Villegas vs. Hu Chong Tsai Pao Ho 86 SCRA 275 (1978) G.R. No.

L-29646, November 10, 1978

AN ORDINANCE MAKING IT UNLAWFUL FOR ANY PERSON NOT A CITIZEN OF THE PHILIPPINES
TO BE EMPLOYED IN ANY PLACE OF EMPLOYMENT OR TO BE ENGAGED IN ANY KIND OF TRADE,
BUSINESS OR OCCUPATION WITHIN THE CITY OF MANILA WITHOUT FIRST SECURING AN
EMPLOYMENT PERMIT FROM THE MAYOR OF MANILA; AND FOR OTHER PURPOSES

Fact: September 17, 1968 of respondent Judge rendered in favor of the respondent and against the
petitioner, declaring Ordinance No. 6 37 of the City of Manila null and void. The Ordinance No. 6537 was
passed by the Municipal Board of Manila on February 22, 1968 and signed by the herein petitioner who
prohibits aliens from being employed or to engage or participate in any position or occupation or business
enumerated therein, whether permanent, temporary or casual, without first securing an employment permit
from the Mayor of Manila and paying the permit fee of P50.00 except persons employed in the diplomatic or
consular missions of foreign countries, or in the technical assistance programs of both the Philippine
Government and any foreign government, and those working in their respective households, and members
of religious orders or congregations, sect or denomination, who are not paid monetarily or in kind.
Violations of this ordinance is punishable by an imprisonment of not less than three (3) months to six (6)
months or fine of not less than P100.00 but not more than P200.00 or both such fine and imprisonment,
upon conviction. Private respondent who was employed in Manila, filed a petition with the praying for the
issuance of the writ of preliminary injunction and restraining order to stop the enforcement of Ordinance No.
6537 as well as for a judgment declaring said Ordinance No. 6537 null and void. Adrian Avilado Antazo

Issue: Whether the Petitioner’s ordinance violates the due process and equal protection clauses of the
Constitution?

Held: Yes, While it is true that the first part which requires that the alien shall secure an employment permit
from the Mayor involves the exercise of discretion and judgment in the processing and approval or
disapproval of applications for employment permits and therefore is regulatory in character the second part
which requires the payment of P50.00 as employee’s fee is not regulatory but a revenue measure. There is
no logic or justification in exacting P50.00 from aliens who have been cleared for employment. It is obvious
that the purpose of the ordinance is to raise money under the guise of regulation.

It 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. The Ordinance does not lay
down any criterion or standard to guide the Mayor in the exercise of his discretion. 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, expresses no purpose to be attained by requiring a permit, enumerates no conditions for its
grant or refusal, and entirely lacks standard, thus conferring upon the Mayor arbitrary and unrestricted
power to grant or deny the issuance of building permits, such ordinance is invalid, being an undefined and
unlimited delegation of power to allow or prevent an activity per se lawful.

Requiring a person before he can be employed to get a permit from the City Mayor of Manila who may
withhold or refuse it at will is tantamount to denying him the basic right of the people in the Philippines to
engage in a means of livelihood. While it is true that the Philippines as a State is not obliged to admit aliens
within its territory, once an alien is admitted, he cannot be deprived of life without due process of law. This
guarantee includes the means of livelihood. The shelter of protection under the due process and equal
protection clause is given to all persons, both aliens and citizens.Adrian Avilado

CREBA v. EXECUTIVE SECRETARY

G.R. No. 160756 March 9, 2010

FACTS: Chamber of Real Estate and Builders’ Associations, Inc. (CREBA) is an association of real estate
developers and builders in the Philippines. It filed a petition for certiorari and mandamus questioning the
constitutionality of Section 27 (E) of Republic Act (RA) 8424 and the revenue regulations (RRs) issued by
the Bureau of Internal Revenue (BIR) to implement said provision and those involving creditable
withholding taxes. It impleaded former Executive Secretary Alberto Romulo, then acting Secretary of
Finance Juanita D. Amatong and then Commissioner of Internal Revenue Guillermo Parayno, Jr. as
respondents. CREBA assails the validity of the imposition of minimum corporate income tax (MCIT) on
corporations and creditable withholding tax (CWT) on sales of real properties classified as ordinary assets.
CREBA argues that the MCIT violates the due process clause because it levies income tax even if there is
no realized gain. CREBA also seeks to nullify Sections 2.57.2(J) (as amended by RR 6-2001) and 2.58.2 of
RR 2-98, and Section 4(a)(ii) and (c)(ii) of RR 7-2003, all of which prescribe the rules and procedures for
the collection of CWT on the sale of real properties categorized as ordinary assets. Petitioner contends that
these revenue regulations are contrary to law for two reasons: first, they ignore the different treatment by
RA 8424 of ordinary assets and capital assets and second, respondent Secretary of Finance has no
authority to collect CWT, much less, to base the CWT on the gross selling price or fair market value of the
real properties classified as ordinary assets.

ISSUE: Whether or not the imposition of the MCIT on domestic corporations is unconstitutional. : Whether
or not the imposition of CWT on income from sales of real properties classified as ordinary assets under
RRs 2-98, 6-2001 and 7-2003, is unconstitutional.

DECISION: No. Under the MCIT scheme, a corporation, beginning on its fourth year of operation, is
assessed an MCIT of 2% of its gross income when such MCIT is greater than the normal corporate income
tax imposed under Section 27(A). If the regular income tax is higher than the MCIT, the corporation does
not pay the MCIT. Any excess of the MCIT over the normal tax shall be carried forward and credited
against the normal income tax for the three immediately succeeding taxable years.

The SC ruled that MCIT is not violative of due process and thus is not unconstitutional. MCIT was devised
as a relatively simple and effective revenue-raising instrument compared to the normal income tax which is
more difficult to control and enforce. It is a means to ensure that everyone will make some minimum
contribution to the support of the public sector.
CITY OF BAGUIO vs. DE LEON
25 SCRA 938
GR No. L-24756, October 31, 1968

"There is no double taxation where one tax is imposed by the state and the other is imposed by the city."

FACTS: The City of Baguio passed an ordinance imposing a license fee on any person, entity or
corporation doing business in the City. The ordinance sourced its authority from RA No. 329, thereby
amending the city charter empowering it to fix the license fee and regulate businesses, trades and
occupations as may be established or practiced 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. 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, and that there it imposed double taxation, and violates the requirement
of uniformity.

ISSUE: Are the contentions of the defendant-appellant tenable?

HELD: No. First, 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,
thus the ordinance cannot be considered ultra vires for there is more than ample statury authority for the
enactment thereof.

Second, 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, so that where, as here, Congress has clearly expressed its intention,
the statute must be sustained even though double taxation results.

And third, 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,
calling or activity by both the state and the political subdivisions thereof.

Province of Abra vs Judge Hernando, The Roman Catholic Bishop of Bangued, Inc.
107 SCRA 104

FACTS: The Province of Abra sought to tax the properties of The Roman Catholic Bishop of Bangued, Inc.
Desirous of being exempted from a real estate tax, the latter filed a petition for declaratory relief on the
ground that other than being exempted from payment of real estate taxes, its properties are also “being
actually, directly and exclusively used for religious or charitable purposes as sources of support for the
bishop, the parish priest and his helpers.” After conducting a summary hearing, respondent Judge
Hernando granted the exemption without hearing the side of petitioner. The petitioner then filed a motion to
dismiss but the same was denied. Hence, this present petition for certiorari and mandamus alleging denial
of procedural due process.

ISSUE: Whether or not the properties of the church in this case is exempt from taxes.
HELD: No, they are not tax exempt. It is true that the Constitution provides that “charitable institutions,
mosques, and non-profit cemeteries” are required that for the exemption of “lands, buildings, and
improvements,” they should not only be “exclusively” but also “actually” and “directly” used for religious or
charitable purposes. There must be proof therefore of the actual and direct use of the lands, buildings, and
improvements for religious or charitable purposes to be exempt from taxation. It has been the constant and
uniform holding that the exemption from taxation is not favored and is never presumed, so that if granted it
must be strictly construed against the taxpayer. Affirmatively put, the law frowns on exemption from
taxation, hence, an exempting provision should be construed strictissimijuris. However, in this case, there is
no showing that the said properties are actually and directly used for religious or charitable uses.

On the other hand, the respondent Judge, in his capacity to hear the case at bar, would not have erred so
grievously had he merely compared the provisions of the present Constitution with that appearing in the
1935 Charter on the tax exemption of "lands, buildings, and improvements." There is a marked difference.
Under the 1935 Constitution: "Cemeteries, churches, and parsonages or convents appurtenant thereto, and
all lands, buildings, and improvements used exclusively for religious, charitable, or educational purposes
shall be exempt from taxation." The present Constitution added "charitable institutions, mosques, and non-
profit cemeteries" and required that for the exemption of "lands, buildings, and improvements," they should
not only be "exclusively" but also "actually and "directly" used for religious or charitable purposes. The
Constitution is worded differently. The change should not be ignored. It clearly appears, therefore, that in
failing to accord a hearing to petitioner Province of Abra and deciding the case immediately in favor of
private respondent, respondent Judge failed to abide by the constitutional command of procedural due
process. The petition was granted. Respondent Judge, or whoever was acting on his behalf, was ordered
to hear the case on the merit.

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 Court’s 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 petitioner’s 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 Congress’s 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