Sison vs Ancheta (1984)

Facts: Batas Pambansa 135 was enacted. Sison, as taxpayer, alleged that its provision (Section 1) unduly discriminated against him by
the imposition of higher rates upon his income as a professional, that it amounts to class legislation, and that it transgresses against
the equal protection and due process clauses of the Constitution as well as the rule requiring uniformity in taxation.

Issue: Whether BP 135 violates the due process and equal protection clauses, and the rule on uniformity in taxation.

Held: There is a need for proof of such persuasive character as would lead to a conclusion that there was a violation of the due process
and equal protection clauses. Absent such showing, the presumption of validity must prevail. Equality and uniformity in taxation means
that all taxable articles or kinds of property of the same class shall be taxed at the same rate. The taxing power has the authority to
make reasonable and natural classifications for purposes of taxation. Where the differentitation conforms to the practical dictates of
justice and equity, similar to the standards of equal protection, it is not discriminatory within the meaning of the clause and is therefore
uniform. Taxpayers may be classified into different categories, such as recipients of compensation income as against professionals.
Recipients of compensation income are not entitled to make deductions for income tax purposes as there is no practically no overhead
expense, while professionals and businessmen have no uniform costs or expenses necessaryh to produce their income. There is ample
justification to adopt the gross system of income taxation to compensation income, while continuing the system of net income taxation
as regards professional and business income.

Eastern Theatrical Co. v Alfonso

Facts
The Municipal Board of the City of Manila enacted Ordinance No. 2958 which imposes a fee on the price of every admission
ticket sold by theaters and other similar amusement establishments. The fees imposed are graduated according to the price
of the ticket sold.
Twelve corporations (Petitioners) engaged in the motion picture business instituted a complaint in the CFI to impugn the
validity of the ordinance.
CFI upheld the validity of the ordinance and held that:
o Under Sec 2444(m) of the Revised Administrative Code (RAC), the City of Manila had the power to enact the
ordinance.
o Sec 2444(m) of the RAC was not repealed by the NIRC nor the power granted by it withdrawn.
o Ordinance did not violate the principle of equality and uniformity of taxation.

Issues and Arguments:

1. WON ordinance was enacted beyond the charter powers of the City of Manila?
Petitioners: Sec 2444(m) of the Revised Administrative Code, which grants to the City the power to regulate theaters,
confers only the power to tax on business but not on amusement.
2. WON Sec 2444(m) of the RAC has been impliedly repealed by the NIRC?
Petitioners: Since the NIRC was passed later the RAC and since both taxing powers cover the same field of legislation,
Sec 2444(m) of the RAC must have been repealed by the NIRC and consequently, the power to regulate theaters
granted to the City was withdrawn.
3. WON the ordinance violates the principle of equality and uniformity of taxation enjoined by the Constitution?
Petitioners: Ordinance does not tax other kinds of amusements (e.g. race tracks, cockpits, cabarets, concert halls)

Held and Ratio:

1. NO. The tax imposed by Sec 2444(m) cannot be defined as and be restricted to tax on business. The fact that said section
includes theaters and similar amusement establishments shows that the power to tax amusement is expressly included within
the power granted by Sec 2444(m).
2. NO. Both provisions of law may stand together and enforced at the same time.
3. NO. Equality and uniformity of taxation means that all taxable articles or kinds of property of the same class shall be taxed
at the same rate. The taxing power has the authority to make reasonable and natural classifications for purposes of
taxation. Petitioners cannot point out what places of amusement do not constitute a class by themselves and which can be
confused with those not included in the ordinance.

Manila Race Horse Trainers Assoc & Juan Sordan vs Manuel Dela Fuente January 11, 1951 Amparo, J.
Digest by: KY Bautista
Topic:
Rule of taxation shall be uniform and equitable
Provision:
Art VI. Sec 28. (1) The rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of taxation.
DOCTRINE:
There is equality and uniformity in taxation when: all articles or kinds of property of the same class are taxed at the same rate.
Equity in taxation is conceived in terms of ABILITY TO PAY in relation to BENEFITS RECEIVED by the taxpayer & the public from the
business taxed. Race horses are devoted to GAMBLING if legalized, and their owners derive fat incomes but the public hardly profits
from race horsing. This business also demands heavy police supervision

Punsalan vs Municipal Board of Manila GR 4817 26 May 1954

Facts: Municipal Board of Manila enacted Ordinance No. 3398 imposing municipal occupation tax on persons exercising various
professions in the city and penalizing non-payment of the same. Punsalan, et al paid the same under protest and filed suit with the
court. Petitioners contend that the ordinance is unjust and oppressive and amounts to double taxation. The lower court upheld the
validity of the provision of law authorizing the enactment of the ordinance but declared the ordinance itself illegal and void on the
ground that the penalty there in provided for non-payment of the tax was not legally authorized. Both parties appealed the courts
decision.

Issue: Whether or not Ordinance No 3398 constitute double taxation?

Decision: Decision reversed. The Legislature may select what occupations shall be taxed, and in the exercise of that discretion it may
tax all, or it may select for taxation certain classes and leave the others untaxed. Manila offers a more lucrative field for the practice
of the professions, so that it is but fair that the professionals in Manila be made to pay a higher occupation tax than their brethren in
the provinces. The ordinance imposes the tax upon every person exercising or pursuing in the City of Manila naturally any one
of the occupations named, but does not say that such person must have his office in Manila. The argument against double taxation
may not be invoked where one tax is imposed by the state and the other is imposed by the city

The Legislature may, in its discretion, select what occupations shall be taxed, and in its discretion may tax all, or select classes of
occupation for taxation, and leave others untaxed. It is not for the courts to judge which cities or municipalities should be empowered
to impose occupation taxes aside from that imposed by the National Government. That matter is within the domain of political
departments. The argument against double taxation may not be invoked if one tax is imposed by the state and the other is imposed
by the city. It is widely recognized that there is nothing inherently terrible in the requirement that taxes be exacted with respect to
the same occupation by both the state and the political subdivisions thereof. Judgment of the lower court is reversed with regards to
the ordinance and affirmed as to the law authorizing it.

CITY OF BAGUIO v. DE LEON

Facts:
Fortunato de Leon appealed to the SC questioning the validity of an ordinance enacted by the Baguio City
Council to collect taxes from real estate dealers. The source of councils power to create such ordinance is the
amending act (RA 329) of the Baguio Charter empowering the city to fix the license fee and regulate
business, trades, and occupations as may be established or practiced in the City.
He was held liable as a real estate dealer with a property worth more than P10,000 but not in excess of P50,000.
He was obligated to pay a P50 annual fee. He was further engaged in the rental of his property in Baguio
deriving income therefrom during the period in 1958-1962.
The complaint was thereafter filed by the City Attorney of Baguio for his failure to pay P300 as license fee
covering the period aforementioned.
Issues:
1) WON RA 329 is broad enough to justify the enactment of the ordinance
2) WON there was a violation of the rule of uniformity established by the Constitution
Held/Ratio:
1) YES. Even a cursory reading of the above amendment readily discloses that the enactment of the ordinance
in question finds support in the power thus conferred. In our opinion, the amendment above adverted to
empowers the city council not only to impose a license fee but also to levy a tax for purposes of revenue, more
so when in amending section 2553 (b), the phrase 'as provided by law' has been removed by section 2 of
Republic Act No. 329. The city council of Baguio, therefore, has now the power to tax, to license and to
regulate provided that the subjects affected be one of those included in the charter. In this sense, the ordinance
under consideration cannot be considered ultra vires whether its purpose be to levy a tax or impose a license
fee. The terminology used is of no consequence."

2) NO. According to the challenged ordinance, a real estate dealer who leases property worth P50,000 or above
must pay an annual fee of P100. If the property is worth P10,000 but not over P50,000, then he pays P50 and
P24 if the value is less than P10,000. On its face, therefore, the above ordinance cannot be assailed as violative
of the constitutional requirement of uniformity. In Philippine Trust Company v. Yatco, Justice Laurel,
speaking for the Court, stated: "A tax is considered uniform when it operates with the same force and effect
in every place where the subject may be found."

There was no occasion in that case to consider the possible effect on such a constitutional requirement where
there is a classification. The opportunity came in Eastern Theatrical Co. v. Alfonso. Thus: "Equality and
uniformity in taxation means that all taxable articles or kinds of property of the same class shall be taxed at
 the same rate. The taxing power has the authority to make reasonable and natural classifications for purposes
of taxation;

The Supreme Court said that uniformity of taxation, like the kindred concept of equal protection, requires that all objects
of taxation, similarly situated, are to be treated alike both in privileges and liabilities (Juan Luna Subdivision vs. Sarmiento,
91 Phil. 371; Tan vs. del Rosario, G.R. No. 109289)
Juan Luna Subdivision vs. Sarmiento91 PHIL 371

Juan Luna Subdivision, Inc. brought a suit against the City treasurer and the Philippines Trust Company
as defendants in the alternative to determine which of the two defendants is liable for plaintiffs checks.
Is appears that the plaintiff issued to the City treasurer of Manila a check to be applied to plaintiffs land tax for the second
semester of 1941, the exact amount of which was yet undetermined . On Feb.20,1942, after the amount had been verified ,
which was P341.60, the balance of P1,868.92, covered by voucher no 1487 of the City Treasurers Office , was noted in
the ledger as a credit to Juan Luna Subdivision, Inc. Thereafter, the books of the Philippine Trust Company revealed that
plaintiffs check was deposited by the City Treasurer with the Philippine National Bank, and the latter was paid the cash
equivalent thereof by the Philippines Trust Company, which debited the amount against Juan Luna Subd.. However the
City Treasurer refused after liberation tore fund the plaintiffs deposit or apply
it to such future taxes as maybe found due. The plaintiff claims the whole amount of the check contendingthat the taxes
for the last semester of 1941 had been remitted by CA No. 703.
Held:
The law is clear that it applies to taxes and penalties due and payable, i.e. taxes owed or owing. The
remission of taxes due and payable to the exclusion of taxes already collected does not constitute unfair discrimination.
Each set of taxes is a class by itself, and the law would be open to attack as class legislation only if all taxpayers belonging
to one class were not treated alike. Herein, they are not. The taxpayers who paid their taxes before liberation and those
who had not were not on the same footing on the need of material relief. Taxpayers who had been in arrears in their
obligation should have to satisfy their liability with genuine currency, while the taxes paid during the occupation had been
satisfied in Japanese War Notes, many of them at a time when those notes were well-nigh worthless. To refund those
taxes with restored currency would be unduly enrich many of the payers at a greater expense to the people at large

Misamis Oriental Association of Coco Traders, Inc. vs. Department of Finance

G.R. No. 108524 | November 10, 1994
Third Division

FACTS
This is a petition for prohibition and injunction seeking to nullify Revenue Memorandum Circular No. 47-91 and
enjoin the collection by respondent revenue officials of the Value Added Tax (VAT) on the sale of copra by members of
petitioner organization.
Petitioner Misamis Oriental Association of Coco Traders, Inc. is a domestic corporation whose members,
individually or collectively, are engaged in the buying and selling of copra in Misamis Oriental. The petitioner alleges that
prior to the issuance of Revenue Memorandum Circular 47-91 1991, which implemented VAT Ruling 190-90, copra was
classified as agricultural food product under $ 103(b) of the National Internal Revenue Code and, therefore, exempt from
VAT at all stages of production or distribution.
Respondents represent departments of the executive branch of government charged with the generation of funds
and the assessment, levy and collection of taxes and other imposts.
The pertinent provision of the NIRC states:
Sec. 103. Exempt Transactions. The following shall be exempt from the value-added tax:
(a) Sale of nonfood agricultural, marine and forest products in their original state by the primary producer
or the owner of the land where the same are produced;
(b) Sale or importation in their original state of agricultural and marine food products, livestock and poultry
of a kind generally used as, or yielding or producing foods for human consumption, and breeding stock and
genetic material therefor;
Under 103(a), as above quoted, the sale of agricultural non-food products in their original state is exempt from
VAT only if the sale is made by the primary producer or owner of the land from which the same are produced. The sale
made by any other person or entity, like a trader or dealer, is not exempt from the tax. On the other hand, under 103(b) the
sale of agricultural food products in their original state is exempt from VAT at all stages of production or distribution
regardless of who the seller is.

ISSUE/S
1. Is the Bureau of Food and Drug of the Department of Health and not the BIR is the competent government agency
to determine the proper classification of food products?
 2. Is RMC No. 47-91 is discriminatory and violative of the equal protection clause of the Constitution because while
coconut farmers and copra producers are exempt, traders and dealers are not, although both sell copra in its original
state. Petitioners add that oil millers do not enjoy tax credit out of the VAT payment of traders and dealers.

RULING
1. YES. Petitioner cites the opinion of Dr. Quintin Kintanar of the Bureau of Food and Drug to the effect that copra should
be considered "food" because it is produced from coconut which is food and 80% of coconut products are edible. On the
other hand, the respondents argue that the opinion of the BIR, as the government agency charged with the implementation
and interpretation of the tax laws, is entitled to great respect.
We agree with respondents. In interpreting 103(a) and (b) of the NIRC, the Commissioner of Internal Revenue
gave it a strict construction consistent with the rule that tax exemptions must be strictly construed against the taxpayer and
liberally in favor of the state. Indeed, even Dr. Kintanar said that his classification of copra as food was based on "the
broader definition of food which includes agricultural commodities and other components used in the
manufacture/processing of food." Moreover, as the government agency charged with the enforcement of the law, the opinion
of the Commissioner of Internal Revenue, in the absence of any showing that it is plainly wrong, is entitled to great weight.
Indeed, the ruling was made by the Commissioner of Internal Revenue in the exercise of his power under 245 of the NIRC
to "make rulings or opinions in connection with the implementation of the provisions of internal revenue laws, including
rulings on the classification of articles for sales tax and similar purposes."

2. NO. The argument has no merit. There is a material or substantial difference between coconut farmers and copra
producers, on the one hand, and copra traders and dealers, on the other. The former produce and sell copra, the latter
merely sell copra. The Constitution does not forbid the differential treatment of persons so long as there is a reasonable
basis for classifying them differently.
It is not true that oil millers are exempt from VAT. Pursuant to 102 of the NIRC, they are subject to 10% VAT
on the sale of services. Under 104 of the Tax Code, they are allowed to credit the input tax on the sale of copra by traders
and dealers, but there is no tax credit if the sale is made directly by the copra producer as the sale is VAT exempt. In the
same manner, copra traders and dealers are allowed to credit the input tax on the sale of copra by other traders and dealers,
but there is no tax credit if the sale is made by the producer.

Tiu v Ca G.R. No. 127410. January 20, 1999

Facts:
On March 13, 1992, Congress, with the approval of the President, passed into law RA 7227. This was for the conversion of
former military bases into industrial and commercial uses. Subic was one of these areas. It was made into a special
economic zone.

In the zone, there were no exchange controls. Such were liberalized. There was also tax incentives and duty free
importation policies under this law.

On June 10, 1993, then President Fidel V. Ramos issued Executive Order No. 97 (EO 97), clarifying the application of the
tax and duty incentives. It said that
On Import Taxes and Duties. Tax and duty-free importations shall apply only to raw materials, capital goods and
equipment brought in by business enterprises into the SSEZ

On All Other Taxes. In lieu of all local and national taxes (except import taxes and duties), all business enterprises in the
SSEZ shall be required to pay the tax specified in Section 12(c) of R.A. No. 7227.

Nine days after, on June 19, 1993, the President issued Executive Order No. 97-A (EO 97-A), specifying the area within
which the tax-and-duty-free privilege was operative.

Section 1.1. The Secured Area consisting of the presently fenced-in former Subic Naval Base shall be the only completely
tax and duty-free area in the SSEFPZ. Business enterprises and individuals (Filipinos and foreigners) residing within the
Secured Area are free to import raw materials, capital goods, equipment, and consumer items tax and duty-free.

Petitioners challenged the constitutionality of EO 97-A for allegedly being violative of their right to equal protection of the
laws. This was due to the limitation of tax incentives to Subic and not to the entire area of Olongapo. The case was referred
to the Court of Appeals.

The appellate court concluded that such being the case, petitioners could not claim that EO 97-A is unconstitutional, while
at the same time maintaining the validity of RA 7227.
The court a quo also explained that the intention of Congress was to confine the coverage of the SSEZ to the "secured
area" and not to include the "entire Olongapo City and other areas mentioned in Section 12 of the law.

Hence, this was a petition for review under Rule 45 of the Rules of Court.

Issue:
Whether the provisions of Executive Order No. 97-A confining the application of R.A. 7227 within the secured area and
excluding the residents of the zone outside of the secured area is discriminatory or not owing to a violation of the equal
protection clause.

Held. No. Petition dismissed.

Ratio:

Citing Section 12 of RA 7227, petitioners contend that the SSEZ encompasses (1) the City of Olongapo, (2) the Municipality
of Subic in Zambales, and (3) the area formerly occupied by the Subic Naval Base. However, they claimed that the E.O.
narrowed the application to the naval base only.

OSG- The E.O. Was a valid classification.

Court- The fundamental right of equal protection of the laws is not absolute, but is subject to reasonable classification. If
the groupings are characterized by substantial distinctions that make real differences, one class may be treated and
regulated differently from another. The classification must also be germane to the purpose of the law and must apply to
all those belonging to the same class.

Inchong v Hernandez- Equal protection does not demand absolute equality among residents; it merely requires that all
persons shall be treated alike, under like circumstances and conditions both as to privileges conferred and liabilities
enforced.

Classification, to be valid, must (1) rest on substantial distinctions, (2) be germane to the purpose of the law, (3) not be
limited to existing conditions only, and (4) apply equally to all members of the same class.

RA 7227 aims primarily to accelerate the conversion of military reservations into productive uses. This was really limited
to the military bases as the law's intent provides. Moreover, the law tasked the BCDA to specifically develop the areas the
bases occupied.

Among such enticements are: (1) a separate customs territory within the zone, (2) tax-and-duty-free importations, (3)
restructured income tax rates on business enterprises within the zone, (4) no foreign exchange control, (5) liberalized
regulations on banking and finance, and (6) the grant of resident status to certain investors and of working visas to certain
foreign executives and workers. The target of the law was the big investor who can pour in capital.

Even more important, at this time the business activities outside the "secured area" are not likely to have any impact in
achieving the purpose of the law, which is to turn the former military base to productive use for the benefit of the
Philippine economy. Hence, there was no reasonable basis to extend the tax incentives in RA 7227.

It is well-settled that the equal-protection guarantee does not require territorial uniformity of laws. As long as there
are actual and material differences between territories, there is no violation of the constitutional clause.

Besides, the businessmen outside the zone can always channel their capital into it.

RA 7227, the objective is to establish a "self-sustaining, industrial, commercial, financial and investment center. There
will really be differences between it and the outside zone of Olongapo.
The classification of the law also applies equally to the residents and businesses in the zone. They are similarly treated to
contribute to the end gaol of the law.

e Court held that the classification was based on valid and reasonable standards and does not violate the equal
protection clause.
The fundamental right of equal protection of the laws is not absolute, but is subject to reasonable classification. If
the groupings are characterized by substantial distinctions that make real differences, one class may be treated
and regulated differently from another. The classification must also be germane to the purpose of the law and
must apply to all those belonging to the same class.

SCRA 603, 1968

Facts: The City Council of Ormoc enacted Ordinance No.4, Series of 1964 taxing
the production and exportation of only centrifugal sugar. At the time of the
enactment, plaintiff Ormoc Sugar Co. was the only sugar central in Ormoc.
Petitioner alleged that said Ordinance is unconstitutional for being violative of the
equal protection clause.
Q. Is the Ordinance valid?
A. No, equal protection clause applies only to persons or things identically situated
and does not bar a reasonable classification of the subject of legislation. A
classification is reasonable where:
(1) It is based on substantial distinction which makes real difference;
(2) These are germane to the purpose of the law;
(3) The classification applies not only to present conditions but also to future
conditions which are substantially identical to those of the present;
(4) It applies only to those who belong to the same class.
A perusal of the requisites instantly show that the questioned ordinance does
not meet them, for it taxes only centrifugal sugar produced and exported by Ormoc Sugar Company, Inc. and
none other. At the time of the taxing ordinances
enactment, Ormoc Sugar Company, it is true, was the only sugar central in the City
of Ormoc. Still, the classification, to be reasonable, should be in terms applicable to
future conditions as well. The taxing ordinance should not be singular and exclusive
as to exclude any substantially established sugar central, of the same class as
plaintiff, from the coverage of the tax.

Ruling:
The taxing ordinance should not be singular and exclusive as to exclude any subsequently established sugar
central, of the same class as the present company, from the coverage of the tax. As it is now, even if later a
similar company is set up, it cannot be subject to the tax because the ordinance expressly points only to the
company as the entity to be levied upon.
EPC applies only to persons or things identically situated and doesnt bar a reasonable classification of the
subject of legislation.
A classification is reasonable where: 1) it is based on substantial distinctions which make real differences; (2)
these are germane to the purpose of the law; (3) the classification applies not only to present conditions but also
to future conditions which are substantially identical to those of the present; (4) the classification applies only to
those who belong to the same class.

Mayor Antonio J. Villegas vs. Hiu Chiong Tsao Pao Ho, 86

SCRA 270
Facts: The City of Manila enacted an Ordinance prohibiting aliens from being
employed or to engage or participate in any position or occupation or business,
whether permanent, temporary or casual without first securing an employment
permit from the Mayor of Manila. Private respondent questioned the
Constitutionality of the Ordinance as being violative of the equal protection clause.
Petitioners, however, claim that it is an exercise of the police power as it is a
regulatory measure by nature.
Q. Is the Ordinance unconstitutional?
A. Yes, the P50.00 fee is unreasonable because it fails to consider valid substantial
differences in situation among individual aliens who are required to pay it. The
Constitution does not prohibit classification but 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. The fee is collected
from every employed alien, whether he is casual or permanent, part-time or fulltime,
whether he is a lowly employee or a highly-paid executive.
The ordinance does not lay down any criterion or standard to guide the Major
in the exercise of his discretion.

ASSOCIATION OF CUSTOMS BROKERS vs. THE MUNICIPALITY BOARD

Facts:

Association of Customs Brokers1 and Manlapit, Inc.2 challenge the validity of Ordinance No. 3379
Grounds:
(1) while it levies a so-called property tax it is in reality a license tax which is beyond the power of the Municipal
Board of the City of Manila;
(2) said ordinance offends against the rule of uniformity of taxation; and
(3) it constitutes double taxation.
The respondents contend that the challenged ordinance imposes a property tax which is within the power of the
City of Manila to impose under its Revised Charter [Section 18 (p) of Republic Act No. 409], and that the tax in
question does not violate the rule of uniformity of taxation, nor does it constitute double taxation.
The disputed ordinance was passed by the Municipal Board of the City of Manila under the authority conferred
by section 18 (p) of Republic Act No. 409. Said section confers upon the municipal board the power "to tax motor
and other vehicles operating within the City of Manila the provisions of any existing law to the contrary
notwithstanding."
CFI: sustained the validity of the ordinance and dismissed the petition

Issue/s:

1. WON the tax imposed is property tax

2. WON the ordinance infringes the rule of the uniformity of taxation ordained by our Constitution

Held:

1. NO
under the Section 70 (b)3 of Motor Vehicles Law, no fees may be exacted or demanded for the operation of any
motor vehicle other than those therein provided, the only exception being that which refers to the property tax
which may be imposed by a municipal corporation
This provision is all-inclusive in that sense that it applies to all motor vehicles this provision should be
construed as limiting the broad grant of power conferred upon the City of Manila by its Charter to impose
taxes
When section 18 of said Charter provides that the City of Manila can impose a tax on motor vehicles
operating within its limit, it only refers to property tax as a different interpretation would make it
repugnant to the Motor Vehicle Law.
The title of the Ordinance is "An Ordinance Levying a Property Tax on All Motor Vehicles Operating Within the City
of Manila"; in its section 1 it provides that the tax should be 1 per cent ad valorem per annum; it also provides
that the proceeds of the tax "shall accrue to the Streets and Bridges Funds of the City and shall be expended
exclusively for the repair, maintenance and improvement of its streets and bridges."
While as a rule an ad valorem tax is a property tax, and this rule is supported by some authorities, the rule should
not be taken in its absolute sense if the nature and purpose of the tax as gathered from the context show that it
is in effect an excise or a license tax.
If a tax is in its nature an excise, it does not become a property tax because it is proportioned in amount to the
value of the property used in connection with the occupation, privilege or act which is taxed.
Every excise necessarily must finally fall upon and be paid by property and so may be indirectly a tax upon
property; but if it is really imposed upon the performance of an act, enjoyment of a privilege, or the engaging in
an occupation, it will be considered an excise
While the ordinance refers to property tax and it is fixed ad valorem yet the idea cannot be rejected that it is
merely levied on motor vehicles operating within the City of Manila with the main purpose of raising funds to be
expended exclusively for the repair, maintenance and improvement of the streets and bridges in said city.
This prohibition is intended to prevent duplication in the imposition of fees for the same purpose It is for this
reason that SC believes that the ordinance in question merely imposes a license fee although under the cloak of
an ad valorem tax to circumvent the prohibition above adverted to.

2. YES

1
composed of all brokers and public service operators of motor vehicles in the City of Manila
2
a public service operator of the trucks in said City
3
No further fees than those fixed in this Act shall be exacted or demanded by any public highway, bridge or ferry, or for the exercise
of the profession of chauffeur, or for the operation of any motor vehicle by the owner thereof: Provided, however, That nothing in
this Act shall be construed to exempt any motor vehicle from the payment of any lawful and equitable insular, local or municipal
property tax imposed thereupon. . .
 the ordinance exacts the tax upon all motor vehicles operating within the City of Manila but it does not distinguish
between a motor vehicle for hire and one which is purely for private use.
Neither does it distinguish between a motor vehicle registered in the City of Manila and one registered in another
place but occasionally comes to Manila and uses its streets and public highways.
The distinction is important if the ordinance intends to burden with the tax only those registered in the City of
Manila as may be inferred from the word "operating" used therein.
The word "operating" denotes a connotation which is akin to a registration, for under the Motor Vehicle Law no
motor vehicle can be operated without previous payment of the registration fees.
There is no pretense that the ordinance equally applies to motor vehicles who come to Manila for a temporary
stay or for short errands, and it cannot be denied that they contribute in no small degree to the deterioration of
the streets and public highway.
The fact that they are benefited by their use they should also be made to share the corresponding burden.
Since such is not yet the case, there is an inequality in the ordinance which renders it offensive to the Constitution.

Kapatiran ng mga Naglilingkod sa Pamahalaan v Tan GR No 81311 June 30, 1988

FACTS:
EO 372 was issued by the President of the Philippines which amended the Revenue Code, adopting the value-added tax
(VAT) effective January 1, 1988. Four petitions assailed the validity of the VAT Law from being beyond the President to
enact; for being oppressive, discriminatory, regressive and violative of the due process and equal protection clauses, among
others, of the Constitution. The Integrated Customs Brokers Association particularly contend that it unduly discriminate
against customs brokers (Section 103r) as the amended provision of the Tax Code provides that service performed in the
exercise of profession or calling (except custom brokers) subject to occupational tax under the Local Tax Code and
professional services performed by registered general professional partnerships are exempt from VAT.

ISSUE:
Whether the E-VAT law is void for being discriminatory against customs brokers

RULING:
No. The phrase except custom brokers is not meant to discriminate against custom brokers but to avert a potential conflict
between Sections 102 and 103 of the Tax Code, as amended. The distinction of the customs brokers from the other
professionals who are subject to occupation tax under the Local Tax Code is based on material differences, in that the
activities of customs partake more of a business, rather than a profession and were thus subjected to the percentage tax under
Section 174 of the Tax Code prior to its amendment by EO 273. EO 273 abolished the percentage tax and replaced it with
the VAT. If the Association did not protest the classification of customs brokers then, there is no reason why it should
protest now.