thereafter. Held: Contrary to the petitioner's contention.69.00 representing the overpayment of taxes in the first and second quarters of 1985. within two (2) years after payment of tax.795. 1986.00.69 was likewise denied on the assumption that it was automatically credited by PBCom against its tax payment in the succeeding year. petitioner requested the Commissioner of Internal Revenue (CIR). COURT OF TAX APPEALS and COURT OF APPEALS. The lessees withheld and remitted to the BIR withholding creditable taxes of P282. The circular states that overpaid income taxes are not covered by the two-year prescriptive period under the tax Code and that taxpayers may claim refund or tax credits for the excess quarterly income tax with the BIR within ten (10) years.016.749.016.50 and in 1986 for P234. This must necessarily be so because it is upon taxation that the government chiefly relies to obtain the means to carry on its operations and it is of utmost importance that the modes adopted to enforce the collection of taxes levied should be summary and interfered with as little as possible. on July 25. 1988. No.954. the petitioner likewise reported a net loss of P14. respondent.701. However on September 22. and paid the total income tax of P5. the Bureau of Internal Revenue (BIR) issued Tax Debit Memo Nos. repo rted profits. Basic is the principle that "taxes are the lifeblood of the nation. 1993. On May 20. its functions should not be unduly delayed or hampered by incidental matters. On August 7.615. petitioner instituted a Petition for Review on November 18.299. Thereafter. 1987.00.95. 1988 before the Court of Tax Appeals (CTA). should be computed from the time of filing the Adjustment Return and final payment of the tax for the year. PBCom earned rental income from leased properties. Subsequently. and thus declared no tax payable for the year.69 in 1986.253. 1993. Claims for refund or tax credit should be exercised within the time fixed by law because the BIR being an administrative body enforced to collect taxes. The two-year prescriptive period provided. G. respectively.077. Issue: Whether or not the Court of Appeals erred in denying the plea for tax refund or tax credits on the ground of prescription. 0746-85 and 0747-85 for P3.795. 7-85 issued on April 1.10. filed its quarterly income tax returns for the first and second quarters of 1985." The primary purpose is to generate funds for the State to finance the needs of the citizenry and to advance the common weal. 112024 January 28.R.00 and P1. The rule states that the taxpayer may file a claim for refund or credit with the Commissioner of Internal Revenue. a commercial banking corporation duly organized under Philippine laws.129. PBCom filed a petition for review of said decision and resolution of the CTA with the Court of Appeals (CA).954. . Pending the investigation of the respondent CIR. petitioner filed a Motion for Reconsideration of the CTA's decision but the same was denied due course for lack of merit. the CTA rendered a decision which denied the request of petitioner for a tax refund or credit in the sum amount of P5. PHILIPPINE BANK OF COMMUNICATIONS. for a tax credit of P5. petitioner filed a claim for refund of creditable taxes withheld by their lessees from property rentals in 1985 for P282. PBCom suffered losses so that when it filed its Annual Income Tax Returns for the yearended December 31. 1993. 1985.50 in 1985 and P234. 7-85.00.401. despite petitioner's reliance on Revenue Memorandum Circular No. before any suit in CTA is commenced. 1993. VS. however. petitioner. on the ground that it was filed beyond the two-year reglementary period provided for by law. changing the prescriptive period of two years to ten years. the relaxation of revenue regulations by RMC 7-85 is not warranted as it disregards the two-year prescriptive period set by law. among others. The petitioner's claim for refund in 1986 amounting to P234. the CA affirmed in toto the CTA's resolution dated July 20. Petitioner argues that its claims for refund and tax credits are not yet barred by prescription relying on the applicability of Revenue Memorandum Circular No.077. The taxes due were settled by applying PBCom's tax credit memos and accordingly. Due process of law under the Constitution does not require judicial proceedings in tax cases.602.077. hence this petition. Philippine Bank of Communications (PBCom). 1999 Facts: Petitioner. But during these two years. On June 22.

petitioner requested the COA for an early release of its reimbursement certificates from the OPSF covering claims with the Office of energy Affairs In its Answer dated 8 May 1989. No. the COA denied petitioner's request for the early release of the reimbursement certificates from the OPSF. 1956 which as of 31 December 1987. Caltex in its letter of 3 May 1989.D. taxes may be levied with a regulatory purpose to provide means for the rehabilitation and stabilization of a threatened industry which is affected with public interest as to be within the police power of the state. the COA sent a letter to Caltex Philippines.00 and informing it that. hereinafter referred to as Petitioner. because the same did not result from the reduction of the domestic price of petroleum products. however.037. if indeed incurred. this Court can do nothing. 8 May 1992 En Banc. No. COA further prohibited Caltex from offseting remittances and reimbursements for the current and ensuing years ISSUE: Whether the amounts due from Caltex to the OPSF may be offsetted against Caltex’ outstanding claims from said funds. Commission on Audit (COA) GR 92585. of the additional tax on petroleum products authorized under the aforesaid Section 8 of P. amounted to 335. 2 took no part FACTS: On 2 February 1989. Taxation is no longer envisioned as a measure merely to raise revenue to support the existence of government. A taxpayer may not offset taxes due from the claims that he may have against the government. Section 8 of the decree. . all of its claims for from the OPSF shall be held in abeyance.D. Caltex Philippines vs. fall under the foregoing provision of P.649. they do not. pending such remittance. as amended. 1956. (CPI). Although petitioner's financing losses. is further amended by Congress. may constitute cost underecovery in the sense that such were incurred as a result of the inability to fully offset financing expenses from yields in money market placements. excluding that unremitted for the years 1986 and 1988. Until paragraph (2). Inc. directing the latter to remit to the OPSF its collection. Davide (J): 12 concur.15. HELD: NO. as amended.

666. Inc. S/A 265-537154-3) had been opened with the PNB Buendia Branch under petitioner's name containing the sum of P417. 1988 a "Manifestation" informing the court that private respondent was no longer the true and lawful owner of the subject property because a new title over the property had been registered in the name of Philippine Savings Bank. made pursuant to the provisions of Pres. for failure of the manager of the PNB Buendia Branch to comply with the order dated September 8. During the hearings conducted for the above motions.00. for to do so would result in the disbursement of public funds without the proper appropriation required under the law.510. Respondent trial judge issued an order dated December 21. 23 SCRA 899]. private respondent moved for the issuance of a writ of execution. Palacio did not apply to the case because petitioner's PNB Account No.291. Branch CXLII ADMIRAL FINANCE CREDITORS CONSORTIUM. This motion was granted by respondent RTC judge. 1986.00. San Antonio Village.. and SHERIFF SILVINO R. For its part. After several conferences. PSB filed a manifestation informing the court that it had consolidated its ownership over the property as mortgagee/purchaser at an extrajudicial foreclosure sale held on April 20. fixing the appraised value of the property at P5. 89898-99 October 1. a Mr. Nos. 1968. Attached to petitioner's complaint was a certification that a bank account (Account No. involving a parcel of land and improvements thereon located at Mayapis St. After this decision became final and executory. Petitioner and the bank manager of PNB Buendia Branch then filed separate petitions. Inc.. INC. Petitioner filed a motion for reconsideration. sustained the jurisdiction of respondent RTC judge over the funds contained in petitioner's PNB Account No. a Notice of Garnishment dated January 14.160. and the PNB Buendia Branch to reveal the amount in petitioner's account which was garnished by respondent sheriff. After due hearing where the parties presented their respective appraisal reports regarding the value of the property. which was duly opposed by private respondent.506. vs. 1987. 42. DE GUZMAN. PASTRANA. On the other hand. Decree No. Palacio [G. FACTS: The present petition for review is an off-shoot of expropriation proceedings initiated by petitioner Municipality of Makati against private respondent Admiral Finance Creditors Consortium. private respondent filed two succeeding motions to require the bank manager to show cause why he should not be held in contempt of court. 1990 MUNICIPALITY OF MAKATI. 1988 denying petitioner's motion for reconsideration on the ground that the doctrine enunciated in Republic v. HON. THE HONORABLE COURT OF APPEALS. Makati and registered in the name of Arceli P. Pastrana upon the manager of the PNB Buendia Branch. Decree No. 1988. Antonio Bautista.M u n i c i p a l i t 16) G. PSB and private respondent entered into a compromise agreement whereby they agreed to divide between themselves the compensation due from the expropriation proceedings. SALVADOR P. and. However. L-20322. . After issuance of the writ of execution. Private respondent filed its opposition to the motion. Jo.953. from the garnished account of petitioner. as Judge RTC of Makati.respondents. It appears that the action for eminent domain was filed on May 20. 1987. petitioner. 1988 which: (1) approved the compromise agreement. Petitioner filed a motion to lift the garnishment. Jo under TCT No. 1988 was served by respondent sheriff Silvino R.00 which was earlier released to private respondent. Pending resolution of the above motions. 1987. JR. May 29. informed the court that he was still waiting for proper authorization from the PNB head office enabling him to make a disbursement for the amount so ordered. and affirmed his authority to levy on such funds. citing the case of Republic of the Philippines v. 265-537154-3. the Court of Appeals dismissed both petitions for lack of merit. (2) ordered PNB Buendia Branch to immediately release to PSB the sum of P4. 1987. S/A 265-537154-3 was an account specifically opened for the expropriation proceedings of the subject property pursuant to Pres. and ordering petitioner to pay this amount minus the advanced payment of P338. In compliance with this order. petitioner filed on July 20.. 42. No. 1988 praying that an order be issued directing the bank to deliver to respondent sheriff the amount equivalent to the unpaid balance due under the RTC decision dated June 4. respondent sheriff was informed that a "hold code" was placed on the account of petitioner. the general manager of the PNB Buendia Branch.45 which corresponds to the balance of the appraised value of the subject property under the RTC decision dated June 4. Home Building System & Realty Corporation and one Arceli P. Petitioner's motion to lift the garnishment was denied. petitioner contended that its funds at the PNB Buendia Branch could neither be garnished nor levied upon execution. S-5499. Respondent trial judge subsequently issued an order dated September 8.. respondent RTC judge rendered a decision on June 4. As a result of this.R.R. (3) ordered PSB and private respondent to execute the necessary deed of conveyance over the subject property in favor of petitioner. private respondent filed a motion dated January 27. (PSB) Respondent RTC judge issued an order requiring PSB to make available the documents pertaining to its transactions over the subject property. on the ground that the manner of payment of the expropriation amount should be done in installments which the respondent RTC judge failed to state in his decision.

Municipal revenues derived from taxes. without justifiable reason. the Court finds that the municipality has had more than reasonable time to pay full compensation. are exempt from execution The foregoing rule finds application in the case at bar. Absent a showing that the municipal council of Makati has passed an ordinance appropriating from its public funds an amount corresponding to the balance due under the RTC decision dated June 4. well-settled is the rule that public funds are not subject to levy and execution. The funds deposited in the second PNB Account No. S/A 263-530850-7 are public funds of the municipal government. to effect payment of a final money judgment rendered against it. In this jurisdiction. licenses and market fees. the validity of the RTC decision dated June 4. Nevertheless. 1987 is not disputed by petitioner. This Court will not condone petitioner's blatant refusal to settle its legal obligation arising from expropriation proceedings it had in fact initiated. Issue: Whether or not the money in the bank account of the petitioner can be disbursed to the private respondent. 1987. unless otherwise provided for by statute More particularly. for three (3) years. For three years now.Its motion for reconsideration having been denied by the Court of Appeals. less the sum of P99. no levy under execution may be validly effected on the public funds of petitioner deposited in Account No. The State's power of eminent domain should be exercised within the bounds of fair play and justice. Petitioner has benefited from its possession of the property since the same has been the site of Makati West High School since the school year 19861987. the claimant may avail of the remedy of mandamus in order to compel the enactment and approval of the necessary appropriation ordinance. No appeal was taken therefrom.743. whether real or personal. this is not to say that private respondent and PSB are left with no legal recourse. which are necessary for public use cannot be attached and sold at execution sale to satisfy a money judgment against the municipality. the properties of a municipality. S/A 265-537154-3. and the corresponding disbursement of municipal funds therefor In the case at bar. In the case at bar. Held: There is merit in this contention.94 deposited in Account No. petitioner has enjoyed possession and use of the subject property notwithstanding its inexcusable failure to comply with its legal obligation to pay just compensation. the compensation to be paid fixed and the municipality is in full possession and utilizing the property for public purpose. petitioner now files the present petition for review with prayer for preliminary injunction. Where a municipality fails or refuses.             . considering that valuable property has been taken. and which are intended primarily and exclusively for the purpose of financing the governmental activities and functions of the municipality. S/A 263-530850-7.

 It  must  be  exercised  fairly.   It   does   not   conform   with   the   sense   of   justice   for   the   government   to   persuade   the   taxpayer  to  lend  it  a  helping  hand  and  later  on  penalize  him  for  duly  answering  the  urgent  call.  Therefore  it  should  be  exercised  with  caution  to  minimize   injury  to  the  proprietary  rights  of  a  taxpayer.  It  was  the  bounden  duty  of  the  government   to   pay   the   agreed   compensation   after   it   had   persuaded   the   Roxas   siblings   to   sell.17.  equally  and  uniformly.   The   tenants   who   have  all  been  tilling  the  subject  lands  expressed  their  desire  to  purchase  from  the  Roxas  siblings  the  parcels  which  they   actually   occupied.  pursuant  to  the  tax  code.  The  CIR  subsequently  demanded  among  others.   persuaded   the   Roxas   siblings   to   sell   their   landholdings.     .   Held:   No.  lest  the  tax  collector  kill   the  “hen  that  lays  the  golden  egg”.   but   more   in   obedience   to   the   request   and   pursuant  to  the  policy  of  the  government  to  allocate  lands  to  the  landless.  payment  for  real  estate   dealer’s   tax   referring   to   the   act   of   subdividing   the   Nasugbu   farmlands   and   selling   them   to   the   farmer   occupants   on   installment.  In  order  to  maintain  the  general  public’s  trust  and  confidence.  this  power  must  be   used   justly   and   not   treacherously.  Roxas  Y  Cia  vs  CTA   Facts:   Roxas   Siblings   inherited   properties.   Since   the   government   did   not   have   funds   to   cover   the   purchase   price.  Thus.  the  lands  sold  are  capital  assets  and  gain  derived   thereof  is  capital  gain  taxable  only  to  the  extent  of  50%.   Issue:  WON  Roxas  siblings  should  be  imposed  with  a  real  estate  dealers  tax  in  view  of  the  sale  of  Nasugbu  farmlands.   The   court   held   that   the   sale   was   not   only   in   consonance   with.   one   of   which   is   an   agricultural   land   in   Nasugbu   Batangas.   50%   of   which   was   reported   for   income   tax   purposes  as  gain  on  the  sale  of  capital  asset.   loans   were   granted   and   Roxas   siblings   allowed   payment   through   installment.   Roxas   derived   from   said   installments   a   net   gain.   The   court   went   on   to   discuss   “the   power  of  taxation  is  sometimes  called  the  power  to  destroy.  Roxas  cannot  therefore   be  considered  as  a  real  estate  dealer.   The   government.   in   consonance   with   its   constitutional   mandate   to   acquire   big   landed   estates   and   apportion   them   among   the   tenant   farmers.

  144   and   145   of   the   NIRC.  wholesaling.  is  still  liable  to  pay  (a)  tax  on  business  and  (b)  storage  fees.  6-­‐77.  gasoline.  Pililla.  S-­‐1974  otherwise  known  as  "The  Pililla  Tax  Code  of  1974"  which  took  effect  on  July  1.  Rizal.   1977.  1973)  directed  to  all  provincial.  based  on  Municipal   Ordinance  No.   P.  or  producers  of  any  article  of  commerce  of  whatever  kind  or  nature. 90776 June 3.  distillers.  however.  fees  or  charges.  26-­‐73  (December  27.  1974. No.  petroleum  products  subject  to  the  specific  tax  under  the  NIRC.   Sections  9  and  10  of  the  said  ordinance  imposed  a  tax  on  business.  retailing.   storage  permit  fees  from  1975  to  1986.  PD  231  (Local  Tax  Code)  was  issued  enacted.     The  Secretary  of  Finance  issued  Provincial  Circular  No.  1973.  or  dealing  in  petroleum   products  subject  to  the  specific  tax  under  the  NIRC.  1973)was  also  issued  instructing  all  City  Treasurers  to   refrain  from  collecting  any  local  tax  imposed  in  tax  ordinances  enacted  before  or  after  the  effectivity  of  the  Local  Tax  Code.  and  mayor's  permit  and  sanitary  inspection  fee  unto  the  respondent  Municipality  of  Pililla.  The  RTC  rendered  a  decision  against  petitioner.     On  June  28.D.   Under  Section  142  of  the  NIRC  of  1939.  Rizal.  including  brewers.  repackers. RIZAL.  Sections  19  and  19  (a)  provide  that  the  municipality  may  impose  taxes  on  business.  and  compounders  of  liquors.  but  was  not  implemented  and/or  enforced  by  the  Municipality  of  Pililla  because  of  its  having   been   suspended   up   to   now   in   view   of   Provincial   Circular   Nos.  manufactured  oils  and  other  fuels  are  subject  to  specific  tax.  distillers.#18 G.   except   on   those   for   which   fixed   taxes   are   provided   on   manufacturers.   26-­‐73   and   26   A-­‐73.  repackers.   .  combustible  or  explosive  substances. PATENIA.  distilled  spirits  and/or  wines  in  accordance  with  the  schedule   listed  therein.  The  questioned  Municipal  Tax  Ordinance  No.     Enforcing  the  provisions  of  the  ordinance.  Provincial  Circular  No. MUNICIPALITY OF PILILLA.  436  was  promulgated  increasing  the  specific  tax  on  lubricating  oils.   sanitary  inspection  fee  and  storage  permit  fee  for  flammable.  1.  PPC. petitioner.  including  brewers.  Section  153  of  which  specifically  imposes  specific  tax  on  refined  and  manufactured  mineral  oils  and   motor  fuels.   and   granting   provinces. FACTS: Petitioner   is   a   business   enterprise   engaged   in   the   manufacture   of   lubricated   oil   basestock   which   is   a   petroleum   product.  while  Section  139  of  the  disputed  ordinance   imposed  surcharges  and  interests  on  unpaid  taxes.  bunker  fuel  oil.  Pililla.  retailing.  the  respondent  filed  a  complaint  against  PPC  for  the  collection  of  the  business  tax  from  1979  to  1986.  rectifiers.  city  and  municipal  treasurers  to  refrain   from  collecting  any  local  tax  imposed  in  old  or  new  tax  ordinances  in  the  business  of  manufacturing.  importers.   1158   otherwise   known   as   the   National   Internal  Revenue  Code  of  1977  was  enacted.  rectifiers.  P.     Respondent  enacted  Municipal  Tax  Ordinance  No.   On   June   3. vs.R.  on  the  businesses  of   manufacturing.   and   compounders   of   liquors.  or  dealing  in.   importers   or   producers   of   any   article   of   commerce   of   whatever   kind   or   nature. 1991 PHILIPPINE PETROLEUM CORPORATION.  except  for  those  for  which  fixed  taxes  are  provided  in  the  Local  Tax  Code  on   manufacturers.  wholesaling.  1.  considering   Provincial  Circular  No.  26  A-­‐73  (January  9.  1974.   as   well   as   mayor's   permit.  1  was  reviewed   and  approved  by  the  Provincial  Treasurer  of  Rizal.  PPC  owns  and  maintains  an  oil  refinery  including  49  storage  tanks  for  its  petroleum  products  in  Malaya.D. respondent.  diesel  fuel  oil  and  other  similar   petroleum   products   levied   under   Sections   142.  mayor's  permit  and  sanitary  inspection  fees  from  1975  to  1984.  Rizal.     On  April  13. Represented by MAYOR NICOMEDES F.   with   its   refinery   plant   situated  at  Malaya.  have  already  paid  the  last-­‐ named  fees  starting  1985.   cities   and   municipalities   certain   shares   in   the   specific  tax  on  such  products  in  lieu  of  local  taxes  imposed  on  petroleum  products.     ISSUE:     WON  PPC  whose  oil  products  are  subject  to  specific  tax  under  the  NIRC.   distilled   spirits   and/or   wines   in   accordance   with   the   schedule   found   in   the   Local   Tax   Code.

" It conforms with the mandate of said law. 426.D. it should have been expressly stated in P. 436.D.D. or dealers in petroleum products. To allow the continuous effectivity of the prohibition set forth in PC No.D. No. The exercise by local governments of the power to tax is ordained by the present Constitution. etc. in petroleum products contravenes a declared national policy. 426.D. 231 as amended by P. 1 imposing the assailed taxes. producers of any article of commerce of whatever kind or nature. Furthermore. No. 436 prohibits the imposition of local taxes on petroleum products. 26-73 and 26 A-73 issued by the Secretary of Finance when Sections 19 and 19 (a). A tax on business is distinct from a tax on the article itself. fees and charges is valid especially Section 9 (A) which according to the trial court "was lifted in toto and/or is a literal reproduction of Section 19 (a) of the Local Tax Code as amended by P. while Section 2 of P. if the imposition of tax on business of manufacturers. wholesalers. No.D. Thus. wherein the municipality is granted the right to levy taxes on business of manufacturers. But P. importers. No. 426 amending the Local Tax Code is deemed to have repealed Provincial Circular Nos. Well-settled is the rule that administrative regulations must be in harmony with the provisions of the law. said decree did not amend Sections 19 and 19 (a) of P. were carried over into P. retailers.   HELD:   There is no question that Pililla's Municipal Tax Ordinance No. 426 and no exemptions were given to manufacturers.D. . 26-73 (1) would be tantamount to restricting their power to tax by mere administrative issuances.

” The power of a municipality to impose business taxes is provided for in Section 143 of the LGC.62. per Section 148 of the NIRC. including manufacturers.Case 21 PETRON CORPORATION v. ENRIQUEZ of the MUNIPALITY OF NAVOTAS. METRO MANILA G.087. or any other petroleum product for that matter. the filing of this petition. fees or charges on petroleum products. namely: “excise taxes on articles enumerated under the National Internal Revenue Code [(NIRC)]. those engaged in the export or commerce of essential commodities. and Barangays shall not extend to the levy of the following: xxx (h) Excise taxes on articles enumerated under the National Internal Revenue Code. as amended. Second Division. distributors. and taxes. Section 133(h) of the LGC reads as follows: Sec. This obviously broad power is further supplemented by paragraph (h) of Section 143 which authorizes the sanggunian to impose taxes on any other businesses not otherwise specified under Section 143 which the sanggunian concerned may deem proper to tax. fees or charges on petroleum products. dealers of any article of commerce of whatever nature. The letter-protest was denied. TIANGCO and MUNICIPAL TREASURER MANUEL T. and peddlers engaged in the sale of any merchandise or article of commerce.” There is no doubt that among the excise taxes on articles enumerated under the NIRC are those levied on petroleum products. as amended. would undoubtedly cover the business of selling diesel fuels.” excepting excise taxes. Under the provision. a municipality is authorized to impose business taxes on a whole host of business activities. banks and financial institutions. ISSUE: Whether or not a local government unit is empowered under the Local Government Code (LGC) to impose business taxes on persons or entities engaged in the sale of petroleum HELD: Petition GRANTED. In accordance to the New Navotas Revenue Code or Ordinance 92-03. unless there is another provision of law which states otherwise. A Complaint for Cancellation of Assessment was filed before the Regional Trial Court (RTC) of Malabon. Petron filed a letter protest arguing that it is exempt from paying local business taxes as provided by Article 232 (h) of the Implementing Rules of the Local Government Code. . Evidently. The RTC dismissed the Complaint and required Petron to pay the assessed tax. Section 143.R. Common Limitations on the Taxing Powers of Local Government Units. Hence. Section 133 prescribes the limitations on the capacity of local government units to exercise their taxing powers otherwise granted to them under the LGC. a specific prohibition is imposed barring the levying of any other type of taxes with respect to petroleum products.259. paragraph (h) of the Section mentions two kinds of taxes which cannot be imposed by local government units. contractors and other independent contractors. broad in scope as it is.Unless otherwise provided herein. fees and charges. and “taxes. municipalities. fees or charges on petroleum products. 158881. Suffice it to say. retailers. 16 April 2006. 133. MAYOR TOBIAS M. Section 133(h) provides two kinds of taxes which cannot be imposed by local government units: “excise taxes on articles enumerated” under the NIRC. petitioner Petron Corporation was assessed a total tax of P6. cities. the exercise of the taxing powers of provinces. Apparently. wholesalers. The power of a municipality to impose business taxes derives from Section 143 of the Code that specifically enumerates several types of business on which it may impose taxes. as amended. J.) While local government units are authorized to burden all such other class of goods with “taxes.” and “taxes. . A Motion for Reconsideration was filed but it was later denied by the court. (Tinga.

Section 5. since the preceding phrase already prohibits the imposition of excise taxes on articles already subject to such taxes under the NIRC. such as petroleum products. the later reference to “taxes. barred “excise taxes” or “direct taxes. are prohibited by Section 133(h). tobacco products. Section 5(a) of the Code states that “[a]ny provision on a power of a local government unit shall be liberally interpreted in its favor. fees or charges on petroleum products” pertains to the imposition of direct or excise taxes on petroleum products. If the phrase actually pertains to excise taxes. fees or charges that could withstand the absolute prohibition imposed by the provision. fees and charges. and not business taxes.” There is no doubt that following the 1987 Constitution and the Code. fees or charges on petroleum products. automobiles. The absence of such a qualification leads to the conclusion that all sorts of taxes on petroleum products. a specific prohibition is imposed barring the levying of any other type of taxes with respect to petroleum products. However. if not the wisdom of reposing fiscal autonomy to local government units have fallen by the wayside. such distinction is immaterial insofar as the latter part of Section 133(h) is concerned. Section 5(b) then proceeds to assert that “[i]n case of doubt. the fiscal autonomy of local government units has received greater affirmation than ever. While local government units are authorized to burden all such other class of goods with “taxes. any question thereon shall be resolved in favor of devolution of powers and of the lower local government unit. but all “taxes. that a business tax is distinct from an excise tax. mineral products. Evidently. and in case of doubt. local fiscal autonomy should not necessarily translate into abject deference to the power of local government units to impose taxes. The Court concedes that a tax on a business is distinct from a tax on the article itself. any tax ordinance or revenue measure shall be construed strictly against the local government unit enacting it. fees or charges on petroleum products” does not qualify the kind of taxes. perfumes. goods made of precious metals. “petroleum products”. including business taxes. for then it would be understood that only such specified taxes on petroleum products could not be imposed under the prohibition.” excepting excise taxes. fees and charges. and such non-essential goods as jewelry. fees and charges” pertains only to one class of articles of the many subjects of excise taxes. for the phrase “taxes.” And this latter qualification has to be respected as a constitutionally authorized limitation which Congress has seen fit to provide. Article X assures that “[e]ach local government unit shall have the power to create its own sources of revenues and to levy taxes. Where the law does not distinguish. in crafting Section 133(h).This ability of local government units to impose business or other local taxes is ultimately rooted in the 1987 Constitution. fees and charges. and yachts and other vessels intended for pleasure or sports. specifically.” The earlier reference in paragraph (h) to excise taxes comprehends a wider range of subjects of taxation: all articles already covered by excise taxation under the NIRC. .” Respondents assert that the phrase “taxes. such as alcohol products.” though the power is “subject to such guidelines and limitations as the Congress may provide. Section 133(h) states that local government units “shall not extend to the levy of xxx taxes. There would be no sense on the part of the legislature to twice emphasize in the same sentence that excise taxes on petroleum products are beyond the pale of local government taxation. we should not distinguish. and liberally in favor of the taxpayer.” or any category of taxes only. The language of Section 133(h) makes plain that the prohibition with respect to petroleum products extends not only to excise taxes thereon. or for that matter. Previous decisions that have been skeptical of the viability.” But somewhat conversely. then it would be an exercise in utter redundancy. It would have been a different matter had Congress. In contrast.

 ALFREDO  PIO  DE  RODA.   petitioner.  860  because  said  Deeds  of   Sale  were  mere  formalities  in  the  implementation  of  Contract  No.   HYDRO   RESOURCES   CONTRACTORS   CORPORATION.    By  the   terms  of  the  contract  NIA  undertakes  payment  of  all  the  import  duties  and  taxes  incident  to  the  importations  deductible   from  the  proceeds  of  the  contract  price.   vs.  petitioner  was  allowed  to  procure  new  construction  equipment.   HYDRO   was   assessed   additional   3%   ad   valorem   duty   prescribed   in   Executive   Order   860.       These   findings   of   the   Collector   of   Customs   as   well   as   the   Acting   Customs   Commissioner   were   reversed   by   the   Deputy   Minister   of   Finance.  sometime  in  August  1978.     The   Acting   Commissioner   of   Customs   affirmed   the   ruling   of   the   Collector   of   Customs.  which  should  be   reckoned  and  construed  as  the  actual  date  of  sale.     Upon   the   transfer   of   the   ownership   of   the   said   equipment   HYDRO   was   assessed  by  the  Bureau  of  Customs  the  corresponding  customs  duty  and  compensating  tax.  Under  the  aforesaid  contract.  HYDRO  shall  repay  NIA  in  full  the  value  of  the  construction  equipment  out  of   the  same  proceeds  before  eventual  transfer  or  taking  ownership  of  subject  construction  equipment  upon  termination  of   the  contract.23.   DEPUTY  MINISTER  OF  FINANCE.  No.    This  amount  was  paid  by   HYDRO   to   the   Bureau   of   Customs.  it  is  not  liable  for  the  payment  of  ad  valorem  tax.  MPI-­‐C-­‐1  executed  on  August  1978.  80276         FACTS:       The  National  Irrigation  Administration  (NIA)  entered  into  an  agreement.  the  payment  for  which  was  advanced  by  NIA  under  a  financing  plan  embodied  in  the  contract.  This  must  be  so  because  the  contract  of  purchase  and  sale  of  the  NIA-­‐ .           The   Collector   of   Customs   acted   favorably  on  petitioner's  protest  and  ordered  the  refund  of  the  amount  paid  for  the  ad  valorem  duty  in  the  form  of  tax   credit.  HYDRO  had  fully  repaid   the  value  of  the  construction  equipment  so  much  so  that  NIA  executed  deeds  of  sale  covering  the  same  and  transferring   the   ownership   thereof   in   favor   of   petitioner.   HYDRO   also   paid   this   amount   but   this   time   under   protest.     The  subsequent  executions  of  the  Deeds  of  Sale  of  the  equipment  in  question  on  December  6.     Petitioner   appealed   to   the   Court   of   Tax   Appeals   but   the   same   affirmed   the   ruling   of   the   Deputy   Minister   of   Finance   denying  petitioner's  claim  for  refund.  spare  parts  and   tools  from  abroad.     In   addition.   for   the   construction   of   the   Magat   River   Multipurpose   Project   in   Isabela.R.   1990  Dec  21  2nd  Division  G.  In  the  meantime.     ISSUE:    WHETHER  OR  NOT  THE  HYDRO  RESOURCES  IS  LIABLE  FOR  THE  PAYMENT  OF  AD  VALOREM  TAX?     HELD:     No.    NIA  reneged  and  failed  in  the  compliance  of  its  tax  obligations.  1982  and  March  24.  respondents.  1983   are  not  relevant  and  material  in  the  consideration  of  the  application  of  Executive  Order  No.  with  petitioner  Hydro   Resources   Contractors   Corporation   (Hydro   for   short).   THE   COURT   OF   TAX   APPEALS   and   THE   HON.

 The  formality  of   vesting  of  title  over  the  equipment  was  not  an  unwarranted  expectation  but  a  matter  of  an  implementation  of  a  pre-­‐ existing  agreement.     "Let  it  suffice  that  the  procurement  of  the  equipment.           .  hence.  delivery.  the  imported  articles  can  only  be  subject  to  the  rates  of  import  duties/taxes  prevailing  at  the   time  of  entry  or  withdrawal  from  customs'  custody  (Sec.  transfer  of  possession   and  ownership.  repayment.   MPI-­‐C-­‐1   was   signed   by   NIA   and   HYDRO   wherein  the  contracting  parties  provided  for  their  financing.  was  not  on  a  tax  exempt  basis  as  the  import   liabilities  thereon  have  been  secured  to  be  paid  under  the  terms  of  the  financial  scheme  in  the  contract.financed/owned   equipment   to   Hydro   took   place   in   1978   when   Contract   No.  The  said  scheme  contemplated  a  Contract  of  Sale  within  the  purview  of  Art.  TCC)  in  1978  and  1979.  1458  of  the  Civil  Code.  as  earlier  stated.  thus  foreclosing  any  retroactive   application  of  the  1982  Executive  Order.  205.  procurement.

or payment of public expenses. the least limitable. Petitioners contend. On the other hand. this Court held that the Oil Price Stabilization Fund (OPSF) and the Sugar Stabilization Fund (SSF) were exactions made in the exercise of the police power. and Rule 18 of the Rules and Regulations (IRR) which seeks to implement the said imposition. 34 which enumerates the purposes for which the Universal Charge is imposed and which can be amply discerned as regulatory in character. Petitioners contend that the Universal Charge has the characteristics of a tax and is collected to fund the operations of the NPC. HELD: The power to tax is based on the principle that taxes are the lifeblood of the government. that the assailed provision of law and are unconstitutional since the universal charge provided for under Sec. 2.27. Respondents further contend that said Universal Charge does not possess the essential characteristics of a tax. respondent PSALM through the Office of the Government Corporate Counsel (OGCC) contends that unlike a tax which is imposed to provide income for public purposes. Rule 18 of the IRR of the said law is a tax which is to be collected from all electric end-users and self-generating entities. Energy Regulatory Board. Thus. imposing the Universal Charge. government cannot fulfill its mandate of promoting the general welfare and well-being of the people.and in Gaston v. the State's police power. the theory behind the exercise of the power to tax emanates from necessity. unlike a tax which is imposed based on the individual taxpayer's ability to pay. without taxes.It is the most pervasive. be declared unconstitutional. ISSUE: Whether or not the Universal Charge imposed under Sec. which is to ensure the viability of the country's electric power industry. administration of the law. that its imposition would redound to the benefit of the electric power industry and not to the public. In Valmonte v. the assailed Universal Charge is levied for a specific regulatory purpose. Such can be deduced from Sec. police power is the power of the state to promote public welfare by restraining and regulating the use of liberty and property. otherwise known as the “Electric Power Industry Reform Act of 2001” (EPIRA). et al. among others. 34 of the EPIRA and sought to be implemented under Sec. and their prompt and certain availability is an imperious need. It is a well-established doctrine that the taxing power may be used as an implement of police power. The EPIRA resonates such regulatory purposes. such as support of the government. and the most demanding of the three fundamental powers of the State. Gerochi vs DOE Facts: Petitioners filed an original action praying that Section 34 of Republic Act (RA) 9136. particularly its regulatory dimension. On the other hand. In exacting the assailed Universal Charge through Sec. 34 of the EPIRA. is invoked. . and that its rate is uniformly levied on electricity end-users. 34 of the EPIRA is a tax. Republic Planters Bank.

Mail users were already a class by themselves even before the enactment of the statue and all that the legislature did was merely to select their class. Manila did not bear the special anti-TB stamp required by the statute. laid upon the exercise of a privilege. their exemption rests on the State's sovereign immunity from taxation. That no such additional charge of five centavos shall be imposed on newspapers. Issue: Whether or not RA 1635 violates the equal protection clause and the rule of uniformity and equality of taxation Ruling It is said that the statute is violative of the equal protection clause of the Constitution. to test the constitutionality of the statute. it was returned to the petitioner. The same considerations may induce the legislature to impose a flat tax which in effect is a charge for the transaction. granted the power to select the subject of taxation. It is based on ability to pay. operating equally on all persons within the class regardless of the amount involved. As such the objections leveled against it must be viewed in the light of applicable principles of taxation. Legislation is essentially empiric and Republic Act 1635. A tax need not be measured by the weight of the mail or the extent of the service rendered. As for the Government and its instrumentalities. as amended. as well as the implementing administrative orders issued. More specifically the claim is made that it constitutes mail users into a class for the purpose of the tax while leaving untaxed the rest of the population and that even among postal patrons the statute discriminatorily grants exemption to newspapers while Administrative Order 9 of the respondent Postmaster General grants a similar exemption to offices performing governmental functions. While the principle that there must be a reasonable relationship between classification made by the legislation and its purpose is undoubtedly true in some contexts. more than in other areas. addressed to a certain Agustin Aquino of 1014 Dagohoy Street. the privilege of using the mails. no mail matter shall be accepted in the mails unless it bears such semi-postal stamps: Provided. the Director of Posts shall order for the period from August nineteen to September thirty every year the printing and issue of semi-postal stamps of different denominations with face value showing the regular postage charge plus the additional amount of five centavos for the said purpose. The State cannot be taxed without its consent. classification has been a device for fitting tax programs to local needs and usages in order to achieve an equitable distribution of the tax burden. Moreover. as amended by RA 2631 (Anti-TB Stamp Law). the State's power to grant exemption must likewise be conceded as a necessary corollary. 1963 petitioner mailed a letter at the post office in San Fernando. the rule of uniformity and equality of taxation is not infringed by the imposition of a flat rate rather than a graduated tax. . such as the case of newspapers. The additional proceeds realized from the sale of the semi-postal stamps shall constitute a special fund and be deposited with the National Treasury to be expended by the Philippine Tuberculosis Society in carrying out its noble work to prevent and eradicate tuberculosis. namely. hence this appeal by the respondent postal authorities. It is settled that the legislature has the inherent power to select the subjects of taxation and to grant exemptions. which provides as follows: “To help raise funds for the Philippine Tuberculosis Society. Congress must have concluded that the contribution to the anti-TB fund can be assured by those who can afford the use of the mails. The reason for this is that traditionally. is in the nature of an excise tax. The classification of mail users is not without any reason. the petitioner brought suit for declaratory relief in the Court of First Instance of Pampanga. the legislature possesses the greatest freedom in classification. In the field of taxation. The lower court declared the statute and the orders unconstitutional. In the allocation of the tax burden. In view of this development. It is not accurate to say that the statute constituted mail users into a class. as amended. it has no application to a measure whose sole purpose is to raise revenue. and on administrative convenience. PALOMAR Facts Herein petitioner Benjamin Gomez questions the constitutionality of Republic Act 1635.28. Considerations of administrative convenience and cost afford an adequate ground for classification. and during the said period. Because this letter. Singalong. The legislature may withhold the burden of the tax in order to foster what it conceives to be a beneficent enterprise. Finally. GOMEZ V. equal protection of the law has been afforded. be that standard based upon ability to produce revenue or some other legitimate distinction. contending that it violates the equal protection clause of the Constitution as well as the rule of uniformity and equality of taxation. let alone the enjoyment of a privilege.” On September l5. no more than reflects a distinction that exists in fact. So long as the classification imposed is based upon some standard capable of reasonable comprehension. The five centavo charge levied by Republic Act 1635. Pampanga.

Issue: Whether the ordinance and the law authorizing it constitute class legislation." Object of the suit is the annulment of Ordinance No. a public accountant. outsiders who have no offices in the city but practice their profession therein are not subject to the tax – this requires judicial determination.29. so that it is but fair that the professionals in Manila be made to pay a higher occupation tax than their brethren in the provinces. . it is not for the courts to judge what particular cities or municipalities should be empowered to impose occupation taxes in addition to those imposed by the National Government. 3398 of the City of Manila together with the provision of the Manila charter authorizing it and the refund of taxes collected under the ordinance but paid under protest." Among the professions taxed were those to which plaintiffs belong. no doubt. Moreover. Held:The lower court was in error in saying that the imposition of the penalty provided for in the ordinance was without the authority of law. The ordinance in question imposes a municipal occupation tax on persons exercising various professions in the city and penalizes non-payment of the tax "by a fine of not more than two hundred pesos or by imprisonment of not more than six months. No. it has withheld that authority from other chartered cities. Regarding "class legislation". or by both such fine and imprisonment in the discretion of the court. Required tax by the questioned ordinance was paid under protest. That matter is peculiarly within the domain of the political departments and the courts would do well not to encroach upon it. Plaintiffs' complaint is that while the law has authorized the City of Manila to impose the said tax. a dental surgeon and a pharmacist. and authorize what amounts to double taxation. calling or activity by both the state and the political subdivisions thereof. offers a more lucrative field for the practice of the professions. 1954 Facts:This suit was commenced by two lawyers. The argument against double taxation may not be invoked where one tax is imposed by the state and the other is imposed by the city it being widely recognized that there is nothing inherently obnoxious in the requirement that license fees or taxes be exacted with respect to the same occupation. Plaintiffs brand the ordinance unjust and oppressive because they say that it creates discrimination within a class in that while professionals with offices in Manila have to pay the tax. purportedly "in their own behalf and in behalf of other professionals practising in the City of Manila who may desire to join it. The lower court upheld the validity of the charter provision but declared the ordinance itself illegal and void on the ground that the penalty there in provided for nonpayment of the tax was not legally authorized. G. Punsalan vs Municipal Board of the City of Manila.R. a medical practitioner. as the seat of the National Government and with a population and volume of trade many times that of any other Philippine city or municipality. Section 18 of Manila Charter in fact authorize to fix tax and provide penalty as much as what has been provided in the Ordinance in question. not to mention municipalities. Manila. are unjust and oppressive. L-4817 May 26.

herein appellee Robert Garrett and others filed a bill against the City of Memphis.31. is a public officer. Meriwether appealed before the SC. On March 13. 1879. Thus. The complainants filed an amended and supplemental bill alleging that the appointment of Meriwether is interfering and hindering Mr. Also. In June 1987. except through taxation. On February 28. which could grant the same. Whether the court has the power to collect the taxes due the creditors before the repealing of the charters. private properties may not be used as payments for the debt. Taxes levied according to law before the repeal of the charter. of Acts of 1879 establishing taxing districts and providing the means of local government for the same. they refused to pay to Latham. clothed with authority from the legislature for the collection of the taxes levied before the repeal . 1879. The presiding judge held that the parties and other creditors may recover the debts due them and that all the assets and property of the city. cannot be collected through the instrumentality of a court of chancery at the instance of the creditors of the city. the defendants filed for injunction restraining Meriweather from collecting taxes. or which may surrender their Charters. If there is none. The power of taxation is legislative. the legislature of Tennessee passed Chapter 10. other than such that were levied in obedience to the special requirement of contracts. Upon the repeal of the Charter. and those that were levied under judicial direction for the payment of judgments recovered against the city. the remedy is to appeal to the legislature. Such taxes can only be collected under authority from the legislature. Thereafter. Meriwether vs. the legislature passed Chapter 92. it was financially in a bad condition. as receiver. these properties are automatically transferred to the control of the State. of Acts of 1879. Latham. and cannot be exercised by any other than the legislative. Issue: Whether the court has the right to seize and impound the assets of the Corporation and place those in the hands of the receiver. Thus. including unpaid taxes may be applied as payment of the debts. was directed to retain possession of all the assets and property and may be disposed only through court order. they pray for the appointment of a receiver and that Garrett be given the powers stated in Chapter 71 of Acts of 1877. Lastly. Pursuant to the Acts passed. the receiver and back-tax collector appointed under the authority of the act of March 13. and for the compromise settlement of the debts of such extinct municipal corporations. the Governor of Tennessee appointed Minor Meriwether as receiver and back-tax collector. thus resulting to incompetency. imposing the collection and disposal of taxes assessed for municipal corporations of Tennessee whose charters have been or may be repealed. Held: Properties that are held for public use cannot be subjected to the payment of the debts of the city. Though the petitioners themselves were indebted to the city of Memphis. to settle the complainants’ debts. 1879. a large proportion remained uncollected. of Acts of 1879 repealing the charters of certain municipal corporations and Chapter 11. Garrett 102 US 472 October 1880 Facts: The city of Memphis. Latham as receiver of the court. including the power to collect all outstanding indebtedness and claim of every kind. Tennessee asserting that they are the owners and holders of overdue bonds and other indebtedness and that because of the malfeasance and incompetency of the officers charged with the collection of taxes. Tennesee is a municipal corporation with the ordinary powers to make contracts and to levy and collect taxes to meet its expenditures. Whether the appointment of Meriwether as receiver and back-tax collector can be validly made by an act of the legislature.

and to apply the proceeds upon the judgments. on the settlement of the accounts of the receiver herein. it shall be found he has any money in his hands collected on taxes levied under judicial direction to pay judgments in favor of parties to the suit. without prejudice. as well as any other agent of the State charged with the duty of their collection. The cause is remanded. The decree of the court below is reversed.                                               . with instructions to dismiss the bills. The funds collected by him from taxes levied under judicial direction cannot be appropriated to any other uses than those for which they were raised. If.of the charter. He. an order may be made directing its appropriation to the payment of such judgment. can be compelled by appropriate judicial orders to proceed with the collection of such taxes by sale of property or by suit or in any other way authorized by law.

 L-­‐75697  June  18.  the  tax  remains  a  valid  imposition.     Facts:  The  petition  assails  the  constitutionality  of  Presidential  Decree  No.       Issue:  WON  that  the  tax  provision  of  the  DECREE  is  a  rider  and  is  without  merit.  The  DECREE  imposes  a  tax  of   30%  on  the  gross  receipts  and  petitioners  argue  that  the  tax  imposed  is  harsh.  Tio  vs.  The  levy  of  the  30%  tax  is   for  a  public  purpose.  J.  confiscatory.  which  is  the  regulation  of  the  video  industry  through  the  Videogram  Regulatory   Board.       Petition  is  hereby  dismissed.  particularly  because   of  the  rampant  film  piracy.       Held:  The  Constitutional  requirement  that  "every  bill  shall  embrace  only  one  subject  which  shall  be  expressed  in  the  title   thereof"  is  sufficiently  complied  with  if  the  title  be  comprehensive  enough  to  include  the  general  purpose  which  a   statute  seeks  to  achieve.  No.  and  is  reasonably  necessary  for  the  accomplishment   of.   thereby  depriving  the  Government  of  an  additional  source  of  revenue.  1987  entitled  "An  Act  Creating  the  Videogram   Regulatory  Board"  with  broad  powers  to  regulate  and  supervise  the  videogram  industry.  the  flagrant  violation  of  intellectual  property  rights.  nor  foreign  to  that  general  subject  and  title.  The  tax  provision  is  allied  and  germane  to.  1987   Melencio-­‐Herrera.37.  oppressive  and/or  in   unlawful  restraint  of  trade  in  violation  of  the  due  process  clause  of  the  Constitution.     And  while  it  was  also  an  objective  of  the  DECREE  to  protect  the  movie  industry.           .  It  was  imposed  primarily  to  answer  the  need  for  regulating  the  video  industry.  The  tax  provision  is  not  inconsistent  with.  The  tax  imposed  by  the  DECREE  is  not  only  a  regulatory  but  also  a  revenue  measure  prompted  by  the   realization  that  earnings  of  videogram  establishments  of  around  P600  million  per  annum  have  not  been  subjected  to  tax.  the  general  object  of  the  DECREE.   Taxation  has  been  made  the  implement  of  the  state's  police  power.  and  the  proliferation  of  pornographic   video  tapes.  Videogram  Regulatory  Board   Gr.

That Congress chose to do so in such a manner that is not within the province of the Court to inquire into. after any of the following conditions has been satisfied: 1. exchange or lease of goods or properties and services. 9337 took effect. vs. Section 28 (2) of the 1987 Philippine Constitution. National gov't deficit as a percentage of GDP of the previous year exceeds one and one-half percent (1 1/2%). amending Sections 106. In contrast. a direct tax is a tax for which a taxpayer is directly liable on the transaction or business it engages in. & Section 6 imposes a 10% VAT on sale of services and use or lease of properties. effective 1/1/06. The VAT is a tax on spending or consumption – it is levied on the sale. 9/1/05 Facts: Petitioners filed a petition for prohibition on 5/27/05 before R. or 2. its task being to interpret the law. In this case.Abakada Guro Party List. to raise the VAT rate to 12%. without transferring the burden to someone else. Petitioners argue that the law is unconstitutional. The Court is neither blind nor is it turning a deaf ear on the plight of the masses. a first-aid measure to resuscitate an economy in distress. barter. 5. No. These questioned provisions contain a uniform proviso authorizing the President.38. Value-added tax collection as a percentage of Gross Domestic Product (GDP) of the previous years exceeds two and four-fifth percent (2 4/5%).R. 9337 is unconstitutional Held: It has been said that taxes are the lifeblood of the gov't. The intent and will to increase the VAT rate to 12% came from Congress and the task of the President is to simply execute the legislative policy. Section 5 imposes a 10% VAT on importation of goods. 168056. Issue: Whether or not R. the seller of goods or services may pass on the amount of tax paid to the buyer. upon recommendation of the Secretary of Finance. They question the constitutionality of Sections 4. et al. 107. as it constitutes abandonment by Congress of its exclusive authority to fix the rate of taxes under Article VI. No. Ermita. it is just an enema.A. But IT does not have the panacea for the malady that the law seeks to remedy. Congress did not delegate the power to tax but the mere implementation of the law. the Court cannot strike down a law as unconstitutional simply because of its yokes. As in other cases. G. . & 108. Being an indirect tax on expenditure.A. & 6 of said law. respectively of the National Internal Revenue Code. Section 4 imposes a 10% VAT on sale of goods and properties.

44) GR No. L-47252 April 18, 1941 THE APOSTOLIC OF THE MOUNTAIN PROVINCE PREFECT vs.. THE TREASURER OF THE CITY OF BAGUIO, FACTS: In 1937, an ordinance (Ord. 137) was passed in the City of Baguio. The said ordinance sought to assess properties of property owners within the defined city limits. APMP, on the other hand, is a religious corporation duly established under Philippine laws. Pursuant to the ordinance, it contributed a total amount of P1,019.37. It filed the said contribution in protest. APMP later averred that it should be exempt from the said special contribution since as a religious institution, it has a constitutionally guaranteed right not to be taxed including its properties.

ISSUE: Whether or not APMP is exempt from taxes. HELD: The test of exemption from taxation is the use of the property for purposes mentioned in the Constitution. Based on Justice Cooley’s words: "While the word 'tax' in its broad meaning, includes both general taxes and special assessments, and in a general sense a tax is an assessment, and an assessment is a tax, yet there is a recognized distinction between them in that assessment is confined to local impositions upon property for the payment of the cost of public improvements in its immediate vicinity and levied with reference to special benefits to the property assessed. The differences between a special assessment and a tax are that (1) a special assessment can be levied only on land; (2) a special assessment cannot (at least in most states) be made a personal liability of the person assessed; (3) a special assessment is based wholly on benefits; and (4) a special assessment is exceptional both as to time and locality. The imposition of a charge on all property, real and personal, in a prescribed area, is a tax and not an assessment, although the purpose is to make a local improvement on a street or highway. A charge imposed only on property owners benefited is a special assessment rather than a tax notwithstanding the statute calls it a tax." In the case at bar, the Prefect cannot claim exemption because the assessment is not taxation per se but rather a system for the benefits of the inhabitants of the city. According to the stipulation of facts, the appellant can not invoke with success the exemption established by the Constitucion because was not incorporated nor proven that their Property exactly who paid the special tax were used exclusively for religious. True, it stipulated that the properties were dedicated to religious purposes, but not agreed or proved that such use was exclusive, and may therefore be that the properties to be more devoted to religious purposes and to use also be earmarked for other purposes nonreligious.

As for the validity of Ordinance No. 137 as amended, it is undeniable that Baguio City is authorized by section 8 (1) of Law No. 1963, now Article 2553 (1) of the Revised Administrative Code, for discussed creating the special tax to repay the cats caused by drainage and sewerage system that was built for the benefit of all inhabitants of that city.

45. VICTORIAS MILLING CO., INC., plaintiff-appellant, vs. THE MUNICIPALITY OF VICTORIAS, PROVINCE OF NEGROS OCCIDENTAL, defendant-appellant. G.R. No. L-21183 Facts: The disputed ordinance was approved by the municipal Council of Victorias on September 22, 1956 by way of an amendment to two municipal ordinances separately imposing license taxes on operators of sugar centrals and sugar refineries. The changes were: with respect to sugar centrals, by increasing the rates of license taxes; and as to sugar refineries, by increasing the rates of license taxes as well as the range of graduated schedule of annual output capacity. Ordinance No. 1 is labeled "An Ordinance Amending Ordinance No. 25, Series of 1953 and Ordinance No. 18, Series of 1947 on Sugar Central by Increasing the Rates on Sugar Refinery Mill by Increasing the Range of Graduated Schedule on Capacity Annual Output Respectively". Of importance are the provisions of Section 1(m) relating to sugar centrals and Section 2(m) covering sugar refineries with specific reference to the maximum annual license tax, viz: Section No. 1 — Any person, corporation or other forms of Companies, operating Sugar Central or engage[d] in the manufacture of centrifugal sugar shall be required to pay the following annual municipal license tax, payable quarterly, to wit: (m) Sugar Central with mill having a capacity of producing an annual output of from 1,500,001 piculs or more shall be required to pay an annual municipal license tax of — P40,000.00. Section No. 2 — Any person, corporation or other forms of Companies shall be required to pay an annual municipal license tax for the operation of Sugar Refinery Mill at the following rates: (m) Sugar Refinery with mill having a capacity of producing an annual output of from 1,750,001 bags of 100 lbs. or more shall be required to pay an annual municipal license tax of — P40,000.00. For, the production of plaintiff Victorias Milling Co., Inc. in both its sugar central and its sugar refinery located in the Municipality of Victorias comes within these items in the schedule. Plaintiff filed asked for judgment declaring Ordinance No. 1, series of 1956, null and void. The reasons put forth by plaintiff are that: (a) the ordinance exceeds the amounts fixed in Provincial Circular 12-A issued by the Finance Department on February 27, 1940; (b) it 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; (c) it constitutes double taxation; and (d) the national government has preempted the field of taxation with respect to sugar centrals or refineries. Issue: Whether or not Ordinance No. 1, series of 1956, of the Municipality of Victorias, Negros Occidental is valid. Held: To be recalled at this point is that Ordinance No. 1, series of 1956, is but an amendment of Ordinance No. 18, series of 1947, in reference to refineries, and Ordinance No. 25, series of 1953, covering sugar centrals. Ordinance No. 18 imposes "municipal taxes on persons, firms or corporations operating refinery mills in this municipality." Ordinance No. 25 speaks of municipal taxes "relative to the output of the sugar centrals." What are these taxes for? Resolution No. 60 of the municipal council of Victorias, adopted also on September 22, 1956 in conjunction with Ordinance No. 1, series of 1956, furnishes a ready answer. It reads in part: WHEREAS, the Municipal Treasurer informed the Municipal Council of the revenue of the Municipality and the heavy obligations which confront it because of the implementation of Minimum Wage Law on the salaries and wages it pays to its municipal employees and laborers thus greatly draining the Municipal Treasury; September 27, 1968

WHEREAS, this local administration is committed to the plan of ameliorating the deplorable situation existing in the barrios, sitios and rural areas by giving them essential and necessary facilities calculated to improve conditions thereat thru improvements of roads and feeder roads; WHEREAS, one of the causes of the municipality's financial difficulty is low rates of municipal taxes imposed by some of the ordinances enacted by the local legislative body; WHEREAS, [in] . . . the ordinances known as Ordinance No. 25, Series of 1953, dealing on theoperation of Sugar Central, and Ordinance No. 18, Series of 1947, which exclusively deals with the operation of Sugar Refinery Mill, the rates so given are rates suggested and determined by the Provincial Circular No. 12-A, dated February 27, 1940 issued by the Department of Finance as regards to Sugar Centrals; WHEREAS, the Municipal Council has come to the conclusion that the rates provided for in such ordinances are no longer adequate if made in keeping with the present high cost of living; WHEREAS, the Municipal Council has also taken cognizance of the fact that the price of sugar per picul today is more than twice its pre-war average price; . . . . Given the purposes just mentioned, we find no warrant in logic to give our assent to the view that the ordinance in question is solely for regulatory purpose. Plain is the meaning conveyed. The ordinance is for raising money. To say otherwise is to misread the purpose of the ordinance.1awphîl.nèt We should not hang so heavy a meaning on the use of the term "municipal license tax". This does not necessarily connote the idea that the tax is imposed — as the lower court would want it — to mean a revenue measure in the guise of a license tax. For really, this runs counter to the declared purpose to make money. Besides, the term "license tax" has not acquired a fixed meaning. It is often "used indiscriminately to designate impositions exacted for the exercise of various privileges." It does not refer solely to a license for regulation. In many instances, it refers to "revenue-raising exactions on privileges or activities." On the other hand, license fees are commonly called taxes. But, legally speaking, the latter are "for the purpose of raising revenues," in contrast to the former which are imposed "in the exercise of police power for purposes of regulation." We accordingly say that the designation given by the municipal authorities does not decide whether the imposition is properly a license tax or a license fee. The determining factors are the purpose and effect of the imposition as may be apparent from the provisions of the ordinance. Precisely because of these considerations the present imposition must be treated as a levy for revenue purposes. A quick glance at the big amount of maximum annual tax set forth in the ordinance, P40,000.00 for sugar centrals, and P40,000.00 for sugar refineries, will readily convince one that the tax is really a revenue tax. And then, we read in the ordinance nothing which would as much as indicate that the tax imposed is merely for police inspection, supervision or regulation. The Supreme Court ruled that Ordinance No. 1, series of 1956, of the Municipality of Victorias, was promulgated not in the exercise of the municipality's regulatory power but as a revenue measure — a tax on occupation or business. The authority to impose such tax is backed by the express grant of power in Section 1 of Commonwealth Act 472. Judgment is hereby rendered: declaring valid and subsisting Ordinance No. 1, series of 1956, of the Municipality of Victorias, Province of Negros Occidental.

60.   the   Municipal   Board   of   the   city   of   Manila   exceeded   its   powers.A.                 .   The   charge   of   one-­‐half   of   the   assessed   value   imposed   on   applicants   for   building   permits   can   therefore.  upon  its  attention  being  called  to  the  matter.  301  is  illegal.  It  does  not  appear  that  the  cost  of  licensing.  defendant-­‐appellant.   to   hold   the   fee   in   this   case   valid   would   amount   to  judicial  legislation.  under  the  general  welfare  of  the  city  charter.     In   imposing   a   fee   equal   to   one-­‐half   of   the   assessed   value   of   the   portion   of   the   sidewalk   covered   by   the   arcade   in   question.  not  be  considered  as  rent.  however.  particularly  undesirable  in  the  present  instance  where  the  Legislature.  and  surveillance.   The   plaintiff   refuses   to   construct   the   arcade   and   to   comply   with   the   ordinance   in   question   on   the   grounds   that   the   arcade   is   unnecessary   and   unsuitable  for  his  warehouse  and  that  the  city  has  no  power  to  require  its  construction.  with  the  arcade  the  fee  exacted  is  P525.   Therefore.  plaintiff-­‐appellee.  engineer  of  the  city  of  Manila.#46 G.  regulating.  has  power  to  provide  for  the   construction  of  arcades  on  certain  by  assignment  of.  The  power  conferred  in  relation  to  such  construction  is  considered  merely  as   police   power   from   which.  and  that  the  ordinance  in  exacting  the  payment  of  a  fee  of   one-­‐half  of  the  assessed  value  of  the  city  of  land  covered  by  the  arcade  is  in  excess  of  the  legislative  powers  of  the  Municipal  Board  and.  the  City  of  Manila  has  the  power  to  require  the  construction  of  arcades  in  certain  circumstances  but  that  the  license  fee  prescribed  by   city  Ordinance  No.  arcades  are  both  useful  and  desirable  from   the  standpoint  of  public  convenience  and  that  the  Municipal  Board.  It  appears  that  without  the  arcade  the  normal  fee  for  the  building  permit  would  have   been  about  P31.   FRED  L.301  of  the  City  of   Manila.e.   The   city   does   not   posses   such   an   extraordinary   power   as   that   of   compelling   property   holders   to   lease   the   portions   of   the   public   sidewalks.   The   construction   of   buildings   is   a   useful   enterprises   and   the   amount   of   the   license   fee   should   therefore   be   limited  to  the  cost  of  licensing.   ISSUE:   Whether  the  fee  was  validly  imposed.   which   adjoin   their   lands.   Under   the   circumstances.  would  no   doubt  willingly  grant  as  much  power  as  could  wisely  be  placed  in  the  hands  of  the  municipality.  PATSTONE.  therefore.   requires   no   argument.  and  surveillance  would  be   materially  increased  through  the  construction  of  the  arcade.  regulating.   taxing   power   is   not   inferred.  i.  payment  of  ½  of  the  assessed  value  of  the  land.  CUUNJIENG.  and  it  is  therefore  clear  that  the  excess  fee  is  imposed  for  the  purpose  of  revenue   There  is  nothing  in  the  character  of  the  city  of  Manila  indicating  an  intention  on  the  part  of  the  Legislature  to  confer  power  on  the  Municipal  Board   to  impose  a  license  tax  for  revenue  on  the  construction  of  buildings. 1922 G.  and  to  be  valid  must  either  be  a  tax  or  a  license  fee. L-16254 February 21.     HELD:   No.R.  It  seems.   FACTS:   The  plaintiff  desires  a  erect  a  warehouse  on  Azcarraga  Street  but  is  denied  a  building  permit  until  be  shall  have  made  provision  for  the  construction   of  an  arcade  over  the  side  walk  in  front  of  the  building  and  until  he  shall  have  further  complied  with  section  1  of  Ordinance  No.   as   we   have   seen.  to  be  conceded  that  under  the  climatic  conditions  here  existing. No.  vs.   unconstitutional.

 It   not  appearing  that  the  power  to  tax  owners  of  tenement  houses  is  one  among  those  clearly  and  expressly  granted  to  the   city  of  Iloilo  by  its  charter.47.   the   case  was  elevated  to  the  court  of  first  instance.  The  charter  or  statute  must  plainly  show  an  intent  to  confer  that  power  or  the  municipality  cannot  assume  it.   its   purpose   is   to   raise   revenue.   unreasonable   and   discriminatory.   If   the   fee   is   designed   to   raise   substantially   more   than   the  cost   of   the   regulation   to   which   it   purports   to   be   an   incident.  The  spouses  Villanueva  refused  to  pay  the  taxes  and  the  City  of  Iloilo  filed  a  case  to  recover   the  same.  the  license  fee  for  the  purpose  of  raising  revenue  is  not  warranted.   unlike   a   sovereign   state.   is   clothed   with   no   inherent   power   of   taxation.   Because   of   the   issue   on   constitutionality.   Held:   Yes.  the  exercise  of  such  power  cannot  be  assumed  and  hence  the  ordinance  in  question  is  ultra   vires  in  so  far  as  its  taxes  a  tenement  house  such  as  those  belonging  to  the  spouses  Villanueva   .   The   court   held   that   although   the   municipal   board   was   granted   with   the   power   to   impose   a   license   fee   in   exercise  of  its  police  power.   then   it   is   merely   a   regulatory   measure.  Spouses  Villanueva  contend  that  the  ordinance  under  which  the  tax  infringes  the  powers  granted  to  the  city   by   its   charter   and   that   the   said   ordinance   is   violative   of   the   constitutional   provisions   requiring   uniformity   of   taxation   upon   the   theory   that   it   is   oppressive.    Imposing  a  license  fee   to  raise  revenues  must  be  expressly  granted  by  the  charter  or  statute  and  is  not  to  be  implied  from  the  conferred  power   to  license  and  merely  regulate.   If   it   is   a   fee   to   be   attached   to   a   particular   provision   for   regulation.   it   is   well   settled   that   a   municipal   corporation.   Issue:   WON   the   municipal   board   imposed   the   license   fees   as   a   revenue   measure   and   therefore   exceeded   the   powers   granted  to  it  by  its  charter.   Further.  City  of  Iloilo  vs  Villanueva   Facts:  Spouses  Villanueva  are  owners  of  apartment  houses  in  Iloilo  where  a  city  ordinance  was  passed  imposing  license   tax  fees  for  tenant  houses.  The  court  distinguished  authority  to  impose  a  license  in  exercise  of  police  power  from   the   exercise   of   power   to   tax.   and   appears   to   be   imposed   to   cover   the   cost   of   that   regulation.

Case 51 E S S O S T A N D A R D E A S T E R N . However. A t a x i s l e v i e d t o p r o v i d e r e v e n u e f o r government operations. t h e a m o u n t i t h a d s p e n t f o r d r i l l i n g a n d e x p l o r a t i o n of its petroleum concessions. T h e m a rg in fe e w a s im p o se d b y th e S ta te in th e e xe rcise o f i t s p o l i c e p o w e r a n d n o t t h e p o w e r o f t a x a t i o n . Ordinarily. 2. O n A u g u st 5 . Esso appealed to the Court of T a x A p p e a ls (C T A ) fo r th e re fu n d o f th e m a rg in fe e s it h a d earlier paid contending that the margin fees were deductible from gross i n c o m e e i t h e r a s a t a x o r a s a n ordinary and necessary business expense. Whether or not the margin fees are necessary and ordinary business expenses. Esso then file d a n a m e n d e d re tu rn w h e re it a ske d fo r th e re fu n d o f P323. which is a separate a n d d i s t i n c t i n c o m e t a x p a y e r f r o m t h e b r a n c h i n t h e P h ilip p in e s.279. a s p a rt o f i t s o r d i n a r y a n d n e c e s s a r y b u s i n e s s e x p e n s e s . th e C IR g ra n te d a ta x cre d it o f P 2 2 1 . COMMISSIONEROFINTERNALREVENUEG.0 0 o n ly . re p re se n tin g m a rg in fe e s it h a d p a id to th e Central Bank on its profit remittances to its New York head o ffice .8 2 2 . Nos. fo r its d isp o sa l a b ro a d . Esso Standard Eastern Inc.00 by reason of its abandonment as dry holes of s e v e r a l o f i t s o i l w e l l s . This c l a i m w a s d i s a l l o w e d b y 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.R. N o . It is 'o rd in a ry' w h e n it co n n o te s a p a ym e n t w h ich is n o rm a l in re la tio n to th e b u sin e ss o f th e t a x p a y e r a n d t h e s u r r o u n d i n g circumstances. it ca n n e v e r b e sa id therefore that the margin fees were appropriate and helpful in t h e d e v e l o p m e n t o f E s s o ' s b u s i n e s s i n t h e P h i l i p p i n e s e xclu sive ly o r w e re in cu rre d fo r p u rp o se s p ro p e r to th e co n d u ct o f th e a ffa irs o f E sso 's b ra n ch in th e P h ilip p in e s e x c l u s i v e l y o r f o r t h e p u r p o s e o f r e a l i z i n g a p r o f i t o r o f minimizing a loss in the Philippines exclusively . while the proceeds of the margin fee are applied to strengthen our country's international reserves. Since the margin fees in question were incurred for the r e m i t t a n c e of funds to Esso's Head Office in New York.0 4 . ISSUE: 1. I N C v s . L-28508-9. 1989 F CS AT: In CTA Case No. an expense will be considered 'necessary' where the expenditure is appropriate and helpful in the development of th e ta xp a ye r's b u sin e ss. 1251. 1 9 6 4 . A l s o c l a i m e d a s o r d i n a r y a n d n e c e s s a r y e x p e n s e s i n t h e s a m e r e t u r n w a s t h e a m o u n t o f P 3 4 0 .(E sso ) d e d u cte d fro m its g ro ss in co m e fo r 1 9 5 9 . RULING: 1 . W h e t h e r o r n o t t h e m a r g i n f e e s a r e t a x e s 2. N o . d isa llo w in g th e cla im e d d e d u ctio n fo r 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.0 3 3 . E s s o ’ s appeal was denied. July 7.

 (supra)."  From  this  judgment.  L-­‐41383         FACTS:     Under  its  franchise.   PAL   filed   the   complaint   against   Land   Transportation   Commissioner   Romeo   F.  and  UBALDO  CARBONELL.   And   as   proof   that   the   money   collected   is   not   intended   for   the   expenditures  of  that  office.  (PAL).  March  30.  (32  SCRA  211.  Philippine  Rabbit  Bus  Lines.   Hence.  in  his  capacity  as  Land  Transportation   Commissioner.   Edu   and   National   Treasurer   Ubaldo   Carbonell.   the   appellee  refused  to  register  the  appellant's  motor  vehicles  unless  the  amounts  imposed  under  Republic  Act  4136  were   paid.    Edu  denied  the  request  for   refund  basing  his  action  on  the  decision  in  Republic  v.           .  in  his  capacity  as  National  Treasurer.   They   are   veritable   taxes.  1970)  to   the  effect  that  motor  vehicle  registration  fees  are  regulatory  exactions  and  not  revenue  measures  and.  Lorenzo  (97  Phil.   among   them   PAL   to   pay   motor   vehicle   registration   fees.  as  an  incident  to  the  enforcement  of  regulations  governing  the  operation  of  motor  vehicles  on   public   highways.  therefore.R.  not  merely  fees.  ROMEO  F.  EDU.  the  law  itself  provides  that  all  such  money  shall  accrue  to  the  funds  for  the  construction  and   maintenance   of   public   roads.53.   invoking  the  ruling  in  Calalang  v.   It   is   thus   obvious   that   the   fees   are   not   collected   for   regulatory   purposes.  PAL  is  exempt  from  the  payment  of  taxes.  Philippine  Rabbit  Bus  Lines.  PAL    demanded  a  refund  of  the  amounts  paid.  Inc.  LTO  Commissioner  issued  a  regulation  requiring   all   tax   exempt   entities.   1988  Aug  15En  Banc  G.  PHILIPPINE  AIRLINES.     The   trial   court   rendered   a   decision  dismissing  the  appellant's  complaint  "guided  by  the  later  ruling  laid  down  by  the  Supreme  Court  in  the  case  of   Republic  v.  under  protest.  However.  Inc.     It  appears  that  the  expenditures  of  the  Motor  Vehicle  Office  are  but  a  small  portion  -­‐-­‐-­‐-­‐  about  5  per  centum  -­‐-­‐-­‐-­‐  of  the   total   collections   from   motor   vehicle   registration   fees.  No.  The  appellant  thus  paid.  vs.  INC.       Despite   PAL's   protestations.  PAL  appealed  to  the  Court  of  Appeals  which   certified  the  case  to  us.   for   their   express   object   is   to   provide   revenue   with   which   the   Government   is   to   discharge   one   of   its   principal   functions   -­‐-­‐-­‐-­‐   the   construction   and   maintenance   of   public   highways   for   everybody's   use..  do  not   come   within   the   exemption   granted   to   PAL   under   its   franchise.  After  paying  under  protest.  212  [1951])  where  it  was  held  that  motor  vehicle  registration  fees  are   in  reality  taxes  from  the  payment  of  which  PAL  is  exempt  by  virtue  of  its  legislative  franchise.     ISSUE:        What  is  the  nature  of  motor  vehicle  registration  fees?  Are  they  taxes  or  regulatory  fees?       HELD:         The  motor  vehicle  registration  fees  are  taxes.   streets   and   bridges.  defendants-­‐appellants.  that  is  to  say.  plaintiff-­‐appellant.

  Act   587   quoted   in   the   Calalang   case.  It  is  patent  there  from  that  the  legislators  had  in  mind  a  regulatory  tax  as  the  law   refers   to   the   imposition   on   the   registration.   for   the   registration   or   operation   or   on   the   ownership   of   any   motor   vehicle.  61.   Act   5448   cited   by   the   respondents.  5431.   Thus.  dated  June  27.  It  is  not  clear  from  the  records  as  to  what  payments  were   made  in  succeeding  years.  the  imposition  in  Rep.  These  are  not  to  be  understood  as  taxes  because  such  fees  are   very   minimal   to   be   revenue-­‐raising.   The   conclusions   become   inescapable   in   view   of   Section   70(b)   of   Rep.   they   are   not   mentioned   by   Sec.   or   ownership   of   a   motor   vehicle   under   Rep.   operation.     The  claim  for  refund  is  made  for  payments  given  in  1971.  11).  Act  4136  does  the  law  specifically  state  that  the  imposition  is  a  tax.)   Such   is   the   case   of   motor   vehicle   registration   fees.   or   if   revenue   is.   Thus.   Simply   put.   one   of   the   real   and   substantial   purposes.   .  10)   and  additional  fees  for  change  of  registration  (Sec.If   the   purpose   is   primarily   revenue.   59(b)   of   the   Code   as   taxes   like   the   motor   vehicle  registration  fee  and  chauffeurs'  license  fee.   .   or   for   the   exercise   of   the   profession   of   chauffeur   .   even   Rep."   where   the   law   could   have   referred   to   an   original   tax   and   not   one   in   addition   to   the   tax   already   imposed   on   the   registration.  1968.   operation   or   ownership   of   a   motor   vehicle   as   a   "tax   or   fee.   then   the   exaction   is   properly   called   a   tax   (Umali.  Section  59(b)  speaks  of  "taxes  or   fees   .  Rep.   .  Such  fees  are  to  go  into  the  expenditures  of  the  Land  Transportation   Commission  as  provided  for  in  the  last  proviso  of  sec."   making   the   intent   to   impose   a   tax   more   apparent.  repealed  all  earlier   tax  exemptions  of  corporate  taxpayers  found  in  legislative  franchises  similar  to  that  invoked  by  PAL  in  this  case.  aforequoted.  We  have  ruled  that  Section  24  of  Rep.   id.   The   same   provision   appears   as   Section   59(b)  in  the  Land  Transportation  Code.   speak   of   an   "additional   tax.       SECOND  ISSUE:    May  the  respondent  administrative  agency  be  required  to  refund  the  amounts  stated  in  the  complaint   of  PAL?     The  answer  is  NO.  Act  4136  were  merely  a  regulatory  fee.  Act  5448  need  not  be  an  "additional"   tax.  Act  No.   Act   4136.   .   if   the   exaction  under  Rep.   at   least.     ."   Though   nowhere  in  Rep.  Act  4136  also  speaks  of  other  "fees"  such  as  the  special  permit  fees  for  certain  types  of  motor  vehicles  (Sec.

for value received. The petitioner argues that the Japanese shipbuilders were not subject to tax under the above provision because all the related activities (the signing of the contract. The vessels were eventually completed and delivered to the NDC in Tokyo. The law specifies: 'Interest derived from sources within the Philippines.” There is nothing in the above undertaking exempting the interests from taxes. or other interest-bearing obligations of residents. The NDC remitted to the shipbuilders in Tokyo the total amount of US$4. This is a domestic and resident corporation with principal offices in Manila. The BIR thereupon served on the NDC a warrant of distraint and levy to enforce collection of the claimed amount.74. and interest on bonds. or place where the contract is signed. the due and punctual payment of both principal and interest of the above note. Initial payments were made in cash and through irrevocable letters of credit. the undersigned. No tax was withheld. Petitioner has not established a clear waiver therein of the right to tax interests. CIR Facts The national Development Company entered into contracts in Tokyo with several Japanese shipbuilding companies for the construction of twelve ocean-going vessels. The NDC went to the Court of Tax Appeals. under the terms of the law. Issue: Whether or not NDC is liable for deficiency tax Ruling The Japanese shipbuilders were liable to tax on the interest remitted to them under Section 37 of the Tax Code. The residence of the obligor who pays the interest rather than the physical location of the securities.00.115. corporate or otherwise. The NDC then came to this Court in a petition for certiorari. The purchase price was to come from the proceeds of bonds issued by the Central Bank.70 as interest on the balance of the purchase price. bonds or notes or the place of payment.066. and their delivery to the NDC) were done in Tokyo. on behalf of the Republic of the Philippines.56. as required by the shipbuilders. The law. Negotiations followed but failed. representing the compromise penalty. The Commissioner then held the NDC liable on such tax in the total sum of P5. Fourteen promissory notes were signed for the balance by the NDC and." which in this case is the NDC. is the determining factor of the source of interest income. does not speak of activity but of "source. Pursuant thereto. NDC V.” It is also incorrect to suggest that the Republic of the Philippines could not collect taxes on the interest remitted because of the undertaking signed by the Secretary of Finance in each of the promissory notes that: “Upon authority of the President of the Republic of the Philippines. guaranteed by the Republic of the Philippines. Any doubt concerning this question must be resolved in favor of the taxing power. Tax exemptions cannot be merely implied but must be categorically and unmistakably expressed.234.580. . that the Government's right to levy and collect income tax on interest received by foreign corporations not engaged in trade or business within the Philippines is not planted upon the condition that 'the activity or labor and the sale from which the (interest) income flowed had its situs' in the Philippines. however. As the Tax Court put it: “It is quite apparent. the construction of the vessels. the remaining payments and the interests thereon were remitted in due time by the NDC to Tokyo.The BIR was sustained by the CTA except for a slight reduction of the tax deficiency in the sum of P900. hereby absolutely and unconditionally guarantee (sic).' Nothing there speaks of the 'act or activity' of nonresident corporations in the Philippines. notes. the payment of the stipulated price.

to exclude the remedy in an action or any indebtedness of the state or municipality to one who is liable to the state or municipality for taxes." .400. is that taxes are not in the nature of contracts between the party and party but grow out of duty to.57.. "The general rule based on grounds of public policy is well-settled that no set-off admissible against demands for taxes levied for general or local governmental purposes.S. a 125 square meter portion of Francia's property was expropriated by the Republic of the Philippines for the sum of P4. his property was sold at public auction by the City Treasurer of Pasay City in order to satisfy a tax delinquency of P2.. on December 5. . Petitioner Francia contended that he was not informed of the sale. and are the positive acts of the government to the making and enforcing of which. HELD: The Supreme Court affirmed the RTC 's decision. Hence. the Registry of Deeds to issue a nev TCT to Ho Fernandez. On October 15. thus. demand.00 representing the estimated amount equivalent to the assessed value of the aforesaid portion. among others.116.. contract or judgment as is allowed to be set-off under the statutes of set-off. this petition ISSUE: Whether or not Francia's obligation to pay Real Property tax was offset by the indebtedness of the Government to him in the amount of Php 4116.00. ordering. 1977. he filed an action. It explained: A claim for taxes is not such a debt. 7374). . The RTC ruled in favor of the defendant. and subsequently an amended complaint to annul the sale. Since 1963 up to 1977 . Metro Manila. Thus. which are construed uniformly. in the light of public policy. However. Ho Fernandez was the highest bidder for the property..J. FRANCIA VS IAC Facts: Engracio Francia is the registered owner of a residential lot and a two-story house built upon it situated at Pasay City. 1977. Neither are they a proper subject of recoupment since they do not arise out of the contract or transaction sued on.00. the personal consent of individual taxpayers is not required. The reason on which the general rule is based.. (80 C. Francia failed to pay his real estate taxes.

 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.  Philex  vs  CIR  aug  28  1998   Facts:     Philex  Mining  Corp  assails  the  order  to  pay  tax  for  the  amount  of  110.Taxes  are  the  lifeblood  of  the  government  and  so  should  be  collected  without  unnecessary  hindrance.  a  tax  does  not  depend  upon  the   consent  of  the  taxpayer.52.  The  collection  of  a  tax  cannot  await  the  results  of  a  lawsuit  against  the   government.677.  17  There  is  a  material  distinction  between  a  tax  and  debt.  It  must  be  noted  that  a  distinguishing   feature  of  a  tax  is  that  it  is  compulsory  rather  than  a  matter  of  bargain.  Philex  protested  the  demand  for   payment  of  the  tax  liabilities  stating  that  it  has  pending  claims  for  VAT  input  credit/refund  for  the  taxes  it  paid  for  the   years  1989  to  1991  in  the  amount  of  P119.  18  We  find  no  cogent  reason   to  deviate  from  the  aforementioned  distinction.  this  would  adversely  affect  the  government  revenue  system.037.669.  Philex's  theory  that  would  automatically   apply  its  VAT  input  credit/refund  against  its  tax  liabilities  can  easily  give  rise  to  confusion  and  abuse.     The  CTA  and  CA  denied  the  petitioners  request  to  offset  the  tax  liabilities  by  the  pending  claim.  depriving  the   government  of  authority  over  the  manner  by  which  taxpayers  credit  and  offset  their  tax  liabilities.   We  have  consistently  ruled  that  there  can  be  no  off-­‐setting  of  taxes  against  the  claims  that  the  taxpayer  may  have   against  the  government.977.  25  Hence.  However.  we  cannot  allow  Philex  to  refuse  the  payment  of  its  tax  liabilities  on  the  ground  that  it  has  a  pending  tax   claim  for  refund  or  credit  against  the  government  which  has  not  yet  been  granted.     To  be  sure.   .  Philex  was  able  to  obtain  its  VAT  input  credit/refund  which  is  way  more   than  the  tax  liability  assessed.       Held:     Taxes  cannot  be  subject  to  compensation  for  the  simple  reason  that  the  government  and  the  taxpayer  are  not  creditors   and  debtors  of  each  other.  A  taxpayer  cannot   refuse  to  pay  his  taxes  when  they  fall  due  simply  because  he  has  a  claim  against  the  government  or  that  the  collection  of   the  tax  is  contingent  on  the  result  of  the  lawsuit  it  filed  against  the  government.  few  days  after   the  denial  of  its  motion  for  reconsideration.       Issue:  whether  or  not  it  is  possible  to  offset  Philex's  tax  liabilities  now  that  the  pending  tax  refund  claim  had  been   decided.59.  Therefore  these  claims  for  tax  credit/refund  should   be  applied  against  the  tax  liabilities  according  to  him.  while  taxes  are  due  to  the  Government  in  its  sovereign  capacity.02  plus  interest.  26  If  any  taxpayer  can  defer  the  payment  of  taxes  by  raising  the  defense  that  it  still  has  a   pending  claim  for  refund  or  credit.  Debts  are  due  to  the  Government   in  its  corporate  capacity.

Rizal offering to donate the feeder roads. the petitioner prayed that RA 920 be declared unconstitutional. public funds may only be used for public purpose. Thus. Held: Yes. The district engineer did not endorse the letter because the feeder roads were private property. Under constitutional provisions of against taxation unless for public purpose. with injunction on the ground that RA 920. the appropriation of funds was held unconstitutional. owned by respondent Jose Zulueta. The donation was not executed. The act of the Congress is null and void itself and the donation was made five (5) months after the Act was approved. 1953.00 for construction and repair of feeder road terminals. Thus. CFI Rizal dismissed the case. in the case at bar. Issue: Whether the appropriation of funds in RA 920 is unconstitutional. Zulueta addressed a letter to the Municipal Council of Pasig. Al 110 Phil. was indeed planned subdivision roads within Antonio Subdivision. thus. the land being owned by Zulueta. “An Act Appropriating for Public Works” allotting P85. On May 29. Zulueta wrote a letter to the district engineer calling his attention for the approval of RA 920. 331 Facts: Petitioner Wenceslao Pascual instituted an action for declaratory relief. a member of the Senate of the Philippines at the time of the passage and approval of the Act. the judicial nullification of the donation does not determine the constitutionality of the Republic Act. The right of the Legislature to appropriate public funds is correlative with its right to tax. thus. et.000. subject to the condition that the donor would submit the plan of the roads and agree to change the names of two of the street. Pascual vs. Under the express and implied provisions of the Constitution. the appropriation was for a private purpose. . of Public Works. no appropriation of state funds may be made other than public purpose.61. Sec.

it having no real estate in Kentucky. and the tax paid upon them in the year 1894. 'were regularly enrolled. leaving the sum of $66. It then capitalized said net earnings at 6 per cent. passengers. and Jeffersonville. No. under the laws of the United States. in the fall of that year. The company had no intangible property except the franchise granted to it.' The defendant brought 'before the board of valuation and assessment. Kentucky. to recover certain taxes alleged to be due that commonwealth in virtue of the valuation and assessment by the state board of valuation and assessment of the corporate franchise of the defendant company for the year 1894. a corporation of Kentucky. and were assessed. to deduct there from the value of these franchises. for the year preceding that date. 17. wharves. From this the board deducted $54. Indiana. and protested against any assessment being made upon its franchises as being beyond the jurisdiction of the said board and outside of the territorial jurisdiction of the state of Kentucky. 1902 Facts: This action was brought against the Louisville & Jeffersonville Ferry Company. OF KENTUCKY. Plff.' . by the sheriff of Jefferson county. 385 (1903) 188 U. 1869. It was also authorized to accept boats. and ferry franchises for any ferry or ferries between Louisville.886 as the value of defendant's franchise. and it protested against the said board making any valuation whatever of its capital stock because all of its property had been once assessed. the fact that its whole capital stock had been issued in consideration of the transfer of the said ferry franchises granted by the state of Indiana and attendant property.' All tangible property of the defendant company in Kentucky was assessed in the fall of 1893 for the state tax for the year 1894.S. 188 U. The defendant company states in its answer 'that the only ferry franchises owned by it are those which were granted by the authorities of the state of Indiana. and owned and operated by this defendant. The property so assessed consisted of all the company's boats and other personal property.050. and other property in payment of stock subscribed and at such prices as might be agreed on.' The boats owned by the defendant company when this action was brought. in Err.. 'The board of valuation and assessment ascertained what had been the net earnings of the defendant up to September 15th. COMMONWEALTH OF KENTUCKY. By an act of the general assembly of Kentucky. franchises.. and showed that all its property had been assessed as above explained. as aforesaid. if it should insist upon making a valuation upon its capital stock. Argued January 17. with power to carry on the business of ferrying freight. and the defendant further requested the said board. 1893.that is. COM. 385 LOUISVILLE & JEFFERSONVILLE FERRY RY COMPANY.S. and not taxable in Kentucky. and the tax thereon paid. and upon the purchase of such franchises to have the right to carry on and conduct a ferry or ferries between those cities. The said board refused to enter into the question of the valuation of the said franchise granted by the state of Indiana. wharves.164. and vehicles over the Ohio river. the Louisville & Jeffersonville Ferry Company was created a corporation. and that tax was paid. approved March the 16th. being the assessed value of the defendant's property in Kentucky and Indiana. at the port of Louisville.#67 LOUISVILLE & JEFFERSONVILLE FERRY CO. as above stated. and any valuation made upon its capital stock would include alone these franchises and profits resulting to the defendant from engaging in interstate commerce. and also those owned by it in 1893. v. to have been such an amount as at 6 per cent would produce the sum of $121. For the same year all real estate owned by the defendant in Indiana was assessed by the authorities of that state. v. and refused to regard the fact that the profits which were earned by this defendant came from interstate commerce. before that board had made its assessment final. and to purchase ferryboats.

speaking generally. Held: There is. no escape from the conclusion that Kentucky thus asserts its authority to tax a property right. The taxation of that franchise or incorporeal hereditament by Kentucky is.Issue: Whether the assessment of the state of Kentucky is beyond its jurisdiction. that the taxation imposed must have relation to a subject within the jurisdiction of the taxing government. for. and extent of taxation are. which has its situs in Indiana. No difficulty can exist in applying the general rule in this case. an incorporeal hereditament. While the mode. the ferry franchise derived from Indiana is an incorporeal hereditament derived from and having its legal situs in that state. limited only by the wisdom of the legislature. that power is limited by a principle inhering in the very nature of constitutional government. . in our opinion. in our judgment. as much so as if the state taxed the real estate owned by that company in Indiana. We recognize the difficulty which sometimes exists in particular cases in determining the situs of personal property for purposes of taxation. It is not within the jurisdiction of Kentucky. beyond all question. namely. a deprivation by that state of the property of the ferry company without due process of law in violation of the 14th Amendment of the Constitution of the United States. and the above cases have been referred to because they have gone into judgment and recognize the general rule that the power of the state to tax is limited to subjects within its jurisdiction or over which it can exercise dominion. form.

Jr. United States. the assessment and collection by the Philippine Government of the tax on sales of merchandise made in the Philippines to the United States Army and the United States Navy is illegal. or more correctly stated..832. . of fuel oil of the value of P172. amounting to P102. During the period from October 1. The Congress of the United States has created two agencies.580. No. for the use of the Army. on the United States Government for the consumer pays the tax as part of the purchase price. vs. 1929. fuel oil and asphalt of the value of P6. the Philippine Government. The tax collected from the plaintiff by one of these agencies. which was paid in New York. acting under authority of section 1459 of the Administrative Code and Act No. for the use of the Navy. 1929. the Standard Oil Company paid the taxes assessed under protest and is now suing to recover the corresponding refunds. It would further appear perfectly clear that the principle which prohibits a State from taxing the instrumentalities of the Federal Government applies with equal force to the Philippine Islands. The military establishment and the civil government stand side by side but independent of each other in the Philippines. the Standard Oil Company sold and delivered in the Philippines to the Quartermaster Department of the United States Army. Judgment reversed. three agencies to serve the United States in the Philippine Islands. It is sufficient to state that. The United States Army and the United States Navy derive their powers from the Constitution of the United States. JUAN POSADAS.R. is in reality a tax on the United States Army and the United States Navy in other words. and which contract provided that all internal revenue taxes and charges under the laws of the Philippine Islands were to be assumed and paid by the United States Navy. in our opinion.89. 1931 G. February 26.74)THE STANDARD OIL COMPANY OF NEW YORK. to December 31. and the third is the Government of the Philippine Islands.36. under a contract executed in New York. demanded a tax of one and one-half per cent upon the value of the merchandise.84. ISSUE: Whether sales of merchandise made in the Philippines to the United States Army and the United States Navy are subject to the sales tax. Held: No. Two of these agencies are the United States Army and the United States Navy.. During the identical period of time above-mentioned. L-34029 FACTS: The Standard Oil Company of New York is a foreign corporation duly authorized to do business in the Philippines. the Standard Oil Company likewise made delivery in the Philippines to the United States Navy. without express finding as to costs in either instance. and the record ordered returned to the court of origin for further proceedings. The Collector of Internal Revenue of the Philippine Government.49. Collector of Internal Revenue of the Philippine Islands. 3243 of the Philippine Legislature as ratified by the Congress of the United States. The Collector of Internal Revenue required payment of the sales tax upon the value of the fuel oil. in the amount of P2.059.

a government-owned or controlled corporation (GOCC) existing by virtue of C." The land remains "absolute property of the government.O. On 20 March 1970." The government "does not part with its title by reserving them (lands). A reserved land is defined as a "[p]ublic land that has been withheld or kept back from sale or disposition. CEBU CITY and AUGUSTO PACIS as Treasurer of Cebu City. exempt from real property tax? HELD: The National Development Company (NDC) is exempt from real estate tax on the reserved land but liable for the warehouse erected thereon. industrial." Consequently. mining. . the present suit filed 25 October 1972 in the Court of First Instance of Manila. . agricultural and other enterprises necessary or contributory to economic development or important to public interest. ISSUE: Is a public land reserved by the President for warehousing purposes in favor of a government-owned or controlled corporation. hence." the warehouse constructed on a public reservation.75. a different rule should apply because "[t]he exemption of public property from taxation does not extend to improvements on the public lands made by pre-emptioners.NATIONAL DEVELOPMENT COMPANY. indeed. at their own expense. should properly be assessed real estate tax as such improvement does not appear to belong to the Republic. homesteaders and other claimants. and these are taxable by the state . is authorized to engage in commercial. vs. 399. but simply gives notice to all the world that it desires them for a certain purpose. 182 and E. CEBU did not acquiesce in the demand. the warehouse constructed on the reserved land by NWC (now under administration by NDC).A. plaintiff-appellee. . as well as the warehouse subsequently erected thereon. or occupants. defendant-appellants FACTS: Petitioner National Development Company (NDC). NDC wrote the City Assessor demanding full refund of the real estate taxes paid to CEBU claiming that the land and the warehouse standing thereon belonged to the Republic and therefore exempt from taxation.

 Respondent  Acting  Commissioner  of  Customs."  But   this   contention   runs   smack   against   the   familiar   rules   that   exemption   from   taxation   is   not   favored.   a   special   import   tax   is   imposed   "on   all   goods.R.   Republic  Act  1394.  petitioner-­‐appellant.  accessories..  are  "machinery.  it  is  quite  evident  that  the  pump  parts  are  not  used  in  petitioner's  industry  of  processing  gasoline.  by  the  terms  of  Section  6.  on  appeal.  grease  and  tin  containers.  grease  and  tin  containers.   ACTING  COMMISSIONER  OF  CUSTOMS.   which   are   leased   to   and   operated   by   gasoline   dealers.   The   drive   of   petitioner's   argument   is   that   marketing   of   its   gasoline   product   "is   corollary   to   or   incidental   to   its   industrial   operations.  and  manufacturing  lubricating  oil.  or  manufacturing   lubricating  oil.  Petitioner  owns  gasoline   stations   with   pumps.   FACTS:   Claim  for  the  refund  of  P722.  for  the  use  of  industries.  Which  are  but  statements  in  adherence  to  the  ancient  rule  that  exemptions  from  taxation  are  construed  in  strictissimi  juris  against  the   taxpayer  and  liberally  in  favor  of  the  taxing  authority.  and  spare  parts.84  paid  in  1956  as  special  import  tax  on  pump  parts  imported  by  petitioner.   installed   and   actually   used   by   gasoline   dealers   in   pumping   gasoline   from   under   around   tanks   into   customers'   motor   vehicles.     .   Petitioner  is  engaged  in  the  industry  of  processing  gasoline.   The   pump   parts   imported   by   petitioner   in   1956   were   intended.  miners.   are   used   in   the   sale   at   retail   of   gasoline  —   not   by   petitioner   but   by   lessees   of   gasoline   stations.   It   sells   gasoline   to   these   dealers.   Exempt   from   this   tax.  Petitioner's  ground:  The  imported  articles   "consist  of  equipment  and  spare  parts  for  its  own  exclusive  use  and  therefore  were  exempt  from  special  import  tax".  vs.  respondent-­‐appellee.   by   express   mandate  of  Section  6  of  the  same  law.   In  this  factual  environment. L-21841 October 28.  equipment.  Petitioner's  case  suffered  the  same  fate  in  the  Court  of  Tax  Appeals.   These   pump   parts.  mining   enterprises.#76 G.  inter  alia.  affirmed  the     rejection.   articles   or   products   imported   or   brought   into   the   Philippines"   during   the   period   from   1956   up   to   and   including   1965   in   accordance   with   the   schedule   of   rates   therein   provided.   By   Section   1   of   Republic   Act   1394.  and   that   exemption   in   tax   statutes   are   never   presumed. 1966 ESSO  STANDARD  EASTERN.  INC.   in   other   words.  The  Collector  of  Customs  of  Manila  rejected  the  claim.  planters  and  farmers". No.  ISSUE:   Are  the  imported  pump  parts  exempt  from  the  payment  of  special  import  tax?   HELD:   No.

Eastern Theatrical Co.concert halls. are taxed is no argument at all against the equality and uniformity of the tax imposition. The taxing power has the authority to make reasonable and natural classifications for purposes of taxation. The fact that somew places of amusement are not taxed while others. circuses. among others. such as race tracks. cabarets. in addition to fees imposed under Sections 633 and 778 of Ordinance 1600. on the ground that it is unconstitutional for being contrary to the provisions on uniformity and equality of taxation and the equal protection of the laws inasmuch as the ordinance does not tax other kinds of amusement. .. and other places of amusement. vs. cockpits. and the theater companies 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. vaudeville companies. like the ones herein. Held: 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. question the validity of ordinance. theatrical shows and boxing exhibitions. Perfecto (J): 5 concur Facts: The municipal board of Manila enacted Ordinance 2958 (series of 1946) imposing a fee on the price of every admission ticket sold by cinematograph theaters. Alfonso GR L-1104. Issue: Whether the ordinance violates the rule on uniformity and equality of taxation.Case 81 Eastern Theatrical Co. 31 May 1944 Second Division.

83.   and   so   it   was   entered   in   the   ledger.   the   City   Treasurer's   sole   depository.  and  the  City  Treasurer  accepted.  Inc.   Inc.  plaintiff-­‐appellee.  JUAN  LUNA  SUBDIVISION.  for  brevity)  issued  to  the  City  Treasurer  of  Manila.     The   City   Treasurer   refused   after   liberation   to   refund   the   plaintiff's   deposit   or   apply   it   to   such   future   taxes   as   might   be   found   due.   brought   this   suit   against   the   City   Treasurer   and   the   Philippine   Trust   Company  as  defendants  in  the  alternative.  for  to  remit  is  to  desist  or   refrain  from  exacting.   1952  May  28  En  Banc      G...  vs.  (Juan.   The  property  owners  who  had  paid  their  taxes  before  liberation  and  those  who  had  not  were  not  on  the  same  footing  on   the  need  of  material  relief.    This  check  was  to  be  applied  to  plaintiff's  land  tax  for  the  second  semester  of  1941  the  exact  amount  of   which   was   yet   undetermined.  No.  L-­‐3538      D  E  C  I  S  I  O  N       FACTS:     Juna  Luan  Subd.R.   The   City   Treasurer's   office   does   not   show   what   was   done   with   the   check.   while   the   Philippine  Trust  Company  was  unwilling  to  reverse  its  debit  entry  against  the  Juan  Luna  Subdivision.     HELD:     There  is  no  ambiguity  in  the  language  of  the  law.  It  was  upon  this   predicament   that   the   Juan   Luna   Subdivision.  defendants-­‐appellants.  It  says  "taxes  and  penalties  due  and  payable.  and  note  that  penalties  accrue  only  when  taxes   are  not  paid  on  time.   and   that   it   was   presented   by   that   Bank   to   the   Philippine   Trust   Company   and   was   cashed   by   the   drawee.   as   a   deposit   by   the   taxpayer.  The  word  "remit"  underlined  by  the  appellant  does  not  help  its  theory.  Each  set  of  taxes  is  a  class  by  itself.  It  is  true  that  the  ravages  and  devastations  brought  by  war  operations  had  rendered  the  bulk   ..  628334."  the  literal  meaning  of   which  taxes  owed  or  owing.  Inc.  They  are  not.  Note  that  the  provision  speaks  of  penalties.  SARMIENTO.  the  confinement  of  the  condonation  to  delinquent  taxes  was  not  without  good  reason.   Exhibit   "F".   But   the   books   of   the   Philippine   Trust   Company   do   reveal   that   it   was   deposited   with   the   Philippine   National   Bank.  and  the  law  would  be  open  to  attack  as  class  legislation  only  if  all   taxpayers  belonging  to  one  class  were  not  treated  alike.  ET  AL.     As  to  the  justice  of  the  measure.  INC.  or  enforcing  something  as  well  as  to  restore  what  has  already  been  taken.       ISSUE:     Whether    the    provision    allowing    the    remission    covers    taxes    paid    before    the    enactment    of   Commonwealth  Act  703  or  taxes  which  were  still  unpaid.     The   remission   of   taxes   due   and   payable   to   the   exclusion   of   taxes   already   collected   does   not   constitute   unfair   discrimination.  M.  inflicting.  Check   No.

and. and that the tax in question does not violate the rule of uniformity of taxation. also a public service operator of the trucks in said City. or by the mode adopted in fixing its amount. it will be considered an excise. privilege or act which is taxed. if the tax is levied upon persons on account of their business." It is contended that this power is broad enough to confer upon the City of Manila the power to enact an ordinance imposing the property tax on motor vehicles operating within the city limits. 3379 passed by the Municipal Board of the City of Manila on March 24. 1950. THE CITY ASSESSOR and THE CITY MAYOR. The distinction is important if we note that the ordinance intends to burden with the tax only those registered in the City of Manila as may be inferred from the word "operating" used therein. 1953 ASSOCIATION OF CUSTOMS BROKERS.R. This is precisely what the Motor Vehicle Law (Act No. nor does it constitute double taxation. but if it is really imposed upon the performance of an act. (2) said ordinance offends against the rule of uniformity of taxation. for the reason that. vs. it does not become a property tax because it is proportioned in amount to the value of the property used in connection with the occupation. No. 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. THE MUNICIPALITY BOARD. petitioners-appellants. it will be so regarded. Said section confers upon the municipal board the power "to tax motor and other vehicles operating within the City of Manila the provisions of any existing law to the contrary notwithstanding. 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.J. or on the gross receipts of the business. 409]. or the engaging in an occupation. 172) The ordinance in question falls under the foregoing rules. FACTS: This is a petition for declaratory relief to test the validity of Ordinance No. for under the Motor Vehicle Law no motor vehicle can be operated without previous payment of the registration fees. under said Act. and from the natural and legal effect of the language employed in the act or ordinance. which is composed of all brokers and public service operators of motor vehicles in the City of Manila.84) G. MANLAPIT. all of the City of Manila. Court of First Instance of Manila sustained the validity of the ordinance and dismissed the petition. It does not distinguish between a motor vehicle for hire and one which is purely for private use. and not by the name by which it is described. The Association of Customs Brokers. The word "operating" denotes a connotation which is akin to a registration. and (3) it constitutes double taxation. It is also our opinion that the ordinance infringes the rule of the uniformity of taxation ordained by our Constitution. and G. Roja for appellants.. The respondents. respondents-appellees. There is no pretense that the ordinance equally applies to motor vehicles who come to Manila for a temporary .. maintenance and improvement of the streets and bridges in said city. 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. City Fiscal Eugenio Angeles and Assistant Fiscal Eulogio S. Teotimo A. Note that the ordinance exacts the tax upon all motor vehicles operating within the City of Manila. The disputed ordinance was passed by the Municipal Board of the City of Manila under the authority conferred by section 18 (p) of Republic Act No. This prohibition is intended to prevent duplication in the imposition of fees for the same purpose. 3992) intends to prevent. L-4376 May 22. (37 C. The character of the tax as a property tax or a license or occupation tax must be determined by its incidents. municipal corporation already participate in the distribution of the proceeds that are raised for the same purpose of repairing. THE CITY TREASURER. Every excise necessarily must finally fall upon and be paid by property and so may be indirectly a tax upon property. Held: It has been held that "If a tax is in its nature an excise. enjoyment of a privilege. it will be construed as a license or occupation tax. Hence this appeal. INC. even though nominally and in form it is a license or occupation tax. While it refers to property tax and it is fixed ad valoremyet 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. If it is clearly a property tax. and G.. 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. Manlapit.. Inc. INC. even though it is graduated according to the property used in such business. on the other hand. ISSUE: Whetehr or not the ordinance levies a license tax and therefore beyond the power of the City of Manila. 409. maintaining and improving bridges and public highway (section 73 of the Motor Vehicle Law). Inc. Serrano for appellees. a member of said association.

Every excise necessarily must finally fall upon and be paid by property and so may be indirectly a tax upon property. 3379 passed by the Municipal Board of the City of Manila on March 24. or on the gross receipts of the business. If it is clearly a property tax. maintenance and improvement of the streets and bridges in said city." It is contended that this power is broad enough to confer upon the City of Manila the power to enact an ordinance imposing the property tax on motor vehicles operating within the city limits. it will be so regarded. The distinction is important if we note that the ordinance intends to burden with the tax only those registered in the City of Manila as may be inferred from the word "operating" used therein. INC. and. City Fiscal Eugenio Angeles and Assistant Fiscal Eulogio S. and that the tax in question does not violate the rule of uniformity of taxation. municipal corporation already participate in the distribution of the proceeds that are raised for the same purpose of repairing. G. (2) said ordinance offends against the rule of uniformity of taxation. It does not distinguish between a motor vehicle for hire and one which is purely for private use. The respondents. The Association of Customs Brokers. respondents-appellees. Roja for appellants. privilege or act which is taxed. or the engaging in an occupation. 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. MANLAPIT. Held: It has been held that "If a tax is in its nature an excise. even though nominally and in form it is a license or occupation tax. 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. This is precisely what the Motor Vehicle Law (Act No. This prohibition is intended to prevent duplication in the imposition of fees for the same purpose.. or by the mode adopted in fixing its amount. 409...84. nor does it constitute double taxation. (37 C. L-4376 May 22. ISSUE: Whetehr or not the ordinance levies a license tax and therefore beyond the power of the City of Manila. under said Act. and not by the name by which it is described. 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. it will be considered an excise. No. Serrano for appellees. 1950. THE CITY ASSESSOR and THE CITY MAYOR. It is also our opinion that the ordinance infringes the rule of the uniformity of taxation ordained by our Constitution. enjoyment of a privilege. and G. and from the natural and legal effect of the language employed in the act or ordinance. FACTS: This is a petition for declaratory relief to test the validity of Ordinance No. THE MUNICIPALITY BOARD. a member of said association. but if it is really imposed upon the performance of an act. which is composed of all brokers and public service operators of motor vehicles in the City of Manila. 409]. Said section confers upon the municipal board the power "to tax motor and other vehicles operating within the City of Manila the provisions of any existing law to the contrary notwithstanding. The word "operating" denotes a connotation which is akin to a registration.J. THE CITY TREASURER.R. There is no pretense that the ordinance equally applies to motor . 1953 ASSOCIATION OF CUSTOMS BROKERS. Teotimo A. Manlapit. 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. Note that the ordinance exacts the tax upon all motor vehicles operating within the City of Manila. for under the Motor Vehicle Law no motor vehicle can be operated without previous payment of the registration fees. Inc. 172) The ordinance in question falls under the foregoing rules. INC. all of the City of Manila. it will be construed as a license or occupation tax. Hence this appeal. Court of First Instance of Manila sustained the validity of the ordinance and dismissed the petition. The disputed ordinance was passed by the Municipal Board of the City of Manila under the authority conferred by section 18 (p) of Republic Act No. and (3) it constitutes double taxation. if the tax is levied upon persons on account of their business. even though it is graduated according to the property used in such business. and G. 3992) intends to prevent. While it refers to property tax and it is fixed ad valoremyet 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. maintaining and improving bridges and public highway (section 73 of the Motor Vehicle Law). on the other hand. The character of the tax as a property tax or a license or occupation tax must be determined by its incidents. petitioners-appellants.. Inc. vs. also a public service operator of the trucks in said City. it does not become a property tax because it is proportioned in amount to the value of the property used in connection with the occupation. for the reason that.

D." Congress. consistent with the basic policy on local autonomy. The latter role is governmental. (e) Petitioners also argue that the Local Autonomy Clause of the Constitution will be violated by P.D. PAGCOR should be and actually is exempt from local taxes. filed an instant petition seeking to annul PAGCOR Charter (PD 1869) because it waived the Manila City government's right to impose taxes and license fees. This is a pointless argument. 1869 is violative of the principle of local autonomy. BASCO V. Otherwise. as well as fees. (2) of P. fees. which is recognized by law. operate and maintain gambling casinos on land or water within the territorial jurisdiction of the Philippines. Issue: Whether or not PAGCOR’s charter has intruded into the local government’s right to impose taxes and license fees Ruling Petitioners contend that the exemption clause in P. (c) The City of Manila's power to impose license fees on gambling. thus. Subsequently. it can also provide for exemptions or even take back the power. XVIII. being a mere Municipal corporation has no inherent right to impose taxes. on July 11. PAGCOR is a government owned or controlled corporation with an original charter. "the Charter or statute must plainly show an intent to confer that power or the municipality cannot assume it. (d) Local governments have no power to tax instrumentalities of the National Government. petitioners alleged that the law has intruded into the local government's right to impose local taxes and license fees. charges or levies of whatever nature. has the power of control over Local governments. 1977 and was granted a franchise under PD 1067-B also dated Jan 1. which places it in the category of an agency or instrumentality of the Government. The power of local government to "impose taxes and fees" is always subject to "limitations" which Congress may provide by law. licenses or permits" was withdrawn by P. Necessarily. repealed or revoked" (Sec.86.D. whether National or Local. Since PD 1869 remains an "operative" law until "amended. fees and charges shall accrue exclusively to the local government. which is in contravention of the constitutionally enshrined principle of local autonomy. the power of local governments to regulate gambling thru the grant of "franchise. As early as 1975. PAGCOR’s charter was created under PD 1869 to enable the Government to fully regulate and centralize all games of chance authorized by existing franchise or permitted by law. 1869. Therefore. 3. 1977 “to establish. All of its shares of stocks are owned by the National Government. PD 1399 was passed on June 2. 771 and was vested exclusively on the National Government. PAGCOR Facts PAGCOR was created by virtue of PD 1067-A dated Jan1. 1978 for PAGCOR to fully attain this objective. therefore.” Petitioners Basco et al." Their contention is without merit for the following reasons: (a) The City of Manila. They must be referring to Section 13 par.” 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".D. the power to demand or collect license fees which is a consequence of the issuance of "licenses or permits" is no longer vested in the City of Manila. PAGCOR has a dual role. and other charges subject to such guidelines and limitation as the congress may provide. impeded or subjected to control by a mere Local government. 5. Article X of the 1987 Constitution (on Local Autonomy) provides: Sec. And if Congress can grant the City of Manila the power to tax certain matters. 1987 Constitution). only the National Government has the power to issue "licenses or permits" for the operation of gambling.” Its operation was originally conducted in the well known floating casino “Philippine Tourist. its "exemption clause" remains as an exception to the exercise of the power of local governments to impose taxes and fees. (b) The Charter of the City of Manila is subject to control by Congress. has long been revoked. Futhermore. No. It should be stressed that "municipal corporations are mere creatures of Congress" which has the power to "create and abolish municipal corporations" due to its "general legislative powers. 1983. Such taxes. Each local government unit shall have the power to create its own source of revenue and to levy taxes. income or otherwise. PD 1869. 1869 which exempts PAGCOR. . Thus. under the following declared policy which states: “It is hereby declared to be the policy of the State to centralize and integrate all games of chance not heretofore authorized by existing franchises or permitted by law. Art. to operate and to regulate gambling casinos. its operation might be burdened. Being an instrumentality of the Government.” The operation was considered a success for it proved to be a potential source of revenue to fund infrastructure and socioeconomic projects. as the franchise holder from paying any "tax of any kind or form.

Under this principle. respondent. particularly of the President. separation of powers. which created the Congressional Oversight Committee. any provision of law that empowers Congress or any of its members to play any role in the implementation or enforcement of the law violates the principle of separation of powers and is thus unconstitutional. the role of the executive branch. as is a provision that allows Congress or its members to overturn any directive or ruling made by the members of the executive branch charged with the implementation of the law. NEDA. rather than violates. DBM. . is limited to approving or vetoing the law. contended. It ensures the fulfillment of the legislative policy and serves as a check to any over-accumulation of power on the part of the executive and the implementing agencies. It explained: Where Congress delegates the formulation of rules to implement the law it has enacted pursuant to sufficient standards established in the said law. the law must be complete in all its essential terms and conditions when it leaves the hands of the legislature. among others that the creation of the congressional oversight committee under the law enhances.63 From the moment the law becomes effective. BIR. Subject to the indispensable requisite of publication under the due process clause. among others the unconstitutionality of the law because the assailed act contained a provision in which The DOF. ISSUE: Whether or not the creation of the Congressional Oversight Comittee is unconstitutional HELD: The Supreme court partially granted the petiton and declared unconstitutional Section 12 of the assailed act.61 the determination as to when a law takes effect is wholly the prerogative of Congress. to be approved by a Joint Congressional Oversight Committee created for such purpose.62 As such. Before that point. On the other hand. a provision that requires Congress or its members to approve the implementing rules of a law after it has already taken effect shall be unconstitutional. it is only upon its effectivity that a law may be executed and the executive branch acquires the duties and powers to execute the said law. BOC and the Civil Service Commission (CSC) were tasked to promulgate and issue the implementing rules and regulations of RA 9335.87. ABAKADA vs Purisima FACTS: The petitioners sought to prevent respondents from implementing and enforcing RA 93352 (Attrition Act of 2005). And it may be deemed to have left the hands of the legislature when it becomes effective because it is only upon effectivity of the statute that legal rights and obligations become available to those entitled by the language of the statute. Petitioners alleged.

is not exempt from the tax. DEPARTMENT OF FINANCE SECRETARY. respondent Commissioner of Internal Revenue issued the circular in question. therefore. Inc. classifying copra as an agricultural non-food product and declaring it "exempt from VAT only if the sale is made by the primary producer pursuant to Section 103(a) of the Tax Code. vs. like a trader or dealer. Petitioner Misamis Oriental Association of Coco Traders. although both sell copra in its original state. Whether copra is an agricultural food or non-food product for purposes of assessing VAT. petitioner. As . 2.. levy and collection of taxes and other imposts. On June 11. the sale of agricultural non-food products in their original state is exempt from VAT only if the sale is made by the primary producer or owner of the land from which the same are produced. in the absence of any showing that it is plainly wrong. exempt from VAT at all stages of production or distribution. 3. 1991. are engaged in the buying and selling of copra in Misamis Oriental. held: 1. the Commissioner of Internal Revenue gave it a strict construction consistent with the rule that tax exemptions must be strictly construed against the taxpayer and liberally in favor of the state. which implemented VAT Ruling 190-90. Quintin Kintanar of the Bureau of Food and Drug to the effect that copra should be considered "food" because it is produced from coconut which is food and 80% of coconut products are edible. as amended. Whether RMC No. COMMISSIONER OF THE BUREAU OF INTERNAL REVENUE (BIR). Indeed. Indeed. copra was classified as agricultural food product under $ 103(b) of the National Internal Revenue Code and. issues: 1. 47-91 is discriminatory and violative of the equal protection clause of the Constitution because while coconut farmers and copra producers are exempt. even Dr. 1991. Kintanar said that his classification of copra as food was based on "the broader definition of food which includes agricultural commodities and other components used in the manufacture/processing of food. MISAMIS ORIENTAL ASSOCIATION OF COCO TRADERS. In interpreting §103(a) and (b) of the NIRC. Respondents represent departments of the executive branch of government charged with the generation of funds and the assessment. 47-91 is counterproductive because traders and dealers would be forced to buy copra from coconut farmers who are exempt from the VAT and that to the extent that prices are reduced the government would lose revenues as the 10% tax base is correspondingly diminished. Whether RMC No. Petitioners add that oil millers do not enjoy tax credit out of the VAT payment of traders and dealers. under §103(b) the sale of agricultural food products in their original state is exempt from VAT at all stages of production or distribution regardless of who the seller is. BIR MISAMIS ORIENTAL. respondents. Petitioner cites the opinion of Dr. as the government agency charged with the enforcement of the law. individually or collectively. Under §103(a). the ruling was made by the Commissioner of Internal Revenue in the exercise of his power under § 245 of the NIRC to "make rulings or opinions in connection with the implementation of the provisions of internal revenue laws. the opinion of the Commissioner of Internal Revenue. is entitled to great weight. The sale made by any other person or entity.89." Moreover. we find no reason for holding that respondent Commissioner erred in not considering copra as an "agricultural food product" within the meaning of § 103(b) of the NIRC. traders and dealers are not. AND REVENUE DISTRICT OFFICER. On the other hand.including rulings on the classification of articles for sales tax and similar purposes." In the case at bar." 2 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. The petitioner alleges that prior to the issuance of Revenue Memorandum Circular 47-91 on June 11. is a domestic corporation whose members. Petitioner contends that the Bureau of Food and Drug of the Department of Health and not the BIR is the competent government agency to determine the proper classification of food products. INC.

former produce and sell copra. they are subject to 10% VAT on the sale of services. 3. The sale of agricultural non-food products is exempt from VAT only when made by the primary producer or owner of the land from which the same is produced. but there is no tax credit if the sale is made by the producer. Pursuant to § 102 of the NIRC. the argument that the classification of copra as agricultural non-food product is counterproductive is a question of wisdom or policy which should be addressed to respondent officials and to Congress. but there is no tax credit if the sale is made directly by the copra producer as the sale is VAT exempt.                                                                   . the latter merely sell copra. The Constitution does not forbid the differential treatment of persons so long as there is a reasonable basis for classifying them differently. At any rate. 8 It is not true that oil millers are exempt from VAT. copra traders and dealers are allowed to credit the input tax on the sale of copra by other traders and dealers. but in the case of agricultural food products their sale in their original state is exempt at all stages of production or distribution. Under § 104 of the Tax Code. the petition is DISMISSED. they are allowed to credit the input tax on the sale of copra by traders and dealers. In the same manner. This is not so.

 and  at  the  same  time  to  subject  to  the  taxation  on  some  fair  bases  that  which  is  not  in  its   nature   so   clearly   local.       Held:  No.   should   pay   its   share   to   the   State   and   to   all  the  countries.  State  Railroad  Tax  Cases   92  US  575     The  Act  of  Illinois  of  1872  makes  special  provisions  for  the  taxation  of  railroads  and  other  corporations.   the   appellees   insist   that   the   Act   creating   the   State   Board   of   Equalization   is   unconstitutional   because   it   classified   the   property   to   determine   what   addition   or   deduction   from   the   aggregate   assessed   value   should   be   made.  be  valued  separately.   Whether  the  Act  is  unconstitutional  and  violates  the  equal  protection  clause.  preliminary  or  final.  No  injunction.   it   is  essential  that  it  cannot  authorize  injunction  against  its  collection.   Thus.     .  The  cases  are  remanded  to  the  Circuit  Court  with  directions  to  dissolve  the   injunction  and  dismiss  the  bills.   by   reason   of   its   being   incident   to   the   railroad.  for  the  purpose  of  taxation.  it  is  not  unconstitutional  that  the  city  prescribed  a  different  rule  of  taxation  for  companies  and  industries  because   the   equal   protection   clause   in   the   Constitution   implies   that   it   shall   be   equal   to   everyone   according   to   the   class   of   which   it  operates.  the  main  feature   of  which  is  leaving  to  each  county.         Issues:  Whether  taxes  may  be  subject  to  injunction.  the  decisions  in  the  cases  are  reversed.   They  contest  that  the  Cinstitution  requires  the  property.91.  Each  person  shall  pay  a  tax  according  to  the  value  of  his  property.   but   which.     With   this.     Also.  city  and  town  the  property  local  in  the  same  manner  that  other  similar  property  is   taxed  in  that  municipality.  can  ba  granted   until  it  is  shown  that  all  taxes  conceded  to  be  due  have  been  paid  or  tendered.   While   the   court   does   not   lay   down   absolute   rule   limiting   the   powers   of   the   court   in   restraining   the   collection   of   taxes.  towns  and  citites  through  of  which  any  part  of  the  road  runs.  stating  that   the  exaction  made  by  means  of  the  illegal  assessments  set  forth  that  the  Act  is  unconstitutional.  taxes  may  not  be  subjected  to  injunction  and  the  Act  is  constitutional.

. 1912. 627. promulgation and enforcement of CAC No.JOAQUIN DE VILLATA. when sailing from the port of Gubat to the port of Legaspi. although they require “uniformity” of taxation. Petitioner alleged in his complaint that he is the master of S. Our statutes . petitioner. Vizcaya of the coastwise trade. 627 at the date of its promulgation and at the date of the institution of this action. respondent Facts: Petitioner applied for a writ of prohibition directed against the Collector of Customs to restrain the latter from enforcing against the former the provisions of Customs Administrative Circular (CAC) No. The constitutional law requiring uniformity of taxation imposes the duty upon the State directly to lay its burdens uniformly and evenly upon all. on July 6. STANLEY. under and by virtue of the terms of Customs Administrative Circular No. vs. 627 that prescribes regulations for the transportation of mails on vessels engaged in the Philippine coastwise trade. that defendant is threatening to suspend or revoke the license of plaintiff by reason of said facts.S.96. do not prescribe the rule as to “equality” in taxation which prevails in some jurisdiction. of his intended sailing. Acting Insular Collector of Customs. and therefore failed to carry the mails between said ports. that as such captain . he failed to notify the postmaster of the former port. in advance. Issue: Whether or not the Collector of Customs is correct Held: The Insular Collector of Customs was clothed with the necessary authority for the preparation.S. J.

such annual fees are unauthorized and illegal. it is an occupation “and one occupation or line of business does not become exempt by being conducted with some other occupation or business for which such tax has been paid” and the occupation tax must be paid by “each individual engaged in a calling subject thereto”. 11. where the imposition of such tax is authorized by law. The contention that the ordinance is discriminatory and hostile because there is no other person in the locality who exercises such “designation” or occupation is also without merit.I. whereas the ordinance which imposes taxes in question was adopted under and pursuant to the provisions of Commonwealth Act No. This contention is without merit. a foreign corporation. Province of Cebu. still. The permit and the fee referred to may be required and charged by the municipal council of Cordova in the exercise of its regulative authority. J. The judgment appealed from is hereby affirmed. . plaintiff-appellant. which imposes as annual tax of P150 on “installation manager” comes under the provisions of Commonwealth Act No. E. on the ground that the ordinances imposing such taxes are ultra vires. L-6093 February 24. VAÑO. LTD.. “the payment of… occupation tax shall not exempt any person from any tax… provided by law or ordinance in places where such… occupation in… regulated by municipal law. which imposes an annual tax of P40 for local deposits in drums of combustible and inflammable materials and an annual tax of P200 for tin can factories. and that the installation manager employed by the plaintiff is a salaried employee which may not be taxed by the municipal council under the provisions of Commonwealth Act no. The defendant denies that they are so. and No. Ltd. or exercising privileges in the municipality or municipal district. as Municipal Treasurer of the Municipality of Cordova. 11 is valid and lawful because it is neither a percentage tax nor one on specified articles. filed suit for the refund of the taxes paid by it. Issue: Whether or not the subject municipal ordinances are valid. of P. 10.I. adopted the following ordinances: No. series of 1946. Province of Cebu. which provides that the municipal council in the exercise of the regulative authority may require any person engaged in any business or occupation to obtain permit for which a reasonable fee may be charged.R. 472. and of P200 “for tin factory” was adopted under and pursuant to Section 2244 of the Revised Administrative Code. But it is claimed that “installation manager” is a designation made by the plaintiff and such designation cannot be deemed to be a “calling” as defined in Section 178 of the National Internal Revenue Code. Lastly. PADILLA. Likewise. E. with costs against the appellant. And pursuant to Section 179 of the National Internal Revenue Code. Commonwealth Act no. inasmuch as it is and will be applicable to any person or firm who exercises such calling or occupation named or designated as “installation manager”. which authorizes municipal councils and municipal district councils “to impose license taxes upon persons engaged in any occupation or business. Ordinance No. because even if the installation manager is a salaried employee of the plaintiff. vs.000 tin cans. G.. which imposes an annual tax of P150 on tin can factories having a maximum output capacity of 30. which imposes an annual tax of P150 on occupation or the exercise of the privilege of installation manager.. 1954 THE SHELL CO. Ordinance no. 472. 9. series of 1947. nor shall the payment of any such tax be held to prohibit any municipality from placing a tax upon the same… occupation.: Facts: The Municipal Council of Cordova. The Shell Co. 472. Held: It is contended that as the municipal ordinance imposing an annual tax of P40 for “minor local deposit in drums of combustible and inflammable materials”. OF P. series of 1948. 10. by requiring them to secure licenses at rates fixed by the articles”. defendant-appellee. for local purposes.97. because the fact that there is no other person in the locality who exercises such a “designation” or calling does not make the ordinance discriminatory or hostile. No. Neither does it fall under any of the prohibitions provided for in Section 3 of the same Act. No. which are the only exemptions provided in Section 1. 472.

952.66.66 and accordingly.52 (the amount adjudged by the Court of Tax Appeals and on appeal to the Supreme Court) or P33..175..R. POBLADOR. No. & Gen. Inc.52.. the Commissioner of Internal Revenue issued Tax Debit memo dated January 17. and the Philippine Power and Development Co. 1977COMMISSIONER OF INTERNAL REVENUE. L-25501 July 29. and to this Honorable Court respectfully manifest: 1. to this Honorable Court..952. 2. 1977 the parties and their respective counsels filed the following: JOINT MANIFESTATION AND MOTION COME NOW Commissioner of Internal Revenue. L-25501 and G. G. That in view of the aforesaid application of the taxpayer's tax credit liability of P33.) EFREN I. No. docketed as G. Inc.) RAMON A.102) G. 1976. No. 1977. 5. GAL-LANG DEVELOPMENT CO. -Petitioner is hereby ordered to pay respondent Commissioner. NAZARENO. have become moot and academic. L-25507 July 29. deficiency franchise tax for the period from October 1. within 30 days from the date this decision becomes final. Inc. vs.. 308 and in the letter dated December 17. 4. Manila. by their respective counsel. 3. MENDOZA Acting Commissioner of Solicitor General Internal Revenue (Sgd.COMMISSIONER OF INTERNAL REVENUE. 1955 to June 30. PUNO Assistant Solicitor General PHILIPPINE POWER & (Sgd.) REYNATO S. Mgr. June 14. the same shall be subject to the surcharge of 25% for delinquency pursuant to Section 259 of the Revenue Code. 1977PHILIPPINE POWER AND DEVELOPMENT CO. 1960 in the amount of ?138. 1965. Solicitor INC. If the said amount is not paid within 30 days from the date this decision becomes final. it is respectfully prayed that the aforesaid appeals be dismiss without costs.. PHILIPPINE POWER AND DEVELOPMENT CO. INC. L-25507. That the said decision was appealed by the Commissioner of Internal Revenue and the Philippine Power and Development Co. 1977. That on October 31. AZADA. had availed of the privileges of Letter of Instructions No.) LOLITA O.R. and vs .R.R. in full and complete settlement of the tax liabilities in question.66. PLANA ESTELITO P..952. That the Philippine Power and Development Co.06 against the said amount of P33. the appeals of the Commissioner of Internal Revenue and the Philippine Power and Development Co.. a xerox copy of which letter is hereto attached as Annex 'A' and made an integral part hereof. AGULLANA Special Attorney (Sgd. INC. a xerox copy of which is hereto attached as Annex 'B' and made an integral part hereof. and THE COURT OF TAX APPEALS. WHEREFORE. FACTS: On July 14. ACHACOSO Vice-Pres. applied its tax credit of P79. are pending resolution. the Court of Tax Appeals rendered a decision in CTA Case No. Inc.175... (Sgd. the dispositive portion of which is quoted as follows: WHEREFORE. 1955 to June 30.. That the Philippine Power and Development Co. the Commissioner of Internal Revenue informed the taxpayer herein that its offer to pay 15% of its deficiency franchise tax from October 1.229. By: (Sgd. 1960 was increased to 30% of P133. Inc. No. which appeals. 1152.) PELAGIO M. TOMACRUZ & PAREDES . the assessment appealed from is hereby modified.

Contractual tax exemptions. respondent province enacted Laguna Provincial Ordinance No. sheds its cloak of authority and waives its governmental immunity. the provisions of the now repealed Local Tax Code. PROVINCE OF LAGUNA and BENITO R. The basic 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. are not to be confused with tax exemptions granted under franchises. is violative of the non-impairment clause of the Constitution and Section 1 of Presidential Decree No. consistent with the basic policy of local autonomy.#104 G. nevertheless. HELD: Local governments do not have the inherent power to tax except to the extent that such power might be delegated to them either by the basic law or by statute. petitioner. are those agreed to by the taxing authority in contracts. fees and charges. these exemptions. by virtue of existing laws then in effect. Biñan. Indeed. Petitioner MERALCO paid the tax. Whether Republic Act No. tax exemptions of this kind may not be revoked without impairing the obligations of contracts.628. No. Republic Act No. amended or modified Presidential Decree No. 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. subject to the limitations expressed therein. Under the now prevailing Constitution.respondents. 01-92. lawfully entered into by them under enabling laws in which the government. MERALCO was likewise granted a franchise by the National Electrification Administration to operate an electric light and power service in the Municipality of Calamba. 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. otherwise known as the "Local Government Code of 1991. referred to tax exemptions contained in special franchises as being in the nature of contracts and a part of the inducement for carrying on the franchise. 551. certain municipalities of the Province of Laguna." was enacted enjoining local government units to create their own sources of revenue and to levy taxes. 1999 MANILA ELECTRIC COMPANY. alteration or repeal by Congress as and when the common good so requires. Sta. like its precursor provisions in the 1935 and the 1973 Constitutions. Laguna. under protest. which is beyond the purview of the non-impairment clause of the Constitution. in his capacity as Provincial Treasurer of Laguna. acting in its private capacity. such as those contained in government bonds or debentures. 131359 May 5. by and large. .42. not too infrequently. Luisiana. On 19 January 1983. San Pedro. otherwise known Local Government Code of 1991. FACTS: On various dates. Petition is dismissed. in part the imposition of franchise tax at a rate of 50% of the 1% of the gross annual receipts. however. vs. are far from being strictly contractual in nature. 551. in the real sense of the term and where the non-impairment clause of the Constitution can rightly be invoked. where there is neither a grant nor a prohibition by statute. Article XII. 01-92. including. While the Court has. 7160. heat and power within their concerned areas. Calauan and Cabuyao. insofar as petitioner is concerned. 7160.R. of the 1987 Constitution.D.520. Section 11. respondent Provincial Treasurer sent a demand letter to MERALCO for the corresponding tax payment. Rosa. On 12 September 1991. Truly. ISSUE: Whether the imposition of a franchise tax under Section 2. providing. The Local Government Code of 1991 has incorporated and adopted. has repealed. On the basis of the above ordinance. BALAZO. Pursuant to the provisions of the Code. the tax power must be deemed to exist although Congress may provide statutory limitations and guidelines. which then amounted to P19. issued resolutions through their respective municipal councils granting franchise in favor of petitioner Manila Electric Company ("MERALCO") for the supply of electric light.09 of Laguna Provincial Ordinance No. These contractual tax exemptions. A franchise partakes the nature of a grant. 551 already included the franchise tax imposed by the Provincial Tax Ordinance.

7294 on whether Smart is exempted from both local and national franchise tax must be construed strictly against Smart which claims the exemption. but from a general view of the act as a whole. SMART COMMUNICATIONS. PETITIONER.A.A. RESPONDENTS G. REPRESENTED HEREIN BY ITS MAYOR HON. RODRIGO R. 7160 shows the clear legislative intent to exempt it from the provisions of R. ISSUE: Whether Smart is liable to pay the franchise tax imposed by the City of Davao in view of the "in lieu of all taxes" clause in its franchise? HELD: YES.A. there is hereby imposed a tax on businesses enjoying a franchise. No. INC.A. and (d) the imposition of franchise tax by the City of Davao would amount to a violation of the constitutional provision against impairment of contracts. 7160 can only apply to exemptions already existing at the time of its effectivity and not to future exemptions. Every part of the statute must be construed with reference to the context. (c) the power of the City of Davao to impose a franchise tax is subject to statutory limitations such as the "in lieu of all taxes" clause found in Section 9 of R. September 16.) No. Smart contends that its telecenter in Davao City is exempt from payment of franchise tax to the City. THE CITY OF DAVAO. 2002. No. . 7160. No. (b) Section 137 of R. Article 10 thereof.. VS. particularly Section 1. It is not clear whether the "in lieu of all taxes" provision in the franchise of Smart would include exemption from local or national taxation. 7294.105. 7294 subsequent to R. The grant of tax exemption by R. the pertinent portion of which reads: Notwithstanding any exemption granted by any law or other special law. Smart filed a special civil action for declaratory relief under Rule 63 of the Rules of Court. No.R. AND THE SANGGUNIANG PANLUNGSOD OF DAVAO CITY.A. No. R.A.A. 155491. on the following grounds: (a) the issuance of its franchise under Republic Act (R.A. at a rate of seventy-five percent (75%) of one percent (1%) of the gross annual receipts for the preceding calendar year based on the income or receipts realized within the territorial jurisdiction of Davao City. for the ascertainment of its rights and obligations under the Tax Code of the City of Davao. DUTERTE. No 7294 does not expressly provide what kind of taxes Smart is exempted from. The uncertainty in the "in lieu of all taxes" clause in R. 7294 is not to be interpreted from a consideration of a single portion or of isolated words or clauses. 2008 FACTS: On February 18. No.

  which   is   out   of   proportion   to   the   cost   of   registration   and   that   it   fails   to   prescribe   any   standard   to   guide   or   limit   the   action   of   Mayor   Villegas   thus   violating   the   fundamental   principle   on   illegal   delegation   of   legislative   powers.   it   is   imperative   that   the   classification   be   based   on   real   and   substantial   differences   having   a   reasonable   relation   to   the   subject   of   the   particular   regulation.   Issue:  WON  the  ordinance  imposing  a  50  peso  fee  for  non  Filipino  citizens  prior  to  employment  is  not  a  revenue  measure   but  a  valid  regulatory  measure   Held:   No.  Although  the  equal  protection  clause  of  the  constitution  does  not   forbid   classification.   The   court   held   the   fee   to   be   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.  liberty   and  property  and  therefore  violating  the  due  process  and  equal  protection  clauses  of  the  constitution.     .  Villegas  contend   that  the  ordinance  is  not  purely  a  tax  or  revenue  measure  because  its  principal  purpose  is  regulatory.   while   it   is   true   that   the   first   part   of   the   ordinance   which   requires   an   alien   to   secure   an   employment   permit   involves   the   exercise   of   discretion   and   judgment   in   the   processing   and   approval   of   applications   and   therefore   regulatory   in   character.  as   a  police  power  measure.   Respondent   argues   the   following:   that   the   permit  fee  is  a  revenue  measure  imposed  on  aliens  is  discriminatory  and  violative  of  the  rule  of  uniformity  in  taxation.  Mayor  Villegas  vs  Hiu  Chiong  Tsai  Pao  Ho   Facts:  Respondent  questioned  the  validity  of  the  ordinance  passed  by  petitioner  Villegas  that  imposes  a  payment  of  50   pesos   for   an   employment   permit   applicable   only   to   non-­‐Filipino   citizens.   and   lastly.   Such   equal   protection   clause   is   a   limitation   on   the   power   of   taxation.   The   Court   held.  it  makes  no  distinction  between  the  useful  and  non-­‐useful  occupations  imposing  a  fixed  rate.107.   The   ordinance   does   not   lay   down   any   criterion   or   standard   to   guide   the   mayor   in   the   exercise   of   his   discretion  therefore  it  must  be  considered  an  unlimited  delegation  of  power  which  is  invalid.   it   is  arbitrary  oppressive  and  unreasonable  being  applied  only  to  aliens  who  are  thus  deprived  of  their  rights  to  life.   There   is   no   logic   or   justification   in   exacting   50   pesos   from   aliens   who   have   been   cleared   from   employment.   the   part   which   requires   a   50   peso   payment   is   a   revenue   measure.

Case 111 Commissioner vs. supplies. Regala (J): 7 concur. the admission of pay patients does not detract from the charitable character of a hospital. and the St. On these shipments. but which was denied by the Commissioner on the ground that St. As the law does not distinguish or qualify the enjoyment or the exemption (as the Secretary of Finance did in Department Order 18. owns and operates the St. Issue: Whether the shipments for St. series of 1958). society or institution. which covers taxes on donations in any form and all articles imported into the Philippines. In 1957 to 1959. equipment and other articles intended for use in the construction and operation of the new St. or for free distribution and not for sale. Thus. Held: Under RA 1916. The Missionary District filed claims for refund. Luke’s Hospital. and the articles must have been donated for the use of the organization. barter or hire. religious or charitable purposes. Bishop of Missionery District of the Philippine Islands GR L-19445. of the Protestant Episcopal Church in the United States. Luke’s Hospital in Quezon City. requires that the imported articles ush have been donated. the Missionary District received various shipments of materials. the donee must be a duly incorporated or established international civic organization. . the shipments are tax exempt. 1 took no part Facts: The Missioner y District of the Philippine Islands. Luke’s Hospital are tax-exempt. Stephen’s High School in Manila. Luke’s Hospital was not a charitable institution and therefore was not exempt from taxes. the Commissioner collected compensation tax. if its funds are devoted exclusively to the maintenance of the institution. the Brent Hospital in Zamboanga City. 31 August 1965 En Banc. religious or charitable society or institution for civic.

  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.   alleging   that   the   collection   of   this   tax   is   illegal.   In   therefore   must.  under  protest.  the  base  of  which  still  be  seen.  In  the  center  is  the  remainder  of  the  churchyard  and  the  church.  On  the  north  is  an  old  cemetery  with  two  of  its  walls  still  standing.   while   it   is   no   longer   used   as   such.   HELD:   Yes.  On  the  south  side  is  a  part  of  the  churchyard.  without  any  special  pronouncement  as  to  costs. 1927 THE  ROMAN  CATHOLIC  BISHOP  OF  NUEVA  SEGOVIA.   include   not   only   the   land  actually  occupied  by  the  church.  was  illegal.  as  representative  of  the  Roman  Catholic  Apostolic  Church.  Ilocos  Norte.  defendants-­‐appellants.  is  now  being  used  as  a  lodging  house  by  the  people  who  participate  in  religious  festivities.  and  a   portion  where  formerly  stood  a  tower.  containing  an  area  off  1.   The   plaintiff   filed   this   action   for   the   recovery   of   the   sum   paid   by   to   the   defendants   by   way   of   land   tax.                                                         .  which  constitutes  an  incidental  use  in   religious  functions.   in   the   sense.  in  the  case  of  a  convent.   according   to  the  evidence.  in  which  there  is  a  stable  and  a  well  for  the  use  of  the   convent.  but  also  the  adjacent  ground  destined  to  the  ordinary  incidental  uses  of  man.  The  exemption  in  favor  of  the  convent  in  the  payment  of  the  land  tax  (sec.  it  use  is  limited  to  the  necessities  of  the  priest.  Except  in  large  cities  where  the   density   of   the   population   and   the   development   of   commerce   require   the   use   of   larger   tracts   of   land   for   buildings.   As  required  by  the  defendants.  the  convent   and  an  adjacent  lot  used  for  a  vegetable  garden.  1925  the  plaintiff  paid.   THE  PROVINCIAL  BOARD  OF  ILOCOS  NORTE.  all  four  sides  of  which  face  on  public  streets.  the  land  tax  on  the  lot  adjoining  the  convent  and  the  lot.  which  comes  under  the  exemption.624  square  meters.  which  also  comes  within  the  exemption.  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.#112 G.R.   a   vegetable   garden   belongs   to   a   house  and.  So  ordered.  vs.  on  July  3..   which   formerly   was   the   cemetery   and   on   the   portion   where   the   lower  stood.  containing  a  total  area  of  8.   ISSUE:   Whether  or  not  the  lots  of  the  petitioner  are  exempted  from  land  tax.   represented   by   the   Bishop   of   Nueva   Segovia.  Both  parties  appealed  from  this  judgment.  ET  AL.   FACTS:   The   Roman   Catholic   Apostolic   Church.   In   regard   to   the   lot   which   formerly   was   the   cemetery.   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.955  square  meters.   where   the   tower   stood.  plaintiff-­‐appellant.  which   formerly   was   the   cemetery   with   the   portion.   neither   is   it   used   for   commercial   purposes   and. No. L-27588 December 31.   possesses   and   is   the   owner   of   a   parcel   of   land   in   the   municipality  of  San  Nicolas.

  No.     Nor  does  the  Constitution  prohibit  the  filing  in  the  Senate  of  a  substitute  bill  in  anticipation  of  its  receipt  of  the  bill  from   the  House.     The   contention   of   petitioners   is   that   in   enacting   Republic  Act  No.       ISSUE:    Whether  or  not  the  RA  7716  is  invalid  as  it  violates  the  provision  of  the  Constitution  that  the  all  appropriation.  elected  as  they  are  from  the  districts.  THE  SECRETARY  OF  FINANCE  and  THE  COMMISSIONER  OF  INTERNAL   REVENUE.  115455    D  E  C  I  S  I  O  N     FACTS:     The  valued-­‐added  tax  (VAT)  is  levied  on  the  sale.     To  begin  with.  bills  authorizing  an   increase  of  the  public  debt.  1994   GR  NO.  115455   1994  Aug  25  En  Banc  G.  ARTURO  M.   revenue   or   tariff   bills.   .  What  is  important  to  note  is  that.  tariff.  or  the  Expanded  Valued-­‐Added  Tax  Law.  what  the  Constitution  simply  means  is  that  the  initiative  for  filing  revenue.   7716   seeks   to   widen   the   tax   base   of   the   existing   VAT   system   and   enhance   its   administration   by   amending   the   National   Internal   Revenue   Code.   bills   authorizing   increase   of   the   public   debt.  the  members  of  the  House  can  be  expected  to  be  more  sensitive   to  the  local  needs  and  problems.  a   distinct  bill  may  be  produced.   and   private   bills   shall   originate  exclusively  in  the  House  of  Representatives.  barter  or  exchange  of  goods  and  properties  as  well  as  on  the  sale  or   exchange   of   services.  it  is  not  the  law  -­‐  but  the  revenue  bill  -­‐  which  is  required  by  the  Constitution  to  "originate  exclusively"  in   the  House  of  Representatives.  TOLENTINO.  To  insist  that  a  revenue  statute  -­‐  and  not  only  the  bill  which  initiated  the  legislative   process  culminating  in  the  enactment  of  the  law  -­‐  must  substantially  be  the  same  as  the  House  bill  would  be  to  deny  the   Senate's  power  not  only  to  "concur  with  amendments"  but  also  to  "  propose  amendments.     AUGUST  25.  as  a  result  of  the  Senate  action.  although  H.  No.  private  bills  and  bills  of  local  application  must  come  from  the  House  of  Representatives  on   the  theory  that.   11197   had   originated   in   the   House   of   Representatives.  The  possibility  of  a  third  version  by   the  conference  committee  will  be  discussed  later.  vs.  petitioner.  Both  views  are  thereby  made  to  bear  on  the  enactment  of  such  laws.     Republic   Act   No.     Indeed.  so  long  as  action  by  the  Senate  as  a  body  is  withheld  pending  receipt  of  the  House  bill.  Congress  violated  the  Constitution  because.  because  a  bill  originating  in  the  House  may  undergo   such  extensive  changes  in  the  Senate  that  the  result  may  be  a  rewriting  of  the  whole.  the  senators."  It  would  be  to  violate  the   coequality  of  legislative  power  of  the  two  houses  of  Congress  and  in  fact  make  the  House  superior  to  the  Senate.  who  are  elected  at  large.  7716.  or  tax  bills.  are  expected  to  approach   the  same  problems  from  the  national  perspective.   bills   of   local   application.  It  is  important  to  emphasize  this.113.  but  the  Senate  may  propose  or  concur  with  amendments?     HELD:       RA  7716  is  valid.   it   was   not   passed   by   the   Senate   but   was   simply   consolidated   with  the  Senate  version  in  the  Conference  Committee  to  produce  the  bill  which  the  President  signed  into  law.R.  On  the  other  hand.

-T h e f o l l o w i n g s h a l l b e exempt from the value-added tax:[q] Transactions which are exempt under special laws.1491.XII. in the case at bar.D. although no mention is made therein of P. No. AS AMENDED. established. in addition to Section103 of the NIRC. VI. D. alteration or repeal by Congress when the common good so requires. modified or repealed by a special law specifically for that purpose. or n a t i o n a l a u t h o r i t y o r g o v e r n m e n t a g e n c y . 11197 nor S. Republic Act No. In the case at bar. they can be heard regarding it. it is not because of any defect in the title but perhaps for the same reason other statutes.1590 be mentioned in the title of the law. city. n o w o r i n t h e future. 66. D.1630 provided for removal of exemption of PAL transactions from the payment of the VAT and that this was made only in the Conference Committee bill which became Republic Act No. SEC." It is contended that neither H. No. D. T h e c o n s t i t u t i o n a l requirement that every bill passed by C o n g r e s s s h a l l e m b r a c e o n l y o n e s u b j e c t w h i c h s h a l l b e expressed in its title is intended to prevent surprise upon the m e m b e r s o f C o n g r e s s a n d t o i n f o r m t h e p e o p l e o f p e n d i n g legislation so that.A D D E D TAX [VAT] SYSTEM. Section26 [1] which provides that. bartered or exchanged or of the gross receipts from the sale or exchange of services. although published. Exempt Transactions. No. OF FINANCE Facts T h e s e a r e v a r i o u s s u i t s f o r c e r t i o r a r i a n d p r o h i b i t i o n challenging the constitutionality of RA 7716." cannot be amended by Rep. levied. would be to insist that the title of a bill should be a complete index of its content. barter or exchange of goods and properties as well as on the sale or exchange of services. It is equivalent to 10% of the gross selling price or gross value in money of goods or properties sold. Furthermore.7716. PAL V. which provides that the g r a n t o f a f r a n c h i s e f o r t h e o p e r a t i o n o f a p u b l i c u t i l i t y i s subject to amendment. 1 5 9 0 ] b y s p e c i f i c a l l y e x c e p t i n g f r o m t h e g r a n t o f exemptions from the VAT PAL's exemption under P. A N D F O R T H E S E P U R P O S E S A M E N D I N G A N D R E P E A L I N G THE RELEVANT PROVISIONS OF THE NATIONALINTERNAL REVENUE CODE. Philippine Airlines [PAL] claims that its franchise under P. 24 of P. PAL attacks the formal validity of Republic Act No. because Sec. 7716. Act No. 7716 expressly amends PAL's franchise [P. ANDFOR OTHER PURPOSES. 7716 is: A N A C T R E S T R U C T U R I N G T H E V A L U E . imposed. n a t u r e o r d e s c r i p t i o n . No. 1590 which makes it liable for a franchise tax of only 2% of gross revenues "in lieu of all the other fees and charges of any k i n d .1590. pass unnoticed until some event somehow calls attention to their existence. The Value-Added Tax [VAT] is levied on the sale. No. No. The title states that the purpose of the statute is to expand the VAT system. and one way of doing this is to widen its base by withdrawing some of the exemptions granted before. in which it is specifically referred to. PAL contends that it violates Art. 1590 Ruling The court ruled in the affirmative. provincial. 1590. Republic Act No. 7716 seeks to widen the tax base of the existing VAT system and enhance its administration by amending the National Internal Revenue Code.N o . To insist that P.114. petitioner did not know before that its exemption had been withdrawn.D. Section 11 of the Constitution. 1590 provides that PAL's franchise can only be amended. D. 7716 as to make it[PAL] liable for a 10% value-added tax on revenues. except those granted under Presidential Decree Nos. 529. If.7716 without reflecting this fact in its title. Issue: Whether or not the amendment of Section 103 of the NIRC is fairly embraced in the title of Republic Act No. if they wish to. assessed or collected by any municipal. as far as the VAT is concerned. "Every bill passed by the Congress shall embrace only one subject which shall be expressed in the title thereof. The title of Republic Act No. T h e e f f e c t o f t h e a m e n d m e n t i s t o r e m o v e t h e e x e m p t i o n granted to PAL. WIDENING ITS TAX BASE ANDE N H A N C I N G I T S A D M I N I S T R A T I O N . section 103 of RA 7716 states the following: Section 103. . This is within the power of Congress to do under Art.No. 972.

1974. is to be avoided. in effect giving each publication an annual tax credit of $4. From 1967 until 1971. however. 11 publishers. but also because it targets a small group of newspapers. to May 31.000 worth of ink and paper consumed by a publication in any calendar year." is the publisher of a morning newspaper and an evening newspaper (until 1982) in Minneapolis. as Minnesota asserts here. It explained: Minnesota has offered no adequate justification for the special treatment of newspapers. Star Tribune instituted this action to seek a refund of the use taxes it paid from January 1. And the State has offered no explanation of why it chose to use a substitute for the sales tax. it paid $608. A rule that would automatically allow the State to single out the press for a different method of taxation as long as the effective burden is no different from that on other taxpayers or. this time to exempt the first $100.. To recognize a power in the State not only to single out the press. and. Its interest in raising revenue. Minneapolis Star & Tribune Co. and even fewer pay any significant amount of tax. cannot justify such treatment. ISSUE: Whether or not the imposition of the "use tax" violated Star Tribune's freedom of the press and equal protection rights. Minnesota's ink and paper tax violates the First Amendment not only because it singles out the press. "Star Tribune. or roughly two-thirds of the total revenue raised by the tax. MINNESOTA COMM OF REVENUE FACTS: The appellant. presents such a potential for abuse that no interest suggested by Minnesota can justify the scheme. for the alternative means of taxing businesses generally is clearly available. The possibility of error inherent in such a rule poses too great a threat to concerns at the heart of the First Amendment. producing 14 of the 388 paid circulation newspapers in the State. is lighter than that on other businesses.000. In 1971. .000 exemption. After the enactment of the $100. The effect of the $100. Star Tribune was one of the 11. the legislature again amended the statute. Hence the petition. of the $893. In 1974. MINNEAPOLIS STAR VS.355 collected. but also to tailor the tax so that it singles out a few members of the press. HELD: The High Court reversed the decison of the Minnesota Supreme Court. the legislature amended the scheme to impose a "use tax" on the cost of paper and ink products consumed in the production of a publication. it enjoyed an exemption from the sales and use tax provided by Minnesota for periodic publications.000 exemption is that only a handful of publishers in the State pay any tax at all. It challenged the imposition of the use tax on ink and paper used in publications as a violation of the guarantees of freedom of the press and equal protection in the First and Fourteenth Amendments. rather than the sales tax itself.117.634. while leaving the exemption from the sales tax in place. incurred a tax liability in 1974. standing alone. 1975. The Minnesota Supreme Court upheld the tax against the federal constitutional challenge.

  .  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).  and  as  such.   The  Supreme  Court  affirmed  the  decision  of  the  CFI  Abra  (Branch  I)  subject  to  the  modification  that  half  of  the  assessed   tax  be  returned  to  the  petitioner.  In  the  case  at  bar.  On  12  April  1973.  The  treasurers  served  upon  the  petitioner  a  Notice  of  Sale  on  8  July  1972.  Aquino    [GR  L-­‐39086.  Article  VI.  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.  Quezon  City  Board  of  Assessment  Appeals).000  on  public  auction  involving  the  sale  of  the  college  lot  and  building.  and  thus  the  property  is  not  being  used  “exclusively”  for   educational  purposes.  A  lot  which  is  not   used  for  commercial  purposes  but  serves  solely  as  a  sort  of  lodging  place.119.  then  municipal  mayor  of  Bangued.   Issue:  Should  there  be  tax  exemption?     Ruling:                                    Interpretation  of  the  phrase  “used  exclusively  for  educational  purposes”   Section  22.140.  for  non-­‐payment  of  real  estate  taxes  and  penalties   amounting  to  P5.  Abra.  Commonwealth  Act  470  as  amended  by  RA  409  (Assessment  Law).  also  qualifies  for  exemption  because  this   constitutes  incidental  use  in  religious  functions  (Bishop  of  Nueva  Segovia  case).  the  Municipal  and  Provincial  treasurers  (Gaspar  Bosque  and  Armin  Cariaga.  and   improvements  used  exclusively  for  religious.                                    Exemption  in  favour  of  property  used  exclusively  for  charitable  or  educational  purposes  is  ‘not  limited  to   property  actually  indispensable’  therefor  but  extends  to  facilities  which  are  incidental  to  and  reasonably  necessary  for   the  accomplishment  of  said  purposes  (Herrera  v.  Paterno  Millare.  paragraph  3.  The  certificate  of  sale  was  correspondingly   issued  to  him.  notwithstanding   that  it  keeps  a  lodging  and  a  boarding  house  and  maintains  a  restaurant  for  its  members  (YMCA  case).  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.  Dr.  While  the  Court  allows  a   more  liberal  and  non-­‐restrictive  interpretation  of  the  phrase  “exclusively  used  for  educational  purposes.  15  June  1988]   Facts:  Petitioner  Abra  Valley  College  is  an  educational  corporation  and  institution  of  higher  learning  duly  incorporated   with  the  SEC  in  1948.  Instead  of  perfecting  an  appeal.  the  sale   being  held  on  the  same  day.31.”  reasonable   emphasis  has  always  been  made  that  exemption  extends  to  facilities  which  are  incidental  to  and  reasonably  necessary   for  the  accomplishment  of  the  main  purposes.  offered  the  highest  bid  of  P   6.  paragraph  c.  On  6  July  1972.  An  institution  used  exclusively  for   religious.  The  trial  court  ruled  for  the  government.  a  commercial  establishment.  The  use  of  the  school  building  or  lot  for  commercial  purposes  is  neither   contemplated  by  law.  of  the  then  1935  Philippine  Constitution.  charitable  or  educational  purposes.  nor  by  jurisprudence.”  This  constitution  is  relative  to  Section   54.  churches  and  parsonages  or  convents  appurtenant  thereto.  Abra  Valley  College  v.  charitable  and  educational  purposes.  by  filing  said  petition  on  17  August  1974.  expressly  grants  exemption  from  realty   taxes  for  “Cemeteries.  Abra.   The  petitioner  filed  a  complaint  on  10  July  1972  in  the  court  a  quo  to  annul  and  declare  void  the  “Notice  of  Seizure”  and   the  “Notice  of  Sale”  of  its  lot  and  building  located  at  Bangued.  it  is  entitled  to  be  exempted  from  taxation.   respectively)  and  issued  a  Notice  of  Seizure  upon  the  petitioner  for  the  college  lot  and  building  (OCT  Q-­‐83)  for  the   satisfaction  of  said  taxes  thereon.  buildings.  petitioner  availed  of  the  instant  petition  for  review  on  certiorari   with  prayer  for  preliminary  injunction  before  the  Supreme  Court.  and  all  lands.  the  parties  entered  into  a  stipulation  of  facts  adopted  and  embodied  by  the   trial  court  in  its  questioned  decision.

B. Issue: Whether or not the imposition of gift tax despite the fact the Fr. Held: Yes. Estate Inc. Lladoc. 16 June 1945) Facts: Sometime in 1957. Estate filed the donor's gift tax return. M. Under date of April 29.. imposition of the gift tax was valid. . A gift tax is not a property by way of gift inter vivos. the donor M. Crispin Ruiz. 14 PHIL 2923 (L – 19201. On March 3. donated 10.Lladoc vs. under Section 22(3) Article VI of the Constitution contemplates exemption only from payment of taxes assessed on such properties as Property taxes contra distinguished from Excise taxes The imposition of the gift tax on the property used for religious purpose is not a violation of the Constitution. Negros Occidental. of Bacolod City.00 pesos in cash to Fr.B. The head of the Diocese and not the parish priest is the real party in interest in the imposition of the donee's tax on the property donated to the church for religious purpose.Case # 120 . Commissioner of Internal Revenue issued an assessment for the donee's gift tax against the Catholic Parish of Victorias of which petitioner was the parish priest. 1960. Lladoc was not the Parish priest at the time of donation. the parish priest of Victorias. for the construction of a new Catholic church in the locality.000. 1958. CIR. Catholic Parish priest of Victorias did not have juridical personality as the constitutional exemption for religious purpose is valid. The donated amount was spent for such purpose. and predecessor of Fr.

charitable and educational purposes. Subsequently. an association of young men. improving the spiritual. Firstly. was incorporated under the Philippine law in June 1907. Held: No. particularly the lodging and boarding houses. YMCA filed an action for recovery of money contesting that the said property is under tax exemption on the ground that it is for religious. The Supreme Court ruled that the lodging and boarding houses of YMCA does not amount to a business. The appellee opposed this statement by stating that an institution must devote itself exclusively to one or the other of the purpose mentioned in the statute before it can be subject to tax exemption. charitable and educational purposes. it was used to keep the membership intact and retain influence and control over their members. The institution may be a combination of any of the purposes stated and can still be entitled to exemption. Also. the latter paid the imposed tax under protest. 217 Facts: The Young Men’s Christian Association (YMCA). The RTC ruled in favor of the City of Manila. the word “exclusively” does not mean that the association should only limit itself to one purpose to be exempt from taxation. Collector of Internal Revenue 33 Phil. thus. social and physical condition of men. Issue: Whether the building and grounds of YMCA are subject to taxation. mental. The association was founded exclusively for religious. The City of Manila assessed and levied tax over the property and grounds.   . Secondly. the building and grounds of YMCA are not subject to taxation.121. no profit is gained by YMCA from the property being questioned. YMCA vs. of the YMCA. the association did not use the property to obtain money from the boarders and the lodgers rather.

: Facts: Republic Act No. tax holiday. REGINA VICTORIA A. JOHN HAY PORO POINT DEVELOPMENT CORPORATION. Petitioners argue that nowhere in R. TUNTEX and ASIAWORLD stressed the need to declare Camp John Hay a SEZ as a condition precedent to its full development in accordance with the mandate of R. PEREZ ALIAS “BA-YAY. REBECCA MOLINA LUYK. As gathered from Section 12 of R. CARMEN CAROMINA. The incentives under R. which established a SEZ on a portion of Camp John Hay The issuance of Proclamation No. 7227. 420.127. the grant thereof to the John Hay SEZ cannot be sustained. CLARAVALL. STRASSER. DIANE MONDOC. Inc. The grant of tax exemption to the John Hay SEZ. No. No.V. PACALSO ALIAS “KEVAB. in the main. duties and other restrictions.” set out the policy of the government to accelerate the sound and balanced conversion into alternative productive uses of the former military bases under the 1947 Philippines-United States of America Military Bases Agreement. No. No. free trade zones and the like. ELISA BENAFIN. MATEO CARIÑO FOUNDATION INC. petitioners. INC.A. Held: The issue refers to petitioners’ objection against the creation by Proclamation No.I. mandamus and declaratory relief challenging.A. 420. private corporations registered under the laws of the British Virgin Islands.  2003]   JOHN HAY PEOPLES ALTERNATIVE COALITION. GIRON. the privileges given to Subic SEZ consist principally of exemption from tariff or customs duties. PE. unlike the grant under Section 12 thereof of tax exemption and investment incentives to the therein established Subic SEZ. CITY OF BAGUIO. LTD. Ltd (TUNTEX) and Asiaworld Internationale Group.. A. CARPIO MORALES. preparatory to the formation of a joint venture for the development of Poro Point in La Union and Camp John Hay as premier tourist destinations and recreation centers. IZABEL M. its constitutionality or validity as well as the legality of the Memorandum of Agreement and Joint Venture Agreement between public respondent BCDA and private respondents TUNTEX and ASIAWORLD. The deliberations of the Senate confirm the exclusivity to Subic SEZ of the tax and investment privileges accorded it under the law.A. and other incentives under the Omnibus Investments Code of 1987.  119775.” It is clear that under Section 12 of R. No. 7227 are exclusive only to the Subic SEZ.A. the Clark and Subic military reservations as well as their extensions including the John Hay Station (Camp John Hay or the camp) in the City of Baguio. There is no express extension of the aforesaid benefits to other SEZs still to be created at the time via presidential proclamation. 7227. and relaxed immigration rules for foreign investors. RUBY C. No.    October  24. J.  [G. apart from these. hence. 420 also makes available to the John Hay SEZ benefits existing in other laws such as the privilege of export processing zone-based businesses of importing capital equipment and raw materials free from taxes.” BETTY I.. BCDA entered into a Memorandum of Agreement and Escrow Agreement with private respondents Tuntex (B. namely.   . BASES CONVERSION DEVELOPMENT AUTHORITY.I. TUNTEX (B.. respondents. tax and duty exemptions. LILIA G. DEPARTMENT OF ENVIRONMENT AND NATURAL RESOURCES. the extension of the same to the John Hay SEZ finds no support therein. URSULA C. President Ramos then issued Proclamation No.A.) Co. KATHERINE PE REPRESENTED AND JOINED BY HER MOTHER ROSEMARIE G. CENTER FOR ALTERNATIVE SYSTEMS FOUNDATION INC.  No. 7227 is there a grant of tax exemption to SEZs yet to be established in base areas.. 420 is constitutional by providing for national and local tax exemption within and granting other economic incentives to the John Hay Special Economic Zone. Yet. 7227.V. 7227 created public respondent Bases Conversion and Development Authority(BCDA). CAMILO. 420 spawned the present petition for prohibition. 7227. No.. thus contravenes Article VI. Section 28 (4) of the Constitution which provides that “No law granting any tax exemption shall be passed without the concurrence of a majority of all the members of Congress. LUYK REPRESENTED AND JOINED BY HER MOTHER MRS. the “Bases Conversion and Development Act of 1992. vesting it with powers pertaining to the multifarious aspects of carrying out the ultimate objective of utilizing the base areas in accordance with the declared government policy. (ASIAWORLD). and the applicability to the subject zone of rules governing foreign investments in the Philippines. PRESIDENT. Issue: Whether Proclamation No. VICTOR LIM. R. 7227 it is only the Subic SEZ which was granted by Congress with tax exemption. 420 of a regime of tax exemption within the John Hay SEZ.A. BENAFIN REPRESENTED AND JOINED BY HER MOTHER MRS. As noted in its title.) CO. vs.  R. free market and trade of specified goods or properties. Proclamation No. BCDA.” EDILBERTO T. tax credit. YARANON. which laws were already extant before the issuance of the proclamation or the enactment of R. ASIAWORLD INTERNATIONALE GROUP. national and local taxes of business entities therein. While the grant of economic incentives may be essential to the creation and success of SEZs. investment incentives and the like. ALICIA C. liberalized banking and finance. petitioners conclude. SOLEDAD S. 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.

which was approved on September 25. NO it is not undue delegation of power. (3) either the person or property taxed is within the jurisdiction of the government levying the tax. Legislative powers may be delegated to local governments in respect of matters of local concern. 1963. L-31156 February 27. 27. the plaintiff-appellant. Article XI provides: "Each local government unit shall have the power to create its sources of revenue and to levy taxes. commenced a complaint with preliminary injunction before the Court of First Instance of Leyte for that court to declare Section 2 of Republic Act No. fun company. 23 and 27 constitute double taxation and impose percentage or specific taxes? HELD: 1. as applied to a particular taxpayer. Section 5. said theory does not apply. THE MUNICIPAL MAYOR. of the municipality of Tanauan. 2264] declaring Ordinance Nos. Leyte. This is not to say though that the constitutional injunction against deprivation of property without due process of law may be passed over under the guise of the taxing power. firm. defendant appellees. 1963.. local governments are granted the autonomous authority to create their own sources of revenue and to levy taxes. Pepsi-Cola Bottling Company of the Philippines.130) PEPSI-COLA BOTTLING COMPANY OF THE PHILIPPINES. 2264 an undue delegation of power. belonging as a matter of right to every independent government. MUNICIPALITY OF TANAUAN. except when the taking of the property is in the lawful exercise of the taxing power.R. 27. 23 and 27 legal and constitutional. sought to enforce compliance by the latter of the provisions of said Ordinance No. 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. Municipal Ordinance No. however. But. as per his letter addressed to the Manager of the Pepsi-Cola Bottling Plant in said municipality. Municipalities may be permitted to tax subjects which for reasons of public policy the State has not deemed wise to tax for more general purposes.. 1 otherwise known as the Local Autonomy Act. which was approved on October 28. (2) the rule on uniformity of taxation is observed. null and void. corporation or plant producing soft drinks shall submit to the Municipal Treasurer a monthly report of the total number of gallons produced or manufactured during the month. 23 and 27 that embrace or cover the same subject matter and the production tax rates imposed therein are practically the same. and (4) in the assessment and collection of certain kinds of taxes notice and opportunity for hearing are provided. the acting Municipal Treasurer of Tanauan. LEYTE. 23 and 27. which. and second. plaintiff-appellant. of Tanauan. Inc. elevated the case to Us pursuant to Section 31 of the Judiciary Act of 1948. Due process does not require that the property subject to the tax or the amount of tax to be raised should be determined by judicial inquiry. of the total number of bottles produced and corked during the month. G.01) on each gallon (128 fluid ounces. vs. the person. as when (1) the tax is for a public purpose." For the purpose of computing the taxes due. Republic Act No. 23. The municipality of Tanuan Leyte passed Ordinances Nos. 2264." Withal. 1963. it cannot be said that Section 2 of Republic Act No. subject to such limitations as may be provided by law. U. unconstitutional as an undue delegation of taxing authority as well as to declare Ordinances Nos." From this judgment. and to pay the costs. company or corporation producing soft drinks shall submit to the Municipal Treasurer a monthly report. series of 1962. It is a power that is purely legislative and which the central legislative body cannot delegate either to the executive or judicial department of the government without infringing upon the theory of separation of powers. INC.. 2264 emanated from beyond the sphere of the legislative power to enact and vest in local governments the power of local taxation. ordering the plaintiff to pay the taxes due under the oft the said Ordinances.S. 1962. Republic Act No. Leyte." 4For the purpose of computing the taxes due. Leyte. levies and collects "on soft drinks produced or manufactured within the territorial jurisdiction of this municipality a tax of ONE CENTAVO (P0. to which. without being expressly conferred by the people. 1976 FACTS: On February 14. Municipal Ordinance No. ISSUE: 1) Section 2.' On October 7. the plaintiff Pepsi-Cola Bottling Company appealed to the Court of Appeals.. partnership. lies in the case of municipal corporations. as amended. 1962. in turn. The exception. a tax does not violate the due process clause. series of 1962. the Court of First Instance of Leyte rendered judgment "dismissing the complaint and upholding the constitutionality of [Section 2. Under the New Constitution. the person. ET AL.) of volume capacity. On the other hand. No. that on January 17. and a notice and hearing as to the amount of the tax and the . although the purpose of the tax will result in an injury rather than a benefit to such taxpayer. The tax imposed in both Ordinances Nos. 23 and 27 is denominated as "municipal production tax. The power of taxation is an essential and inherent attribute of sovereignty. confiscatory and oppressive? 2) Do Ordinances Nos.

series of 1962. But. 27. pursuant to the rules of exclucion attehus and exceptio firmat regulum in cabisus non excepti. 27. the taxing authority conferred on local governments under Section 2. the imposition of "a tax of one centavo (P0. but there is not set ratio between the volume of sales and the amount of the tax. Undoubtedly. it is one centavo (P0.S. accepting those which are mentioned therein. U. U.01) on each gallon (128 fluid ounces. 2264. The volume capacity of the taxpayer's production of soft drinks is considered solely for purposes of determining the tax rate on the products. series of 1962 clearly repeals Ordinance No. Even the Provincial Fiscal. 27. series of 1962 is being enforced by defendants-appellees. to the prohibition against municipalities and municipal districts to impose "any percentage tax or other taxes in any form based thereon nor impose taxes on articles subject to specific tax except gasoline. Leyte sought t6 compel compliance by the plaintiff-appellant of the provisions of said Ordinance No.S.) of volume capacity.01) on each gallon (128 fluid ounces. even without words to that effect. particularly. 27 is thus clear: it was intended as a plain substitute for the prior Ordinance No. counsel for defendants-appellees admits in his brief "that Section 7 of Ordinance No. The tax is levied on the produce (whether sold or not) and not on the sales. is broad enough as to extend to almost "everything. 27. 23. 27 imposes a percentage or a specific tax." That brings Us to the question of whether the remaining Ordinance No. under the provisions of the National Internal Revenue Code. The difference between the two ordinances clearly lies in the tax rate of the soft drinks produced: in Ordinance No. . The intention of the Municipal Council of Tanauan in enacting Ordinance No. U. 27.01) on each gallon (128 fluid ounces.S. 23 as the provisions of the latter are inconsistent with the provisions of the former." For purposes of this particular limitation. it was 1/16 of a centavo for every bottle corked. and operates as a repeal of the latter. Plaintiff-appellant in its brief admitted that defendants-appellees are only seeking to enforce Ordinance No. The limitation applies. the same comes within the ambit of the general rule." As long as the text levied under the authority of a city or municipal ordinance is not within the exceptions and limitations in the law. The aforementioned admission shows that only Ordinance No. series of 1962. Even the stipulation of facts confirms the fact that the Acting Municipal Treasurer of Tanauan. 23. Republic Act No. 27 does not partake of the nature of a percentage tax on sales. or other taxes in any form based thereon.imposing a tax of one centavo (P0. a municipal ordinance which prescribes a set ratio between the amount of the tax and the volume of sale of the taxpayer imposes a sales tax and is null and void for being outside the power of the municipality to enact. in Ordinance No.) of volume capacity" on all soft drinks produced or manufactured under Ordinance No.) of volume capacity.

 President  Corazon  C.D. It is segregated from the general fund.  promulgated  Executive  Order  No. not quite correct.   partake   of   the   nature  of  the  taxation  power  of  the  State.  that  since  "a  'special  fund'   consists   of   monies   collected   through   the   taxing   power   of   a   State.  the  petitioner  seeks  the  corrective.'  not  as  a   'trust   account'   or   a   'trust   fund.  1956. In . and oil companies are allowed to recover those portions of their costs which they would not otherwise recover given the level of domestic prices existing at any given time.'   and   that   "if   a   special   tax   is   collected   for   a  specific   purpose.  It  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.   OSCAR  ORBOS. they are exacted in the exercise of the police power of the State.   Later.  but  also  impose  a  specific  limit  on  how  much  to  tax.  prohibitive  and  coercive  remedies  provided  by  Rule  65  of  the  Rules  of  Court.  who  (shall)  be  taxed  (and)  what  the  tax  is   for. 99886 March 31.   "the   limits. With regard to the alleged undue delegation of legislative power.  must  be  treated  as  a  'SPECIAL  FUND. the practice is not without precedent."   He   also   contends   that   the   "delegation   of   legislative   authority"   to   the   Energy   Regulatory   Board   (ERB)   violates   Section   28   (2)   of   Article   VI   of   the   Constitution   and.  such   amounts   belong   to   the   State. The OPSF is thus a buffer mechanism through which the domestic consumer prices of oil and petroleum products are stabilized.  amending  PD  1956.#132 G.  JESUS  ESTANISLAO. and while it is placed in what the law refers to as a "trust liability account.                                    Whether   or   not   there   is   an   undue   delegation   of   legislative   power  to   the   Energy   Regulatory   Board   (ERB)   of   the   exercise   of   the   power  of  taxation. that comprehensive sovereign authority we designate as the police power of the State. costs of crude importation.   Petitioner  argues. It appears to the Court that the establishment and maintenance of the OPSF is well within that pervasive and non-waivable power and responsibility of the government to secure the physical and economic survival and well-being of the community.D.   the   revenue   generated   therefrom   shall   'be   treated   as   a   special  fund'  to  be  used  only  for  the  purpose  indicated. as well as underrecovery of. in the Court's view."  by  virtue  of  Executive  Order  (E.   2.  vs. 1993 JOHN  H.  137."   Petitioner  assumes  that  the  Fund  is  formed  from  a  tax  undoubtedly  because  a  portion  thereof  is  taken  from  collections  of  ad  valorem  taxes  and  the   increases  thereon.  in  his  capacity  as  Executive  Secretary.  Thus. into which a portion of the purchase price of oil and petroleum products paid by consumers as well as some tax revenues are inputted and from which amounts are drawn from time to time to reimburse oil companies.   FACTS:   On   October   10. the OPSF serves as a pocket.  petitioner.  the  law  must  not  only  specify  how  to  tax.   President   Ferdinand   Marcos   issued   P. To address this critical misgiving in the position of the petitioner on these issues.  REX  V.   HELD:   The petitioner's perceptions are.  OSMEÑA.  WENCESLAO  DELA  PAZ.   inasmuch   as   the   delegation   relates   to   the   exercise   of   the   power   of   taxation.  limitations  and  restrictions  must  be  quantitative. The Court is satisfied that these measures comply with the constitutional description of a "special fund.  the   amount  of  the  under  recovery  being  left  for  determination  by  the  Ministry  of  Finance.  TANTIONGCO." the fund nonetheless remains subject to the scrutiny and review of the COA.O.  among  others. for increases in.R.  as  amended." Indeed.  the  OPSF  was  reclassified  into  a  "trust  liability  account. the OPSF is in effect a device through which the domestic prices of petroleum products are subsidized in part.O.  and  not  channeled  to  another  government  objective.   as   amended.   designated   as   the   Oil   Price   Stabilization  Fund  (OPSF).  in  his   capacity  as  Head  of  the  Office  of  Energy  Affairs.)  1024. Moreover.  Aquino.   1984.” It seems clear that while the funds collected may be referred to as taxes. Energy Regulatory Board. No.  that  "the  monies  collected  pursuant  to  P.   1956. instead of fluctuating every so often.   1956   creating   a   Special   Account   in   the   General   Fund. 137. when appropriate situations arise. the Court recalls its holding in Valmonte v.  in  his  capacity  as  Secretary  of  Finance. et al.   ISSUES:   1.  and  the  ENERGY  REGULATORY  BOARD.                                    Whether   or   not  the   powers   granted   to   the   Energy   Regulatory   Board   (ERB)   under   P.  expanding  the  grounds   for  reimbursement  to  oil  companies  for  possible  cost  under  recovery  incurred  due  to  the  reduction  of  domestic  prices  of  petroleum  products.  that  is. the Court finds that the provision conferring the authority upon the ERB to impose additional amounts on petroleum products provides a sufficient standard by which the authority must be exercised."  Further. Thus. To the extent that some tax revenues are also put into it.“The OPSF was established precisely to protect local consumers from the adverse consequences that such frequent oil price adjustments may have upon the economy. that the OPSF is a special fund is plain from the special treatment given it by E.  respondents.D.   although   the   use   thereof   is   limited   to   the   special   purpose/objective   for   which   it   was   created. as it were.  and  ordered  released  from  the  National   Treasury  to  the  Ministry  of  Energy.

135. While it is true that appellees are taxable under the NIRC as real estate dealers. the imposition of municipal tax finds support in Section 2 of RA 2264. that it constitutes not only double taxation but treble taxation. both taxes must be the same kind or character. 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. Appellees aver that the said ordinance is unconstitutional for RA 2264 does not empower cities to impose apartment taxes. Villanueva and the other appellees are apartment owners from whom the city collected license taxes by virtue of Ordinance 11. the imposition of more the 1 per centum real estate tax which is the limit provided by CA 158. It does not have the attributes of a real estate tax. The imposition of the tenement taxes does not fall within the exceptions mentioned by the same law. that it violates uniformity of taxation. Iloilo enacted Ordinance 11 Series of 1960. and. to pursue a business. In order to constitute double taxation. and taxable under Ordinance 11. Does the ordinance impose double taxation? 2. Real estate taxes and tenement taxes are not of the same character. It is argued however that the said taxes are real estate taxes and thus. occupation or calling. The contention that appellees are doubly taxed because they are paying real estate taxes and the tenement tax is also devoid of merit. RA 2264 confers local governments broad taxing powers. imposing a municipal license tax on tenement houses in accordance with the schedule of payment provided by therein. or to exercise a privilege. Issues: 1. that the same is oppressive and unreasonable for it penalizes those who fail to pay the apartment taxes. The court ruled that the tax in question is not a real estate tax. . Villanueva Vs City of Iloilo 26 SCRA 578 FACTS: Relying on the passage of RA 2264 or the Local Autonomy Act. This is because the same tax may be imposed by the national government as well as by the local government. makes the said ordinance ultra vires. 2. the tax is a municipal tax which means an imposition or exaction on the right to use or dispose of property. By the title and the terms of the ordinance. double taxation may not be invoked. Is Iloilo city empowered by RA 2264 to impose tenement taxes? Held: 1. Tenement houses being offered for rent or lease constitute a distinct form of business or calling and as such.

  but   is   paid   only   after   every   taxable   quarter   in   which   it   is   earned.  In  sum.     Issue:  Whether  or  not  there  is  double  taxation  in  having  the  20%  FWT  on  banks  interest  income  form  part  of  the  taxable   gross  receipts  in  computing  for  the  5%  GRT.  the  GRT  is   neither   deducted   nor   withheld.   There   is   no   double   taxation   in   the   case   at   hand.  Relying  on  a  ruling  of  the  CTA  wherein  it  was  held  that  the  20%  final  withholding  tax  on  a   bank’s  interest  income  should  not  form  part  of  its  taxable  gross  receipts  for  the  purposes  of  computing  gross  receipts   tax.   although   both   taxes   are   national   in   scope  because  they  are  imposed  by  the  same  taxing  authority  and  operate  within  the  same  Philippine  jurisdiction  for  the   same   purpose   of   raising   revenues.   the   final   withholding   tax   is   withheld   at   source   and   is   thus   not   actually   and   physically   received   by   the   banks   because   it   is   paid   directly  to  the  government  by  the  entities  from  which  the  bank  derives  their  income.   the   difference   is   the  FWT  is  an  income  tax  subject  to  withholding  while  the  GRT  is  a  percentage  tax  not  subject  to  withholding.   It   is   not   an   income   tax   unlike   the   FWT.   Otherwise   described   as   “direct   duplicate   taxation”   the   two   taxes   must   be   imposed   on   the   same   subject   matter.   the  court  held  that  there  is  no  double  taxation  because  there  is  no  taxing  twice.  the  former  being  a  percentage  tax  and  the   latter   being   an   income   tax.     Held:  No.   On   the   same   day.     .   within   the   same  jurisdiction.  The  subject  matter  of  FWT  is  the  passive  income  generated    in  the   form   of   interest   on   deposits   and   yield   on   deposit   substitutes   while   the   subject   matter   of   the   GRT   is   the   privilege   of   engaging  in  the  business  of  banking.  The  contemplation  is  that  the  final   withholding   tax   is   constructively   received   by   the   banks   and   forms   part   of   their   gross   receipts   or   earnings   which   is   imposable  with  the  said  5%.  The  court  held  that  the  GRT  and  FWT  are  two  different  types  of  tax.  it  filed  a  petition  for  review  with  the  CTA  on  the  same  subject  matter.  The  court  emphasized   that  the  taxes  imposed  on  solidbank  are  different.137:  CIR  vs  Solidbank   Facts:  What  is  in  dispute  here  is  the  imposition  of  the  20%  final  withholding  tax  of  the  “passive  income”  plus  the    5%   Gross   receipts   tax   on   the   gross   receipts   including   the   “passive   income”   of   the   banks.   The   FWT   is   deducted   and   withheld   as   soon  as  the  income  is  earned  and  is  paid  after  every  calendar  quarter  in  which  it  is  earned.   Lastly.   Solidbank   sent   a   letter   of   request   to   the   BIR   asking   for   a   refund   of   alleged   overpaid   gross   receipts   tax.  A  tax  based  on  receipts  is  a  tax  on  business  rather  than  on  the  property  hence  it  is   an   excise   rather   than   a   property   tax.   Double   taxation   means   taxing   the   same   person   twice   by   the   same   jurisdiction   for   the   same   thing.  the  CA  upheld  the  argument  of   Solidbank  saying  that   the  bank’s   interest   income   did   not   form   part   of   the   taxable   gross   receipts   in   computing   for   the   5%   GRT  because  the  FWT  was  not  actually  received  by  the  bank  but  was  directly  remitted  to  the  government.   Further.  during  the  same  taxing  period.  and  they  must  be  of  the  same  kind  or  character.     Under   the   tax   code.   for   the   same   purpose.   by   the   same   taxing   authority.  On  the  other  hand.  On  appeal.   the   taxing   periods   they   affect   are   different.

(HCPTI) entered into an agreement with the asset pool. Gen. causing material and substantial modification. The JVA was later modified/amended (Amended and Restated Joint Venture Agreement or ARJVA). and to prevent further over-crowding of the Court's docket.. In the light of existing jurisprudence. wherein NHA was a major component. However. While direct recourse to this Court is generally frowned upon and discouraged. we have however ruled in Santiago v. To comply with the AARJVA. Specifically. Clarifying the terms and condition of the ARJVA. NHA then reported that temporary and permanent housing structures had been turned over by respondent RBI and that beneficiary-families had been transferred to their permanent homes from the Project. Pursuant to MO161A. HCPTI and Mr. Respondent NHA argues that the instant petition is misfiled because it does not introduce special and important reasons or exceptional and compelling circumstances to warrant direct recourse to this Court and that the lower courts are more equipped for factual issues since this Court is not a trier of facts. . newly elected President Estrada failed to act upon the approval of the said agreement causing the NHA. It is a policy that is necessary to prevent inordinate demands upon the Court's time and attention which are better devoted to those matters within its exclusive jurisdiction. On 2004. and should also serve as a general determinant of the appropriate forum for petitions for the extraordinary writs. RBI demanded the payment of just compensations for all the accomplishments and costs incurred." The instant petition challenges the constitutionality and legality of the SMDRP involving several hectares of government land and hundreds of millions of funds of several government agencies. Cuaresma. That hierarchy is determinative of the venue of appeals. As such. Meanwhile. conduct regular monitoring of activities of the Plan to ensure compliance with environmental standards and assist DOH in the conduct of the study on hospital waste management. Moreover. to grant RBI’s request to suspend work on The Project. for the development and operations of a port in the Smokey Mountain Area. prohibition. National Housing Authority 530 SCRA 235 (2007) Then Pres. Writ of mandamus is granted. though cognizable by other courts. which contained the guidelines which prescribed the functions of responsibilities of 15 various government departments and offices tasked to implement the Plan.. the National Housing Authority (NHA) was ordered conduct feasibility studies and develop low-cost housing projects at the dumpsite and absorb scavengers in NHA resettlement/low-cost housing projects. NHA and RBI entered into a Supplemental Agreement covering the aforementioned modifications. R-10 aka Radial Road 10 is a property west of the Smokey Mountain. or mandamus. RATIO/DOCTRINE: The OSG claims that the jurisdiction over petitions for prohibition and mandamus is concurrent with other lower courts like the Regional Trial Courts and the Court of Appeals. Inc. (RBI) which garnered the highest score in a public bidding. These concerns in the instant action compel us to turn a blind eye to the judicial structure meant to provide an orderly dispensation of justice and consider the instant petition as a justified deviation from an established precept. serious constitutional challenges are made on the different aspects of the Project which allegedly affect the right of Filipinos to the distribution of natural resources in the country and the right to information of a citizen--matters which have been considered to be of extraordinary significance and grave consequence to the public in general.Case 141 Chavez v. Through the Housing and Urban Development Coordinating Council (HUDCC). Writ of prohibition is denied. RBI.Francisco Chavez filed the instant petition which impleaded as respondents the NHA. Vasquez that such resort to us may be allowed in certain situations. wherein this Court ruled that petitions for certiorari. 39 placing the reclamation area under the administration and disposition of NHA. HELD: Petition partially granted. Judicial hierarchy was made clear in the case of People v. R-IIHoldings. thus: There is after all a hierarchy of courts. as directed by July 2002 Cabinet Meeting. This is an established policy. raising constitutional issues. R-II Builders. we find paucity of merit in respondents' postulation. respondent Harbour Centre Port Terminal Inc. the NHA formulated the Smokey Mountain Development Plan and Reclamation of the Area Across R-10" or the Smokey Mountain Development and Reclamation Project (The Project). President Ramos issued Proclamation No. While the Department of Environment and Natural Resources was tasked to review and evaluate proposed projects under the Plan with regard to their environmental impact. Aquino (1988) issued Memorandum Order (MO) 161 directing the implementation of the Comprehensive and Integrated Metropolitan Manila Waste Management Plan(the Plan). Sol. RBI lamented the decision of the government to bid out the remaining works unilaterally terminating the Project with RBI and all the agreements related thereto. Under MO 11A. and NHA entered in to a Joint Venture Agreement (JVA) for the development of the Smokey Mountain Dumpsite. may directly be filed with us if "the redress desired cannot be obtained in the appropriate courts or where exceptional compelling circumstances justify availment of a remedy within and calling for the exercise of [this Court's] primary jurisdiction. As authorized by then President Ramos. Subsequently. NHA and RBI executed an Amendment to the Amended and Restated Joint Venture Agreement (AARJVA). on 1998. Reghis Romero II.

.142. (b) From all income taxes. and municipalities and other government agencies and instrumentalities. upon recommendation of the Fiscal Incentives Review Board (FIRB) to restore. franchise. (c) From all import duties.A. No. MACEDA V. NAPOCOR moved for reconsideration. the National Power Corporation shall be exempt from all taxes. R. cities. cities and municipalities. its provinces. the Corporation is hereby declared exempt: (a) From the payment of all taxes. and sale of electric power. C. as well as excess revenues from its operation. No. other charges and restrictions. Republic Act No. Since the subject . As to the pertinent tax exemption provision. materials. 1971.A. 40. A new section was added to the charter. supplies and services. 6395. P.D. FIRB issued Resolution 17-87 (24 June 1987) restoring NAPOCOR’s exemption. The FIRB issued Resolution 10-85 (7 February 1985) restoring the duty and tax exemptions privileges of NAPOCOR for period 11 June 1984. as primary obligor. P. No.D.D. duties. 938. To enable the Corporation to pay its indebtedness and obligations and in furtherance and effective implementation of the policy enunciated in Section one of this act (RA No. and (d) From all taxes. 6395. 120. The NPC must be and has to be exempt from all forms of taxes if this goal is to be achieved. however. R. paid from the proceeds of any loan. for expansion.A. Oil companies started to pay specific and ad valorem taxes on their sales of oil products to NAPOCOR only in 1984. 938. 358 was also enacted expressly authorizing the NPC. No.No. R. the exemptions withdrawn or revised. No. imposts and all other charges its provinces. to incur other types of indebtedness. interest and other charges thereon. contributions and restrictions of the Republic of the Philippines. absolutely and unconditionally.A. duties. 380 was issued giving extra powers to the NPC to enable it to fulfill its role under aforesaid P. stating that all deliveries of petroleum products to NAPOCOR are tax exempt. charges.A. corresponding to Caltex. Issue: Whether or not NAPOCOR ceased to enjoy exemption from indirect tax when PD 938 stated the exemption in general terms. MACARAIG Facts Commonwealth Act 120 created NAPOCOR as a public corporation to undertake the development of hydraulic power and the production of power from other sources.D. charges costs and service fees in any court or administrative proceedings in which it may be a party.c13(d) : petroleum products used in generation of electric power. municipalities and other government agencies and instrumentalities. was approved and released by way of a tax credit memo. No. equipment. No. PD 380 (1974) specified that NAPOCOR’s exemption includes all taxes. President Marcos must have considered all the NPC statutes from C. the law stated as follows: “To facilitate payment of its indebtedness. No. Resolution 1-86 (1January 1986) restored such exemption indefinitely effective 1July 1985. shall also be exempt from all direct and indirect taxes. as amended by P.D. and to be imposed by the Republic of the Philippines. for the first time. partially or completely. NAPOCOR claimed for a refund (P468. or any of its agencies and political subdivisions. 938 did not amend the same and so the tax exemption provision in Section 8 (b).A. included 13(a) under the "as well as" clause and added PNOC subsidiaries as qualified for tax exemptions. No. 380.D. as amended.A. 120 up to its latest amendments. He was also authorized to contract on behalf of the NPC with the International Bank for Reconstruction and Development (IBRD) for NPC loans for the accomplishment of NPC's corporate objectives and for the reconstruction and development of the economy of the country. No. provided for tax exemptions for the following items:13(a) : court or administrative proceedings. No. and wharfage fees on import of foreign goods required for its operations and projects. transmission. 13(c). R. On June 4. imposts. municipalities and other government agencies and instrumentalities. by the Corporation. AND came up with a very simple Section 13. 759. 987 was enacted specifically to withdraw NPC's tax exemption for real estate taxes. 13(c) : import of foreign goods required for its operations and projects. the payment of any and all NPC loans. still stands. aside from indebtedness incurred by flotation of bonds. directly or indirectly. No. realty taxes. its provinces. 1949. No.D. Ruling It should be noted that section 13. and restrictions of the Republic of the Philippines. empowering the President or the Minister of Finance. imposts.A. P.380. R. P. fees. No. oil firms never paid excise or specific and ad valorem taxes for petroleum products sold and delivered to NAPOCOR. credit or indebtedness incurred under this Act.395 and P.” R. No.D. Only portion thereof. Shell and Caltex amounting to P410. 6395. R. It was expressly stated that: “Any such loan or loans shall be exempt from taxes. 380 which provides: The loans. The claim for refund of taxes paid by PetroPhil. fees.58 million was denied. utilization.D. fees. cities and municipalities. No. as amended by P. and 13(d) into the phrase "ALL FORMS OF TAXES. On January 22. fees. This is the only conclusion one can arrive at if he has read all the NPC laws in the order of enactment or issuance as narrated above. imposed. imposts.". duties. Since 1976. etc. its provinces. 1954. PD 938 integrated the exemptions in favor of GOCCs including their subsidiaries. charges. as of P. 938 lumped up 13(b). at any one time.” On June 2. On September 10. which declares the non-profit character and tax exemptions of NPC as follows: “The Corporation shall be non-profit and shall devote all its returns from its capital investment. 6395). credits and indebtedness contracted this subsection and the payment of the principal. The tax exemption on foreign loans found in Section 8(b). 6395. compensating taxes and advanced sales tax. and U$4 Billion in total foreign loans at any one time. franchise taxes and realty taxes to be paid to the National Government. imposts. No. No. No. 1974. cities.D. No. 13(b) : income.A. R.A. now known as Section 13. cities. fees. EO 93 (1987) again withdrew the exemption. One common theme in all these laws is that the NPC must be enable to pay its indebtedness which. P. 357 was enacted authorizing the President of the Philippines to guarantee. regardless of the period of delivery. was P12Billion in total domestic indebtedness.58 million).D. ETC. 6395 was enacted revising the charter of the NPC. which was approved by the President on 5 October 1987.30 June 1985. on all petroleum products used by the Corporation in the generation. restrictions and duties to the Republic of the Philippines. duties. 6395 and further amended by P. its provinces. including import restrictions previously and presently imposed. as well as the importation of machinery.

 and  good   condition   of   the   petroleum   fuel   industry   within   the   CSEZ.    Thereafter.   The   questioned   royalty   fees   form   part   of   the   regulatory   framework  to  ensure  “free  flow  or  movement”  of  petroleum  fuel  to  and  from  the  CSEZ.  a  Statement  of  Account  was  sent  by  CDC  billing  the  petitioner  for  royalty  fees  for  its  fuel  sales   from   Coastal   depot   to   Nanox   Philippines.143.  even  though  incidentally.  security.    After  the  aforementioned  policy  guidelines  were   implemented.  VS  BASES  CONVERSION  DEVELOPMENT  AUTHORITY  (BCDA)  and  CLARK  DEVELOPMENT   CORPORATION  (CDC)   GR  NO.   CDC   denied   the   protest.       Chevron   protest   the   assessment   for   royalty   fees   but   paid   the   fees   under   protest.  The  protest  was  however  denied   by  BCDA.   ISSUE:    Whether  or  not  the  imposition  of  royalty  fees  for  revenue  generating  purposes  would  amount  to  tax.  INC.  the  court  held  that  the  subject  royalty  fee  was  imposed  primarily  for  regulatory  purposes.   In   distinguishing   tax   and   regulation   as   a   form   of   police   power.     Chevron   responded   reiterating   its   continuing   objection   over   the   assess   royalty   fees   and   requested   a   refund   for   the   amount   paid   under   protest.  which  the   respondents  have  no  power  to  impose?   HELD:   No.  if   the  purpose  is  primarily  to  regulate.  to  ensure  the  safety.     CDC   again   wrote   a   letter   to   Chevron   demanding   for   the   settlement   of   the   royalty   fees.   the   fact   that   revenue   is   incidentally  raised  does  not  make  the  imposition  a  tax.   the   determining   factor   is   the   purpose   of   the   implemented   measure.   .   the   imposition   is   a   tax.   then   it   will   be   deemed   a   tax   even   though   the   measure  results  in  some  form  of  regulation.   If   generation   of   revenue   is   the   primary   purpose   and   regulation   is   merely   incidental.  revenue  is  generated.   In  the  case  at  bar.  The  fact  that  respondents  have   the  exclusive  right  to  distribute  and  market  petroleum  products  within  CSEZ  pursuant  to  its  JVA  with  SBMA  and  CSBTI   does  not  diminish  the  regulatory  purpose  of  the  royalty  fee  for  fuel  products  supplied  by  petitioner  to  its  client  at  the   CSEZ.  On  the  other  hand.   Chevron   elevated   the   protest   before   BCDA     arguing   that   the   royalty   fees   imposed   had   no   reasonable   relation   to   the   probable   expenses   of   regulation   and   that   the   imposition   on   a   per   unit   measurement  of  fuel  sales  was  for  a  revenue  generating  purpose.    Chevron  appealed  to  the  Office  of  the  President  which  dismissed  the  appeal  for  lack  of  merit.  Thus.  The  Policy  Guidelines  on  the  Movement  of  Petroleum   Fuel  to  and  from  the  Clark  Special  Economic  Zone  was  issued.  173863   SEPTEMBER  15.   but   if   regulation   is   the   primary   purpose.  2010       FACTS:     The   Board   of   Directors   of   respondent   CDC   issued   and   approved   Policy   Guidelines   on   the   Movement   of   Petroleum  Fuel  to  and  from  the  Clark  Special  Economic  Zone  (CSEZ).   Hence.  in   Gerochi  v.  akin  to  a  “tax”.  Department  of  Energy.  thus.  then  it  is  deemed   a  regulation  and  an  exercise  of  the  police  power  of  the  state.  CHEVRON  PHILIPPINES.  first  and  foremost.  CDC  sent  a  letter  to  Chevron  informing  it  that  a  royalty  fee  shall  be  assessed  on  its  deliveries  to  Nanox   Philippines.   If   the   purpose   is   primarily   to   raise   revenue.  the  Court  stated:     The  conservative  and  pivotal  distinction  between  these  two  (2)  powers  rests  in  the  purpose  for   which   the   charge   is   made.  the  imposition  of  royalty  fees  in  this  case  does  not  amount  to  tax.  and   not  for  the  generation  of  income  or  profits  as  petitioner  claims.

The Sangguniang Panlalawigan approved Resolution No. Lara. MAMBA.145) G. Manuel N. sign and execute contracts or agreements pertinent to the flotation of the bonds of the provincial government in an amount not to exceed P500 million for the construction and improvement of priority projects to be approved by the Sangguniang Panlalawigan. 2009 The Sangguniang Panlalawigan of Cagayan passed Resolution No. Lara to negotiate. The majority of the members of the Sangguniang Panlalawigan of Cagayan approved Ordinance No. Guzman and Leonides N. LARA. 15 On the assumption that the controversy presents justiciable issues which this Court may take cognizance of. vs. Fausto filed a Petition for Annulment of Contracts and Injunction with prayer for a Temporary Restraining Order/Writ of Preliminary Injunction 13against Edgar R. Fausto were members of the Sangguniang Panlalawigan of Cagayan. Lara) to engage the services of and appoint Preferred Ventures Corporation as financial advisor or consultant for the issuance and flotation of bonds to fund the priority projects of the governor without cost and commitment. CA. The Resolution likewise granted authority to Gov. 19-2002. Only a party to the contract can maintain an action to enforce the obligations arising under said contract (Young vs. Contracts produce effect as between the parties who execute them. petitioners in the present case who presumably presented legitimate interests in the controversy are not parties to the questioned contract. Raymund P. No. 8 authorizing the bond flotation of the provincial government in an amount not to exceed P500 million to fund the construction and development of the new Cagayan Town Center. 2001-272 4 authorizing Governor Edgar R. or that the public money is being deflected to any improper purpose. MANUEL N. 41 In other words. 350-2003 9 ratifying the Cagayan Provincial Bond Agreements entered into by the provincial government. Guzman and Leonides N. however. 40 He must also prove that he has sufficient interest in preventing the illegal expenditure of money raised by taxation and that he will sustain a direct injury because of the enforcement of the questioned statute or contract. . Issue: Whether or not the petitioner as a taxpayer and not party to a contract have legal standing to sue Held: Petitioners have legal standing to sue as taxpayers A taxpayer is allowed to sue where there is a claim that public funds are illegally disbursed. or that there is wastage of public funds through the enforcement of an invalid or unconstitutional law. Petitioners Manuel N. Lara to negotiate. represented by Gov. 39 A person suing as a taxpayer. for a taxpayer’s suit to prosper.et al. EDGAR R. sign and execute contracts and agreements necessary and related to the bond flotation subject to the approval and ratification by the Sangguniang Panlalawigan. 169 SCRA 213). At the time of the filing of the petition. a law is violated or some irregularity is committed and (2) the petitioner is directly affected by the alleged act. 2002-061-A 7 authorizing Gov. Facts: December 14. 165109 145. two requisites must be met: (1) public funds derived from taxation are disbursed by a political subdivision or instrumentality and in doing so. Mamba. Lara (Gov. must show that the act complained of directly involves the illegal disbursement of public funds derived from taxation. Mamba was the Representative of the 3rd Congressional District of the province of Cagayan 14 while Raymund P.R. Lara. The Sangguniang Panlalawigan approved Resolution No.

720 and withheld the corresponding 10% final dividend tax thereon. AG&P directly remitted the cash dividends to petitioner's head office in Tokyo. petitioner sought a ruling from the Bureau of Internal Revenue on whether or not the dividends petitioner received from AG&P are effectively connected with its conduct or business in the Philippines as to be considered branch profits subject to the 15% profit remittance tax imposed under Section 24 (b) (2) of the National Internal Revenue Code as amended by Presidential Decrees Nos. said dividend income is subject to the 25 % tax pursuant to Article 10 (2) (b) of the Tax Treaty dated February 13. net not only of the 10% final dividend tax in the amounts of P764. Japan. in a letter dated September 21.748 for the first and third quarters of 1981. 1980 between the Philippines and Japan. AG&P declared and paid cash dividends to petitioner in the amount of P849.424.40 on April 20 and August 4.260 shares including that of nominee) was made for purposes peculiarly germane to the conduct of the corporate affairs of Marubeni Japan. cannot now claim the increments as ordinary consequences of its trade or business in the Philippines and avail itself of the lower tax rate of 10 % But while public respondents correctly concluded that the dividends in dispute were neither subject to the 15 % profit remittance tax nor to the 10 % intercorporate dividend tax. 1981. petitioner claimed for the refund or issuance of a tax credit of P229. but also of the withheld 15% profit remittance tax based on the remittable amount after deducting the final withholding tax of 10%. AG&P declared and paid P849. In reply. There can be no other logical conclusion considering the undisputed fact that the investment (totalling 283. NDR VS CIR (Marubueni vs.720 as cash dividends to petitioner and withheld the corresponding 10% final dividend tax thereon. the recipient being a non-resident stockholder. being a non-resident stockholder. Petitioner appealed to the Court of Tax Appeals which affirmed the denial of the refund. Consequently. for the third quarter of 1981 ending September 30. For the first quarter of 1981 ending March 31. Similarly. the petition. said claim was denied since the recipient of the dividends. but certainly not of the branch in the Philippines.40.147. as amended. 1981 and filed with the Commissioner of Internal Revenue on September 24. AG&P as withholding agent paid 15% branch profit remittance on cash dividends declared and remitted to petitioner at its head office in Tokyo in the total amount of P229. It is thus clear that petitioner.424. they grossly erred in holding that no refund was forthcoming to the petitioner because the taxes thus withheld totalled the 25 % rate imposed by the Philippine-Japan Tax Convention pursuant to Article 10 (2) (b). 1705 and 1773. To simply add the two taxes to arrive at the 25 % tax rate is to disregard a basic rule in taxation that each tax has a . for the first and third quarters of 1981. Thus. only profits remitted abroad by a branch office to its head office which are effectively connected with its trade or business in the Philippines are subject to the 15% profit remittance tax. nevertheless. 1981. having made this independent investment attributable only to the head office. However. CIR) 177 SCRA 500 FACTS: Marubeni Corporation of Japan has equity investments in AG&P of Manila. It explained: The alleged overpaid taxes were incurred for the remittance of dividend income to the head office in Japan which is a separate and distinct income taxpayer from the branch in the Philippines. In a letter dated January 29. Hene. the commissioner ruled that Pursuant to Section 24 (b) (2) of the Tax Code. 1981. ISSUE Whether or not the petitioners are entitled to the issuance of a tax credit HELD : The Supreme court granted the petiton.

Some of the parties were close friends and/or relatives of Cafe. and in keeping with the Court's duty.000. Feliciano are instructive: (1) the character of the funds or other assets involved in the case. et al. Jumamil filed before the Regional Trial Court (RTC) of Panabo. Subsequently. the petition was amended anew to include the 57 awardees of the stalls as private respondents. standing or interest are procedural matters. Prior to the passage of these resolutions.00 for each stall. Series of 1989 (Resolution 7). The leases of the stalls were then awarded by public raffle which. however. Jumamil brought the petition in his capacity as taxpayer of the Municipality of Panabo. Thus.000 each.000. to determine whether or not the other branches of the Government have kept themselves within the limits of the Constitution and the laws and that they have not abused the discretion given to them. was limited to those who had deposited P40. 7 and 49 were unconstitutional because they were passed for the business.000 for the construction of additional stalls in the same public market. (2) the presence of a clear case of disregard of a constitutional or statutory prohibition by the public respondent agency or instrumentality of the government. and with whom also the mayor had a prior contract to award the would be constructed stalls to all private respondents. Resolution 7. as distinguished from mere interest in the question involved. Legal standing or locus standi is a party’s personal and substantial interest in a case such that he has sustained or will sustain direct injury as a result of the governmental act being challenged. Jumamil alleges that Resolution Nos. and that nor there were any prior notice or publication pertaining to contracts entered into by public and private respondents for the construction of stalls to be awarded to private respondents that the same can be availed of by anybody willing to deposit P40. The term “interest” means a material interest. It calls for more than just a generalized grievance.000 for the construction of stalls around a proposed terminal fronting the Panabo Public Market which was destroyed by fire. occupation. 21 September 2005] FACTS: Facts: In 1989. Café.Case # 148 . enacting Appropriation Ordinance 111. and (3) the lack of .515.000. Davao del Norte and not in his personal capacity. specially explicated in the 1987 Constitution. appropriating a further amount of P1. Unless a person’s constitutional rights are adversely affected by the statute or ordinance. He was questioning the official acts of the the mayor and the members of the Sanggunian in passing the ordinances and entering into the lease contracts with private respondents. Considering the importance to the public of a suit assailing the constitutionality of a tax law. provided for an initial appropriation of P765. enjoyment and benefit of private respondents. series of 1989 (Resolution 49). Whether the rule on locus standi should be relaxed? Held: 1. or a mere incidental interest. Cafe and the members of the Sangguniang Bayan of Panabo. and ordered Jumamil to pay attorney’s fees in the amount of P1. 2. The Regional Trial Court dismissed Jumamil’s petition for declaratory relief with prayer for preliminary injunction and writ of restraining order.000 to each of the 57 private respondents. WON Jumamil had the legal standing to bring the petition for declaratory relief? 2. that resolutions and ordinances did not provide for any notice of publication that the special privilege and unwarranted benefits conferred on the private respondents may be availed of by anybody who can deposit the amount of P40. [GR 144570. Issue: 1. Parties suing as taxpayers must specifically prove sufficient interest in preventing the illegal expenditure of money raised by taxation.00. He questioned the constitutionality of Municipal Resolution 7. the Supreme Court may brush aside technicalities of procedure and take cognizance of the suit. Davao del Norte a petition for declaratory relief with prayer for preliminary injunction and writ of restraining order against Mayor Jose J. some of which were close friends and/or relative of the mayor and the sanggunian. There being no doctrinal definition of transcendental importance. the petition was amended due to the passage of Resolution 49. rendering the prayer therefor moot and academic. The expenditure of public funds by an officer of the State for the purpose of executing an unconstitutional act constitutes a misapplication of such funds. Davao del Norte. he has no legal standing. Vivencio V. Mayor Cafe had already entered into contracts with those who advanced and deposited (with the municipal treasurer) from their personal funds the sum of P40. A taxpayer need not be a party to the contract to challenge its validity. an interest in issue affected by the decree. et al. the following determinants formulated by former Supreme Court Justice Florentino P. Objections to a taxpayer's suit for lack of sufficient personality.000 each. who deposited the amount of P40. The construction of the stalls which Jumamil sought to stop through the preliminary injunction in the RTC was nevertheless finished.Jumamil vs. denominated as Ordinance 10.

Held: No. 28 (A)(3)(a) does not exempt all international carriers nor is it intended by the Congress in amending the definition of the GBP. the correct interpretation is that. earn income from other activities will be taxed with 32% of their income. which shall be taxed at 2 ½% of their GPB. cannot be the basis for the grant of the refund. cargo and mail originating from the Philippines”. Sec. while air carriers that do not have flights to and from the Philippines but nonetheless. this fact does not preclude that he is not entitled to pay any other income tax for the sale of passage documents in the Philippines. excess baggage. In the Philippines. The claim was unheeded. Although it does not maintain flights to and from the Philippines. except for foreign resident foreign corporations that are international carriers that derive income “from carriage of persons. The petition was denied by the Court. with office located therein. if an international air carrier maintains flights to and from the Philippines. the petitioner is not entitled for refund. South African Airways vs. by itself and without unquestionabe evidence. that is. The petitioner does not fall under the exception. wwhich sells passage documents for petitioner’s off-line flights for the carriage of passengers and cargo between ports outside the jurisdiction of the Philippines. CIR 670 SCRA 669 Facts: Petitioner South African Airways is a foreign corporation existing under the laws of Republic of South Africa. although not yet final. excess baggage. It is neither registered with SEC as a corporation. The petitioner filed a Motion for Reconsideration and a Petition for Review and both were denied. branch office. irrespective of the place of sale of issue and the place of payment of the ticket or passage document. it is an internal air carrier without landing rights in the country but with general sales through Aerotel. For the year 2000.151. It is the general rule that resident foreign corporations shall be liable for a 32% income tax on their income from within the Philippines. or partnership and nor does it have a license to do business in the Philippines. it filed with the BIR a refund for the erroneously paid tax on the GPB. Issue: Whether the petitioner is entitled for refund.       . Thus. cargo and mail originating from the Philippines in a continuous and interrupted flight. The deficiency assessment. it shall be taxed at the rate of 2 ½% of its GPB. created a doubt as to and constitutes a challenge against the truth and accuracy of the facts stated in said return which. the petitioner filed quarterly and annual income tax returns but in 2001. GPB was defined as the amount of gross revenue derived from carriage of persons. The grant of a refund is founded on the assumption that the tax return is valid. the facts stated therein are true and correct.