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CASE DIGEST (Second Batch for July 20

Mactan Cebu Int’l Airport v Marcos
Doctine: As a general rule, the power to tax is an incident of sovereignty and is unlimited in its range, so that security against its
abuse is to be found only in the responsibility of the legislature w/c imposes the tax. Since taxes are what we pay for civilized
society, or are the lifeblood of the nation, the law frowns against exemptions from taxation and statutes granting tax exemptions
are thus construed strictissimi juris against the taxpayers and liberally in favor of the taxing authority. A claim of exemption from
tax payment must be clearly shown and based on language in the law too plain to be mistaken. Elsewise stated, TAXATION IS THE
RULE, EXEMPTION THEREFROM IS THE EXCEPTION. However, if the grantee of the exemption is a political subdivision or
instrumentality, the rigid rule of construction does not apply. However, it may also be relevant to recall that the original reasons
for the withdrawal of tax exemption privileges granted to GOCCs and all other units of Gov’t were that such privilege resulted in
serious tax base erosion and distortions in the tax treatment of similarly situated enterprises.
1. Petitioner Mactan Cebu Internat’l Airport Authority (MCIAA) was created by virtue of RA 6958, mandated to “principally
undertake the economical, efficient and effective control, management and supervision of the Mactan Internat’l Airport in
the Province of Cebu and the Lahug Airport in Cebu City and such other airports as may be established in the Province of
2. Since the time of its creation, petitioner MCIAA enjoyed the privilege of exemption from payment of realty taxes in
accordance with Section 14 of its Charter
3. In 1994, however, the OIC of Cebu City Treasurer demanded payment for realty taxes on several parcels of land belonging to
the petitioner.
4. Petitioner objected to such demand for payment as baseless and unjustified, claiming in its favour the
a. aforecited Section 14 of RA 6958 w/c exempts it from payment of realty taxes.
b. that it is an instrumentality of the Gov’t performing Gov’tal functions, citing Section 133 of the Local Gov’t Code of
1991 w/c puts limitations on the taxing powers of local Gov’t units.
Can the City of Cebu demand payment of realty taxes on several parcels of land belonging to the petitioner?
Yes. Since the last paragraph of Section 234 unequivocally withdrew, upon the effectivity of the LGC, exemptions from
payment of real property taxes granted to natural or juridical persons, including Gov’t-owned or controlled corporations,
except as provided in the said section, and the petitioner is, undoubtedly, a Gov’t-owned corporation, it necessarily follows
that its exemption from such tax granted it in Section 14 of its Charter, R.A. No. 6958, has been withdrawn.
The power to tax is the most effective instrument to raise needed revenues to finance and support myriad activities of LGUs.
It may also be relevant to recall that the original reasons for the withdrawal of tax exemption privileges granted to GOCCs
and all other units of Gov’t were that such privilege resulted in serious tax base erosion and distortions in the tax treatment
of similarly situated enterprises, and there was a need for these entities to share in the requirements of the development by
paying the taxes and other charges due from them.

Inasmuch as the land on w/c the projected feeder roads were to be constructed belonged then to respondent Zulueta. was null and void. in section 1-C (a) thereof. 1953. hence. Case remanded to lower court for proceedings not contrary to SC ruling. was passed by Congress. RTC upheld the validity of the donation ruling that the same is a contract over w/c petitioner has no interest so he cannot question it. the result is that said appropriation sought a private purpose. w/c. RP senator) and do not connect any Gov’t property or any important premises to the main highway 3. an item of P85. became Republic Act 920. Decision of lower court reversed. such. Issue: Constitutionality of RA 920 Ruling: Referring to the P85. said donation violated the provision of our fundamental law prohibiting members of Congress from being directly or indirectly financially interested in any contract with the Gov’t. (prop of resp Jose Zulueta. w/c was lobbied by Sen. That.Pascual v Sec of Public Works Facts: 1.00 "for the construction. latter on. Zulueta to the municipal council of Pasig and to w/c the senaor also donated 85K 2.000. Pet questions the constitutionality of RA 920. when said bill was approved by the President and the disbursement of said sum became effective. repair. entitled "An Act Appropriating Funds for Public Works". extension and improvement" of Pasig feeder road terminals. and hence. the legality thereof depended upon whether said roads were public or private property when the bill. and. is unconstitutional 4. approved on June 20.000. contained. not yet constructed w/in Antonio Subd. or. the aforementioned feeder roads were nothing but projected and planned subdivision roads. At the time of the passage and approval of said Act. reconstruction.00 appropriation for the projected feeder roads in question. .

No. That the fees were collected from sugar producers. "administered in trust' for the purpose intended. 388 and that the stabilization fees collected are considered Gov’t funds under the Gov’t Auditing Code Issues: 1. Respondents argue that no trust results from Section 7 of P." a "Development and Stabilization Fund. Ruling: 1. or public funds 2. whether the stabilization fees collected from sugar planters and millers pursuant to Section 7 of P. That is the essence of the trust intended. the balance. if any. w/c is within the power of the State to impose for the promotion of the sugar industry. to be. The collections made accrue to a "Special Fund.D." 3. Although said Executive Order abolished the PHILSUCOM. NO. its existence as a juridical entity was mandated to continue for three (3) more years "for the purpose of prosecuting and defending suits by or against it and enables it to settle and close its affairs. to provide means for the stabilization of the sugar industry. and that the funds were channeled to the purchase of shares of stock in respondent Bank do not convert the funds into a trust fired for their benefit nor make them the beneficial owners of the shares so purchased. in the language of the statute. It is levied with a regulatory purpose. to dispose of and convey its property and to distribute its assets. the revenues collected are to be treated as a special fund. . The levy is primarily in the exercise of the police power of the State." The tax collected is not in a pure exercise of the taxing power. is to be transferred to the general funds of the Gov’t.00 oer picul from proceeds of sdaid sugar producers from 1978-79 4. Having been levied for a special purpose. planters and millers. filed w/SC a writ of mandamus commanding Republic Planters Bank to distribute the shares of Philsucom to sugar planters who are its true and beneficial owners as these were from deductions of P1. Once the purpose has been fulfilled or abandoned. Respondent Philippine Sugar Commission (PHILSUCOM. The Stabilization Fund is to be utilized for the benefit of the entire sugar industry Facts: 1. whether shares of stock in respondent Bank paid for with said stabilization fees belong to the PHILSUCOM or to the different sugar planters and millers from whom the fees were collected or levied. Republic Planters Bank Doctrine: To rule in petitioners' favor would contravene the general principle that revenues derived from taxes cannot be use d for purely private purposes or for the exclusive benefit of private persons. 388 are funds in trust for them.D. sugar producers. No. The stabilization fees collected are in the nature of a tax. Petitioners.Gaston vs. for short) was formerly the Gov’t office tasked with the function of regulating and supervising the sugar industry until it was superseded by its co-respondent Sugar Regulatory Administration under EO 18 (1986) 2. 2.

If a. together with prostitution. The power of LGUs to "impose taxes and fees" is always subject to "limitations" w/c Congress may provide by law. 3. c. b. drug trafficking and other vices. rules and regulations. Under its Charter. from paying any "tax of any kind or form. are accordingly repealed.D. And if Congress can grant the City of Manila the power to tax certain matters. c. But the prohibition of gambling does not mean that Gov’t cannot regulate it in the exercise of its police power. while most other forms of gambling are outlawed. charges or levies of whatever nature. as well as fees. To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines. being a mere Municipal corporation has no inherent right to impose taxes. PAGCOR was created under P. 1983. the exemption clause in P. On July 11." its "exemption clause" remains as an exception to the exercise of the power of local Gov’ts to impose taxes and fees. b. police power is inborn in the very fact of statehood and sovereignty. Local Gov’ts have no power to tax instrumentalities of the Nat’l Gov’t. P. it violates the equal protection clause of the constitution in that it legalizes PAGCOR — conducted gambling. as the franchise holder. Constitutionality of PD 1896. PD 1869. 1869 constitutes a waiver of the right of the City of Manila to impose taxes and legal fees. Gambling in all its forms. Along with the taxing power and ED.D. 1869 to enable the Gov’t to regulate and centralize all games of chance authorized by existing franchise or permitted by law. income or otherwise. Since PD 1869 remains an "operative" law until "amended. unless allowed by law." The Charter of the City of Manila is subject to control by Congress being a municipal corporation w/c is a mere creature of Congress. Its "power to tax" therefore must always yield to a legislative act w/c is superior having been passed upon by the state itself w/c has the "inherent power to tax." Facts: 1. is generally prohibited. repealed or revoked.D. it can also provide for exemptions or even take back the power. Constitutional a. all laws. Their "power to tax" therefore must always yield to a legislative act w/c is superior having been passed upon by the state itself w/c has the "inherent power to tax. amended or modified. ." Issue: 1. 1869. It cannot therefore be violative but rather is consistent with the principle of local autonomy.D. decrees.Basco v PAGCOR Doctrine: Local Gov’ts have no power to tax instrumentalities of the Nat’l Gov’t. 2. PAGCOR is a Gov’t owned or controlled corporation with an original charter. (2) of P. Under its Charter's repealing clause. Section 13 par. whether Nat’l or Local. PAGCOR is exempted. inconsistent therewith. The City of Manila. 1869 is violative of the principle of local autonomy Ruling: 1. LGUs. being mere Municipal corporations have no inherent right to impose taxes. executive orders.

authorize the President to fix within specified limits.. Most commonly. the pertinent provisions thereof.. import and export quotas.00 per liter of imported oil products. tonage and wharfage dues. 3. The President then issued EO No. and private bills shall originate exclusively in the Congress 2. 104. 2. including crude oil and other oil products. it has been held that "customs duties" is "the name given to taxes on the importation and exportation of commodities. a. customs duties. The Tariff Commission held public hearings on said EO and submitted a report to the President for consideration and appropriate action. the President. w/c levied (in addition to the aforementioned additional duty of nine percent (9%) ad valorem and all other existing ad valorem duties) a special duty of P0. and other duties or imposts within the framework of the nat’l development program of the Gov’t. W/N EO Nos. 478. tariff rates. 475 was issued by the President. dated 23 August 1991.05 per barrel of imported crude oil and P1. 438 w/c imposed. upon recommendation of NEDA is hereby empowered: (1) to increase. 401. In the interest of nat’l economy. 4. The relevant congressional statute is the Tariff and Customs Code of the Philippines. and subject to such limitations and restrictions as it may impose. to increase. w/c constitute taxes in the sense of exactions the proceeds of w/c become public funds — have either or both the generation of revenue and the regulation of economic or social activity as their moving purposes Facts: 1. Meantime. 475 and 478 are violative of the Consti w/c provides that all appropriation. chapters. according to petitioner. 34 and all subsequent amendments issued under Executive Orders and Presidential Decrees are hereby adopted and form part of this Code. reduce or remove tariff duties. revenue or tariff bills.95 per liter or P151.. by law. Issues: 1. headings and subheadings and the rates of import duty under Section 104 of PD No. All tariff sections. . The President issued an EO No. general welfare and/or nat’l security. Thus. EO No.Garcia v ES Doctrine: Customs duties w/c are assessed at the prescribed tariff rates are very much like taxes w/c are frequently imposed for both revenue-raising and for regulatory purposes. W/N the questioned EOs contravene the Tariff and Customs Code. bills authorizing increase of the public debt. on 15 August 1991 reducing the rate of additional duty on all imported articles from nine percent (9%) to five percent (5%) ad valorem. 2. There is explicit constitutional permission to Congress to authorize the President "subject to such limitations and restrictions is [Congress] may impose" to fix "within specific limits" "tariff rates and other duties or imposts Section 28(2) of Article VI of the Constitution provides as follows: The Congress may. except in the cases of crude oil and other oil products w/c continued to be subject to the additional duty of nine percent (9%) ad valorem. additional (5%) duty ad valorem. ONLY when necessary to protect local industries or products but not for the purpose of raising additional revenue for the Gov’t Ruling: 1. across the board. Sec. reduce or remove existing protective rates of import duty. bills of local application. and subject to the limitations herein prescribed.. The rates of duty herein provided or subsequently fixed pursuant to Section 401 of this Code shall be subject to periodic investigation by the Tariff Commission and may be revised by the President upon recommendation of the NEDA b. w/c Section authorizes the President. and Sections 104 and 401.

Philippine territory. Philippine territory. In order that a foreign corporation may be regarded as doing business within a State. 37 of the Tax Code is not an all-inclusive enumeration of items to be considered as sources of income. From 1959 to 1972. and occurred within. taxable. and the source of an income is that activity . 2. it is sufficient that the income is derived from activity within the Philippines. profits. Therefore. trades. The site of the source of payments is the Philippines. The activities performed by the agent for BOAC were in exercise of the functions which are normally incident to. But it maintained a general sales agent in the Philippines which was responsible for selling BOAC tickets covering passengers and cargoes.. British overseas airways corp. (BOAC) a wholly owned British Corporation. Issue: 1. accordingly. The source of an income is the property. The definition is broad and comprehensive to include proceeds from sales of transport documents. W/N the revenue derived by BOAC from sales of tickets in PH for air transportation. commerce. For the source of income to be considered as coming from the Philippines. while having no landing rights here. Facts: 1. 2.CIR v BOAC Doctrine: The flow of wealth proceeded from. Ruling: 1. BOAC. W/N during the fiscal years in question BOAC is a resident foreign corporation doing business in PH or has an office or place of business in PH. and income derived from salaries. Sec. the purpose and object of its organization as an international air carrier. . It is our considered opinion that BOAC is a resident foreign corporation. and income derived from any source whatever. "Gross income" includes gains. 4. it has no landing rights for traffic purposes in the Philippines and was not granted a Certificate of public convenience and necessity to operate in the Philippines by the Civil Aeronautics Board 3. the flow of wealth should share the burden of supporting the government. the flow of wealth should share the burden of supporting the government.. which produced the income. and occurred within. The CIR assessed deficiency income taxes against BOAC. organized and existing under the laws of the United Kingdom. The flow of wealth proceeded from. and. although there was no mention of transportation. In BOAC's case. The test of taxability is the "source". vocations. activity or service that produced the income. and not one of a temporary character. The tickets exchanged hands here and payments for fares were also made here in Philippine currency. and are in progressive pursuit of. maintained a general sales agent in the Philippines. 2. or from profession. there must be continuity of conduct and intention to establish a continuous business. In consideration of such protection. is engaged in international airlines business. during the periods covered by the subject assessments. enjoying the protection accorded by the Philippine government. constitute income of BOAC from Philippine sources. business. sales. such as the appointment of a local agent. In consideration of such protection. the sale of tickets in the Philippines is the activity that produces the income. enjoying the protection accorded by the Philippine government. wages or compensation for personal service of whatever kind and in whatever form paid. it may be included.

the generation of sales being the paramount objective. Indeed. the sale of tickets is the very lifeblood of the airline business. it was taxable only on income from Philippine sources as determined under Section 37 of the Tax Code. 2. for years 1959 through 1963 6. 4.CIR v Japan Airlines Facts: 1. literature and other information playing up the attractions of Japan as a tourist spot and the services enjoyed in JAL planes. 3. resident foreign corporations are taxed thirty percentum (30%) upon the amount by which their total net income exceed one hundred thousand pesos. and in progressive prosecution of commercial gain or for the purpose and object of the business organization. 1957. In 1957. 466 otherwise known as the "National Internal Revenue Code of 1939". and contemplates. The term implies continuity of commercial dealings and arrangements. and there being no such income during the period in question. However. There is no specific criterion as to what constitutes `doing' or `engaging in' or `transacting' business. plane tickets and reservations for cargo spaces which were used by the passengers or customers on the facilities of JAL. JAL had maintained an officeat Manila w/c did not sell tickets but was maintained merely for the promotion of the company's public relations and to hand out brochures. 5. JAL received deficiency income tax assessment notices and a demand letter from CIR inclusive of 50% surcharge and interest. 2. In 1972. since mid-July. Under Section 24 of Commonwealth Act No. Respondent Japan Air Lines (JAL) is a foreign corporation engaged in the business of international air carriage. it was not liable for the deficiency income tax liabilities assessed Issues: 1. JAL did not have planes that lifted or landed passengers and cargo in the Philippines as it had not been granted then by the Civil Aeronautics Board (CAB) a certificate of public convenience and necessity to operate here. W/N JAL IS A FOREIGN CORPORATION ENGAGED IN TRADE OR BUSINESS IN THE PHILIPPINES. JAL protested and said assessments alleging that as a non-resident foreign corporation. the applicable law in the case at bar. doing business in the Philippines. From 1959 to 1963. the performance of acts or works or the exercise of some of the functions normally incident to. JAL constituted the PAL as its general sales agent in the Philippines. there can be no conclusion other than that JAL is a resident foreign corporation. JAL is liable to pay 30% of its total net income for the years 1959 through 1963 . There being no dispute that JAL constituted PAL as local agent to sell its airline tickets. 2. W/N PROCEEDS FROM SALES OF JAL TICKETS SOLD IN THE PHILIPPINES ARE TAXABLE AS INCOME FROM SOURCES WITHIN THE PHILIPPINES. It sold for and in behalf of JAL. Ruling: 1. to that extent.

NOT liable under the city tax ordinance. or is a necessary consequence of its main or principal business of bottling. as amended. Truck sales were made independently of transactions in the main office. Thus. tru-orange. (2) manufacture and (3) bottling of softdrinks. First is when the principal business of manufacturing. It is clear from the ordinance that three types of activities are covered: (1) distribution. as manufacturer's sales tax on all the softdrinks it manufactures On July 12. 6. independently of its business of bottling them. The delivery trucks were therefore much the same as the stores and warehouses under the second marketing system. a manufacturer does not necessarily become engaged in the separate business of selling simply because it sells the products it manufactures. b. where in turn actual deliveries are made. 2. Second is when the company is engaged in a separate business of selling. 28. it stopped paying the tax Pet contends it must not be bound to pay said tax anymore bec a. The second ground is manifestly devoid of merit. The warehouses only serve as storage sites and delivery points of the products earlier sold at the main office. Here. . seven-up and other soft drinks within the jurisdiction of the City of Iloilo. its activity of selling is merely an incident to. It is a tax on the privilege of distributing. In the case at bar. privileges or businesses are done or performed within the jurisdiction of said authority. Series of 1960 which ordinance was successively amended by Ordinance No. manufacturing or bottling softdrinks. This Court has always recognized that the right to manufacture implies the right to sell/distribute the manufactured products. 5. manufacturer enters into sales transactions and invoices the sales at its main office where purchase orders are received and approved before delivery orders are sent to the company's warehouses. There are two marketing systems in manufacturing of products: a. in Iloilo City. filed a complaint docketed as Civil Case No. which amount allegedly constituted payments of municipal license taxes under Ordinance No. it can be levied by the taxing authority only when the acts. imposes municipal license tax on all firms engaged in the distribution. for tax purposes. Pet is engaged in the business of bottling softdrinks under the trade name of Pepsi Cola And 7-up and selling the same to its customers. Iloilo Bottlers. 3. It is not a distributor as it sells products directly to consumers plaintiff is already paying the National Government a percentage Tax of 71/t. Facts: 1. W/N pet is engaged in the independent business of distributing soft-drinks. Hence. sales transactions are entered into and perfected at stores or warehouses maintained by the company.329. 7.Iloilo Bottlers v City of Iloilo Doctrine: The tax imposed under Ordinance No. 2. Sales were made by Iloilo Bottlers. W/N it is liable to pay tax under the ordinance when it is not a manufacturer or bottler w/plant inside the territorial jurisdiction of the city Ruling: 1. that the company paid under protest. Series of 1960. pepsi cola. Any one who desires to purchase the product may go to the store or warehouse and there purchase the merchandise.1972. the company distributed its softdrinks by means of a fleet of delivery trucks which went directly to customers in the different places in lloilo province. We have no option but to declare the company liable under the tax ordinance. 5 series of 1960. A person engaged in any or all of these activities is subject to the tax. def. Inc. Inc. 5 is an excise tax. 9046 with the Court of First Instance of Iloilo praying for the recovery of the sum of P3. It is situated outside the City of Iloilo and b. Syjuco was paying the abovementioned municipal tax but when pet transferred the plant. manufacture or bottling of coca-cola. 4. Being an excise tax. A certain Santiago Syjuco sold its Iloilo bottling plant to pet in 1966 w/c was later transferred to a diff municipality but is still in Iloilo Before the sale. Issues: 1.20. with a bottling plant situated at Iloilo and which is outside the jurisdiction of def] Ordinance No. a corporation was engaged in the separate business of selling or distributing soft-drinks. 5. 2. Here.

jurisdiction based on distinct grounds. oppressive or discriminatory. their situs is in the domicile of the owner and their transmission by death necessarily takes place under his domiciliary laws Ruling: 1. Wells Fargo Bank & Union Trust Company. resolution has proceeded upon express or implied recognition of the sovereign taxing power as exerted by governments in the exercise of jurisdiction upon any one of these grounds. Birdie Lillian Eye. The settled law in the United States is that intangibles have only one situs for the purpose of inheritance tax. Facts: 1. left her one-half conjugal share in 70. 5. unless the law involved is challenged. Petitioner-appellant. the actual situs of the shares of stock is in the Philippines. which is not. like the shares of stock. Respondent Collector of Internal Revenue sought to subject anew the aforesaid shares of stock to the Philippine inheritance tax. to which petitioner-appellant objected. Accordingly. 4. In the instant case. organized and existing under the laws of the Philippines 2. a single location in space is hardly possible. But it has been relaxed because of either of two fundamental considerations: (1) upon the recognition of the inherent power of each government to tax persons. the corporation being domiciled therein. the protection of its laws. and (2) upon the principle that as to intangibles. thus. an anonymous partnership. holding that the transmission by will of the said 35. as. was duly appointed trustee 3. considering the multiple. provides that every transmission by virtue of inheritance of any share issued by any corporation of sociedad anonima organized or constituted in the Philippines.Wells Fargo v CIR Doctrine: If that power of the PH to tax is to be conceded.000 shares of stock is subject to Philippine inheritance tax. distinct relationships which may be entered into with respect thereto. The Federal and State of California's inheritance taxes due on said shares have been duly paid. on considerations repugnant to such guaranty of due process or that of the equal protection of the laws. who died in LA. properties and rights within its jurisdiction and enjoying. when the law is alleged to be arbitrary. W/N as to intangibles. As jurisdiction may exist in more than one government. . that is. CFI rendered judgment.000 shares of stock in the Benguet Consolidated Mining Company. is subject to the tax therein provided. as amended. the guaranty of due process cannot certainly be invoked to frustrate it. the jurisdiction of the Philippine Government to tax must be upheld. and that such situs is in the domicile of the decedent at the time of his death. California. Issue: 1. Section 1536 of the Administrative Code. This provision has already been applied to shares of stock in a domestic corporation which were owned by a British subject. The owner residing in California has extended here her activities with respect to her intangibles so as to avail herself of the protection and benefit of the Philippine laws.

1383. would merely have the effect of taking money from one pocket to put it in another pocket. Provincial Assessor of Laguna assessed. NWSA protested claiming that the property described under Tax Declaration No. and that it is owned by the Gov’t as well as all property comprising waterworks and sewerage systems placed under it 2. Upon the other hand. whether national or local. in exempting from taxation "property owned by the Republic of the Philippines. We ruled that the assets of the water system of the City of Cebu. NWSA is a public corporation created by virtue of Republic Act No. with respect to the Cabuyao-Sta. in the final analysis. and a tax on property of the Government. in the final analysis. it would not serve. and a tax on property of the Government. properties of all the existing local government-owned waterworks and sewerage systems all over the Philippines. By the time of the take-over of CSB Waterworks System. 470 makes no distinction between property held in a sovereign. Under RA 1383. whether national or local. W/N CSB is held by the gov’t in its proprietary character and is therefore taxable 2. Rosa-Biñan (CSB) Waterworks System owned by the Province of Laguna were taken over by NWSA 3. any province. Facts: 1. And where the law does not distinguish neither may we. Hence. governmental or political capacity and those possessed in a private. but that all its surplus income are not declared as profits as this surplus are or may be invested for the expansion thereof 4. not in its governmental capacity. NWSA Doctrine: Taxes are financial burdens imposed for the purpose of raising revenues with which to defray the cost of the operation of the Government. Laguna v CTA. pursuant to the provisions of Republic Act No. . the same was self-supporting and revenue-producing." said section 3(a) of Republic Act No. 1383 6. . Board of Assessment Appeals overruled the protest Issues: 1. municipality or municipal district . the property comprising CSB 5. would merely have the effect of taking money from one pocket to put it in another pocket. city. which the NAWASA had sought to take over. the main purpose of taxation. . 2. W/N all corporations. 5987 are exempted from the payment of real estate taxes in view of the nature and kind of said property and functions and activities of petitioner.. proprietary or patrimonial character. 104 Ruling: 1. including the Cabuyao-Sta. agencies or instrumentalities owned or controlled by the Government are subject to taxation under RA No. which held it in a proprietary character.Board of Assessment Appeals. Taxes are financial burdens imposed for the purpose of raising revenues with which to defray the cost of the operation of the Government. it would not serve. the main purpose of taxation. Hence. Rosa-Biñan Waterworks System — are patrimonial property of said city. for purposes of real estate taxes. 1383 — as it did in the case at bar. as provided in RA No.