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L-22734, September 15, 1967 21 SCRA 105
FACTS: Atanasio Pineda died, survived by his wife, Felicisima Bagtas, and 15 children, the eldest of whom is
Atty. Manuel Pineda. Estate proceedings were had in Court so that the estate was divided among and
awarded to the heirs. Atty Pineda's share amounted to about P2,500.00. After the estate proceedings were
closed, the BIR investigated the income tax liability of the estate for the years 1945, 1946, 1947 and 1948
and it found that the corresponding income tax returns were not filed. Thereupon, the representative of the
Collector of Internal Revenue filed said returns for the estate issued an assessment and charged the full
amount to the inheritance due to Atty. Pineda who argued that he is liable only to extent of his proportional
share in the inheritance.
ISSUE: Can BIR collect the full amount of estate taxes from an heir's inheritance.
HELD: Yes. The Government can require Atty. Pineda to pay the full amount of the taxes assessed.
The reason is that the Government has a lien on the P2,500.00 received by him from the estate as his
share in the inheritance, for unpaid income taxes for which said estate is liable. By virtue of such lien, the
Government has the right to subject the property in Pineda's possession to satisfy the income tax
assessment. After such payment, Pineda will have a right of contribution from his co-heirs, to achieve an
All told, the Government has two ways of collecting the tax in question. One, by going after all the heirs
and collecting from each one of them the amount of the tax proportionate to the inheritance received; and
second, is by subjecting said property of the estate which is in the hands of an heir or transferee to the
payment of the tax due. This second remedy is the very avenue the Government took in this case to
collect the tax. The Bureau of Internal Revenue should be given, in instances like the case at bar, the
necessary discretion to avail itself of the most expeditious way to collect the tax as may be envisioned in
the particular provision of the Tax Code above quoted, because taxes are the lifeblood of government and
their prompt and certain availability is an imperious need.
No. L-31156, February 27, 1976
"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.
FACTS: Plaintiff-appellant Pepsi-Cola commenced a complaint with preliminary injunction to declare Section
2 of Republic Act No. 2264, otherwise known as the Local Autonomy Act, unconstitutional as an undue
delegation of taxing authority as well as to declare Ordinances Nos. 23 and 27 denominated as "municipal
production tax" of the Municipality of Tanauan, Leyte, null and void. 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 Ordinance 27 levies and collects on soft drinks produced or manufactured within the
territorial jurisdiction of this municipality a tax of ONE CENTAVO (P0.01) on each gallon (128 fluid ounces,
U.S.) of volume capacity. Aside from the undue delegation of authority, appellant contends that it allows
double taxation, and that the subject ordinances are void for they impose percentage or specific tax.
ISSUE: Are the contentions of the appellant tenable?
HELD: No. On the issue of undue delegation of taxing power, it is settled that the power of taxation is an
essential and inherent attribute of sovereignty, belonging as a matter of right to every independent
government, without being expressly conferred by the people. 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 exception, however, lies in the
case of municipal corporations, to which, said theory does not apply. Legislative powers may be delegated
to local governments in respect of matters of local concern. By necessary implication, the legislative power
to create political corporations for purposes of local self-government carries with it the power to confer on
Also, there is no validity to the assertion that the delegated authority can be declared unconstitutional
on the theory of double taxation. It must be observed that the delegating authority specifies the limitations
and enumerates the taxes over which local taxation may not be exercised. The reason is that the State has
exclusively reserved the same for its own prerogative. Moreover, double taxation, in general, is not
forbidden by our fundamental law, 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, but not in a case where one tax is imposed by the State and the other by the city or municipality.

231 as amended by P.668. imposed tax on business. The volume capacity of the taxpayer's production of soft drinks is considered solely for purposes of determining the tax rate on the products. ISSUE: Whether or not Provincial Circular No.” P. VIDEOGRAM REGULATORY BOARD [151 SCRA 208. respondent received a favorable decision. the order of the lower court was affirmed by SC with certain modification.. Hence.D. The municipality of Pililia.C. 26-73. Mun of Pililia. 231. contract or judgment as is allowed to be set-off. as amended by EO 137. the former prevails. v Commission on Audit GR No. TIO VS.820. City and municipal treasurers to refrain from collecting any local imposed in petroleum products. In the case at bar. May 8. Provincial Circular 26-73 was issued directing all provincial. “An Act Creating the Videogram Regulatory Board" with broad powers to . directing it to remit its collection to the Oil Price Stabilization Fund (OPSF). In the RTC. Hence. 231 or the local tax code of 1973 provide for the Municipality of impose taxes on business any article of commerce. Caltex submitted a proposal to COA for the payment and the recovery of claims. Thereafter. 426. amending the local tax code repealed P. L-75697. Taxes may be levied with a regulatory purpose to provide means for the rehabilitation and stabilization of a threatened industry which is affected with public interest as to be within the police power of the State. Caltex moved for reconsideration but was denied. P. The grant total of its unremitted collections of the above tax is P1. 18 Jun 1987] Facts: The case is a petition filed by petitioner on behalf of videogram operators adversely affected by Presidential Decree No. S-1974. No. Phil Petroleum Corporation vs. Taxation is no longer envisioned as a measure merely to raise revenue to support the existence of government. explicitly provides that the source of OPSF is taxation.287. directing herein petitioner to pay the tax and fees impose unto it.D. stating that “in case of discrepancy between the basic law and on implementing rule or regulation. but there is not set ratio between the volume of sales and the amount of the tax. 426? RULING: The court ruled in the negative. COA approved the proposal but prohibited Caltex from further offsetting remittances and reimbursements for the current and ensuing years. G. Inc. P. In 1974. A taxpayer may not offset taxes due from the claims he may have against the government. Pending such remittance. The tax is levied on the produce (whether sold or not) and not on the sales. through Municipal Tax ordinance 1. COA sent a letter to Caltex. ISSUE: Whether the amounts due from Caltex to the OPSF may be offsetted against Caltex’s outstanding claims from said funds RULING: No. Petitioner contended that Provincial Arcular 26-73 suspended the effectively of local tax ordinances of the local tax code.D. 92585.C. No. 26-73 and 26-A73 where section 19 of which stated “the municipality may impose taxes on business… manufacturers importers or producers of any article of commerce of whatever kind or nature…” Thus. Rizal GR 90776 June 3. likewise upholding the constitutional right granted to local autonomy to imposed taxes. 26-73 supersedes the provisions of P. 1987.R. or other taxes in any form based thereon. of the additional tax on petroleum products authorized under the PD 1956. all of its claims for reimbursement from the OPSF shall be held in abeyance. COA decision is affirmed except that Caltex’s claim for reimbursement of underrecovery arising from sales to the National Power Corporation is allowed.D. excluding that unremitted for the years 1986 and 1988. 1992 FACTS: In 1989. the present petition. PD 1956. the provisions of the local tax code of 1974 supersedes P. demand. Caltex Philippines. 1991 / 198 SCRA 82 Facts: Petitioner. 426 amended certain provisions of P.D.On the last issue raised. Rizal. Taxes cannot be subject of compensation because the government and taxpayer are not mutually creditors and debtors of each other and a claim for taxes is not such a debt. Philippine Petroleum Corporation (PPC) owns and maintains an oil refinery conducting business within the municipality of Pililia. the ordinances do not partake of the nature of a percentage tax on sales.D.

" "Section 10. No. and the other fifty percent (50%) shall accrue to the municipality where the tax is collected. Issues: (1) Whether or not tax imposed by the DECREE is a valid exercise of police power. as the case may be. That in Metropolitan Manila. ready for playback. The levy of the 30% tax is for a public purpose. August 15. thereby resulting in substantial losses estimated at P450 Million annually in government revenues. PROVIDED. v. and these earnings have not been subjected to tax.regulate and supervise the videogram industry.” “Fifty percent (50%) of the proceeds of the tax collected shall accrue to the province. 1988 . 1987 as unconstitutional and void. the tax shall be shared equally by the City/Municipality and the Metropolitan Manila Commission. and the proliferation of pornographic video tapes. The unregulated activities of videogram establishments have also affected the viability of the movie industry. the tax remains a valid imposition. amusement and other taxes. the flagrant violation of intellectual property rights. lease or disposition of a videogram containing a reproduction of any motion picture or audiovisual program. We find no clear violation of the Constitution which would justify us in pronouncing Presidential Decree No. Such unregulated circulation have caused a sharp decline in theatrical attendance by at least forty percent (40%) and a tremendous drop in the collection of sales. Tax on Sale. particularly because of the rampant film piracy. considering "the unfair competition posed by rampant film piracy. and losses in government revenues due to the drop in theatrical attendance. sales and disposition of videograms. regardless of length. INC. Provided. thereby depriving the Government of approximately P180 Million in taxes each year. PHILIPPINE AIRLINES." WHEREFORE. — There shall be collected on each processed video-tape cassette. L. (2) Whether or nor the DECREE is constitutional. Video Tapes. No costs. Lease or Disposition of Videograms. the amended the National Internal Revenue Code provided that: "SEC.41383. Videogram(s) establishments collectively earn around P600 Million per annum from rentals. — Notwithstanding any provision of law to the contrary. 134. EDU G. not to mention the fact that the activities of video establishments are virtually untaxed since mere payment of Mayor's permit and municipal license fees are required to engage in business. the province shall collect a tax of thirty percent (30%) of the purchase price or rental rate. While the underlying objective of the DECREE is to protect the moribund movie industry. And while it was also an objective of the DECREE to protect the movie industry. videotapes. for every sale. discs. there is no question that public welfare is at bottom of its enactment. the instant Petition is hereby dismissed.R. an annual tax of five pesos. That locally manufactured or imported blank video tapes shall be subject to sales tax. Held: Taxation has been made the implement of the state's police power. have greatly prejudiced the operations of movie houses and theaters. A month after the promulgation of the said Presidential Decree. the erosion of the moral fiber of the viewing public brought about by the availability of unclassified and unreviewed video tapes containing pornographic films and films with brutally violent sequences.” The rationale behind the tax provision is to curb the proliferation and unregulated circulation of videograms including. It was imposed primarily to answer the need for regulating the video industry. contractor's specific. among others. cassettes or any technical improvement or variation thereof.

1971. ISSUE: Whether or not motor vehicle registration fees are considered as taxes. Hence. or if revenue is. Elevate (Elevate) issued a regulation pursuant to Section 8.FACTS: The Philippine Airlines (PAL) is a corporation engaged in the air transportation business under a legislative franchise. Under its franchise. PAL is exempt from the payment of taxes. PAL filed a complaint against Edu and National Treasurer Ubaldo Carbonell (Carbonell). PAL thus paid. at least. The trial court dismissed PAL's complaint. otherwise known as the Land and Transportation and Traffic Code. registration fees of its motor vehicles. to Land Transportation Commissioner Romeo Edu (Edu) demanding a refund of the amounts paid. Despite PAL's protestations. The motor vehicle registration fees are actually taxes intended for additional revenues of the government even if one fifth or less of the amount collected is set aside for the operating expenses of the agency administering the program. Republic Act 4136. requiring all tax exempt entities. After paying under protest. wrote a letter dated May 19. Land Transportation Commissioner Romeo F. Such is the case of motor vehicle registration fees. Edu denied the request for refund. PAL appealed to the Court of Appeals which in turn certified the case to the Supreme Court. If the purpose is primarily revenue. one of the real and substantial purposes. Act No. then the exaction is properly called a tax. Sometime in 1971. RULING: Yes. PAL through counsel. however. Elevate refused to register PAL's motor vehicles unless the amounts imposed under Republic Act 4136 were paid. among them PAL to pay motor vehicle registration fees. . under protest. 42739.