TAXATION LAW REVIEW

Atty. Jose Vicente D. Fernandez

I. GENERAL PRINCIPLES
A. Nature, concept and primary purpose of Taxation
J.B.L. Reyes vs. Almanzor [G.R. Nos. L-49839-46. April 26, 1991.]
Yu vs. CIR; [G.R. No. 20479. February 6, 1925.]
Lutz vs. CIR [G.R. No. L-7859. December 22, 1955.]

B. Taxation power of the State

1. As distinguished from police power
a. Primary purpose of police power
Pacific Commercial Company vs. Romualdez [G.R. No.
26124. February 14, 1927.]

b. Exactions that are both taxes and regulatory fees

PAL vs. Edu [G.R. No. L-41383. August 15, 1988.]

c. Importance in distinguishing the two exactions

Cuunjieng vs. Patstone [G.R. No. 16254. February 21,
1922.]
Angeles University Foundation vs. City of Angeles [G.R.
No. 189999. June 27, 2012.]

2. As distinguished from its Power of Eminent Domain

Southern Luzon vs. DSWD [G.R. No. 199669. April 25, 2017.]

C. Inherent and constitutional limitations of taxation

1. Inherent limitations
a. Public purpose requirement
Pascual vs. Secretary of Public Works [G.R. No. L-
10405. December 29, 1960.]
Planters Products vs. Fertiphil Corp. [G.R. No. 166006.
March 14, 2008.]

b. Non-delegability of the congressional power to tax

TUCP vs. Secretary Teves [G.R. No. 184538. January
24, 2017.]
Exemptions:
i. Fixing of tariff rates, etc. of the President
Sec. 28(2), Art. VI, 1987 Constitution

ii. Taxing authority of LGU’s

Sec. 5, Art. X, 1987 Constitution
Film Development Council vs. City of Cebu [G.R.
No. 204418. June 16, 2015.]

iii. Administrative implementations

 Abakada Partylist vs. Executive Secretary; [G.R.
No.168056. September 1, 2005.]

c. Territorial requirement
i. Income tax
Sec. 42, RA 8424 as amended
ii. Estate/donor’s tax
Sec. 104, RA 8424 as amended
iii. Business/excise tax

d. Exemption of Government from paying taxes

National City Bank of New York vs. CIR; [G.R. No.
41032. September 21, 1934.]

e. International comity
Sec. 2, Art. II, 1987 Constitution
Section 32(B)(7)(a), RA 8424 as amended

2. Constitutional limitations; requisites of a valid tax

a. Due process clause
Sec. 1, Art. III, 1987 Constitution
i. Substantive due process
City of Manila vs. Hon. Laguio [G.R. No. 118127.
April 12, 2005.]

ii. Procedural due process

Abakada Partylist vs. Executive Secretary; [G.R.
No. L-168056. September 1, 2005.]

iii. Judicial proceedings not mandatory in tax cases

Churchill vs. CIR; [G.R. No. 10572. December
21, 1915.]

b. Equal protection clause

Sec. 1, Art. III, 1987 Constitution
Sec 28(1), Art. VI, 1987 Constitution
i. Requisite of uniformity
Southern Luzon vs. DSWD [G.R. No. 199669.
April 25, 2017.]

ii. Requisite of equality

CIR vs. De La Salle University [G.R. No. 196596.
November 9, 2016.]

c. Freedom of the press

Sec. 4, Art. III, 1987 Constitution
Tolentino vs. Secretary of Finance [G.R. No. 115455.
August 25, 1994.]

d. Freedom of religion
Sec. 5, Art. III, 1987 Constitution
 Philippine Bible Society, Inc. vs. Executive Secretary
[G.R. No. 115781. October 30, 1995.]

e. Non-impairment clause
Sec. 10, Art. III, 1987 Constitution
Smart Communications vs. City of Davao [G.R. No.
155491. September 16, 2008.]

f. Poll tax clause

Sec. 20, Art. III, 1987 Constitution
People vs. Linsañgan [G.R. No. 43290. December 21,
1935.]

g. Exemption of certain entities from real property tax

Sec. 28(3), Art. VI, 1987 Constitution
Lung Center vs. Quezon City [G.R. No. 144104. June
29, 2004.]

h. Educational institutions

Sec. 4(3), Art. XIV, 1987 Constitution

CIR vs. De La Salle University [G.R. No. 196596.
November 9, 2016.]

i. Origination of tax bills from the House

Sec. 24, Art. XIV, 1987 Constitution
Abakada vs. Ermita [G.R. No. 168056. September 1,
2005.]

j. One bill, one subject rule

Sec. 26(1), Art. XIV, 1987 Constitution
Philippine Airlines vs. Secretary of Finance [G.R. No.
115852. October 30, 1995.]

k. 3-reading rule
Sec. 26(2), Art. XIV, 1987 Constitution
Abakada vs. Ermita [G.R. No. 168056. September 1,
2005.]

l. Progressive system of taxation

Sec. 28, Art. XIV, 1987 Constitution
Abakada vs. Ermita [G.R. No. 168056. September 1,
2005.]