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Reyes vs.

Almanzor GR 49839-46, 26 April 1991

En Banc, Paras (J): 15 concur


JBL, Edmundo and Milagros Reyes are owners of parcels of land in Manila which are leased and occupied
as dwelling sites by tenants, said tenants were paying monthly rentals not exceeding 300 pesos. In 1971,
RA 6359 was passed prohibiting an increase of monthly rentals of dwelling units or of land on which
another dwelling is located for one year after effectivity for rentals not exceeding P300 but allowing an
increase of rent there after by not more than 10%. The Act also suspended the operation of Article 1673
of the Civil Code (ejectment of lessess). PD 20 amended RA 6359 by absolutely prohibiting the increase
and indefinitely suspending Article 1673. The Reyeses, thus, were precluded from raising the rentals and
from ejecting the tenants. In 1973, the City Assessor of Manila are classified and reassessed the value of
the properties based on the schedule of market values duly reviewed by the Secretary of Finance. As it
entailed an increase of the corresponding tax rates, the Reyeses filed a memorandum of disagreement
with the Board of Tax Assessment Appeals and averring therein that there assessments were excessive,
unwarranted, unequitable, confiscatory and unconstitutional in as much as the taxes imposed exceeded
the annual income derived from their properties; and that the income approach should have been used
in determining land values instead of the comparative sales approach which the assessor adopted.

Issue: Whether the reassessment is unequitable.

Held: Taxation is equitable when its burden falls on those better able to pay. Taxation is progressive
when its rate goes up depending on the resources of the person affected. Taxes are uniform when all
taxable articles or kinds of property of the same class are taxed at the same rate. The taxing power has
the authority to make reasonable and natural classification for purposes of taxation. Laws should
operate equally and uniformly, however, on all persons under similar circumstances or that all persons
must be treated in the same manner, the conditions not being different both in the privileges conferred
and liabilities imposed. Finally, under the Real Property Tax Code (PD 464), property must be appraised
at its current and fair market value. The market value of the properties covered by PD 20, thus cannot
be equated with the market value of properties not so covered. Should property covered by PD 20 has
naturally a much lesser market value in view of the rental restrictions. Although taxes are the lifeblood
of the government and should be collected without unnecessary hindrance, such collection should be
made in accordance with law as any arbitrariness will negate the very reason for government itself. As
the Reyeses are burdened by the Rent Freeze Laws (RA 6359 and PD 20),they should not be penalized
by the same government by the imposition of excessive taxes they can ill afford and would eventually
result in the forfeiture of their properties, under the principle of social justice