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1) GOMEZ v. PALOMAR, GR No. L-23645, October 29, 1968 (25 SCRA 827)
Petitioner Benjamin Gomez mailed a letter at the post office in San Fernando, Pampanga. It
did not bear the special anti-TB stamp required by the RA 1635. It was returned to the petitioner.
Petitioner now assails the constitutionality of the statute claiming that RA 1635 otherwise known
as the Anti-TB Stamp law is violative of the equal protection clause because 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 exemptions. The law in
question requires an additional 5 centavo stamp for every mail being posted, and no mail shall
be delivered unless bearing the said stamp.
Is the Anti-TB Stamp Law unconstitutional, for being allegedly violative of the equal
protection clause?
No. It is settled that the legislature has the inherent power to select the subjects of taxation and
to grant exemptions. This power has aptly been described as "of wide range and flexibility."
Indeed, it is said that in the field of taxation, more than in other areas, the legislature possesses
the greatest freedom in classification. The reason for this is that traditionally, 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. The classification of mail users is based on the ability to pay, the
enjoyment of a privilege and on administrative convenience. Tax exemptions have never been
thought of as raising revenues under the equal protection clause.
2) LUTZ v. ARANETA, GR No. L-7859, December 22, 1955 (98 PHIL 148)
Plaintiff Walter Lutz, in his capacity as judicial administrator of the intestate estate of
Antionio Ledesma, sought to recover from the CIR the sum of P14,666.40 paid by the estate as
taxes, under section 3 of the CA 567 or the Sugar Adjustment Act thereby assailing its
constitutionality, for it provided for an increase of the existing tax on the manufacture of sugar,
alleging that such enactment is not being levied for a public purpose but solely and exclusively
for the aid and support of the sugar industry thus making it void and unconstitutional. The sugar
industry situation at the time of the enactment was in an imminent threat of loss and needed to
be stabilized by imposition of emergency measures.
Is CA 567 constitutional, despite its being allegedly violative of the equal protection
clause, the purpose of which is not for the benefit of the general public but for the rehabilitation
only of the sugar industry?
Yes. The protection and promotion of the sugar industry is a matter of public concern, it
follows that the Legislature may determine within reasonable bounds what is necessary for its
protection and expedient for its promotion. Here, the legislative discretion must be allowed to
fully play, subject only to the test of reasonableness; and it is not contended that the means
provided in the law bear no relation to the objective pursued or are oppressive in character. If
objective and methods are alike constitutionally valid, no reason is seen why the state may not
levy taxes to raise funds for their prosecution and attainment. Taxation may be made the
implement of the state's police power.

thereby amending the city charter empowering it to fix the license fee and regulate businesses. discourages. 4) CITY OF BAGUIO vs. the flagrant violation of intellectual property rights. The power to impose taxes is one so unlimited in force and so searching in extent. confiscatory. entity or corporation doing business in the City. De Leon was assessed for P50 annual fee it being shown that he was engaged in property rental and deriving income therefrom." FACTS: The petitioner assails the validity of PD 1987 entitled an "Act creating the Videogram Regulatory Board. The ordinance sourced its authority from RA No. 329. Petitioner contends that aside from its being a rider and not germane to the subject matter thereof. It was imposed primarily to answer the need for regulating the video industry. and violates the requirement of uniformity. The levy of the 30% tax is for a public purpose. June 18. in general." FACTS: The City of Baguio passed an ordinance imposing a license fee on any person. except such as those rest in the discretion of the authority which exercises it. October 31. ISSUE: Is PD 1987 a valid exercise of taxing power of the state? HELD: Yes. a sufficient security against erroneous and oppressive taxation. that the courts scarcely venture to declare that it is subject to any restrictions whatever. and that there it imposed double taxation. L-24756. The latter assailed the validity of the ordinance arguing that it is ultra vires for there is no statury authority which expressly grants the City of Baguio to levy such tax. GR No. oppressive and/or unlawfully restraints trade in violation of the due process clause of the Constitution. and the proliferation of pornographic video tapes. the legislature acts upon its constituents. the tax remains a valid imposition. DE LEON. And while it was also an objective of the DECREE to protect the movie industry. 1968 (25 SCRA 938) "There is no double taxation where one tax is imposed by the state and the other is imposed by the city." citing especially Section 10 thereof. VRB. which imposes a tax of 30% on the gross receipts payable to the local government. and such imposition was being harsh. It is beyond serious question that a tax does not cease to be valid merely because it regulates. L-75697. The public purpose of a tax may legally exist even if the motive which impelled the legislature to impose the tax was to favor one industry over another. particularly because of the rampant film piracy. In imposing a tax.3) TIO vs. This is. GR No. or even definitely deters the activities taxed. trades and occupations as may be established or practiced in the City. 1987 (151 SCRA 208) "The public purpose of a tax may legally exist even if the motive which impelled the legislature to impose the tax was to favor one industry over another. ISSUE: Are the contentions of the defendant-appellant tenable? HELD: .

The entrusting of the collection of the fees does not destroy the public purpose of the ordinance. And third. derived from such expenditure. which regulates public markets and prescribes fees for rentals of stalls. RAMIREZ. not yet constructed within the Antonio Subdivision. It is not dependent on the nature or character of the person or corporation whose intermediate agency is to be used in applying it. The people may be taxed for a public purpose. it does not matter whether the agency through which the money is dispensed is public or private. and the government also gains from the donation of the land supposed to be occupied by the streets. situated at Pasig. Some of the feeder roads. calling or activity by both the state and the political subdivisions thereof." ISSUE: Does the delegation of the collection of taxes to a private entity invalidates a tax ordinance and defeats its public purpose? HELD: No. thus the ordinance cannot be considered ultra vires for there is more than ample stature authority for the enactment thereof. 7522 was not made for the corporation but for the purpose of raising revenues for the city. GR No. so that where. private respondent bewails that the market stall fees imposed in the disputed City Ordinance No. The fees collected do not go direct to the private coffers of the corporation. L-10405. 5) BAGATSING vs. SECRETARY OF PUBLIC WORKS. That is the object it serves. 1976 (74 SCRA 306) "The entrusting of the tax collection to private entities does not destroy the public purpose of a tax ordinance. with injunction. however. as here. is merely incidental in the promotion of a particular enterprise." FACTS: Aside from the issue on publication. are diverted to the exclusive private use of the Asiatic Integrated Corporation since the collection of said fees had been let by the City of Manila to the said corporation in a "Management and Operating Contract. made by its owner to the government. The respondents' contention is that there is public purpose because people living in the subdivision will directly be benefitted from the construction of the roads. belonging to private respondent Zulueta. and which projected feeder roads do not connect any government property or any important premises to the main highway." FACTS: Governor Wenceslao Pascual of Rizal instituted this action for declaratory relief. Ordinance No. Rizal. December 17. although it be under the direction of an individual or private corporation. an argument against double taxation may not be invoked where one tax is imposed by the state and the other is imposed by the city. 1960 (110 PHIL 331) "A law appropriating the public revenue is invalid if the public advantage or benefit. purpose and object for which the fund is raised. 6) PASCUAL vs. First. violation of uniformity is out of place 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. 920. were nothing but projected and planned subdivision roads. RA 329 was enacted amending Section 2553 of the Revised Administrative Code empowering the City Council not only to impose a license fee but to levy a tax for purposes of revenue. The assumption is of course saddled on erroneous premise. . Congress has clearly expressed its intention. The right to tax depends upon the ultimate use. December 29. which apropriates funds for public works particularly for the construction and improvement of Pasig feeder road terminals. the statute must be sustained even though double taxation results. 7522.No. Second. upon the ground that RA No. L-41631. GR No. as alleged and as contained in the tracings attached to the petition. So long as the purpose is public.

The CTA position was that income from transportation is income from services so that the place where services are rendered determines the source. may be ultimately benefited by their promotion. 7) COMMISSIONER vs. The tickets exchanged hands here and payments for fares were also made here in Philippine currency. The site of the source of payments is the Philippines. although during the period covered by the assessments. 1987 (149 SCRA 395) "The source of an income is the property. L-65773-74 April 30. it did not carry passengers and/or cargo to or from the Philippines. activity or service that produced the income. The CTA sided with BOAC citing that the proceeds of sales of BOAC tickets do not constitute BOAC income from Philippine sources since no service of carriage of passengers or freight was performed by BOAC within the Philippines and. Ltd. it is sufficient that the income is derived from activity within the Philippines. In consideration of such protection. Philippine territory. and is engaged in the international airline business. and not the magnitude of the interest to be affected nor the degree to which the general advantage of the community. GR No. it is admitted that BOAC had no landing rights for traffic purposes in the Philippines. For such source to be considered as coming from the Philippines.. Consequently. It is a general rule that the legislature is without power to appropriate public revenue for anything but a public purpose. the sale of tickets in the Philippines is the activity that produces the income. and thus the public welfare. although each advantage to individuals might incidentally serve the public. The source of an income is the property. During the periods covered by the disputed assessments. while having no landing rights here. . and accordingly. taxable? HELD: Yes. enjoying the protection accorded by the Philippine government.The test of the constitutionality of a statute requiring the use of public funds is whether the statute is designed to promote the public interest. Incidental to the public or to the state.ISSUE: Should incidental gains by the public be considered "public purpose" for the purpose of justifying an expenditure of the government? HELD: No. therefore. said income is not subject to Philippine income tax. ISSUE: Are the revenues derived by BOAC from sales of ticket for air transportation. It is the essential character of the direct object of the expenditure which must determine its validity as justifying a tax. In BOAC's case. BOAC. For the source of income to be considered as coming from the Philippines. constitute income of BOAC from Philippine sources. it is sufficient that the income is derived from activity within the Philippines. BOAC is a 100% British Government-owned corporation organized and existing under the laws of the United Kingdom. as opposed to the furtherance of the advantage of individuals. which results from the promotion of private interest and the prosperity of private enterprises or business. does not justify their aid by the use public money." FACTS: Petitioner CIR seeks a review of the CTA's decision setting aside petitioner's assessment of deficiency income taxes against respondent British Overseas Airways Corporation (BOAC) for the fiscal years 1959 to 1971. the flow of wealth should share the burden of supporting the government. The flow of wealth proceeded from. and occurred within. it maintained a general sales agent in the Philippines — Wamer Barnes and Company. activity or service that produced the income. and later Qantas Airways — which was responsible for selling BOAC tickets covering passengers and cargoes.

CIR. contends that CTA failed to consider the following: sales to PASAR and PHILPOS within the EPZA as zero-rated export sales. and that petitioner failed to submit substantial evidence to support its claim for refund/credit. evaluated and audited by said CPA should substantiate its claims. 70% of the company's sales must consists of exports. and that sales to PASAR and PHILPOS inside the EPZA are taxed as exports because these export processing zones are to be managed as a separate customs territory from the rest of the Philippines. 1993. the 2-year prescriptive period should be counted from the date of filing of the last adjustment return which was April 15. It is regarded as in derogation of the sovereign authority. The petitioner. Although the Court agreed with the petitioner corporation that the two-year prescriptive period for the filing of claims for refund/credit of input VAT must be counted from the date of filing of the quarterly VAT return. ISSUE: Did the petitioner corporation sufficiently establish the factual bases for its applications for refund/credit of input VAT? HELD: No. 103) "The taxpayer must justify his claim for tax exemption or refund by the clearest grant of organic or statute law and should not be permitted to stand on vague implications. a VAT-registered taxpayer engaged in mining." "Export processing zones (EPZA) are effectively considered as foreign territory for tax purposes. on the other hand. production. filed claims with the BIR for refund/credit of input VAT on its purchases of capital goods and on its zero-rated sales in the taxable quarters of the years 1990 and 1992. 1994). and that the certification of the independent CPA attesting to the correctness of the contents of the summary of suppliers’ invoices or receipts examined. and should be construed in strictissimi juris against the person or entity . and sale of various mineral products. 141104 & 148763. that the same were not filed within the 2-year prescriptive period (the claim for 1992 quarterly returns were judicially filed only on April 20. and thus. GR Nos. 2007 (524 SCRA 73. for tax purposes. BIR did not immediately act on the matter prompting the petitioner to file a petition for review before the CTA. The latter denied the claims on the grounds that for zero-rating to apply." FACTS: Petitioner Corporation.8) ATLAS CONSOLIDATED MINING DEVT CORP vs. and not on every end of the applicable quarters. June 8. Tax refunds are in the nature of tax exemptions. it still denies the claims of petitioner corporation for refund of its input VAT on its purchases of capital goods and effectively zero-rated sales during the period claimed for not being established and substantiated by appropriate and sufficient evidence. are effectively considered as foreign territory.

And where the law does not distinguish neither may we. Indeed. Hence.claiming the exemption. The petitioner denied the protest arguing that such real properties are subject to real estate tax because although said properties belong to the Republic of the Philippines. allegedly. whether national or local. Moreover." FACTS: National Waterworks and Sewerage Authority (NWSA). May 31. not in its governmental. CTA. unless there are facts and circumstances clearly showing that the lawmaker intended the contrary. than from that of domain. It was assessed by the Provincial Assessor of Laguna. Rosa-Biñan Waterworks System in 1956. on the real properties owned by Cabuyao Waterworks. 9) BOARD OF ASSESSMENT APPEALS OF LAGUNA vs. Republic Act No. proprietary or patrimonial character. expenses it would entail. political or sovereign capacity. and a tax on property of the Government. proprietary or patrimonial character. 470. 470 makes no distinction between property held in a sovereign. the same holds it. is not covered by the exemption contained in section 3(a) of Republic Act No. GR No. which. would merely have the effect of taking money from one pocket to put it in another pocket. on account of the paper work. a public corporation owned by the Government of the Philippines as well as all property comprising waterworks and sewerage systems placed under it. the noun "property" and the verb "owned" used in said section 3(a) strongly suggest that the object of exemption is considered more from the view point of dominion. 1963 (8 SCRA 224) "A tax on property of the Government. it would not serve. The respondent protested claiming it is exempted from the payment of real estate taxes in view of the nature and kind of said property and functions and activities of petitioner. in the final analysis. taxes are financial burdens imposed for the purpose of raising revenues with which to defray the cost of the operation of the Government. for purposes of real estate taxes. time and consequently. would merely have the effect of taking money from one pocket to put it in another pocket. it would tend to defeat it. What is more. whether national or local. ISSUE: Are the real properties owned by the respondent public corporation subject to real estate tax? HELD: No. . L-18125. took over the Cabuyao-Sta. but in a private. the main purpose of taxation. but no such facts and circumstances have been brought to our attention. governmental or political capacity and those possessed in a private. The taxpayer who claims for exemption must justify his claim by the clearest grant of organic or statute law and should not be permitted to stand on vague implications.

11) PEPSI-COLA BOTTLING CO. February 27. ISSUE: Are the contentions of the appellant tenable? HELD: .S. Sales by local dealers. Ordinance 23 levies and collects from soft drinks producers and manufacturers a tax of one-sixteenth (1/16) of a centavo for every bottle of soft drink corked. and collected by the latter. shipped to the agents and/or consignees by outside dealers or any person or company having its actual business outside the City.) of volume capacity. also. L-22814. excessive. vs. otherwise known as the Local Autonomy Act. and (4) the classification applies equally to all those who belong to the same class. INC. to be valid. amounts to double taxation. not acting for or on behalf of other merchants. unconstitutional as an undue delegation of taxing authority as well as to declare Ordinances Nos.. appellant contends that it allows double taxation. and constitutes an invalid delegation of the power to tax. to be valid. The tax levied is discriminatory. CITY OF BUTUAN. and hence. oppressive and confiscatory. it would still be invalid. null and void.10) PEPSI-COLA BOTTLING CO. since only sales by "agents or consignees" of outside dealers would be subject to the tax. Even if the burden in question were regarded as a tax on the sale of said beverages. highly unjust and discriminatory.01) on each gallon (128 fluid ounces. FACTS: Plaintiff-appellant Pepsi-Cola commenced a complaint with preliminary injunction to declare Section 2 of Republic Act No. 110 which plaintiff assails as null and void because it partakes of the nature of an import tax. 1976 (69 SCRA 460) "Legislative power to create political corporations for purposes of local self-government carries with it the power to confer on such local governmental agencies the power to tax. It is true that the uniformity essential to the valid exercise of the power of taxation does not require identity or equality under all circumstances.. Leyte. and that the subject ordinances are void for they impose percentage or specific tax. liquors and other carbonated beverages. L31156. must. OF THE PHILS. The ordinance imposes taxes for every case of softdrinks. GR No." FACTS: Plaintiff-appellant Pepsi-Cola sought to recover the sums paid by it under protest. U. to future conditions substantially identical to those of the present. (2) these are germane to the purpose of the legislation or ordinance. or negate the authority to classify the objects of taxation. to the City of Butuan. violative of the uniformity required by the Constitution and the law therefor. MUNICIPALITY OF TANAUAN. must be reasonable . however. 2264. August 28. The classification made in the exercise of this authority. would be exempt from the disputed tax. be reasonable and this requirement is not deemed satisfied unless: (1) it is based upon substantial distinctions which make real differences. not only to present conditions. ISSUE: Does the tax ordinance violate the uniformity requirement of taxation? HELD: Yes. regardless of the volume of sales. INC. and even if the same exceeded those made by said agents or consignees of producers or merchants established outside the City of Butuan. vs. Aside from the undue delegation of authority. (3) the classification applies. and Ordinance 27 levies and collects on soft drinks produced or manufactured within the territorial jurisdiction of this municipality a tax of ONE CENTAVO (P0. as discriminatory. regardless of the volume of their sales. but. OF THE PHILS. 1968 (24 SCRA 789) "The classification made in the exercise of power to tax. pursuant to its Municipal Ordinance No. GR No. 23 and 27 denominated as "municipal production tax" of the Municipality of Tanauan.

It seems clear that while the funds collected may be referred to as taxes. so that double taxation becomes obnoxious only where the taxpayer is taxed twice for the benefit of the same governmental entity or by the same jurisdiction for the same purpose. ISSUE: Is there an undue delegation of the legislative power of taxation? HELD: None. Also. double taxation. 1956. such amounts belong to the State. although the use thereof is limited to the special purpose/objective for which it was created. The tax is levied on the produce (whether sold or not) and not on the sales.No. said theory does not apply. It thus appears that the challenge posed by the petitioner is premised primarily on the view that the powers granted to the ERB under P. but there is not set ratio between the volume of sales and the amount of the tax. March 31. 1993 (220 SCRA 703) " To avoid the taint of unlawful delegation of the power to tax. The volume capacity of the taxpayer's production of soft drinks is considered solely for purposes of determining the tax rate on the products. ORBOS. On the issue of undue delegation of taxing power. partake of the nature of the taxation power of the State. 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. the ordinances do not partake of the nature of a percentage tax on sales. On the last issue raised.O. is not forbidden by our fundamental law. as amended. but not in a case where one tax is imposed by the State and the other by the city or municipality. It is segregated from the general fund. belonging as a matter of right to every independent government. 137. By necessary implication.D. there is no validity to the assertion that the delegated authority can be declared unconstitutional on the theory of double taxation. and while it is placed in . in general. there must be a standard which implies that the legislature determines matter of principle and lays down fundamental policy. it is settled that the power of taxation is an essential and inherent attribute of sovereignty. 99886. GR No." FACTS: Senator John Osmeña assails the constitutionality of paragraph 1c of PD 1956. however. Moreover. Moreover. lies in the case of municipal corporations. the petitioner points out that since a 'special fund' consists of monies collected through the taxing power of a State. Legislative powers may be delegated to local governments in respect of matters of local concern. the legislative power to create political corporations for purposes of local self-government carries with it the power to confer on such local governmental agencies the power to tax. Further. The reason is that the State has exclusively reserved the same for its own prerogative. It must be observed that the delegating authority specifies the limitations and enumerates the taxes over which local taxation may not be exercised. or other taxes in any form based thereon. The exception. that the OPSF as a special fund is plain from the special treatment given it by E. empowering the Energy Regulatory Board (ERB) to approve the increase of fuel prices or impose additional amounts on petroleum products which proceeds shall accrue to the Oil Price Stabilization Fund (OPSF) established for the reimbursement to ailing oil companies in the event of sudden price increases. to which. 12) OSMEÑA vs. without being expressly conferred by the people. they are exacted in the exercise of the police power of the State. The petitioner avers that the collection on oil products establishments is an undue and invalid delegation of legislative power to tax. as amended by EO 137.

" the fund nonetheless remains subject to the scrutiny and review of the COA.D. GR No. 3243 of the Philippine Legislature.00 employment permit. part time or full time or whether he is a lowly employee or a highly paid executive. HIU CHIONG. and entirely lacks standard. It has been held that where an ordinance of a municipality fails to state any policy or to set up any standard to guide or limit the mayor's action. without first securing an employment permit from the Mayor of Manila and paying the permit fee of P50. In addition to the general policy of the law to protect the local consumer by stabilizing and subsidizing domestic pump rates. During the same period Standard delivered fuel to US Navy to be paid in New York. They delivered in the Philippines for the use of US Army. No. which is out of proportion to the cost of registration and that it fails to prescribe any standard to guide and/or limit the action of the Mayor. 1931 (55 PHIL 715) FACTS: Standard is a foreign corporation duly authorized to do business in the Philippines. November 10. 6537 is void for it does not lay down any criterion or standard to guide the Mayor in the exercise of his discretion. the P50. Collector collected sales tax which was paid by Standard under protest. 6537 which prohibits aliens from being employed or to engage or participate in any position or occupation or business. it is imperative that the classification should be based on real and substantial differences having a reasonable relation to the subject of the particular legislation. expresses no purpose to be attained by requiring a permit. 1956 expressly authorizes the ERB to impose additional amounts to augment the resources of the Fund. the ordinance is discriminatory and violative of the rule of the uniformity in taxation. violating the fundamental principle on delegation of legislative powers: ISSUE: Is there a valid exercise of the taxing power of the local government? HELD: None. Standard sue for refund. Ordinance No. L-34029 February 26. ISSUE: Was the sales of merchandise made in the Philippines to the United States Army and the United States Navy are subject to the sales tax? . The same amount of P50. 16) THE STANDARD OIL COMPANY OF NEW YORK vs POSADAS. it is but a revenue measure guised in a police power measure. it makes no distinction between useful and non-useful occupations. imposing a fixed P50.00 is being collected from every employed alien whether he is casual or permanent.00." With regard to the alleged undue delegation of legislative power. P.what the law refers to as a "trust liability account. thus conferring upon the Mayor arbitrary and unrestricted power to grant or deny the issuance of permits. Second. 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. On the illegal delegation part of the argument. being an undefined and unlimited delegation of power to allow or prevent an activity per se lawful. the ordinance is not a regulatory or police power measure. The Court is satisfied that these measures comply with the constitutional description of a "special fund. L-29646. Collector of Internal Revenue demanded a tax of one and one-half per cent upon the value of the merchandise by virtue of section 1459 of the Administrative Code and Act No. The respondent challenged the validity of the ordinance upon the contention that it does not qualify as a valid exercise of the power to tax for. thus. such ordinance is invalid. G. and as a police power measure. Although the equal protection clause of the Constitution does not forbid classification.00 fee is unreasonable not only because it is excessive but because it fails to consider valid substantial differences in situation among individual aliens who are required to pay it.R. 1978 (86 SCRA 270) "A tax law should be declared invalid if it fails to lay down standards to guide or limit the actions of the taxing authority. as a revenue measure imposed on aliens employed in the City of Manila. First. 13) VILLEGAS vs. fuel oil and asphalt. 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. enumerates no conditions for its grant or refusal." FACTS: The Municipal Board of Manila enacted Ordinance No.

442. without express finding as to costs in either instance. Attorneys-General. do so.HELD: No. and the record ordered returned to the court of origin for further proceedings. appearing in 29 Opinions. United States.)Judgment reversed. (Note the well-considered opinion of Attorney-General Wickersham of June 8. could tax the instrumentalities of the very Government which brought it into existence. 1912. If a sovereign State of the American Union cannot abridge or restrict the activities of the United States Government. 17) . as the Philippine Government is. It would be absurd to think that a derivative sovereignty like the Government of the Philippine Islands. much less can a creature of that Government.