British American Tobacco Corporation v.

Finance Secretary Camacho,

BIR Commissioner Parayno (2009)
Doctrine: A levy of tax is not unconstitutional because it is not intrinsically
equal and uniform in its operation.The uniformity rule does not prohibit
classification for purposes of taxation
Facts:
British American Tobacco filed a Motion for Reconsideration for the
Courts decision in 2008
Petitioner interposes that the assailed provisions:
(1) violate the equal protection and uniformity of taxation clauses of the
Constitution,
(2) contravene Section 19,[1] Article XII of the Constitution on unfair
competition, and
(3) infringe the constitutional provisions on regressive and inequitable
taxation.
Petitioner further argues that assuming the assailed provisions are
constitutional, it is entitled to a downward reclassification of Lucky
Strike from the premium-priced to the high-priced tax bracket.
Lucky Strike reiterates in its MR that the classification freeze provision
violates the equal protection and uniformity of taxation clauses
because older brands are taxed based on their 1996 net retail prices
while new brands are taxed based on their present day net retail
prices.
HELD: Petition is denied
Without merit and a rehash of petitioners previous arguments before
this Court
The rational basis test was properly applied to gauge the
constitutionality of the assailed law in the face of an equal protection
challenge
The classification is considered valid and reasonable provided
that: (1) it rests on substantial distinctions; (2) it is germane to
the purpose of the law; (3) it applies, all things being equal, to
both present and future conditions; and (4) it applies equally
to all those belonging to the same class.
The classification freeze provision was inserted in the law for reasons
of practicality and expediency.
o since a new brand was not yet in existence at the time of the
passage of RA 8240, then Congress needed a uniform
mechanism to fix the tax bracket of a new brand.
o The current net retail price, similar to what was used to classify
the brands under Annex D as of October 1, 1996, was thus the
logical and practical choice
The classification freeze provision was in the main the result of
Congresss earnest efforts to improve the efficiency and effectivity of

the tax administration over sin products while trying to balance the
same with other State interests