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1 TAXATION; NATURE; NON-DELEGATION OF POWER, EXCEPTION. — The power of t!

t"o# "$
# e$$e#t"% #& "#here#t ttr"'(te of $o)ere"*#t+, 'e%o#*"#* $ ,tter of r"*ht to e)er+
"#&epe#&e#t *o)er#,e#t, w"tho(t 'e"#* e!pre$$%+ -o#ferre& '+ the peop%e. It "$ power tht
"$ p(re%+ %e*"$%t")e #& wh"-h the -e#tr% %e*"$%t")e 'o&+ -##ot &e%e*te e"ther to the
e!e-(t")e or .(&"-"% &eprt,e#t of *o)er#,e#t w"tho(t "#fr"#*"#* (po# the theor+ of
$eprt"o# of power$. !!! /G.R. No. L-01112. Fe'r(r+ 34, 1542, PEP6I-COLA 7OTTLING
CO8PAN9 OF T:E P:ILIPPINE6, INC., p%"#t";-ppe%%#t, )$. 8UNICIPALIT9 OF TANAUAN,
LE9TE, T:E 8UNICIPAL 8A9OR, ET AL<.
3.
Power of T!t"o#= I#here#t "# 6o)ere"*# 6tte /3>>0<
Wh+ "$ the power to t! -o#$"&ere& "#here#t "# $o)ere"*#
6tte? /@A<
6UGGE6TED AN6WER=
It "$ -o#$"&ere& "#here#t "# $o)ere"*# 6tte 'e-($e "t "$
#e-e$$r+ ttr"'(te of $o)ere"*#t+. W"tho(t th"$ power #o
$o)ere"*# 6tte -# e!"$t or e#&(re. The power to t! pro-ee&$ (po#
the theor+ tht the e!"$te#-e of *o)er#,e#t "$ #e-e$$"t+ #& th"$
power "$ # e$$e#t"% #& "#here#t ttr"'(te of $o)ere"*#t+, 'e%o#*"#* $
,tter of r"*ht to e)er+ "#&epe#&e#t $tte or *o)er#,e#t. No
$o)ere"*# $tte -# -o#t"#(e to e!"$t w"tho(t the ,e#$ to
p+ "t$ e!pe#$e$; #& tht for tho$e ,e#$, "t h$ the r"*ht
to -o,pe% %% -"t"Be#$ #& propert+ w"th"# "t$ %","t$ to
-o#tr"'(te, he#-e, the e,er*e#-e
0. Power of T!t"o#= Le*%"t+; Lo-% Go)Ct T!t"o# /3>>0<
8+ Co#*re$$, (#&er the 15D4 Co#$t"t(t"o#, 'o%"$h the
power to t! of %o-% *o)er#,e#t$? /@A<
6UGGE6TED AN6WER=
No. Co#*re$$ -##ot 'o%"$h wht "$ e!pre$$%+ *r#te& '+
the f(#&,e#t% %w. The o#%+ (thor"t+ -o#ferre& to
Co#*re$$ "$ to pro)"&e the *("&e%"#e$ #& %","tt"o#$ o# the
%o-% *o)er#,e#tE$ e!er-"$e of the power to t! /6e-. 1, Art.
X, 15D4 Co#$t"t(t"o#<.
@. D"$-($$ the ,e#"#* #& ",p%"-t"o#$ of the fo%%ow"#* $tte,e#t$= F T!e$ re the
%"fe'%oo& of *o)er#,e#t #& the"r pro,pt #& -ert"# )"%'"%"t+ "$ # ",per"o($ #ee&.G
/1551<
T!e$ re the %"fe'%oo& of the *o)er#,e#t. W"tho(t t!e$, the *o)er#,e#t -# #e"ther e!"$t
#or e#&(re. The e!er-"$e of t!"#* power &er")e$ "t$ $o(r-e fro, the )er+ e!"$te#-e of the
6tte who$e $o-"% -o#tr-t w"th "t$ -"t"Be#$ o'%"*e$ "t to pro,ote p('%"- "#tere$t #& the
-o,,o# *oo& / G.R. No. 12>412. 8r-h 5, 3>1>, C:A87ER OF REAL E6TATE AND 7UILDER6E
A66OCIATION6, INC., pet"t"o#er, )$. T:E :ON. EXECUTIHE 6ECRETAR9 AL7ERTO RO8ULO,
T:E :ON. ACTING 6ECRETAR9 OF FINANCE IUANITA D. A8ATONG, #& T:E :ON.
CO88I66IONER OF INTERNAL REHENUE GUILLER8O PARA9NO, IR., re$po#&e#t$<.
1.
Power of T!t"o#= L","tt"o#$; Power to De$tro+ /3>>><
I($t"-e :o%,e$ o#-e $"&= The power to t! "$ #ot the power to
&e$tro+ wh"%e th"$ Co(rt /the 6(pre,e Co(rt< $"t$.J De$-r"'e the
power to t! #& "t$ %","tt"o#$. /1A<
6UGGE6TED AN6WER=
The power to t! "$ # "#here#t power of the $o)ere"*#
wh"-h "$ e!er-"$e& thro(*h the %e*"$%t(re, to ",po$e
'(r&e#$ (po# $('.e-t$ #& o'.e-t$ w"th"# "t$ I(r"$&"-t"o#
for the p(rpo$e of r"$"#* re)e#(e$ to -rr+ o(t the
%e*"t",te o'.e-t$ of *o)er#,e#t. The (#&er%+"#* '$"$ for
"t$ e!er-"$e "$ *o)er#,e#t% #e-e$$"t+ for w"tho(t "t #o
*o)er#,e#t -# e!"$t #or e#&(re. A--or&"#*%+, "t h$ the
'ro&e$t $-ope of %% the power$ of *o)er#,e#t 'e-($e "#
the '$e#-e of %","tt"o#$, "t "$ -o#$"&ere& $ (#%","te&,
p%e#r+, -o,prehe#$")e #& $(pre,e. The two %","tt"o#$
o# the power of t!t"o# re the "#here#t #& -o#$t"t(t"o#%
%","tt"o#$ wh"-h re "#te#&e& to pre)e#t '($e o# the
e!er-"$e of the otherw"$e p%e#r+ #& (#%","te& power. It "$
the Co(rtE$ ro%e to $ee to "t tht the e!er-"$e of the power
&oe$ #ot tr#$*re$$ the$e %","tt"o#$.
4. Power of T!t"o#= L","tt"o#$= P$$"#* of Re)e#(e 7"%%$
/1554<
The :o($e of Repre$e#tt")e$ "#tro&(-e& :7 4>>> wh"-h
e#)"$"o#e& to %e)+ t! o# )r"o($ tr#$-t"o#$. After the
'"%% w$ ppro)e& '+ the :o($e, the '"%% w$ $e#t to the
6e#te $ $o reK("re& '+ the Co#$t"t(t"o#. I# the (pper
ho($e, "#$te& of &e%"'ert"o# o# the :o($e 7"%%, the
6e#te "#tro&(-e& 67 D>>> wh"-h w$ "t$ ow# )er$"o# of
the $,e t!. The 6e#te &e%"'erte& o# th"$ 6e#te 7"%% #&
ppro)e& the $,e. The :o($e 7"%% #& the 6e#te 7"%%
were the# -o#$o%"&te& "# the 7"-,er% Co,,"ttee.
E)e#t(%%+, the -o#$o%"&te& '"%% w$ ppro)e& #& $e#t to
the Pre$"&e#t who $"*#e& the $,e. The pr")te $e-tor$
;e-te& '+ the #ew %w K(e$t"o#e& the )%"&"t+ of the
e#-t,e#t o# the *ro(#& tht the -o#$t"t(t"o#% pro)"$"o#
reK("r"#* tht %% re)e#(e '"%%$ $ho(%& or"*"#te fro, the
:o($e of Repre$e#tt")e$ h& 'ee# )"o%te&. Re$o%)e the
"$$(e.
6UGGE6TED AN6WER=
There "$ #o )"o%t"o# of the -o#$t"t(t"o#% reK("re,e#t tht
%% re)e#(e '"%%$ $ho(%& or"*"#te fro, the :o($e of
Repre$e#tt")e$. Wht "$ proh"'"te& "$ for the 6e#te to
e#-t re)e#(e ,e$(re$ o# "t$ ow# w"tho(t '"%% or"*"#t"#*
fro, the :o($e. 7(t o#-e the re)e#(e '"%% w$ p$$e& '+ the
:o($e #& $e#t to the 6e#te, the %tter -# p$$ "t$ ow#
)er$"o# o# the $,e $('.e-t ,tter -o#$o##t w"th the
%tterE$ power to propo$e or -o#-(r w"th ,e#&,e#t$. Th"$
fo%%ow$ fro, the -o-eK(%"t+ of the two -h,'er$ of
Co#*re$$ /To%e#t"#o ). 6e-retr+ of F"##-e, GR No.
111@11, O-t. 0>, 1551<.
11.
I#here#t L","tt"o#$ o# the power to t!
. The reK("re,e#t tht the %e)+ of t! ,($t 'e for p('%"- p(rpo$e
C$e=
EN 7ANC
LG.R. No. L-1>@>1. De-e,'er 35, 152>.M
WENCE6LAO PA6CUAL, "# h"$ oN-"% -p-"t+ $ Pro)"#-"% Go)er#or of R"B%, pet"t"o#er-
ppe%%#t, )$. T:E 6ECRETAR9 OF PU7LIC WORO6 AND CO88UNICATION6, ET AL.,
re$po#&e#t$-ppe%%ee$.
A$$t. F"$-% No%" 8. Corte$ #& Io$e P. 6#to$ for ppe%%#t.
A$$t. 6o%"-"tor Ge#er% Io$e G. 7(t"$t #& 6o%"-"tor A.A. Torre$ for ppe%%ee.
69LLA7U6
1. CON6TITUTIONAL LAW; LEGI6LATIHE POWER6; APPROPRIATION OF PU7LIC REHENUE6
ONL9 FOR PU7LIC PURPO6E6; W:AT DETER8INE6 HALIDIT9 OF A PU7LIC EXPENDITURE. — JIt
"$ *e#er% r(%e tht the %e*"$%t(re "$ w"tho(t power to ppropr"te p('%"- re)e#(e$ for
#+th"#* '(t p('%"- p(rpo$e. . . . It "$ the e$$e#t"% -hr-ter of the &"re-t o'.e-t of the
e!pe#&"t(re wh"-h ,($t &eter,"#e "t$ )%"&"t+ $ .($t"f+"#* t! #& #ot the ,*#"t(&e of
the "#tere$t$ to 'e ;e-te& #or the &e*ree to wh"-h the *e#er% &)#t*e of the
-o,,(#"t+, #& th($ the p('%"- we%fre, ,+ 'e (%t",te%+ 'e#ePte& '+ the"r pro,ot"o#.
I#-"&e#t% &)#t*e to the p('%"- or to the $tte, wh"-h re$(%t$ fro, the pro,ot"o# of
pr")te "#tere$t$, #& the pro$per"t+ of pr")te e#terpr"$e$ or '($"#e$$, &oe$ #ot .($t"f+ the"r
"& '+ the ($e of p('%"- ,o#e+.J /30 R. L. C. pp. 05D-@1><.
3. ID.; ID.; ID.; UNDERL9ING REA6ON FOR T:E RULE. — Ge#er%%+, (#&er the e!pre$$ or
",p%"e& pro)"$"o#$ of the -o#$t"t(t"o#, p('%"- f(#&$ ,+ 'e ($e& o#%+ for p('%"- p(rpo$e.
The r"*ht of the %e*"$%t(re to ppropr"te p('%"- f(#&$ "$ -orre%t")e w"th "t$ r"*ht to t!, #&,
(#&er -o#$t"t(t"o#% pro)"$"o#$ *"#$t t!t"o# e!-ept for p('%"- p(rpo$e$ #& proh"'"t"#*
the -o%%e-t"o# of t! for o#e p(rpo$e #& the &e)ot"o# thereof to #other p(rpo$e, #o
ppropr"te of $tte f(#&$ -# 'e ,&e for other th# p('%"- p(rpo$e. /D1 C.I.6. p. 11@4
The power to t! -# 'e re$orte& to o#%+ for -o#$t"t(t"o#%%+ )%"& p('%"- p(rpo$e. 7+ the
$,e toQe#, t!e$ ,+ #ot 'e %e)"e& for p(re%+ pr")te p(rpo$e$, for '("%&"#* (p of pr")te
fort(#e$, or for the re&re$$ of pr")te wro#*$. The+ -##ot 'e %e)"e& for the ",pro)e,e#t of
pr")te propert+, or for the 'e#ePt, #& pro,ot"o# of pr")te e#terpr"$e$, e!-ept where the
"& "$ "#-"&e#t to the p('%"- 'e#ePt. It "$ we%%-$ett%e& pr"#-"p%e of -o#$t"t(t"o#% %w tht #o
*e#er% t! -# 'e %e)"e& e!-ept for the p(rpo$e of r"$"#* ,o#e+ wh"-h "$ to 'e e!pe#&e&
for p('%"- ($e. F(#&$ -##ot 'e e!-te& (#&er the *("$e of t!t"o# to pro,ote p(rpo$e
tht "$ #ot of p('%"- "#tere$t. W"tho(t $(-h %","tt"o#, the power to t! -o(%& 'e e!er-"$e& or
e,p%o+e& $ # (thor"t+ to &e$tro+ the e-o#o,+ of the peop%e. A t!, howe)er, "$ #ot he%&
)o"& o# the *ro(#& of w#t of p('%"- "#tere$t (#%e$$ the w#t of $(-h "#tere$t "$ -%er. /41
A,. I(r. pp. 041-043<
T:IRD DIHI6ION
LG.R. No. 122>>2. 8r-h 1@, 3>>D.M
PLANTER6 PRODUCT6, INC., pet"t"o#er, )$. FERTIP:IL CORPORATION, re$po#&e#t.
D E C I 6 I O N
'. Proh"'"t"o# *"#$t the &e%e*t"o# of %e*"$%t")e power;
Ge#er% r(%e= No#-&e%e*t"o#
TAXATION; NATURE; NON-DELEGATION OF POWER, EXCEPTION. — The power of t!t"o# "$
# e$$e#t"% #& "#here#t ttr"'(te of $o)ere"*#t+, 'e%o#*"#* $ ,tter of r"*ht to e)er+
"#&epe#&e#t *o)er#,e#t, w"tho(t 'e"#* e!pre$$%+ -o#ferre& '+ the peop%e. It "$ power tht
"$ p(re%+ %e*"$%t")e #& wh"-h the -e#tr% %e*"$%t")e 'o&+ -##ot &e%e*te e"ther to the
e!e-(t")e or .(&"-"% &eprt,e#t of *o)er#,e#t w"tho(t "#fr"#*"#* (po# the theor+ of
$eprt"o# of power$. The e!-ept"o#, howe)er, %"e$ "# the -$e of ,(#"-"p% -orport"o#$, to
wh"-h, $"& theor+ &oe$ #ot pp%+. Le*"$%t")e power$ ,+ 'e &e%e*te& to %o-%
*o)er#,e#t$ "# re$pe-t of ,tter$ of %o-% -o#-er#. Th"$ "$ $#-t"o#e& '+ ",,e,or"%. 7+
#e-e$$r+ ",p%"-t"o#, the %e*"$%t")e power to -rete po%"t"-% -orport"o#$ for p(rpo$e of
%o-% $e%f-*o)er#,e#t -rr"e$ w"th "t the power to -o#fer o# $(-h %o-% *o)er#,e#t *e#-"e$
the power to t! /G.R. No. L-01112. Fe'r(r+ 34, 1542, PEP6I-COLA 7OTTLING CO8PAN9 OF
T:E P:ILIPPINE6, INC., p%"#t";-ppe%%#t, )$. 8UNICIPALIT9 OF TANAUAN, LE9TE, T:E
8UNICIPAL 8A9OR, ET AL<.
-. I#ter#t"o#% -o,"t+, (#&er wh"-h the propert+ of fore"*# 6tte ,+ #ot 'e t!e& '+
#other;
&. Terr"tor"%"t+, wh"-h reK("re$ tht the per$o# or propert+ t!e& ,($t 'e $('.e-t to the
.(r"$&"-t"o# of the t!"#* 6tte;
E!,p%e$ "f - #& & fro, 3>1> 'r K(e$t"o# #& #$wer
I#here#t L","tt"o#$ of Terr"tor"%"t+ #& I#ter#t"o#% Co,"t+
8+ the Ph"%"pp"#e *o)er#,e#t reK("re t! w"thho%&"#* o# the $%r"e$ of F"%"p"#o e,p%o+ee$
worQ"#* "# the A,er"-#
E,'$$+ "# the Ph"%"pp"#e$?
No, 'e-($e th"$ w"%% )"o%te the pr"#-"p%e of "#ter#t"o#% -o,"t+. If the Ph"%"pp"#e
*o)er#,e#t wo(%& ",po$e
the reK("re,e#t of t! w"thho%&"#* o# the $%r"e$ of F"%"p"#o e,p%o+ee$ worQ"#* "# the
A,er"-# E,'$$+ "# the
Ph"%"pp"#e$, th"$ wo(%& "# e;e-t reK("re tht the A,er"-# *o)er#,e#t 'e -o#$t"t(te& $ the
w"thho%&"#* *e#t of
the Ph"%"pp"#e *o)er#,e#t "#$ofr $ the t!e$ o# the $%r"e$ of the F"%"p"#o e,p%o+ee$ re
-o#-er#e&. Th"$ "$
o')"o($%+ )"o%t")e of the "#here#t %","tt"o# tht t!t"o# "$ $('.e-t to the pr"#-"p%e of
"#ter#t"o#% -o,"t+
8+ the Ph"%"pp"#e *o)er#,e#t reK("re t! w"thho%&"#* o# the "#tere$t "#-o,e er#e& '+
re$"&e#t -"t"Be# fro, '#Q &epo$"t 'ro&?
No, 'e-($e th"$ w"%% )"o%te the pr"#-"p%e of terr"tor"%"t+. Wh"%e "t "$ tr(e tht the "#tere$t
"#-o,e "$ $('.e-t to
"#-o,e t! here "# the Ph"%"pp"#e$ -o#$"&er"#* tht the $,e w$ er#e& '+ re$"&e#t
-"t"Be#, $t"%%, the $,e
-o(%& #ot 'e the $('.e-t of t! w"thho%&"#*. Th"$ "$ 'e-($e "f the Ph"%"pp"#e *o)er#,e#t
wo(%& ",po$e the
reK("re,e#t of t! w"thho%&"#* o# the "#tere$t "#-o,e er#e& '+ re$"&e#t -"t"Be# fro,
'#Q &epo$"t 'ro&,
th"$ wo(%& "# e;e-t reK("re tht the fore"*# '#Q 'e -o#$t"t(te& $ the w"thho%&"#* *e#t of
the Ph"%"pp"#e
*o)er#,e#t. Th"$ "$ o')"o($%+ )"o%t")e of the "#here#t %","tt"o# tht t!t"o# "$ $('.e-t to
the pr"#-"p%e of
terr"tor"%"t+ 'e-($e fore"*# t!p+er wh"-h "$ o(t$"&e the terr"tor"% .(r"$&"-t"o# of the
-o(#tr+ wo(%& the# 'e
$('.e-te& to o(r t! %w$.
e. E!e,pt"o# of *o)er#,e#t% *e#-"e$ / perfor,"#* *o)er#,e#t% f(#-t"o#$< fro,
t!t"o# /'(t there "$ #o proh"'"t"o# *"#$t the *o)er#,e#t t!"#* "t$e%f<;
13
8r" 6(erte, F"%"p"#o -"t"Be#, p(r-h$e& %ot "# 8Qt" C"t+ "# 15D> t
pr"-e of P1 ,"%%"o#. 6"& propert+ h$ 'ee# %e$e& to 8A6 Corport"o#, &o,e$t"-
-orport"o# e#**e& "# ,#(f-t(r"#* pper pro&(-t$, ow#e& 55A '+ 8r" 6(erte. I#
O-to'er 3>>4, EIP Corport"o#, re% e$tte &e)e%oper, e!pre$$e& "t$ &e$"re to
'(+ the 8Qt" propert+ t "t$ f"r ,rQet )%(e P0>> ,"%%"o#, p+'%e $ fo%%ow$
= /< P2> ,"%%"o# &ow# p+,e#t; #& /'< '%#-e, p+'%e eK(%%+ "# twe#t+ fo(r
/3@< ,o#th%+ -o#$e-(t")e "#$t%%,e#t$. Upo# the &)"-e of t! %w+er, 8r"
6(erte e!-h#*e& her 8Qt" propert+ for $hre$ of $to-Q of 8A6 Corport"o#. A 7IR
r(%"#*, -o#Pr,"#* the t!-free e!-h#*e of propert+ for $hre$ of $to-Q, w$
$e-(re& fro, the 7IR Nt"o#% ON-e #& Cert"P-te A(thor"B"#* Re*"$trt"o#
w$ "$$(e& '+ the Re)e#(e D"$tr"-t ON-er /RDO< where the propert+ w$ %o-te&.
6('$eK(e#t%+, $he $o%& her e#t"re $to-Q ho%&"#*$ "# 8A6 Corport"o# to EIP
Corport"o# for P0>> ,"%%"o#. I# )"ew of the t! &)"-e, 8r" 6(erte p"& o#%+
the -p"t% *"#$ t! of P35,D51,>>> / P1>>,>>> ! 1A p%($ P35D,5>>,>> ! 1>A <,
"#$te& of the -orporte "#-o,e t! of P1>@,21>,>> / 01A o# P355 ,"%%"o# *"# fro,
$%e of re% propert+ <. After e)%(t"#* the -p"t% *"#$ t! p+,e#t, the RDO
wrote %etter to 8r" 6(erte, 6%t"#* tht $he -o,,"te& t! e)$"o#.
I$ the -o#te#t"o# of the RDO te#'%e? Or w$ "t t! )o"&#-e tht 8r" 6(erte
h& re$orte& to? E!p%"#. / 2A <
A%ter#t")e #$wer
No. The e!-h#*e of the re% $tte propert+ for the $hre$ of $to-Q$ "$ -o#$"&ere& $
%e*"t",te t! )o"&#-e $-he,e / 6e-t"o# @> LC3'M NIRC<. The $%e of the $hre$ of $to-Q$
of &o,e$t"- -orport"o#, wh"-h "$ -p"t% $$et, "$ $('.e-t to P#% t! of 1 A o# the Pr$t
1>>, >>> pe$o$ #& 1> A o# the ,o(#t "# e!-e$$ of 1>>,>>> / 6e-t"o# 3@ L-M NIRC<.
10. Wht "$ the #t(re of the t!"#* power of the pro)"#-e$, ,(#"-"p%"t"e$ #& -"t"e$? :ow
w"%% the %o-% *o)er#,e#t (#"t$ 'e '%e to e!er-"$e the"r t!"#* power$?
The t!"#* power of %o-% *o)er#,e#t$ "$ #ot # "#here#t power '(t o#e &e%e*te& (#&er
the Ph"%"pp"#e Co#$t"t(t"o#.
ARTICLE X
Lo-% Go)er#,e#t
6ECTION 1. E-h %o-% *o)er#,e#t (#"t $h%% h)e the power to -rete "t$ ow# $o(r-e$ of
re)e#(e$ #& to %e)+ t!e$, fee$, #& -hr*e$ $('.e-t to $(-h *("&e%"#e$ #& %","tt"o#$ $
the Co#*re$$ ,+ pro)"&e, -o#$"$te#t w"th the '$"- po%"-+ of %o-% (to#o,+. 6(-h t!e$,
fee$, #& -hr*e$ $h%% --r(e e!-%($")e%+ to the %o-% *o)er#,e#t$.
Lo-% *o)er#,e#t (#"t$ e!er-"$e the"r power$ thro(*h the e#-t,e#t of or&"##-e$ / 1551
Lo-% Go)er#,e#t Co&e, 7ooQ II, Chpter 1, 6e-. 103<.
1@
Basic Stages or Aspects of Taxation (2006)
E#(,erte the 0 $t*e$ or $pe-t$ of t!t"o#. E!p%"#
e-h. /1A<
SUGGESTE A!S"ER#
The $pe-t$ of t!t"o# re=
/1< LEH9ING — the -t of the %e*"$%t(re "#
-hoo$"#* the per$o#$, propert"e$, r"*ht$ or pr")"%e*e$ to 'e
$('.e-te& to t!t"o#.
/3< A66E668ENT #& COLLECTION — Th"$ "$
the -t of e!e-(t"#* the %w thro(*h the &,"#"$trt")e
*e#-"e$ of *o)er#,e#t.
/0< PA98ENT — the -t of the t!p+er "# $ett%"#*
h"$ t! o'%"*t"o#$.
11
irect Tax $s% In&irect Tax ('(())
D"$t"#*("$h &"re-t fro, # "#&"re-t t!.
SUGGESTE A!S"ER#
A DIRECT TAX "$ o#e "# wh"-h the t!p+er who p+$
the t! "$ &"re-t%+ %"'%e therefor, tht "$, the '(r&e# of
p+"#* the t! f%%$ &"re-t%+ o# the per$o# p+"#* the t!.
A# INDIRECT TAX "$ o#e p"& '+ per$o# who "$ #ot
&"re-t%+ %"'%e therefor, #& who ,+ therefore $h"ft or p$$
o# the t! to #other per$o# or e#t"t+, wh"-h (%t",te%+
$$(,e$ the t! '(r&e#. (*ace&a $% *acaraig+ '(, SCRA
,,')
irect Tax $s% In&irect Tax (2000)
A,o#* the t!e$ ",po$e& '+ the 7(re( of I#ter#%
Re)e#(e re "#-o,e t!, e$tte #& &o#orE$ t!, )%(e-&&e&
t!, e!-"$e t!, other per-e#t*e t!e$, #& &o-(,e#tr+
$t,p t!. C%$$"f+ the$e t!e$ "#to &"re-t #& "#&"re-t t!e$,
#& &";ere#t"te &"re-t fro, I#&"re-t t!e$. /1A<
SUGGESTE A!S"ER#
I#-o,e t!, e$tte #& &o#orE$ t! re -o#$"&ere& $ &"re-t
t!e$. O# the other h#&, )%(e-&&e& t!, e!-"$e t!, other
per-e#t*e t!e$, #& &o-(,e#tr+ $t,p t! re "#&"re-t
t!e$.
DIRECT TAXE6 re &e,#&e& fro, the )er+ per$o#
who, $ "#te#&e&, $ho(%& p+ the t! wh"-h he -##ot $h"ft
to #other; wh"%e # INDIRECT TAX "$ &e,#&e& "# the
Pr$t "#$t#-e fro, o#e per$o# w"th the e!pe-tt"o# tht he
-# $h"ft the '(r&e# to $o,eo#e
irect Tax $s% In&irect Tax (200')
D"$t"#*("$h &"re-t t!e$ fro, "#&"re-t t!e$, #& *")e #
e!,p%e for e-h o#e. /3A<
SUGGESTE A!S"ER#
DIRECT TAXE6 re t!e$ where"# 'oth the "#-"&e#-e /or
%"'"%"t+ for the p+,e#t of the t!< $ we%% $ the ",p-t or
'(r&e# of the t! f%%$ o# the $,e per$o#. A#
e!,p%e of th"$ t! "$ "#-o,e t! where the per$o# $('.e-t
to t! -##ot $h"ft the '(r&e# of the t! to #other per$o#.
INDIRECT TAXE6, o# the other h#&, re t!e$ where"#
the "#-"&e#-e of or the %"'"%"t+ for the p+,e#t of the t!
f%%$ o# o#e per$o# '(t the '(r&e# thereof -# 'e $h"fte& or
p$$e& o# to #other per$o#. E!,p%e of th"$ t! "$ the
)%(e-&&e& t!.
ALTER!ATI-E A!S"ER#
A &"re-t t! "$ t! wh"-h "$ &e,#&e& fro, the per$o#
who %$o $ho(%&er$ the '(r&e# of the t!. E!,p%e=
-orporte #& "#&")"&(% "#-o,e t!.
A# "#&"re-t t! "$ t! wh"-h "$ &e,#&e& fro, o#e per$o#
"# the e!pe-tt"o# #& "#te#t"o# tht he $h%% "#&e,#"f+
h",$e%f t the e!pe#$e of #other, #& the '(r&e# P#%%+
re$t"#* o# the (%t",te p(r-h$er or -o#$(,er. E!,p%e=
)%(e &&e& t!.
irect Tax $s% In&irect Tax (2006)
D"$t"#*("$h J&"re-t t!e$J fro, J"#&"re-t t!e$.J G")e
e!,p%e$. /1A<
SUGGESTE A!S"ER#
DIRECT TAXE6 re &e,#&e& fro, the )er+ per$o# who
$ho(%& p+ the t! #& wh"-h he -# #ot $h"ft to #other.
A# INDIRECT TAX "$ &e,#&e& fro, o#e per$o# w"th
the e!pe-tt"o# tht he -# $h"ft the '(r&e# to $o,eo#e
e%$e, #ot $ t! '(t $ prt of the p(r-h$e pr"-e.
E!,p%e$ of &"re-t t!e$ re the "#-o,e t!, the e$tte t!
#& the &o#orE$ t!. E!,p%e$ of "#&"re-t t!e$ re the
)%(e-&&e& t!, the per-e#t*e t! #& the e!-"$e t! o#
e!-"$e'%e rt"-%e$.
12
Exe.ptions/ C0arita12e Instit3tions (2006)
The Co#$t"t(t"o# pro)"&e$ J-hr"t'%e "#$t"t(t"o#$, -h(r-he$,
per$o#*e$ or -o#)e#t$ pp(rte##t thereto, ,o$K(e$, #&
#o#-proPt -e,eter"e$ #& %% %#&$, '("%&"#*$, #&
",pro)e,e#t$ -t(%%+ &"re-t%+ #& e!-%($")e%+ ($e& for
re%"*"o($, -hr"t'%e or e&(-t"o#% p(rpo$e$ $h%% 'e e!e,pt
fro, t!t"o#.J Th"$ pro)"$"o# e!e,pt$ -hr"t'%e
"#$t"t(t"o#$ #& re%"*"o($ "#$t"t(t"o#$ fro, wht Q"#& of
t!e$? Choo$e the 'e$t #$wer. E!p%"#. /1A<
fro, %% Q"#&$ of t!e$, ".e., "#-o,e, HAT,
-($to,$ &(t"e$, %o-% t!e$ #& re% propert+ t!
fro, %o-% t! o#%+
fro, )%(e-&&e& t!
fro, re% propert+ t! o#%+
fro, -p"t% *"#$ t! o#%+
SUGGESTE A!S"ER#
The pro)"$"o# e!e,pt"o#$ -hr"t'%e "#$t"t(t"o#$ #&
re%"*"o($ "#$t"t(t"o#$ fro, /&< REAL PROPERT9 TAXE6
o#%+. The e!e,pt"o# "$ o#%+ for t!e$ $$e$$e& $ propert+
t!e$, $ &"$t"#*("$he& fro, e!-"$e t!e$ (CIR $% CA+ CTA 4
5*CA+ G%R% !o% '2)0)6+ 7cto1er ')+ '((8/
L2a&oc $% Co..issioner of Interna2 Re$en3e+ L9'(20'+ :3ne
'6+'(6;)%
',
Exc23sion 4 Inc23sion/ Gross Receipts (2006)
Co#*re$$ e#-t$ %w ",po$"#* 1A t! o# *ro$$ re-e"pt$
of -o,,o# -rr"er$. The %w &oe$ #ot &eP#e the ter,
J*ro$$ re-e"pt$.J E!pre$$ Tr#$port, I#-., '($ -o,p#+
p%+"#* the 8#"%-7*("o ro(te, h$ t",e &epo$"t$ w"th A7C
7#Q. I# 3>>1, E!pre$$ Tr#$port er#e& P1 8"%%"o#
"#tere$t, fter &e&(-t"#* the 3>A P#% w"thho%&"#* t! fro,
"t$ t",e &epo$"t$ w"th the '#Q. The 7IR w#t$ to -o%%e-t
1A *ro$$ re-e"pt$ t! o# the "#tere$t "#-o,e of E!pre$$
Tr#$port w"tho(t &e&(-t"#* the 3>A P#% w"thho%&"#* t!.
I$ the 7IR -orre-t? E!p%"#. /1A<
ALTER!ATI-E A!S"ER#
9e$. The ter, JGro$$ Re-e"pt$J "$ 'ro& e#o(*h to "#-%(&e "#-o,e
-o#$tr(-t")e%+ re-e")e& '+ the t!p+er. The ,o(#t w"thhe%& "$
p"& to the *o)er#,e#t o# "t$ 'eh%f, "# $t"$f-t"o# of w"thho%&"#*
t!e$. The f-t tht "t &"& #ot -t(%%+ re-e")e the ,o(#t &oe$ #ot
%ter the f-t tht "t "$ re,"tte& "# $t"$f-t"o# of "t$ t! o'%"*t"o#$.
6"#-e the "#-o,e w"thhe%& "$ # "#-o,e ow#e& '+ E!pre$$
Tr#$port, the $,e for,$ prt of "t$ *ro$$ re-e"pt$ (CIR $%
So2i&1an< Corp%+ G%R% !o% ')8'('+ !o$e.1er 2;+ 2006)%
3>. If the t!p+er h$ t! %"'"%"t+, #& he h$ -%", *"#$t the *o)er#,e#t, -# the$e
'e $('.e-t to -o,pe#$t"o#?
A#$wer=
T:IRD DIHI6ION
LG.R. No. 1314>@. A(*($t 3D, 155D.M
P:ILEX 8INING CORPORATION, pet"t"o#er, )$. CO88I66IONER OF INTERNAL REHENUE,
COURT OF APPEAL6, #& T:E COURT OF TAX APPEAL6, re$po#&e#t$.
69LLA7U6
1.
CIHIL LAW; EXTINGUI6:8ENT OF O7LIGATION6; CO8PEN6ATION; TAXE6 CANNOT 7E
6U7IECT TO LEGAL CO8PEN6ATION. — I# $e)er% "#$t#-e$ pr"or to the "#$t#t -$e, we
h)e %re&+ ,&e the pro#o(#-e,e#t tht t!e$ -##ot 'e $('.e-t to -o,pe#$t"o# for
the $",p%e re$o# tht the *o)er#,e#t #& the t!p+er re #ot -re&"tor$ #& &e'tor$ of
e-h other. There "$ ,ter"% &"$t"#-t"o# 'etwee# t! #& &e't. De't$ re &(e to the
Go)er#,e#t "# "t$ -orporte -p-"t+, wh"%e t!e$ re &(e to the Go)er#,e#t "# "t$
$o)ere"*# -p-"t+. We P#& #o -o*e#t re$o# to &e)"te fro, the fore,e#t"o#e&
&"$t"#-t"o#. Pre$-"#&"#* fro, th"$ pre,"$e, "# Fr#-" )$. I#ter,e&"te Appe%%te Co(rt, we
-te*or"-%%+ he%& tht t!e$ -##ot 'e $('.e-t to $et-o; or -o,pe#$t"o#, th($= JWe h)e
-o#$"$te#t%+ r(%e& tht there -# 'e #o o;-$ett"#* of t!e$ *"#$t the -%",$ tht the
t!p+er ,+ h)e *"#$t the *o)er#,e#t. A per$o# -##ot ref($e to p+ t! o# the
*ro(#& tht the *o)er#,e#t owe$ h", # ,o(#t eK(% to or *reter th# the t! 'e"#*
-o%%e-te&. The -o%%e-t"o# of t! -##ot w"t the re$(%t$ of %w$("t *"#$t the
*o)er#,e#t.J The r(%"#* "# Fr#-" h$ 'ee# pp%"e& to the $('$eK(e#t -$e of C%te!
Ph"%"pp"#e$, I#-. )$. Co,,"$$"o# o# A(&"t, wh"-h re"terte& tht= J. . . t!p+er ,+ #ot
o;$et t!e$ &(e fro, the -%",$ tht he ,+ h)e *"#$t the *o)er#,e#t. T!e$ -##ot 'e
the $('.e-t of -o,pe#$t"o# 'e-($e the *o)er#,e#t #& t!p+er re #ot ,(t(%%+
-re&"tor$ #& &e'tor$ of e-h other #& -%", for t!e$ "$ #ot $(-h &e't, &e,#&,
-o#tr-t or .(&*,e#t $ "$ %%owe& to 'e $et-o;.J F(rther, Ph"%e!E$ re%"#-e o# o(r ho%&"#* "#
Co,,"$$"o#er of I#ter#% Re)e#(e )$. Ito*o#-6(+o- 8"#e$, I#-., where"# we r(%e& tht
pe#&"#* ref(#& ,+ 'e $et o; *"#$t # e!"$t"#* t! %"'"%"t+ e)e# tho(*h the ref(#& h$
#ot +et 'ee# ppro)e& '+ the Co,,"$$"o#er, "$ #o %o#*er w"tho(t #+ $(pport "# $tt(tor+
%w. It "$ ",port#t to #ote tht the pre,"$e of o(r r(%"#* "# the fore,e#t"o#e& -$e w$
#-hore& o# 6e-t"o# 11/&< of the Nt"o#% Re)e#(e Co&e of 1505. :owe)er, whe# the
Nt"o#% I#ter#% Re)e#(e Co&e of 1544 w$ e#-te&, the $,e pro)"$"o# (po# wh"-h the
Ito*o#-6(+o- pro#o(#-e,e#t w$ '$e& w$ o,"tte&. A--or&"#*%+, the &o-tr"#e e#(#-"te&
"# Ito*o#-6(+o- -##ot 'e "#)oQe& '+ Ph"%e!. D-IT:E
3. TAXATION; NATIONAL INTERNAL REHENUE CODE; A TAXPA9ER CANNOT REFU6E TO
PA9 :I6 TAXE6 W:EN T:E9 FALL DUE 6I8PL9 7ECAU6E :E :A6 A CLAI8 AGAIN6T T:E
GOHERN8ENT OR T:AT T:E COLLECTION OF T:E TAX I6 CONTINGENT ON T:E RE6ULT OF
T:E LAW6UIT IT FILED AGAIN6T T:E GOHERN8ENT. — We f"% to $ee the %o*"- of Ph"%e!E$
-%", for th"$ "$ # o(tr"*ht &"$re*r& of the '$"- pr"#-"p%e "# t! %w tht t!e$ re the
%"fe'%oo& of the *o)er#,e#t #& $o $ho(%& 'e -o%%e-te& w"tho(t (##e-e$$r+ h"#&r#-e.
E)"&e#t%+, to -o(#te##-e Ph"%e!E$ wh",$"-% re$o# wo(%& re#&er "#e;e-t")e o(r t!
-o%%e-t"o# $+$te,. Too $",p%"$t"-, "t P#&$ #o $(pport "# %w or "# .(r"$pr(&e#-e. To 'e $(re, we
-##ot %%ow Ph"%e! to ref($e the p+,e#t of "t$ t! %"'"%"t"e$ o# the *ro(#& tht "t h$
pe#&"#* t! -%", for ref(#& or -re&"t *"#$t the *o)er#,e#t wh"-h h$ #ot +et 'ee#
*r#te&. It ,($t 'e #ote& tht &"$t"#*("$h"#* fet(re of t! "$ tht "t "$ -o,p(%$or+ rther
th# ,tter of 'r*"#. :e#-e, t! &oe$ #ot &epe#& (po# the -o#$e#t of the t!p+er. If
#+ t!p+er -# &efer the p+,e#t of t!e$ '+ r"$"#* the &efe#$e tht "t $t"%% h$
pe#&"#* -%", for ref(#& or -re&"t, th"$ wo(%& &)er$e%+ ;e-t the *o)er#,e#t re)e#(e
$+$te,. A t!p+er -##ot ref($e to p+ h"$ t!e$ whe# the+ f%% &(e $",p%+ 'e-($e he h$
-%", *"#$t the *o)er#,e#t or tht the -o%%e-t"o# of the t! "$ -o#t"#*e#t o# the re$(%t of
the %w$("t "t P%e& *"#$t the *o)er#,e#t. 8oreo)er, Ph"%e!E$ theor+ tht wo(%&
(to,t"-%%+ pp%+ "t$ HAT "#p(t -re&"tRref(#& *"#$t "t$ t! %"'"%"t"e$ -# e$"%+ *")e r"$e to
-o#f($"o# #& '($e, &epr")"#* the *o)er#,e#t of (thor"t+ o)er the ,##er '+ wh"-h
t!p+er$ -re&"t #& o;$et the"r t! %"'"%"t"e$.
31.
Double Taxation (1997)
Is double taxation a valid defense against the legality of a
tax measure?
SUGGESTED ANSWER:
No, double taxation standing alone and not being forbidden
by our fundamental law is not a valid defense against the
legality of a tax measure (Pepsi Cola v. Tanawan, 69 SCRA
460). However, if double taxation amounts to a direct
duplicate taxation,
1 in that the same subject is taxed twice when it should be
taxed but once,
2 in a fashion that both taxes are imposed for the same
purpose
by the same taxing authority, within the same jurisdiction
or taxing district,
! for the same taxable period and
" for the same #ind or character of a tax
then it becomes legally objectionable
22
Double Taxation; Indirect Duplicate Taxation (1997)
$hen an item of income is taxed in the %hilippines and the
same income is taxed in another country, is there a case of
double taxation?
SUGGESTED ANSWER:
&es, but it is only a case of indirect duplicate taxation which
is not legally prohibited because the taxes are imposed by
di'erent taxing authorities(
2(
Double Taxation; Methods of Avoiding DT (1997)
$hat are the usual methods of avoiding the occurrence of
double taxation?
SUGGESTED ANSWER:
)he usual methods of avoiding the occurrence of double
taxation are*
1 +llowing reciprocal exemption either by law or by
treaty,
2 +llowance of tax credit for foreign taxes paid,
+llowance of deduction for foreign taxes paid,
and
! -eduction of the %hilippine tax rate(
2!
Double Taxation !hat "onstitutes DT# (199$)
., a lessor of a property, pays real estate tax on the
premises, a real estate dealer/s tax based on rental receipts
and income tax on the rentals( . claims that this is double
taxation? 0ecide(
SUGGESTED ANSWER:
sirdondee@gmail.com 9 of 73
)here is no double taxation( 012345 )+.+)I1N
means taxing for the same tax period the same thing or
activity twice, when it should be taxed but once, by the
same taxing authority for the same purpose and with the
same #ind or character of tax( )he -5+4 56)+)5 )+. is
a tax on property, the -5+4 56)+)5 05+45-/6 )+. is
a tax on the privilege to engage in business, while the
IN7185 )+. is a tax on the privilege to earn an income(
)hese taxes are imposed by di'erent taxing authorities and
are essentially of di'erent #ind
T!e$ re wht -")"%"Be& peop%e p+ for -")"%"Be& $o-"et+. The+ re the %"fe'%oo& of the #t"o#.
Th($, $tt(te$ *r#t"#* t! e!e,pt"o#$ re -o#$tr(e& $tr"-"$$"," .(r"$ *"#$t the t!p+er
#& %"'er%%+ "# f)or of the t!"#* (thor"t+. A -%", of t! e!e,pt"o# ,($t 'e -%er%+ $how#
#& '$e& o# %#*(*e "# %w too p%"# to 'e ,"$tQe#. Otherw"$e $tte&, t!t"o# "$ the
r(%e, e!e,pt"o# "$ the e!-ept"o#. 32 The '(r&e# of proof re$t$ (po# the prt+ -%","#* the
e!e,pt"o# to pro)e tht "t "$ "# f-t -o)ere& '+ the e!e,pt"o# $o -%",e&. 34
T:IRD DIHI6ION
LG.R. No. 122@>D. O-to'er 2, 3>>D.M
SUETON CIT9 #& T:E CIT9 TREA6URER OF SUETON CIT9, pet"t"o#er$, )$. A76-C7N
7ROADCA6TING CORPORATION, re$po#&e#t.
29
Taxpa%er &uit; !hen Allo'ed (199$)
$hen may a taxpayer/s suit be allowed?
SUGGESTED ANSWER
+ taxpayer/s suit may only be allowed when an act
complained of, which may include a legislative enactment,
directly involves the illegal disbursement of public funds
derived from taxation :Pas!"al vs. Se!#e$a#% o& P"'li!
Wo#(s, ))0 P*il. ++);(
2<
(o'er of Taxation )*ual (rotection of the +a'
)xecutive 1rder was issued pursuant to law, granting
tax and duty incentives only to businesses and residents
within the =secured area= of the 6ubic 5conomic 6pecial
>one, and denying said incentives to those who live within
the >one but outside such =secured area=( Is the
constitutional right to e?ual protection of the law violated
by the 5xecutive 1rder? 5xplain( :@;
SUGGESTED ANSWER:
No( 5?ual protection of the law clause is subject to
reasonable classiAcation( 7lassiAcation, to be valid, must
:1; rest on substantial distinctions, :2; be germane to the
purpose of the law, :; not be limited to existing conditions
only, :!; apply e?ually to all members of the same class(
)here are substantial di'erences between big investors
being enticed to the =secured area= and the business
operators outside that are in accord with the e?ual
protection clause that does not re?uire territorial uniformity
of laws( )he classiAcation applies e?ually to all the resident
individuals and businesses within the =secured area=( )he
residents, being in li#e circumstances to contributing
directly to the achievement of the end purpose of the law,
are not categoriBed further( Instead, they are similarly
treated, both in privileges granted and obligations re?uired(
35
+ocal Taxation ,ule of -nifor.it% and )*ualit% (/001)
)he 7ity of 8a#ati, in order to solve the tra'ic problem in
its business districts, decided to impose a tax, to be paid by
the driver, on all private cars entering the city during pea#
hours from C*DD a(m( to E*DD a(m( from 8ondays to
Fridays, but exempts those cars carrying more than two
occupants, excluding the driver( Is the ordinance valid?
5xplain( :C@;
SUGGESTED ANSWER:
)he ordinance is in violation of the -ule of 2niformity and
5?uality, which re?uires that all subjects or objects of
taxation, similarly situated must be treated ali#e in e?ual
footing and must not classify the subjects in an arbitrary
manner( In the case at bar, the ordinance exempts cars
carrying more than two occupants from coverage of the
said ordinance( Furthermore, the ordinance only imposes
the tax on private cars and exempts public vehicles from
the imposition of the tax, although both contribute to the
tra'ic problem( )here exists no substantial standard used
in the classiAcation by the 7ity of 8a#ati(
+nother issue is the fact that the tax is imposed on the
driver of the vehicle and not on the registered owner of the
same( )he tax does not only violate the re?uirement of
uniformity, but the same is also unjust because it places the
burden on someone who has no control over the route of
the vehicle( )he ordinance is, therefore, invalid for violating
the rule of uniformity and e?uality as well as for being
unjust(
D(
(o'er of Taxation ,evocation of )xe.pting &tatutes
(1997)
=.= 7orporation was the recipient in 1EED of two tax
exemptions both from 7ongress, one law exempting the
company/s bond issues from taxes and the other exempting
the company from taxes in the operation of its public
utilities( )he two laws extending the tax exemptions were
revo#ed by 7ongress before their expiry dates( $ere the
revocations constitutional?
SUGGESTED ANSWER:
&es( )he exempting statutes are both granted unilaterally by
7ongress in the exercise of taxing powers( 6ince taxation is
the rule and tax exemption, the exception, any tax exemption
unilaterally granted can be withdrawn at the pleasure of the
taxing authority without violating the 7onstitution :,a!$an
Ce'" -n$e#na$ional Ai#po#$ A"$*o#i$%
+).
(urpose of Taxation; +egislative in 2ature (/003)
)axes are assessed for the purpose of generating revenue to
be used for public needs( )axation itself is the power by
which the 6tate raises revenue to defray the expenses of
government( + jurist said that a tax is what we pay for
civiliBation(In our jurisdiction, which of the following
statements may be erroneous* 1; )axes are pecuniary in
nature( 2; )axes are enforced charges and contributions( ;
)axes are imposed on persons and property within
the territorial jurisdiction of a 6tate( !; )axes are levied by the
executive branch of the government( "; )axes are assessed
according to a reasonable rule of apportionment( Gustify your
answer or choice brieHy( :"@;
SUGGESTED ANSWER
A. 4. Taxes are levied by the executive branch of government( )his
statement is erroneous because levy refers to the act of
imposition by the legislature which is done through the
enactment of a tax law( 4evy is an exercise of the power to
tax which is exclusively legislative in nature and character(
7learly, taxes are not levied by the executive branch of
government( (./PC v. Al'a%, )06 SCRA )90 1)9902).
3