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COMMISSIONER OF INTERNAL REVENUE vs. CEBU PORTLAND CEMENT COMPANY and COURT OF TAX APPEALS G.R. No. L-29059 December 15, 1987 FACTS: By virtue of a decision of the Court of Tax Appeals rendered on June 21, 1961, as modified on appeal by the Supreme Court on February 27, 1965, the Commissioner of Internal Revenue was ordered to refund to the Cebu Portland Cement Company the amount of P359,408.98, representing overpayments of ad valorem taxes on cement produced and sold by it after October 1957. On March 28, 1968, following denial of motions for reconsideration filed by both the petitioner and the private respondent, the latter moved for a writ of execution to enforce the said judgment. The motion was opposed by the petitioner on the ground that the private respondent had an outstanding sales tax liability to which the judgment debt had already been credited. In fact, it was stressed, there was still a balance owing on the sales taxes in the amount of P 4,789,279.85 plus 28% surcharge. On April 22, 1968, the Court of Tax Appeals granted the motion, holding that the alleged sales tax liability of the private respondent was still being questioned and therefore could not be set-off against the refund. ISSUE: Whether or not the judgment debt can be enforced against private respondent’s sales tax liability, the latter still being questioned. RULING: The argument that the assessment cannot as yet be enforced because it is still being contested loses sight of the urgency of the need to collect taxes as "the lifeblood of the government." If the payment of taxes could be postponed by simply questioning their validity, the machinery of the state would grind to a halt and all government functions would be paralyzed. The Tax Code provides: Sec. 291. Injunction not available to restrain collection of tax. - No court shall have authority to grant an injunction to restrain the collection of any national internal revenue tax, fee or charge imposed by this Code. It goes without saying that this injunction is available not only when the assessment is already being questioned in a court of justice but more so if, as in the instant case, the challenge to the assessment is still-and only-on the administrative level. There is all the more reason to apply the rule here because it appears that even after crediting of the refund against the tax deficiency, a balance of more than P 4 million is still due from the private respondent. COMMISSIONER OF INTERNAL REVENUE vs. ALGUE and THE COURT OF TAX APPEALS G.R. No. L-28896 February 17, 1988 FACTS: The Philippine Sugar Estate Development Company had earlier appointed Algue as its agent, authorizing it to sell its land, factories and oil manufacturing process. Pursuant to such authority, Alberto Guevara, Jr., Eduardo Guevara, Isabel Guevara, Edith, O'Farell, and Pablo Sanchez, worked for the formation of the Vegetable Oil Investment Corporation, inducing other persons to invest in it. Ultimately, after its incorporation largely through the promotion of the said persons, this new corporation purchased the PSEDC properties. For this sale, Algue received as agent a commission of P126,000.00, and it was from this commission that the P75,000.00 promotional fees were paid to the aforenamed individuals. The petitioner contends that the claimed deduction of P75,000.00 was properly disallowed because it was not an ordinary reasonable or necessary business expense. The Court of Tax Appeals had seen it differently. Agreeing with Algue, it held that the said amount had been legitimately paid by the private respondent for actual services rendered. The payment was in the form of promotional fees. ISSUE: Whether or not the Collector of Internal Revenue correctly disallowed the P75,000.00 deduction claimed by private respondent Algue as legitimate business expenses in its income tax returns. RULING: The Supreme Court agrees with the respondent court that the amount of the promotional fees was not excessive. The amount of P75,000.00 was 60% of the total commission. This was a reasonable proportion, considering that it was

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the payees who did practically everything, from the formation of the Vegetable Oil Investment Corporation to the actual purchase by it of the Sugar Estate properties. It is said that taxes are what we pay for civilization society. Without taxes, the government would be paralyzed for lack of the motive power to activate and operate it. Hence, despite the natural reluctance to surrender part of one's hard earned income to the taxing authorities, every person who is able to must contribute his share in the running of the government. C.N. HODGES vs. MUNICIPAL BOARD OF THE CITY OF ILOILO G.R. No. L-18129 January 31, 1963 FACTS: On June 13, 1960, the Municipal Board of the City of Iloilo enacted Ordinance No. 33, series of 1960, pursuant to the provisions of Republic Act No. 2264, known as the Local Autonomy Act, requiring any person, firm, association or corporation to pay a sales tax of 1/2 of 1% of the selling price of any motor vehicle and prohibiting the registration of the sale of the motor vehicle in the Motor Vehicles Office of the City of Iloilo unless the tax has been paid. C. N. Hodges, who was engaged in the business of buying and selling second-hand motor vehicles in the City of Iloilo, is one of those affected by the enactment of the ordinance, and believing that the same is invalid for having been passed in excess of the authority conferred by law upon the municipal board, he filed on June 27, 1960 a petition for declaratory judgment with the Court of First Instance of Iloilo praying that said ordinance be declared void ab initio. The court a quo rendered decision on December 8, 1960 holding that that part of the ordinance which requires the owner of a used motor vehicle to pay a sales tax of 1/2 of 1% of the selling price is valid, but the portion thereof which requires the payment of the tax as a condition precedent for the registration of the sale in the Motor Vehicles Office is invalid for being repugnant to Section 2(h) of Republic Act 2264. Both parties have appealed. ISSUE: Whether or not the ordinance in question is valid even with regard to the portion which requires the payment of the tax as a condition precedent for the registration of the sale in the Motor Vehicles Office of said city. RULING: The City of Iloilo has the authority and power to approve the ordinance in question for it merely imposes a percentage tax on the sale of a second-hand motor vehicle that may be carried out within the city by any person, firm, association or corporation owning or dealing with it who may come within the jurisdiction. The requirement of the ordinance cannot be considered a tax in the light viewed by the court a quo for the same is merely a coercive measure to make the enforcement of the contemplated sales tax more effective. Well-settled is the principle that taxes are imposed for the support of the government in return for the general advantage and protection which the government affords to taxpayers and their property. Taxes are the lifeblood of the government. ASSOCIATION OF CUSTOM BROKERS, INC. vs. MUNICIPAL BOARD G.R. No. L-4376 May 22, 1953 FACTS: The Association of Customs Brokers, Inc., which is composed of all brokers and public service operators of motor vehicles in the City of Manila challenge the validity Ordinance No. 3379 on the ground that (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 on their part 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. ISSUE: Whether or not the ordinance is null and void RULING: The ordinance infringes the rule of the uniformity of taxation ordained by our Constitution. Note that the ordinance exacts the tax upon all motor vehicles operating within the City of Manila. 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

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of Manila and one registered in another place but occasionally comes to Manila and uses its streets and public highways. This is an inequality which we find in the ordinance, and which renders it offensive to the Constitution. ESSO STANDARD EASTERN, INC v. COMMISSIONER OF INTERNAL REVENUE G.R. Nos. L-28508-9, July 7, 1989 FACTS: In CTA Case No. 1251, Esso Standard Eastern Inc. (Esso) deducted from its gross income for 1959, as part of its ordinary and necessary business expenses, the amount it had spent for drilling and exploration of its petroleum concessions. This claim was disallowed by the Commissioner of Internal Revenue (CIR) on the ground that the expenses should be capitalized and might be written off as a loss only when a "dry hole" should result. Esso then filed an amended return where it asked for the refund of P323,279.00 by reason of its abandonment as dry holes of several of its oil wells. Also claimed as ordinary and necessary expenses in the same return was the amount of P340,822.04, representing margin fees it had paid to the Central Bank on its profit remittances to its New York head office. On August 5, 1964, the CIR granted a tax credit of P221,033.00 only, disallowing the claimed deduction for the margin fees paid on the ground that the margin fees paid to the Central Bank could not be considered taxes or allowed as deductible business expenses. Esso appealed to the Court of Tax Appeals (CTA) for the refund of the margin fees it had earlier paid contending that the margin fees were deductible from gross income either as a tax or as an ordinary and necessary business expense. However, Esso’s appeal was denied. ISSUE: (1) Whether or not the margin fees are taxes. (2) Whether or not the margin fees are necessary and ordinary business expenses. RULING: (1) No. A tax is levied to provide revenue for government operations, while the proceeds of the margin fee are applied to strengthen our country's international reserves. The margin fee was imposed by the State in the exercise of its police power and not the power of taxation. (2) No. Ordinarily, an expense will be considered 'necessary' where the expenditure is appropriate and helpful in the development of the taxpayer's business. It is 'ordinary' when it connotes a payment which is normal in relation to the business of the taxpayer and the surrounding circumstances. Since the margin fees in question were incurred for the remittance of funds to Esso's Head Office in New York, which is a separate and distinct income taxpayer from the branch in the Philippines, for its disposal abroad, it can never be said therefore that the margin fees were appropriate and helpful in the development of Esso's business in the Philippines exclusively or were incurred for purposes proper to the conduct of the affairs of Esso's branch in the Philippines exclusively or for the purpose of realizing a profit or of minimizing a loss in the Philippines exclusively. PROGRESSIVE DEVELOPMENT CORPORATION v. QUEZON CITY G.R. No. L-36081, April 24, 1989 FACTS: On December 24, 1969, the City Council of Quezon City adopted Ordinance No. 7997, otherwise known as the Market Code of Quezon City. Section 3 of said ordinance provides that “privately owned and operated public markets shall submit monthly to the Treasurer's Office, a certified list of stallholders showing the amount of stall fees or rentals paid daily by each stallholder, ... and shall pay 10% of the gross receipts from stall rentals to the City, ... , as supervision fee”. On July 15, 1972, Progressive Development Corporation (Progressive), owner and operator of a public market known as the "Farmers Market & Shopping Center" filed a Petition for Prohibition with Preliminary Injunction against Quezon City on the ground that the supervision fee or license tax imposed by the above-mentioned ordinance is in reality a tax on income which Quezon City may not impose, the same being expressly prohibited by Republic Act No. 2264, as amended, otherwise known as the Local Autonomy Act. In its Answer, Quezon City, through the City Fiscal, contended that it had authority to enact the questioned ordinances, maintaining that the tax on gross receipts imposed therein is not a tax on income. The lower court ruled that the questioned imposition is not a tax on income, but rather a privilege tax or license fee which local governments, like Quezon City, are empowered to impose and collect. ISSUE:

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Whether the tax imposed by Quezon City on gross receipts of stall rentals is properly characterized as partaking of the nature of an income tax. RULING: No. The tax imposed in the controverted ordinance constitutes, not a tax on income, not a city income tax (as distinguished from the national income tax imposed by the National Internal Revenue Code) within the meaning of Section 2 (g) of the Local Autonomy Act, but rather a license tax or fee for the regulation of the business in which Progressive is engaged. While it is true that the amount imposed by the questioned ordinances may be considered in determining whether the exaction is really one for revenue or prohibition, instead of one of regulation under the police power, it nevertheless will be presumed to be reasonable. PHILIPPINE AIRLINES, INC. v. EDU G.R. No. L- 41383, August 15, 1988 FACTS: The Philippine Airlines (PAL) is a corporation engaged in the air transportation business under a legislative franchise, Act No. 42739. Under its franchise, PAL is exempt from the payment of taxes. Sometime in 1971, however, Land Transportation Commissioner Romeo F. Elevate (Elevate) issued a regulation pursuant to Section 8, Republic Act 4136, otherwise known as the Land and Transportation and Traffic Code, requiring all tax exempt entities, among them PAL to pay motor vehicle registration fees. Despite PAL's protestations, Elevate refused to register PAL's motor vehicles unless the amounts imposed under Republic Act 4136 were paid. PAL thus paid, under protest, registration fees of its motor vehicles. After paying under protest, PAL through counsel, wrote a letter dated May 19,1971, to Land Transportation Commissioner Romeo Edu (Edu) demanding a refund of the amounts paid. Edu denied the request for refund. Hence, PAL filed a complaint against Edu and National Treasurer Ubaldo Carbonell (Carbonell). The trial court dismissed PAL's complaint. PAL appealed to the Court of Appeals which in turn certified the case to the Supreme Court. ISSUE: Whether or not motor vehicle registration fees are considered as taxes. RULING: Yes. If the purpose is primarily revenue, or if revenue is, at least, one of the real and substantial purposes, then the exaction is properly called a tax. Such is the case of motor vehicle registration fees. The motor vehicle registration fees are actually taxes intended for additional revenues of the government even if one fifth or less of the amount collected is set aside for the operating expenses of the agency administering the program. VILLEGAS v. HIU CHIONG TSAI PAO HO G.R. No. L-29646, November 10, 1978 FACTS: On February 22, 1968, the Municipal Board of Manila passed City Ordinance No. 6537. The said city ordinance was also signed by then Manila Mayor Antonio J. Villegas (Villegas). Section 1 of the said city ordinance 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. Hiu Chiong Tsai Pao Ho (Tsai Pao Ho) who was employed in Manila, filed a petition with the CFI of Manila to declare City Ordinance No. 6537 as null and void for being discriminatory and violative of the rule of the uniformity in taxation. The trial court declared City Ordinance No. 6537 null and void. Villegas filed the present petition. ISSUE: Whether or not City Ordinance No. 6537 is a tax or revenue measure.

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RULING: Yes. The contention that City Ordinance No. 6537 is not a purely tax or revenue measure because its principal purpose is regulatory in nature has no merit. 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.

COMPAÑIA GENERAL DE TABACOS DE FILIPINAS vs. CITY OF MANILA, ET AL G.R. No. L-16619 June 29, 1963 FACTS: Petitioner filed an action in the CFI Manila to recover from City of Manila(City ) the sum of P15,280.00 allegedly overpaid by it as taxes on its wholesale and retail sales of liquor for the period from the third quarter of 1954 to the second quarter of 1957, inclusive, under Ordinances Nos. 3634, 3301, and 3816. Tabacalera's action for refund is based on the theory that, in connection with its liquor sales, it should pay the license fees but not the municipal sales taxes; and since it already paid the license fees aforesaid, the sales taxes paid by it — amounting to the sum of P15,208.00 — under the three ordinances is an overpayment made by mistake, and therefore refundable. The City contends that for the permit issued to it Tabacalera is subject to pay the license fees prescribed by Ordinance No. 3358, aside from the sales taxes imposed by Ordinances Nos. 3634, 3301, and 3816. ISSUE: Whether or not the taxes imposed are valid RULING: Ordinance No. 3358 is clearly one that prescribes municipal license fees for the privilege to engage in the business of selling liquor or alcoholic beverages. On the other hand, it is clear that Ordinances Nos. 3634, 3301, and 3816 impose taxes on the sales of general merchandise, wholesale or retail, and are revenue measures enacted by the Municipal Board of Manila by virtue of its power to tax dealers for the sale of such merchandise. That Tabacalera is being subjected to double taxation is more apparent than real. As already stated what is collected under Ordinance No. 3358 is a license fee for the privilege of engaging in the sale of liquor. On the other hand, what the three ordinances mentioned heretofore impose is a tax for revenue purposes based on the sales made of the same article or merchandise. It is already settled in this connection that both a license fee and a tax may be imposed on the same business or occupation, or for selling the same article, this not being in violation of the rule against double taxation. AMERICAN MAIL LINE, ET AL vs. CITY OF BASILAN, ET AL G.R. No. L-12647 May 31, 1961 FACTS: Appellees are foreign shipping companies licensed to do business in the Philippines, with offices in Manila. Their vessels call at Basilan City and anchor in the bay or channel within its territorial waters. As the city treasurer assessed and attempted to collect from them the anchorage fees prescribed in the aforesaid amendatory ordinance, they filed the present action for Declaratory Relief to have the courts determine its validity. Upon their petition the lower court issued a writ of preliminary injunction restraining appellants from collecting or attempting to collect from them the fees prescribed therein. Appellant contended that, through its city council, it had authority to enact the questioned ordinance in the exercise of either its revenue-raising power or of its police power. The question to be resolved is whether the City of Basilan has the authority to enact Ordinance 180 and to collect the anchorage fees prescribed therein. ISSUE: Is the ordinance valid exercise of taxing power of the City of Basilan.

6 RULING: Under paragraph (a) sec. It is not a tax measure intended to raise revenues for the Government. The use of the phrase "in accordance with law" — which. 14. the proceeds thereof may be devoted only to the specific purpose for which the assessment was authorized. The OPSF was designed to reimburse oil companies for cost increases in crude oil and imported petroleum products resulting from exchange rate adjustments and from increases in the world market prices of crude oil.. 99886 March 31. President Corazon C. JOHN H. Appellant city's own contention that the questioned ordinance was enacted in the exercise of its power of taxation. P. the revenue generated therefrom shall 'be treated as a special fund' to be used only for the purpose indicated. the OPSF was reclassified into a "trust liability account. they are exacted in the exercise of the police power of the State. respondents herein. as amended. . OSMEÑA vs. It would seem that from the above-quoted ruling. vs. OSCAR ORBOS et al G. While the funds collected may be referred to as taxes. although the use thereof is limited to the special purpose/objective for which it was created. means the same as "provided by law" — clearly discloses the legislative intent to limit the taxing power of the City. INC.. It has been held that the power to regulate as an exercise of police power does not include the power to impose fees for revenue purposes. 288. from a decision of the Court of First Instance of Manila finding them liable for special assessments under Section 15 of Republic Act No. As such." ISSUE: Whether or not the funds collected under PD 1956 is an exercise of the power of taxation RULING: The levy is primarily in the exercise of the police power of the State. Subsequently. and not channeled to another government objective. R. Aquino promulgated E. it cannot be overlooked that the overriding consideration is to enable the delegate to act with expediency in carrying out the objectives of the law which are embraced by the police power of the State.A.D. in our opinion." Petitioner further points out that since "a 'special fund' consists of monies collected through the taxing power of a State. What is here involved is not so much the power of taxation as police power. BACOLOD-MURCIA MILLING CO. MA-AO SUGAR CENTRAL CO. L-19824. the petition for prohibition should fail. REPUBLIC OF THE PHILIPPINES.' and that "if a special tax is collected for a specific purpose. What petitioner would wish is the fixing of some definite. and TALISAY-SILAY MILLING COMPANY G. 1956. Although the provision authorizing the ERB to impose additional amounts could be construed to refer to the power of taxation." The Court is cited to this requirement by the petitioner on the premise that what is involved here is the power of taxation. the city of Basilan was not granted a blanket power of taxation. Nos. 137 expanding the grounds for reimbursement to oil companies for possible cost under recovery incurred as a result of the reduction of domestic prices of petroleum products.. must be treated as a 'SPECIAL FUND. this is not the case.. or "a specific limit on how much to tax. quantitative restriction. 1993 FACTS: October 10. The petitioner argues inter alia that "the monies collected pursuant to . O. it is clear that the City of Basilan may only levy and collect taxes for general and special purposes in accordance with or as provided by law.R. L-19825 and 19826 July 9. 1984. but as already discussed. a special assessment being a levy upon property predicated on the doctrine that the property against which it is levied derives some special benefit from the improvement.D.' not as a 'trust account' or a 'trust fund. ISSUE: Is the imposition of special assessment an exercise of the taxing power RULING: . No. in other words. President Ferdinand Marcos issued P. 632. makes it obvious that the fees imposed are not merely regulatory. INC.".R. designated as the Oil Price Stabilization Fund (OPSF). 1956 creating a Special Account in the General Fund. The appellants' thesis is simply to the effect that the "10 centavos per picul of sugar" authorized to be collected under Sec. 1966 FACTS: Joint appeal by three sugar centrals. such amounts belong to the State. 15 of Republic 632 is a special assessment.

as may be provided by law." Analysis of the Act.000. will show that the tax is levied with a regulatory purpose. alleging that such tax is unconstitutional and void. And then. which in plaintiff's opinion is not a public purpose for which a tax may be constitutioally levied. of the Municipality of Victorias. The changes were: with respect to sugar centrals. The trial court rendered its judgment declaring that the ordinance in question refers to license taxes or fees. The plaintiff contends that the ordinance is discriminatory since it singles out plaintiff which is the only operator of a sugar central and a sugar refinery within the jurisdiction of defendant municipality. and as to sugar refineries. Commonwealth Act 567. VICTORIAS MILLING CO. all collections made thereunder "shall accrue to a special fund in the Philippine Treasury. for the crop years 1948-1949 and 1949-1950. ISSUE: Was Ordinance No. and P40. WALTER LUTZ vs. ISSUE: Is the tax provided for in Commonwealth Act No. Negros Occidental. The ordinance is for raising money.R. Given the purposes just mentioned. No. We hold that the special assessment at bar may be considered as similarly as the above.40 paid by the estate as taxes. to provide means for the rehabilitation and stabilization of the threatened sugar industry. No. but. J. otherwise known as the Sugar Adjustment Act. we read in the ordinance nothing which would as much as indicate that the tax imposed is merely for police inspection. ANTONIO ARANETA G.000. P40. the exercise of the police power for the general welfare of the entire country. In other words.. To say otherwise is to misread the purpose of the ordinance. an exercise of a sovereign power which no private citizen may lawfully resist. therefore.666.R. The disputed ordinance imposed license taxes on operators of sugar centrals and sugar refineries. vs. we find no warrant in logic to give our assent to the view that the ordinance in question is solely for regulatory purpose. On the authority of the above case. under section 3 of the Act. that is. Inc. supervision or regulation. For.00 for sugar refineries. 567. then. 1. series of 1956. being levied for the aid and support of the sugar industry exclusively. otherwise known as the Sugar Adjustment Act. The action having been dismissed by the Court of First Instance. the plaintifs appealed the case directly to the Supreme Court. the production of plaintiff Victorias Milling Co. 1955 FACTS: This case was initiated in the Court of First Instance of Negros Occidental to test the legality of the taxes imposed by Commonwealth Act No. by increasing the rates of license taxes. that the levy for the Philsugin Fund is not so much an exercise of the power of taxation. Plaintiff filed suit below to ask for judgment declaring Ordinance No. series of 1956. the act is primarily an exercise of the police power. For in this Lutz case. THE MUNICIPALITY OF VICTORIAS. Walter Lutz seeks to recover from the Collector of Internal Revenue the sum of P14. Araneta. nor the imposition of a special assessment. Plaintiff. PROVINCE OF NEGROS OCCIDENTAL G. to be known as the 'Sugar Adjustment and Stabilization Fund.7 The Court deemed it relevant to discuss its holding in Lutz v. A quick glance at the big amount of maximum annual tax set forth in the ordinance. and particularly Section 6. will readily convince one that the tax is really a revenue tax.. Plain is the meaning conveyed. null and void. series of 1956. L-7859 December 22. in both its sugar central and its sugar refinery located in the Municipality of Victorias comes within these items. INC. passed by defendant's municipal council as a regulatory enactment or as a revenue measure? RULING: The present imposition must be treated as a levy for revenue purposes. L-21183 September 27. 1968 FACTS: This case calls into question the validity of Ordinance No. It is. 1. by increasing the rates of license taxes as well as the range of graduated schedule of annual output capacity. 1. Both plaintiff and defendant directly appealed to the Supreme Court. 567 a pure exercise of the taxing power? .00 for sugar centrals.' and shall be paid out only for any or all of the following purposes or to attain any or all of the following objectives.

Pasig. WENCESLAO PASCUAL vs. On January 23. COJUANGCO JR. that. REPUBLIC OF THE PHILIPPINES. Taxation may be made the implement of the state's police power. 1954. . represented by the PRESIDENTIAL COMMISSION ON GOOD GOVERNMENT (PCGG) vs. b) it is imposed by the State by virtue of its sovereignty. . and BALLARES. ET AL. ISSUE: Are the Coconut Levy Funds raised through the State’s police and taxing powers? RULING: Indeed. the trial court rendered its final Decision nullifying and setting aside the Resolution of the Sandiganbayan which lifted the sequestration of the subject UCPB shares. Based on this definition. L-10405 December 29. Rizal" which projected feeder roads "do not connect any government property or any important premises to the main highway". upon the ground that Republic Act No. and that the petition did "not state a cause of action". ET AL. contained. ET AL. coconut levy funds partake of the nature of taxes which.00 "for the construction. . are enforced proportional contributions from persons and properties. 1953. Taxation is done not merely to raise revenues to support the government. . namely: a) it is an enforced proportional contribution from persons and properties. which is so affected with public interest as to be within the police power of the State. assets and properties. and c) it is levied for the support of the government. it follows that the Legislature may determine within reasonable bounds what is necessary for its protection and expedient for its promotion. and particularly of section 6 will show that the tax is levied with a regulatory purpose. 920. . to provide means for the rehabilitation and stabilization of the threatened sugar industry. No. In other words. the aforementioned feeder roads were "nothing but projected and planned subdivision roads. ISSUE: Should appropriation using public funds be made for public purposes only? RULING: . 1995. The protection and promotion of the sugar industry is a matter of public concern. 147062-64 December 14. COCOFED. G. 1960 FACTS: On August 31. approved on June 20. but also to provide means for the rehabilitation and the stabilization of a threatened industry. an item (43[h]) of P85. Among the properties sequestered by the Commission were shares of stock in the United Coconut Planters Bank (UCPB) registered in the names of the alleged "one million coconut farmers. not yet constructed. at the time of the passage and approval of said Act. freeze orders and provisional takeovers of allegedly ill-gotten companies. situated at .R. . the act is primarily an exercise of the police power. real or personal. in section 1-C (a) thereof.R. petitioner Wenceslao Pascual instituted this action for declaratory relief. If objective and methods are alike constitutionally valid. within the Antonio Subdivision . no reason is seen why the state may not levy taxes to raise funds for their prosecution and attainment. EDUARDO M. with injunction. repair. reconstruction. THE SECRETARY OF PUBLIC WORKS AND COMMUNICATIONS. extension and improvement" of Pasig feeder road terminals. entitled "An Act Appropriating Funds for Public Works". a tax has three elements.8 RULING: Analysis of the Act. No. and the SANDIGANBAYAN (First Division) G." the so-called Coconut Industry Investment Fund companies (CIIF companies) and Private Respondent Eduardo Cojuangco Jr. 2001 FACTS: The PCGG issued and implemented numerous sequestrations. Respondents moved to dismiss the petition upon the ground that petitioner had "no legal capacity to sue". in general.. .000. exacted by the State by virtue of its sovereignty for the support of government and for all public needs.

and not channeled to another government objective. no appropriation of state funds can be made for other than for a public purpose. Municipal Ordinance No. INC.D. The tax imposed in both Ordinances Nos. 1956 partake of the nature of the taxation power of the State? RULING: NO. they are exacted in the exercise of the police power of the State. No. 23 and 27 issued by the Municipality of Tanauan.” ISSUES: 1. The test of the constitutionality of a statute requiring the use of public funds is whether the statute is designed to promote the public interest. ORBOS G. The power of taxation is purely legislative and cannot be delegated to the executive or judicial department of the government without infringing upon the theory of separation of powers. PEPSI-COLA BOTTLING COMPANY OF THE PHIILIPPINES. Municipal Ordinance No. it was a repeal of Municipal Ordinance No. and.D. 23. MUNICIPALITY OF TANAUAN G. 23 and 27 is denominated as "municipal production tax. In the . 1956. The Municipality of Tanauan discovered that manufacturers could increase the volume contents of each bottle and still pay the same tax rate since tax is imposed on every bottle corked. No. OSMEÑA VS. Legislative powers may be delegated to local governments in respect of matters of local concern. Do Ordinance Nos. Is Section 2 of R. The petitioner argues inter alia that "the monies collected pursuant to . The OPSF was established "for the purpose of minimizing the frequent price changes brought about by exchange rate adjustment and/or changes in world market prices of crude oil and imported petroleum products. designated as the Oil Price Stabilization Fund (OPSF). 1984. President Ferdinand Marcos issued P. plaintiff commenced a complaint seeking to declare Section 2 of R.' and that "if a special tax is collected for a specific purpose. 99886 March 31. 27 levies and collects on soft drinks produced or manufactured within the territorial jurisdiction of the municipality a tax of one centavo (P0. 23 levies and collects from soft drinks producers and manufacturers one-sixteenth (1/16) of a centavo for every bottle of soft drink corked. such amounts belong to the State. ." Petitioner further points out that since "a 'special fund' consists of monies collected through the taxing power of a State. But as an exception. 1976 FACTS: In February 1963.R. under constitutional provisions against taxation except for public purposes and prohibiting the collection of a tax for one purpose and the devotion thereof to another purpose. the revenue generated therefrom shall 'be treated as a special fund' to be used only for the purpose indicated." ISSUE: Do the powers granted to the ERB under P. VS. Municipal Ordinance No.9 The right of the legislature to appropriate funds is correlative with its right to tax. as amended.D. 2. Leyte as null and void.01) on each gallon of volume capacity. O.R.A. Aquino promulgated E.' not as a 'trust account' or a 'trust fund. as opposed to the furtherance of the advantage of individuals. To combat this scheme. 1993 FACTS: October 10. 2264 an undue delegation of the power of taxation? 2.". 2264 (Local Autonomy Act) unconstitutional as an undue delegation of taxing power and to declare Ordinance Nos. The OPSF was designed to reimburse oil companies for cost increases in crude oil and imported petroleum products resulting from exchange rate adjustments and from increases in the world market prices of crude oil. although each advantage to individuals might incidentally serve the public. President Corazon C. must be treated as a 'SPECIAL FUND. Subsequently. L-31156 February 27. 1956 creating a Special Account in the General Fund. 23 and 24 constitute double taxation and impose percentage or specific taxes? RULING: 1. the theory does not apply to municipal corporations. 27 was enacted. NO. While the funds collected may be referred to as taxes. 137 expanding the grounds for reimbursement to oil companies for possible cost under recovery incurred as a result of the reduction of domestic prices of petroleum products.A. As such. the OPSF was reclassified into a "trust liability account. NO. On the other hand. P. although the use thereof is limited to the special purpose/objective for which it was created.

1990 . government be interpreted as directly related to the defense and security of the Philippine territories COMMISSIONER OF INTERNAL REVENUE vs. military personnel fall within the tax exemption provided in the RP-US Military Bases Agreement? RULING: NO. No. what it intended was a broad and comprehensive application of such mandate. No. COURT OF APPEALS G. VS.R. the City of Bacolod levied upon said lands and buildings and declared them forfeited in its favor. SEA-LAND SERVICE. 1969 and 1970. ISSUE: Should the subject properties maintained by petitioner SSS be exempt from payment of real property tax? RULING: YES. 2001 FACTS: Petitioner Sea-Land Service Incorporated. military personnel is not included in the term "construction. Said lands and buildings were assessed for taxation.R. the parties admitted that the Municipal Treasurer was enforcing Municipal Ordinance No.R. The transport or shipment of household goods and effects of U. operation and defense of the bases. 24 has amended the Social Security Act of 1954 expressly exempting the SSS from payment of any tax thereby removing all doubts as to its exemption.S. MITSUBISHI METAL CORPORATION G. P. No action was however taken. Subsequently. In protest. L-35726 July 21.5% in accordance with Section 25(a) (2) of the National Internal Revenue Code in relation to Article 9 of the RP-US Tax Treaty. Section 29 of the Charter of Bacolod City does not contain any qualification whatsoever in providing for the exemption from real estate taxes of "lands and buildings owned by the Commonwealth or Republic of Philippines. for operation purposes. Thereafter. No. INC. Petitioner failed to pay the realty taxes for the years 1968. petitioner wrote the city mayor through the city treasurer seeking reconsideration of the forfeiture proceeding on the ground that it is a government-owned and controlled corporation and as such. Consequently. petitioner filed an action in court for the nullification of the court proceedings. CITY OF BACOLOD G. ISSUE: Does the income that petitioner derived from services in transporting the household goods and effects of U. Hence. SOCIAL SECURITY SYSTEM VS. when the legislature exempted lands and buildings owned by the government from payment of said taxes. L-54908. maintains a five-storey building in Bacolod City occupying four parcels of land. 122605 April 30. maintenance. Further. an American international shipping company licensed by the Securities and Exchange Commission to do business in the Philippines entered into a contract with the United States Government to transport military household goods and effects of U." Hence. it is exempt from the payment of taxes. The court ruled that the properties of petitioner are not exempt from the payment of real property tax because these are not one of the exemptions under Section 29 of the Charter of Bacolod City and there is no other law providing for its exemption.10 stipulation of facts.D.S. Sea-Land filed a claim for refund alleging that the taxes it paid were made in mistake because under the RP-US Military Base Agreement. military personnel assigned to the Subic Naval Base. regardless of whether such property is devoted to governmental or proprietary purpose. there was no case of double taxation. 27 only. January 22.S. Laws granting exemption from tax are construed strictissimi juris against the taxpayer and liberally in favor of the taxing power. 1982 FACTS: Petitioner Social Security System.S. Whether a government owned and controlled corporation is performing governmental or proprietary function is immaterial. should be exempt from payment of real estate taxes.” Neither could the performance of this service to the U. Sea-Land paid its corresponding corporate income tax for the taxable year 1984 at the rate of 1.

131.00 in United States currency at the then prevailing exchange rate. cannot secure exemption from taxation for merchants who make sales to the Post Exchange. and by those who do business with the US Army and Navy in the Philippines. An Army Post Exchange. MARUBENI CORPORATION G. POSADAS G.000. 1970. Sometime in November 1985.79 for the years 1974 and 1975. in turn undertook to sell to Mitsubishi all the copper concentrates produced for a period of fifteen (15) years. Under said contract.595. nor could it legally constitute.966. Taxation is the rule and exemption is the exception. The Commissioner collected a sales tax of 1 1/2 % of the gross value of the commodities. is the sole creditor of ATLAS. in the course of its duly authorized business transactions. petitioner Commissioner of Internal Revenue issued a letter of authority to examine the books of accounts of the Manila branch office of respondent corporation. exempt from withholding tax. United States currency. Similar taxes are paid by those who sell merchandise to the Philippine Government. therefore. the merchants who effected the sales to the Post Exchange are the ones who paid the tax. and it is the officers. 1970 in the equivalent sum of $20.00. etc. 2001 FACTS: Respondent Marubeni Corporation is a foreign corporation and is duly registered to engage in business in the Philippines. soldiers. although an agency within the US Army. 137377. the Exchange made many purchases of various and diverse commodities.R. wares and merchandise from various merchants in the Philippines. Such an innocuous statement of purpose could not have been intended for. 1930 FACTS: The 31st Infantry Post Exchange is a post exchange constituted in accordance with Army regulations and the laws of the United States. MITSUBISHI. a contract of agency. Section 139). Taxes have been collected from merchants who made sales to Army Post Exchanges since 1904 (Act 1189.000.R. A formal protest was lodged by the Exchange. ISSUE: Whether or not the petitioner is exempt from the sales tax imposed against its suppliers. The conclusion is indubitable. Atlas.000. December 18. Herein.000. from the merchants who sold said commodities to the Exchange. Its loan application was approved on May 26. RULING: The court ruled in the negative. Cebu. and NOT EXIMBANK. 31st INFANTRY POST EXCHANGE vs.143. and civilian employees and their families who are benefited by the post exchange to whom the tax is ultimately shifted. Eximbank had nothing to do with the sale of the copper concentrates since all that Mitsubishi stated in its loan application with the former was that the amount being procured would be used as a loan to and in consideration for importing copper concentrates from Atlas. It is settled a rule in this jurisdiction that laws granting exemption from tax are construed strictissimi juris against the taxpayer and liberally in favor of the taxing power. The corresponding 15% tax thereon in the amount of P1. Mitsubishi thereafter applied for a loan with the Export-Import Bank of Japan (Eximbank) for purposes of its obligation under said contract. 33403.01 was withheld pursuant to Section 24 (b) (1) and Section 53 (b) (2) of the National Internal Revenue Code. No. Atlas Consolidated Mining and Development Corporation entered into a Loan and Sales Contract with Mitsubishi Metal Corporation for purposes of the projected expansion of the productive capacity of the former's mines in Toledo. September 4. goods. interest payments were made by the former to the latter totaling P13. Pursuant to the contract between Atlas and Mitsubishi.971. COMMISSIONER OF INTERNAL REVENUE vs.11 FACTS: On April 17. Mitsubishi agreed to extend a loan to Atlas 'in the amount of $20. the former being the owner of the $20 million upon completion of its loan contract with EXIMBANK of Japan. ISSUE: Whether or not the interest income from the loans extended to Atlas by Mitsubishi is excludible from gross income taxation pursuant to Section 29 of the tax code and. as amended by Presidential Decree No. RULING: The court ruled in the negative. and duly remitted to the Government. No. .

443.12 In the course of the examination.O. the scope and coverage of E. Any state may. In accordance with the terms of E. the date of effectivity referred to in Section 4 (b) of E. the original issuance. No. No. 1986. It excepts from income tax amnesty those taxpayers "with income tax cases already filed in court as of the effectivity hereof.O. Reagan was liable for the income tax arising from the sale of his automobile in Clark.O. exercises its authority over its entire domain. express or implied." The point of reference is the date of effectivity of E. On September 26.O. Since Executive Order No. 41 should be November 17. 64. 1986.970. As a result of the transaction.600.” ISSUE: Whether or not petitioner Reagan was covered by the tax exemption. which as he contends is “a base outside the Philippines. 1986.O. contractor's and commercial broker's taxes. No. No. passed into law RA 7227 entitled "An Act Accelerating the Conversion of Military Reservations Into Other Productive Uses. TIU vs. No.O. REAGAN vs. Under this E. The Philippines. 64. 41 declaring a one-time amnesty covering unpaid income taxes for the years 1981 to 1985 was issued. a Filipino. 27.O. After acquiring a permit to sell the car from the base commander of Clark Air Base. COMMISSIONER OF INTERNAL REVENUE G. respondent filed its tax amnesty return dated October 30.O. 1986. December 27. as an independent and sovereign country. The law does not look with favor on tax exemptions and that he who would seek to be thus privileged must justify it by words too plain to be mistaken and too categorical to be misinterpreted. No.R. No.83. The difficulty lies with respect to the contractor's tax assessment and respondent's availment of the amnesty under E. 64 are concerned. No. petitioner found respondent to have undeclared income from two (2) contracts in the Philippines. 64 took effect on November 17. By doing so. with the approval of the President. and cannot do so.O. 41 and 64. No. Reagan claimed that he was exempt as the transaction occurred in Clark Air Base. the Commissioner rendered Reagan liable for income tax in the sum of P2. 127410 January 20. 41. 1986. 1986. 64 should be construed strictly against the taxpayer. of the US Marine Corps stationed in Sangley Point. Respondent then received a letter form petitioner assessing respondent several deficiency taxes.O. a taxpayer who wished to avail of the income tax amnesty should comply with certain requirements.) No." to E. Johnson sold the same. Creating the Bases Conversion and Development . On November 17. insurance and other charges. L-26379.O. Neither is it necessarily implied from E. on August 2. RULING: The court ruled in the negative. No. ISSUE: Whether or not herein respondent's deficiency tax liabilities were extinguished upon respondent's availment of tax amnesty under Executive Orders Nos. COURT OF APPEALS GR. No. 64 including estate and donor's taxes and tax on business. Executive Order (E. 41 is very clear and unambiguous. it by no means follows that such areas become impressed with an alien character. No. Cavite for US$ 6. consequently.) No. No. The term "income tax cases" should be read as to refer to estate and donor's taxes and taxes on business while the word "hereof. branch profit remittance. submit to a restriction of its sovereign rights. RULING: Section 4 (b) of E. Reagan sold the car to a certain Willie Johnson Jr.O. respondent filed two (2) petitions for review with the Court of Tax Appeals. insofar as the taxes in E. There is nothing in E. Earlier. 1999 FACTS: Congress. including freight. It may allow another power to participate in the exercise of jurisdictional right over certain portions of its territory. and thus. 64 that it or any of its provisions should apply retroactively. on the same day to Fred Meneses. Respondent questioned this assessment. the vagueness in Section 4 (b) brought about by E. 1969 FACTS: William Reagan imported a tax-free 1960 Cadillac car with accessories valued at US $ 6. 64 that provides that it should retroact to the date of effectivity of E.O. 41.O. No. 41 was expanded by Executive Order (E. The areas retain their status as native soil. by its consent.O. Clark Air Base is within Philippine territorial jurisdiction to tax. however. Petitioner's revenue examiners recommended an assessment for deficiency income. 41.. In the instant case. Reagan has not done so.

President Ramos issued Executive Order No. hence. The sanggunian passed a resolution seeking the issuance by President Ramos of a presidential proclamation declaring an area of 288. subject to the concurrence of the local government units directly affected.A. No. No. It also created the Subic Special Economic and Free Port Zone. . covered and defined by the 1947 Military Bases Agreement between the Philippines and the United States of America. 119775 October 24. BCDA. but rejected or modified the other proposals. More importantly.A. If the groupings are characterized by substantial distinctions that make real differences. unless limited by a provision of the state constitution. it being of the view that such declaration would exempt the camp’s property and the economic activity therein from local or national taxation. ISSUE: Whether Proclamation No.A. but is subject to reasonable classification. 97-A. Providing Funds Therefor and for Other Purposes. 7227 are exclusive only to the Subic SEZ. The sanggunian adopted and submitted a 15-point concept for the development of Camp John Hay. The classification must also be germane to the purpose of the law and must apply to all those belonging to the same class. specifying the area within which the tax-and-duty-free privilege was operative. It was intended to intelligently guide the sanggunian in determining its position on whether Camp John Hay be declared a SEZ. JOHN PEOPLES ALTERNATIVE COALITION vs. The fundamental right of equal protection of the laws is not absolute. President Ramos issued Proclamation No. 420. No. They stressed the need to declare Camp John Hay a SEZ as a condition precedent in accordance R. the 'Secured Area' is precise and well-defined as '." Section 12 thereof created the Subic Special Economic Zone and granted there to special privileges. free trade zones and the like. . It expressly gave authority to the President to create through executive proclamation. It granted the Subic SEZ incentives. which laws were already extant before the issuance of the proclamation or the enactment of R. pursuant to Section 12 of RA 7227. the grant thereof to the John Hay SEZ cannot be sustained. It delineated the exact metes and bounds of the Subic Special Economic and Free Port Zone. The Court found real and substantive distinctions between the circumstances obtaining inside and those outside the Subic Naval Base. 7227 set out the policy of the government to accelerate the sound and balanced conversion into alternative productive uses of the former military bases. . the nature of most of the assailed privileges is one of tax exemption. 420 is constitutional RULING: While the grant of economic incentives may be essential to the creation and success of SEZs. Neither does the same grant of privileges to the John Hay SEZ find support in the other laws specified under Section 3 of Proclamation No. The President issued Executive Order No. It is the legislature. thereby justifying a valid and reasonable classification. This Court referred the matter to the Court of Appeals. 420 which established a SEZ on a portion of Camp John Hay. Respondent Court held that "there is no substantial difference between the provisions of EO 97-A and Section 12 of RA 7227.'" ISSUE: Whether or not Executive Order No. 97-A violates the equal protection clause of the Constitution RULING: No. the extension of the same to the John Hay SEZ finds no support therein. BCDA GR. one class may be treated and regulated differently from another. that has full power to exempt any person or corporation or class of property from taxation. Proclamation No. It created Bases Conversion and Development Authority. BCDA. the lands occupied by the Subic Naval Base and its contiguous extensions as embraced. The Sangguniang Panlungsod of Baguio City asked BCDA to exclude all the barangays partly or totally located within Camp John Hay from the reach or coverage of any plan or program for its development. Tuntex and AsiaWorld agreed to some. . The incentives under R. Tuntex and Asiaworld executed a Joint Venture Agreement. In both. 2003 FACTS: Republic Act No. BCDA entered into a Memorandum of Agreement and Escrow Agreement with Tuntex and Asiaworld. 97. . No. its power to exempt being as broad as its power to tax. The petitioners challenged before this Court the constitutionality of EO 97-A for allegedly being violative of their right to equal protection of the laws. 7227. The challenged grant of tax exemption would circumvent the Constitution’s imposition that a law granting any tax exemption must have the concurrence of a majority of all the members of Congress.1 hectares of the camp as a SEZ. clarifying the application of the tax and duty incentives. 532 was issued by President Ramos.13 Authority for this Purpose. 7227. other Special Economic Zones in the areas covered. as amended . The sanggunian requested the Mayor to order the determination of realty taxes which may be collected from real properties of Camp John Hay.

.3 of Executive Order No. The CSEZ shall have all the applicable incentives in the Subic Special Economic and Free Port Zone under RA 7227.2 and 1. 80 which declared that Clark shall have all the applicable incentives granted to the Subic Special Economic and Free Port Zone under Republic Act No. Section 5 of Executive Order No. allowing tax and duty-free removal of goods to certain individuals.” PROVINCE OF ABRA vs. and improvements used exclusively for religious. Under the 1935 Constitution: "Cemeteries. BCDA passed Board Resolution No. and Section 4 of BCDA Board Resolution No. petitioner failed to exhaust the administrative remedies available under PD No. while the CSEZ Sub-Zone covering the rest of the CSEZ shall have limited incentives.” EO 97-A was issued. 93-05-034 allowing the tax and duty-free sale at retail of consumer goods imported via Clark for consumption outside the CSEZ. executive order or regulation. buildings. HERNANDO G. there being a tax assessment made by the Provincial Assessor on the properties of respondent.the Subic Special Economic Zone shall be developed into a self-sustaining. and parsonages or convents appurtenant thereto. 7227. 1981 FACTS: On the face of this certiorari and mandamus petition. 93-05-034 are null and void RULING: The Court finds that the setting up of such commercial establishments which are the only ones duly authorized to sell consumer items tax and duty-free is still well within the policy enunciated in Section 12 of Republic Act No. and improvements. financial and investment center to generate employment opportunities in and around the zone and to attract and promote productive foreign investments. industrial. there is no dispute that the properties including their procedure are actually." There is a marked difference.” ISSUE: Whether or not Executive Order No. directly and exclusively used by the Roman Catholic Bishop of Bangued. are null and void for being contrary to Section 12 of Republic Act No. 7227 was enacted providing for the sound and balanced conversion of the Clark and Subic military reservations and their extensions into alternative productive uses in the form of special economic zones in order to promote the economic and social development of Central Luzon in particular and the country in general. No. and all lands.R. “Clarifying the Tax and Duty Free Incentive Within the Subic Special Economic Zone Pursuant to R. 2005 FACTS: Republic Act No.” The Court reiterates that the second sentences of paragraphs 1. There was a denial of a motion to dismiss an action for declaratory relief by Roman Catholic Bishop of Bangued desirous of being exempted from a real estate tax followed by a summary judgment granting such exemption.R. The full incentives in the Clark SEZ Main Zone and the limited incentives in the Clark SEZ Sub-Zone shall be determined by the BCDA. 97-A. for religious or charitable purposes. 464 before filing such court action. “Further Clarifying the Tax and Duty-Free Privilege Within the Subic Special Economic and Free Port Zone. vs. Inc." The very next sentence assumed the very point it asked when he categorically stated: "Likewise. 97-A. it clearly appears that the actuation of respondent Judge Hernando left much to be desired. Respondent Judge alleged that there "is no question that the real properties sought to be taxed by the Province of Abra are properties of the respondent Roman Catholic Bishop of Bangued. without even hearing the side of petitioner. 132527 July 29. It was the submission of counsel that an action for declaratory relief would be proper only before a breach or violation of any statute. 7227 that “. 7227. 80. L-49336 August 31. Said Section clearly provides that “exportation or removal of goods from the territory of the Subic Special Economic Zone to the other parts of the Philippine territory shall be subject to customs duties and taxes under the Customs and Tariff Code and other relevant tax laws of the Philippines.A. churches. The President issued EO No. charitable. No. 97. buildings." For him then: "The proper remedy of the petitioner is appeal and not this special civil action. BCDA G. . 7227. commercial. Moreover. even in a limited amount. from the Secured Area of the SSEZ. No. President Ramos issued Executive Order No.14 COCONUT OIL REFINERS ASSOCIATION INC. Inc." ISSUE: Whether or not the properties of respondent Roman Catholic Bishop should be exempt from taxation RULING: Respondent Judge 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. or educational purposes . The CSEZ Main Zone covering the Clark Air Base proper shall have all the investment incentives.

. III Secs. filed a petition for prohibition on May 27. and improvements. 4. To subject the press to its payment is not to burden the exercise of its right any more than to make the press pay income tax or subject it to general regulation is not to violate its freedom under the Constitution. It is not a tax on the exercise of a privilege. 5. Contracts must be understood as having been made in reference to the possible exercise of the rightful authority of the government and no obligation of contract can extend to the defeat of that authority. The change should not be ignored. Ermita G. No. Section 5 imposes a 10% VAT on importation of goods. hardship to taxpayers alone is not an adequate justification for adjudicating abstract issues. 2005 FACTS: Before R. 28 (1) of the Constitution.A. 5 and 6 of R." they should not only be "exclusively" but also "actually and "directly" used for religious or charitable purposes. 7716. "but the Senate may propose or concur with amendments. No. SECRETARY OF FINANCE G. adjudication would be no different from the giving of advisory opinion that does not really settle legal issues. 3.R. 10 of the Constitution. 2005 questioning the constitutionality of Sections 4. III Sec. 1 (2) to decide whenever a claim is made that "there has been a grave abuse of discretion amounting to lack or excess of jurisdiction on the part of any branch or instrumentality of the government. bills of local application. the Senate may propose an entirely new bill as a substitute measure. petitioners ABAKADA GURO Party List. It is imposed on the sale. have been filed by the several petitioners in these cases." In the exercise of this power. What it simply provides is that Congress shall "evolve a progressive system of taxation. Whether or not there is violation of the rule on taxation under Art." This duty can only arise if an actual case or controversy is before us. ABAKADA Guro Party List vs. The motions. VI Sec.A. The Constitution is worded differently. mosques. 5. Whether or not R. the law could take back the privilege anytime without offense to the Constitution. It must be duly taken into consideration. Whether or not there is violation of the due process clause under Art. 24 provides that all appropriation. 107 and 108. bills authorizing increase of the public debt. The Constitution does not really prohibit the imposition of indirect taxes which. These questioned provisions contain a uniform proviso authorizing the President.R. No. of the National Internal Revenue Code (NIRC). No.15 shall be exempt from taxation. 9337 took effect." it also adds. 24 of the Constitution. 115455 October 30. Section 4 imposes a 10% VAT on sale of goods and properties. VIII. 4 and 5 of the Constitution. 1995 FACTS: Motions were filed seeking reconsideration of the Supreme Court decision dismissing the petitions for the declaration of unconstitutionality of R. TOLENTINO vs. lease or exchange of goods or properties or the sale or exchange of services and the lease of properties purely for revenue purposes. barter. and private bills must "originate exclusively in the House of Representatives. No. VI Sec. VI Sec. otherwise known as the Expanded Value-Added Tax Law. RULING: 1. and non-profit cemeteries" and required that for the exemption of ":lands. No. 7716 is violative of press freedom and religious freedom under Art. While Art. III Sec. amending Sections 106. 3. and Section 6 imposes a 10% VAT on sale of services and use or lease of properties. 7716 did not "originate exclusively" in the House of Representatives as required by Art." 4. buildings. respectively. of which there are 10 in all. 2. Sec. et al. revenue or tariff bills. On the alleged violation of due process. 1 of the Constitution. much less a constitutional right. 9337." The present Constitution added "charitable institutions. ISSUES: 1.A.A. Whether or not R.A. Since the law granted the press a privilege. like the VAT. upon . Whether or not there is an impairment of obligation of contracts under Art. The VAT is not a license tax. Otherwise. 2. No. We are told that it is our duty under Art. are regressive. 168056 September 1.

traders and dealers are not. The former produce and sell copra. 2.16 recommendation of the Secretary of Finance. 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 as the classification had the effect of denying to the petitioner the exemption it previously enjoyed when copra was classified as an agricultural food product under Sec. the methods of assessment. INC. This is constitutionally permissible. 1994 FACTS: Petitioner Misamis Oriental Association of Coco Traders. is a domestic corporation engaged in the buying and selling of copra in Misamis Oriental. No. on the other. or arbitrariness. Inc. COMMISSIONER OF INTERNAL REVENUE vs. RULING: There is a material or substantial difference between coconut farmers and copra producers. after specified conditions have been satisfied. and what is the scope of his authority. the latter merely sell copra. copra was classified as agricultural food product under Sec. COURT OF APPEALS G. 108524 November 10. discrimination. to raise the VAT rate to 12%. the kind of property. 3. percentage. RULING: 1. The petitioner alleges that prior to the issuance of Revenue Memorandum Circular 47-91 on June 11. in our complex economy that is frequently the only way in which the legislative process can go forward. The Constitution does not forbid the differential treatment of persons so long as there is a reasonable basis for classifying them differently.R. therefore. 103(b) of the National Internal Revenue Code and. ISSUES: 1. Section 24 of the Constitution. although both sell copra in its original state. No. Whether or not there is undue delegation of legislative power in violation of Article VI Sec 28(2) of the Constitution. and excise and franchise taxes. or the amounts to be raised. who must do it. which implemented VAT Ruling 190-90. vs. on the one hand. Whether or not there is a violation of Article VI. 119761 August 29. DEPARTMENT OF FINANCE SECRETARY G. 2. MISAMIS ORIENTAL ASSOCIATION OF COCO TRADERS. Whether or not there is a violation of the due process and equal protection under Article III Sec. 2006. the State’s power is entitled to presumption of validity. 3. Congress does not abdicate its functions or unduly delegate power when it describes what job must be done. 1996 FACTS: . 1991. the rates to be levied. Petitioner sought to nullify Revenue Memorandum Circular No. There is no undue delegation of legislative power but only of the discretion as to the execution of a law. Petitioners argue that the law is unconstitutional. valuation and collection. As a rule. the judiciary will not interfere with such power absent a clear showing of unreasonableness. 1 of the Constitution. and copra traders and dealers. exempt from VAT at all stages of production or distribution.R. Since there is no question that the revenue bill exclusively originated in the House of Representatives. effective January 1. The power of the State to make reasonable and natural classifications for the purposes of taxation has long been established. 103(b) of the NIRC ISSUE: Whether there is violation of equal protection clause because while coconut farmers and copra producers are exempt. Whether it relates to the subject of taxation. 1950 amending corporate income taxes. the Senate was acting within its constitutional power to introduce amendments to the House bill when it included provisions in Senate Bill No.

. The following day. Pangasinan. COMMISSIONER OF INTERNAL REVENUE vs. or on 30 July 1993. Republic Act (R.R. 14 and 25 of June 29 and July 2.) No. 3843 was passed on June 22. been made in order to place "Hope Luxury. They do not constitute a part of the machinery of the general government.' 'Hope. heat. In so doing. Inc. as amended. instead of the lower rates as provided in the municipal franchises.' and 'More' as foreign brands since they were listed in the World Tobacco Directory as belonging to foreign companies.293. Fortune Tobacco changed the names of 'Hope' to 'Hope Luxury' and 'More' to 'Premium More. granting to the private respondent a legislative franchise for the operation of the electric light. 3843 is unconstitutional for being violative of the "uniformity and equality of taxation" clause of the Constitution. The CTA upheld the position of Fortune Tobacco and adjudged RMC No. The Philippine Patent Office issued to the corporation separate certificates of trademark registration over "Champion. 1954 as prescribed in Section 259 of the National Internal Revenue Code. The Court is convinced that the hastily promulgated RMC 37-93 has fallen short of a valid and effective administrative issuance. RA No. Section 10 of these franchises provides that said grantee shall pay 2% of their gross earnings obtained thru this privilege. L-23771 August 4. Tax exemptions have never been deemed violative of the equal protection clause. Section 4 thereof provides that: In consideration of the franchise and rights hereby granted. The due observance of the requirements of notice." "Premium More" and "Champion" within the classification of locally manufactured cigarettes bearing foreign brands and to thereby have them covered by RA 7654. Revenue Memorandum Circular No.Pending the hearing of the said cases. 1946. Lingayen Gulf Electric Power Co. 1988 FACTS: The respondent taxpayer. thereby discriminatory and violative of the rule on uniformity and equality of taxation. of hearing. it legislated under its quasi-legislative authority." "Hope. ISSUE: Whether or not Section 4 of R. 37-93 as defective. respectively.. Fortune Tobacco requested for a review.A. and power system in the same municipalities of Pangasinan. particularly considering the circumstances under which it has been issued. under Resolution Nos. The request was denied on 29 July 1993. The petitioner submits that the said law is unconstitutional insofar as it provides for the payment by the private respondent of a franchise tax of 2% of its gross receipts. verily. No. the grantee shall pay into the Internal Revenue office of each Municipality in which it is supplying electric current to the public under this franchise. 1 963. the CIR assessed Fortune Tobacco for ad valorem tax deficiency amounting to P9. convinces us that the circular cannot be viewed simply as a corrective measure or merely as construing Section 142(c)(1) of the NIRC. About a month after the enactment and two (2) days before the effectivity of RA 7654. It amended Section 142(c)(1) of the NIRC. Fortune Tobacco filed a petition for review with the CTA.A. but has. No.00. the Bureau of Internal Revenue (BIR) assessed against and demanded from the private respondent the total amount of P19. was issued by the BIR. in fact and most importantly. However. RULING: A reading of RMC 37-93. the BIR not simply intrepreted the law. 7654. 1948 to December 31. The initial position of the CIR was to classify 'Champion. while other taxpayers similarly situated were subject to the 5% franchise tax imposed in Section 259 of the Tax Code. On November 21. reconsideration and recall of RMC 37-93.334. RULING: Uniformity means that all property belonging to the same class shall be taxed alike The Legislature has the inherent power not only to select the subjects of taxation but to grant exemptions.598.' thereby removing the said brands from the foreign brand category. 37-93 ("RMC 37-93") Reclassification of Cigarettes Subject to Excise Tax. ISSUE: Whether or not there is a violation of the due process of law. and of publication should not have been then ignored. LINGAYEN GULF OF ELECTRIC POWER G. a tax equal to two per centum of the gross receipts from electric current sold or supplied under this franchise. operates an electric power plant serving the adjoining municipalities of Lingayen and Binmaley.17 Fortune Tobacco Corporation ("Fortune Tobacco") is engaged in the manufacture of different brands of cigarettes. On 03 August 1993.41 representing deficiency franchise taxes and surcharges for the years 1946 to 1954 applying the franchise tax rate of 5% on gross receipts from March 1. Charters or special laws granted and enacted by the Legislature are in the nature of private contracts. 1955. was enacted and became effective on 03 July 1993. pursuant to the municipal franchise granted it by their respective municipal councils." and "More" cigarettes. .

00. does not suffice. not a doubtful and argumentative implication. which provides for rates of tax on citizens or residents on (a) taxable compensation income. considering that they arc not fixed rules but rather broad standards. No. discriminatory or unjust. for being unconstitutional in that its enactment is not alledgedly within the powers of the President.R. The disputed sales tax is also equitable. To justify the nullification of a law. the presumption of validity must prevail. (c) royalties. ISSUE: Whether or not EO 273 was enacted by the president with grave abuse of discretion and whether or not such law is unconstitutional. discriminatory. issued by the President of the Philippines on 25 July 1987. It appears that a comprehensive study of the VAT had been extensively discussed by this framers and other government agencies involved in its implementation. regressive. HUI CHIONG TSAI PAO G. It is imposed only on sales of goods or services by persons engage in business with an aggregate gross annual sales exceeding P200. to take effect on 1 January 1988. and which amended certain sections of the National Internal Revenue Code and adopted the value-added tax (VAT. 1978 FACTS: . He alleges arbitrariness. there is a need for of such persuasive character as would lead to such a conclusion. for short). for short). RULING: The difficulty confronting petitioner is thus apparent. No. 1988 FACTS: This petition seeks to nullify Executive Order No. that the VAT is oppressive. He characterizes the above section as arbitrary amounting to class legislation. There must be a factual foundation of such unconstitutional taint. and other winnings.18 KAPATIRAN NG MGA NAGLILINGKOD SA PAMAHALAAN vs. (f) adjusted gross income. Considering that petitioner here would condemn such a provision as void or its face. The petitioners have failed to adequately show that the VAT is oppressive. 81311 June 30. ANCHETA G. RULING: Petitioners have failed to show that EO 273 was issued capriciously and whimsically or in an arbitrary or despotic manner by reason of passion or personal hostility. 273 (EO 273. This is merely to adhere to the authoritative doctrine that were the due process and equal protection clauses are invoked. L-59431 July 25. Petitioners merely rely upon newspaper articles which are actually hearsay and have evidentiary value. and violates the due process and equal protection clauses and other provisions of the 1987 Constitution.000. ISSUE: Whether or not BP 135 Sec 1 is violative of due procee and equal protection clause. TAN G. there must be a clear and unequivocal breach of the Constitution. 1984 FACTS: Petitioner assailed the validity of Section 1 of Batas Pambansa Blg. oppressive and capricious in character. SISON vs. Absent such a showing. "he would be unduly discriminated against by the imposition of higher rates of tax upon his income arising from the exercise of his profession vis-a-vis those which are imposed upon fixed income or salaried individual taxpayers. Petitioner as taxpayer alleges that by virtue thereof. (e) dividends and share of individual partner in the net profits of taxable partnership. 135 which further amends Section 21 of the National Internal Revenue Code of 1977. VILLEGAS vs. even under the past administration.R. (d) interest from bank deposits and yield or any other monetary benefit from deposit substitutes and from trust fund and similar arrangements. as here. (b) taxable net income. he has not made out a case.R. L-29646 November 10. Small corner sari-sari stores are consequently exempt from its application. prizes. A mere allegation. Due process was not violated. No.

partly or wholly engaged in business in any other streets. PEPSI-COLA BOTTLING CO. filed a petition with the CFI of Manila to declare City Ordinance No.R. sect or denomination. 6537. 3) tenement house. . etc. partly or wholly engaged in or dedicated to business in the streets of J. ISSUE: Does Ordinance 11 violate the rules of uniformity of taxation? RULING: No. 6537 null and void. The validity and constitutionality of this ordinance were challenged by the spouses Villanueva. 1968 FACTS: The municipal board of Iloilo City enacted Ordinance 86. imposing license tax fees as follows: 1) tenement house. 2) tenement house. association. whether permanent. Ordinance No.00anually. OF THE PHILIPPINES. ISSUE: Whether or not the 50. P24. and those working in their respective households. 6537 is void because it does not contain or suggest any standard or criterion to guide the mayor in the exercise of the power which has been granted to him by the ordinance. 110 which was subsequently amended by Ordinance No. The same amount of P50. v. 122. 6537 is a violation of the equal protection clause. Section 1 of the said city ordinance prohibits aliens from being employed or to engage or participate in any position or occupation or business enumerated therein. Villegas (Villegas). that the owners of other classes of buildings in the City of Iloilo do not pay the taxes imposed by the ordinance in question is no argument at all against uniformity and equality of the tax imposition.00 except persons employed in the diplomatic or consular missions of foreign countries. CITY OF ILOILO G. P12. Hiu Chiong Tsai Pao Ho (Tsai Pao Ho) who was employed in Manila. therefore. 22814 August 28. It has likewise ruled that taxes are uniform and equal when imposed upon all properties of the same class or character within the taxing authority. without first securing an employment permit from the Mayor of Manila and paying the permit fee of P50.00 is being collected from every employed alien whether he is casual or permanent. RULING: The P50. The plaintiff filed a complaint for the recovery of the amount paid under protest on the ground that Ordinance No.10 per case of 24 bottles of PepsiCola and the plaintiff Pepsi-Cola paid under protest. CITY OF BUTUAN G. 6537 as null and void for being discriminatory and violative of the rule of the uniformity in taxation. who are not paid monetarily or in kind. Ordinance No. VILLANUEVA v.00 fee 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. owners of 4 tenement houses containing 34 apartments. temporary or casual. imposes a tax on any person. 1968.00 employment permit fee imposed by virtue of Ordinance No. 110 is illegal. and members of religious orders or congregations. The said city ordinance was also signed by then Manila Mayor Antonio J.” The fact. 1968 FACTS: The City of Butuan enacted Ordinance No. Although the equal protection clause of the Constitution does not forbid classification. P25.R. No. Iznart Aldequer. Villegas filed the present petition. 26521 December 28. 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. Basa.00 per apartment.19 On February 22. 110 as amended. Plaintiff maintains that the ordinance is null and void because it is unjust and discriminatory. or in the technical assistance programs of both the Philippine Government and any foreign government.M. the Municipal Board of Manila passed City Ordinance No. The trial court declared City Ordinance No. This court has ruled that tenement houses constitute a distinct class of property. part time or full time or whether he is a lowly employee or a highly paid executive. No. that the tax imposed is excessive and that it is unconstitutional.00 per apartment. INC. of P0.

20 ISSUE: Whether or not the ordinance in question is violative of the uniformity required by the Constitution? RULING: Yes. 4 imposing “on any and all productions of centrifugal sugar milled at the Ormoc Sugar Company. No. The classification to be valid and reasonable must be: 1) based upon substantial distinctions. Ormoc Sugar Company. Only sales by “agents or consignees” of outside dealers would be subject to the tax. under protest. The court rendered a decision that upheld the constitutionality of the ordinance. on lease or otherwise a tax equivalent to the difference between the money value of the rental or consideration collected and the amount representing 12 per centum of the assessed value of such land. Plaintiff Lutz. The action having been dismissed by the Court of First Instance. Inc. INC. in his capacity as Judicial Administrator of the Intestate Estate of Ledesma. Sales by local dealers. for it taxes only centrifugal sugar produced and exported by the Ormoc Sugar Company. Municipal Board and Mayor alleging that the ordinance is unconstitutional for being violative of the equal protection clause and the rule of uniformity of taxation. in Ormoc City a municipal tax equivalent to one per centum (1%) per export sale to USA and other foreign countries. Equal protection clause applies only to persons or things identically situated and does not bar a reasonable classification of the subject of legislation. regardless of the volume of their sales.. ORMOC SUGAR COMPANY. not acting for or on behalf of other merchants. Section 3 of the said law levies on owners or persons in control of lands devoted to the cultivation of sugar cane and ceded to others for a consideration. Hence. ISSUE: Whether or not the law in question is constitutional? . A perusal of the requisites shows that the questioned ordinance does not meet them. No. which in plaintiff’s opinion is not a public purpose for which a tax may be constitutionally levied. 2)germane to the purpose of the ordinance. The taxing ordinance should not be singular and exclusive as to exclude any subsequently established sugar central for the coverage of the tax. the plaintiffs appealed the case. 1968 FACTS: The Municipal Board of Ormoc City passed Ordinance No. Inc. filed before the Court of First Instance of Leyte a complaint against the City of Ormoc as well as its Treasurer. and a classification is reasonable where 1) it is based upon substantial distinctions. TREASURER OF ORMOC CITY G. seeks to recover from the Collector of Internal Revenue the sum paid by him as taxes alleging that such tax is unconstitutional and void. this appeal. were infringed? RULING: Yes.R. Inc.R. by Ormoc Sugar Company. but also to future conditions substantially identical to those present. would be exempt from the disputed tax. 3) applicable. 2) these are germane to the purpose of the law. 23794 February 17. ARANETA G. ISSUE: Whether or not constitutional limits on the power of taxation. LUTZ v. 7859 December 22. 3) the classification applies not only to present conditions. not only to present conditions. and 4) applicable equally to all those who belong to the same class. and 4) the classification applies only to those who belong to the same class. 567 (Sugar Adjustment Act). and none other.” Payments for said tax were made. 1955 FACTS: This case was initiated in the Court of First Instance of Negros Occidental to test the legality of the taxes imposed by Commonwealth Act No. but also to future conditions substantially identical to those present. v. being levied for the aid and support of the sugar industry exclusively. and even if the same exceeded those made by said agents or consignees of producers or merchants established outside the City of Butuan. These conditions are not fully met by the ordinance in question. Inc. specifically the equal protection clause and rule of uniformity of taxation.

maintaining and improving bridges and public highway (section 73 of the Motor Vehicle Law). No. RULING: . should be exclusively spent in aid of the sugar industry. 1950. It is for this reason that we believe 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. The ordinance in question while it refers to property tax and it is fixed ad valorem yet we cannot reject the idea 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. ASSOCIATION OF CUSTOMS BROKERS et al. The tax levied is with a regulatory purpose. arbitrary capricious unreasonable oppressive and is contrary to and violation our basic and recognizes principles of taxation and licensing laws.” It appears of no moment that the funds raised under the Sugar Stabilization Act.AN ORDINANCE IMPOSING A FEE ON THE PRICE OF EVERY ADMISSION TICKET SOLD BY CINEMATOGRAPHS. L-4376. and G. EASTERN THEATRICAL CO. It appears rational that the tax be obtained precisely from those who are to be benefited from the expenditure of the funds derived from it.The petitioners which is composed of all brokers and public service operators of motor vehicles in the City of Manila. municipal corporation already participate in the distribution of the proceeds that are raised for the same purpose of repairing. That the tax to be levied should burden the sugar producers themselves can hardly be a ground of complaint. Inc. The act is primarily an exercise of the police power. 3992) intends to prevent. 1953 FACTS: This is a petition for declaratory relief to test the validity of Ordinance No. it is inherent in the power to tax that a state be free to select the subjects of taxation. also a public service operator of the trucks in said City. May 22.R.. since it is that very enterprise that is being protected. THEATERS VAUDEVILLE COMPANIES THEATRICAL SHOWS AND BOXING EXHIBITION. ISSUE: Whether or not Ordinance No. for the reason that. ALFONSO G. Manlapit. (b) because it contravenes. G. 3379 passed by the Municipal Board of the City of Manila on March 24.. 3379 is valid as held by the CFI of Manila. vs.. THE MUNICIPALITY BOARD of Manila et al. operator of theaters in Manila And distributor of local or imported films impugns Sections 1.R. L-1104 May 31. to provide means for the rehabilitation and stabilization of the threatened sugar industry. ET AL. under said Act. This prohibition is intended to prevent duplication in the imposition of fees for the same purpose. INC. Plaintiffs. 2958 of the City of Manila. VICTOR. 2958 violated the principle of equality and uniformity of taxation enjoined by the Constitution. unjust. No. existing national legislation more particularly revenue and tax laws and (c) because it is unfair. At any rate. This is precisely what the Motor Vehicle Law (Act No. maintenance and improvement of the streets and bridges in said city. 1949 FACTS: Twelve corporation engaged in motion picture business filed a complaint to impugn the validity of Ordinance No. RULING: No. and it has been repeatedly ruled that “inequalities which result from a singling out of one particular for taxation or exemption infringe no constitutional limitation.21 RULING: Yes. now in question. 2 and 4 of said ordinance as null and void upon the following grounds: (a) For violation the Constitution more particular the provision regarding the uniformity and equality of taxation and the equal protection of the laws. challenge the validity of said ordinance on the ground that (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. ISSUE: Whether or not Ordinance No. violates and is inconsistent with. vs. a member of said association.

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.S. the exemption of the National City Bank of New York from the impositions therein specifically provided (National City Bank of New York v. all banks in the Philippines without distinction and discrimination. A tax is considered uniform when it operates with the same force and effect in every place where the subject may be found. No. unsupported by actual test. and for a number of years. Equality and uniformity of the tax imposition. billboards. is no argument at all against the equality and uniformity of the tax imposition. 80 Law ed. vaudeville companies. L-46255. principally on the grounds that it violates the rule regarding uniformity of taxation. 2432. the said Ordinance does not violate the principle of equality and uniformity of taxation. 1940 FACTS: Prior to the filing of these suits. and if the National City Bank of New York is exempted from its operation because it is a federal instrumentality subject only to the authority of Congress. YATCO G. 2339 imposed an annual tax of P4 per square meter upon "electric signs. and operates on. applies uniformly to. 46256. and boxing exhibitions and other kinds of amusements or places of amusement are taxed. owners of a sign or billboard containing an area of 52 square meters constructed on private property in the city of Manila and exposed to public view. Francis A. ISSUE: Is the tax void for lack of uniformity? RULING: . as amended. Appellants stoutly maintain that although the foregoing provision is of general application and operates on all banks of the same kind doing business in the Philippines.22 No. makes the law discriminatory and violates the rule of uniformity in taxation ISSUE: Whether or not the said section of the Revised Administrative Code violates the rule on uniformity of taxation. and that the plaintiffs themselves admit that a number of other persons have voluntarily and without protest paid the tax herein complained of. theatrical shows. Section 1499 of the Revised Administrative Code. that alone could have the effect of rendering it violative of the rule of uniformity. Plaintiffs assailed that they were gaining lesser profit than what they ought to receive because of the tax imposed by the said law. 351]. CHURCHILL vs. PHILIPPINE TRUST COMPANY vs.. However. 497. as amended. certain descriptions of property and also certain institutions are exempt from taxation. formerly under section 111 of Act No. The taxing power has the authority to make reasonable and natural classifications for purposes of taxation. 11572 September 22. to P2 per square meter or fraction thereof. In every well-regulated and enlightened state or government. based entirely upon the opinion of the plaintiffs.R. but these exemptions have never been regarded as disturbing the rules of taxation. Churchill and Stewart Tait. CONCEPCION G. RULING: No. Posadas [296 U. it was proven that there was no attempt on the part of the plaintiffs to raise the advertising rates in order to cope up with the said tax rates. billboards. even where the fundamental law had ordained that it should be uniform. Appellants challenge the constitutionality of the aforesaid section of the Revised Administrative Code. The fact that some places of amusement are not taxed while others. and spaces used for posting or displaying temporary signs. Nos. The tax was paid under protest. and the appellants cannot point out what places of amusement taxed by the ordinance do not constitute a class by themselves and which can be confused with those not included in the ordinance. 1916 FACTS: Section 100 of Act No. were taxes thereon P104. and all signs displayed on premises not occupied by buildings. and later under section 1499 of the Revised Administrative Code of 1917." This section was subsequently amended by Act No.R. and therefore violative of the equal protection clause of the Constitution. and that it is discriminatory. effective by reducing the tax on such signs. theaters. the plaintiffs-appellants had been paying capital and deposit taxes without protest. such as cinematographs. etc. 46259 and 46277 January 23. It will thus be seen that the contention that the rates charged for advertising cannot be raised is purely hypothetical. 1189.

"the rule of taxation" upon such signs is uniform throughout the Islands. It demanded payment. FACTS Manila Electric Company (MERALCO) was granted a franchise from certain municipalities of Laguna. This is provided under Article X of the 1987 Constitution. a formal claim for refund was sent by MERALCO to the Provincial Treasurer claiming that the franchise tax it had paid and continue to pay to the National Government already includes the franchise tax as provided under Presidential Decree 551. January 12. means that all property belonging to the same class shall be taxed alike. The rule is that a special and local statute applicable to a particular case is not repealed by a . 1999. respondent province enacted a Provincial Ordinance providing that “a tax on business enjoying franchise. 1973. On appeal to the Secretary of Justice. MERALCO paid under protest. such power may be delegated to them either by basic law or by statute. or other special laws. First off. 131359. Thus the petition. Inc. No. CAGAYAN ELECTRIC POWER AND LIGHT COMPANY G." as applied to the constitutional provision that all taxes shall be uniform. Or in other words.R. the petition. Thus. 01-92 violates the non-impairment clause of the Constitution. On June 28. at a rate of 50% of 1% of the gross annual receipts. The claim was denied. alleging that it is exempt from all taxes except the franchise tax required by Republic Act 6020. 1990 FACTS Cagayan Electric Power and Light Company. CEPALCO paid under protest. “in lieu of all taxes” have to give way to the peremptory language of the Local Government Code. On September 13. Thereafter. The Legislature selected signs and billboards as a subject for taxation and it must be presumed that it. there is no provision in PD No. RULING No. 1991. 3 of RA 6020 which exempts CEPALCO. The province filed a petition with the trial court but was dismissed. the Provincial Treasurer sent a demand letter to MERALCO for the tax payment. The statute under consideration imposes a tax of P2 per square meter or fraction thereof upon every electric sign. bill-board.09 of the Laguna Provincial Ordinance No. PROVINCE OF LAGUNA and BENITO BALAZO in his capacity as Provincial Treasurer of Laguna G. No. wherever found in the Philippine Islands. within the constitutional requirement. the Province of Misamis enacted Provincial Revenue Ordinance No.” On the basis of such ordinance. It was amended by Republic Act 3570 and Republic Act 6020. ruled in favor of CEPALCO. subject to the limitations expressed therein. enjoining loval government units to create their own sources of revenue and to levy taxes. The rationale for the current rule is to safeguard the viability and self-sufficiency of local government units by directly granting them general and broad tax powers. the Local Tax Code was promulgated which provides that the province may impose a tax on businesses enjoying franchise. ISSUE Whether CEPALCO is exempt from paying the provincial franchise tax. acted with a full knowledge of the situation... CEPALCO refused to pay. "Uniformity. etc. in so doing. Pursuant thereto. MERALCO filed an appeal with the trial court but was dismissed.R. notwithstanding “any exemption granted by any law.23 A tax is uniform. when it operates with the same force and effect in every place where the subject of it is found. Although local governments do not have the inherent power to tax. The phrase. RULING Yes. xxx (to) impose a tax on business enjoying a franchise. 19. Republic Act 7160. Pursuant to this Code. THE PROVINCE OF MISAMIS ORIENTAL represented by its PROVINCIAL TREASURER v. May 5. fees and charges. otherwise known as the Local Government Code of 1991 was enacted. The Local Government Code of 1991 repealed the Tax Code. 231 expressly or impliedly amending or repealing sec.. consistent with the basic policy of local autonomy. The provincial fiscal upheld the ordinance. It explicitly authorizes provincial governments. ISSUE Whether the imposition of a franchise tax under section 2. 1961 under Republic Act 3247. (CEPALCO) was granted a franchise on June 17. L-45355. MANILA ELECTRIC COMPANY v.

1947 to October 14. altered or repealed by Section 259 of the Tax Code. wires transformers. Alfredo. the original grantee and successors-in-interest paid a franchise tax of 2% on the gross earnings. . granting its franchise constitute a private contract between the petitioner and the Government and such cannot be amended. Republic Act 6020 was enacted under which. CAGAYAN ELECTRIC POWER AND LIGHT CO. 1968. On a date undisclosed. or before the passage of Republic Act 6420 which reiterated its tax exemption. requiring petitioner to pay the deficiency for income taxes for 1968-1971.. No. 1973. franchise. Republic Act 3247 under which. and poles. and assessments of whatever authority upon privileges. L-16428. INC v. earnings. Mario and Benjamin Benito formed a partnership to operate an electric plant. On June 27. ISSUE: Whether petitioner's franchise is a contract which can be impaired by an implied appeal. Republic Act 5431 amended Section 24 of the Tax Code. On August 4.. 1985 FACTS: Petitioner Cagayan Electric Power and Light Co.2475. has made it crystal clear that the franchise tax provided in the Local Tax Code (P. provisions and application even if the terms of the general act are broad enough to include the cases in the special law unless there is manifest intent to repeal or alter the special law. COMMISSIONER OF INTERNAL REVENUE and COURT OF TAX APPEALS G. 1946. 1969. The Commissioner of Internal Revenue (CIR) sent a demand letter on February 15. Such electric plant was granted a franchise in the year 1915 to supply electric current to the municipalities of Albay. Petitioner's franchise. 3-75 issued by the Secretary of Finance on June 26. The franchise. thus petitioner filed with the Court of Tax Appeals (CTA) a petition. 1976. when section 259 of the National Internal Revenue Code was amended by Republic Act 39. Such exemption is part of the inducement for the acceptance of the franchise and the rendition of public service by the grantee. 1958.D. Congress could impair petitioner's franchise by making it liable for income tax from which heretofore it was exempted by virtue of the exemption provided in its franchise. LEALDA ELECTRIC CO. the petition. the CIR cancelled the assessments for 1970 but insisted those for 1968 and 1969. The CTA dismissed the petition. on the ground that Act No. it was liable to pay a franchise tax of 2% and not 5% of its earnings and receipts. it is only liable for the period of January 1 to August 3. the petitioner was again tax exempted.. which increased the franchise tax to 5%. April 30. September 25. alteration. the appeal. COMMISSIONER OF INTERNAL REVENUE and COURT OF TAX APPEALS G. Under its franchise. Republic Act 5431 withdrew petitioner's exemption but was restored by subsequent enactment. 231. it is exempted from “taxes. 9) may only be imposed on companies with franchises that do not contain the exempting clause “in-lieu-of-all-taxes”. 1963 FACTS: On June 11. Sec. Thus. L-60126. Petitioner filed a petition for review with the tax court which held petitioner responsible only for the period from January 1 to August 3.R.24 later statute which is general in its terms.R. 1969 when its tax exemption was modified. Local Tax Regulation No. RULING: Yes. 1949. the Certificate of public convenience and the electric plant was transferred to the said partnership. praying for refund from the period of January 20. INC v. as amended by Act 2620. petitioner filed a petition for refund contending that on its charter. No. and insulators”. or repeal by Congress when public interest so requires. As several petitions were not given definite action. Inc (CEPALCO) is the holder of a legislative franchise. The franchise of CEPALCO expressly exempts it from payment of “all taxes of whatever authority” except 3% tax on its gross earnings. The Constitution provides that a franchise is subject to amendment. making the petitioner liable for income tax in addition to franchise tax. 1969. Upon petitioner's contention. Thus. under Republic Act 3247 also provide it is subject to the Constitution. No. ISSUE Whether petitioner should pay 5% of his gross earnings. income. until October 1. Thus.

the Spanish Government.. It was covered under Section 10 of Act No. granted J. No. which plaintiff Casanovas paid under protest. RULING: . Consequently. non-profit. 1907 FACTS: In 1897. 3473 March 22. the Philippine agency of the American Bible Society has been distributing and selling bibles and/or gospel portions thereof throughout the Philippines and translating the same into several Philippine dialets. The acting City Treasurer of Manila required the society to secure the corresponding Mayor’s permit and municipal license fees. The defendant Commissioner. The defendant appellee is a municipal corporation with powers that are to be exercised in conformity with the provisions of the Revised Charter of the City of Manila.R. non-stock. section 259 of the Tax Code became the basic franchise tax to be paid by holders of all existing and future franchises. AMERICAN BIBLE SOCIETY vs. CITY OF MANILA G. religious. 2475 was enacted. L-9637 April 30. HORD G. JNO S. The society paid such under protest.as are specified in special charters upon whom franchises are conferred”. It simply provides that the grantee and successors-in-interest shall pay the same franchise tax imposed upon other grantees at the time Act No. There is no claim in this case that there was any illegality in the procedure by which these concessions were obtained. or for failure to comply with the conditions prescribed as requisites for their retention in the laws under which they were granted. Section 259 of the Tax Code merely provided that grantees of franchises should pay on their gross earnings or receipts “such taxes. the Court found it unnecessary to consider the claim in view of the result at which the Court has arrived. the act amending the section must be deemed applied to petitioner. in accordance with the provisions of the royal decree of 14 may 1867. S. Casanovas certain mines in the province of Ambos Camarines. In the course of its ministry. missionary corporation duly registered and doing business in the Philippines.25 RULING Yes. CASANOVAS vs. and filed suit questioning the legality of the ordinances under which the fees are being collected. together with compromise covering the period from the 4th quarter of 1945 to the 2nd quarter of 1953. As to the allegation that the section violates uniformity of taxation. Hord. Also. the section conflicts with Section 60 of the Act of Congress of 1 July 1902. Petitioner's franchise does not specifically state that the rate of the franchise tax shall be 2% of his gross earnings or receipts. nor is there any claim that the plaintiff has not complied with the conditions prescribed in the royal decree of 1867. ISSUE: Whether or not the municipal ordinances violate the freedom of religious profession and worship. Such being the case. imposed upon these properties the tax mentioned in Section 134.R. That these were validly perfected mining concessions granted to prior to 11 April 1899 is conceded. of which mines the latter is now the owner. No. J. ISSUE: Whether or not Section 134 of Act 1189 is valid. JNO. prior to its amendment. RULING: The deed constituted a contract between the Spanish Government and Casanovas. 1957 FACTS: Plaintiff-appellant is a foreign. which indicate that concessions can be cancelled only by reason of illegality in the procedure by which they were obtained.. They were so considered by the Collector of Internal Revenue and were by him said to fall within the provisions of Section 134 of Act 1189 (Internal Revenue Act). This does not cover franchise holders whose charters did not specify the rate of franchise tax. The obligation in the contract was impaired by the enactment of Section 134 of the Internal Revenue Law. Furthermore. 3636. Franchise holders did pay the rate of 2% until the rate was increased to 5%. thereby infringing the provisions of Section 5 of the Act of Congress of 1 July 1902.

No. was issued for the satisfaction of the said taxes thereon. Judge. Stephen's High School in Manila. charitable or educational purposes. of the then 1935 Philippine Constitution. holding that the second floor of the building is being used by the director for residential purposes and that the ground floor used and rented by Northern Marketing Corporation. The modification is derived from the fact that the ground floor is being used for commercial purposes (leased) and the second floor being used as incidental to education (residence of the director). ISSUE: Whether or not the lot and building are used exclusively for educational purposes. Even if religious groups and the press are not altogether free from the burdens of the government. L-19445 August 31. and THE COURT OF TAX APPEALS G. the lease of the first floor of the building to the Northern Marketing Corporation cannot by any stretch of the imagination be considered incidental to the purpose of education. JUAN P. and improvements used exclusively for religious. The fact that the price of bibles. 1965 FACTS: Respondent Bishop of the Missionary District of the Philippines Islands of the Protestant. etc. Luke's Hospital in Quezon City. is a corporation sole duly registered with the Securities and Exchange Commission. the Missionary District of the Philippine Islands of the Protestant Episcopal Church the U. The parties entered into a stipulation of facts adopted and embodied by the trial court in its questioned decision. Abra. (hereinafter referred to as Missionary District) is a duly incorporated and established religious society and owns and operates the St. nor by jurisprudence. Episcopal Church in the U. Said "Notice of Seizure" by respondents Municipal Treasurer and Provincial Treasurer. a commercial establishment.R. the act of distributing and selling bibles is purely religious and does not fall under Section 27 (e) of the Tax Code (CA 466). Abra G. The decision of the CFI Abra (Branch I) is affirmed subject to the modification that half of the assessed tax be returned to the petitioner. Court of First Instance. AQUINO. HON. COMMISSIONER OF INTERNAL REVENUE.26 A tax on the income of one who engages in religious activities is different from a tax on property used or employed in connection with those activities. Instead of perfecting an appeal.A. On the other hand.A. The use of the school building or lot for commercial purposes is neither contemplated by law. In the case at bar. and all lands. 1988 FACTS: Petitioner.S. petitioner availed of the instant petition for review on certiorari with prayer for preliminary injunction before the Supreme Court.S. Article VI.ン Reasonable emphasis has always been made that the exemption extends to facilities which are incidental to and reasonably necessary for the accomplishment of the main purposes. defendants below. The trial court ruled for the government.140. RULING: Section 22. are a little higher than actual cost of the same does not necessarily mean it is already engaged in business for profit. and thus the property is not being used “exclusively” for educational purposes. for non-payment of real estate taxes and penalties amounting to P5. BISHOP OF THE MISSIONARY DISTRICT OF THE PHILIPPINE ISLANDS OF THE PROTESTANT EPISCOPAL CHURCH IN THE U.31. The test of exemption from taxation is the use of the property for purposes mentioned in the Constitution. The power to tax the exercise of a privilege is the power to control or suppress its enjoyment. expressly grants exemption from realty taxes for cemeteries. 39086 June 15. churches and parsonages or convents appurtenant thereto. and another to exact a tax for him for the privilege of delivering a sermon.A. paragraph 3. vs. . NO. an educational corporation and institution of higher learning duly incorporated with the Securities and Exchange Commission in 1948. buildings. the Brent Hospital in Zamboanga City and the St. by filing said petition on 17 August 1974. INC vs. Ordinance 2529 and 3000 are not applicable to the Society for in doing so it would impair its free exercise and enjoyment of its religious profession and worship as well as its rights of dissemination of religious beliefs. filed a complaint to annul and declare void the "Notice of Seizure' and the "Notice of Sale" of its lot and building located at Bangued. ABRA VALLEY COLLEGE.R. It is one thing to impose a tax on the income or property of a preacher.S.

or institution for civic religious or charitable purposes. The Missionary District filed claims for refund. No. sale or hire. if its funds are devoted exclusively to the maintenance of the institution. gift tax is not within the exempting provisions of the section just mentioned. Luke’s Hospital are tax-exempt. In the present case. the Missionary District received various shipments of materials.. and improvements used exclusively for religious purposes.L-15270 September 30. 1960. supplies. Petitioner lodged a protest to the assessment and requested the withdrawal thereof. VI of the Constitution of the Philippines. The petitioner appealed to the Court of Tax Appeals. equipment and other articles intended for use in the construction and operation of the new St. On these shipments. society or institution or for free distribution and not for barter. the shipments are tax exempt. The total amount was actually spent for the purpose intended. It did not rest upon general ownership. 1952. of which petitioner was the priest. A gift tax is not a property tax. Commissioner of Internal Revenue G. Estate. Negros Occidental. Inc. 7. (2) the donee must be a duly incorporated or established international civic organization. Under date of April 29. ISSUE: Whether or not the assessment for donee’s gift tax was valid. the M. what the Collector assessed was a donee's gift tax. but which was denied by the Commissioner on the ground that St. churches and parsonages or convents. On or . of Bacolod City. filed the donor's gift tax return.. series of 1958). for the construction of a new Catholic Church in the locality. Manifestly. the donor M. then parish priest of Victorias. Thus. RULING: The following requisites must concur in order that a taxpayer may claim exemption under the law (1) the imported articles must have been donated. Tuazon. Luke’s Hospital was not a charitable institution and therefore was not exempt from taxes because it admits pay patients.B. Negros Occidental. as property taxes. LLADOC v.B. The protest and the motion for reconsideration presented to the Commissioner of Internal Revenue were denied.). located at 58 D. As the law does not distinguish or qualify the enjoyment or the exemption (as the Secretary of Finance did in Department Order 18. the Commissioner collected compensation tax. it was an excise upon the use made of the properties. Art. religious or charitable society. ISSUE: Whether or not the shipments for St. Estate. and all lands. does not constitute an impairment of the Constitution. donated P10. HERRERA v. the assessment was not on the properties themselves. QUEZON CITY BOARD OF ASSESSMENT GR. the respondent Commissioner of Internal Revenue issued an assessment for donee's gift tax against the Catholic Parish of Victorias. the admission of pay patients does not detract from the charitable character of a hospital.No. buildings. The exemption is only from the payment of taxes assessed on such properties enumerated. 1961 FACTS: On July 24. Mesa Heights. BIR rec.000. as contra distinguished from excise taxes. exempts from taxation cemeteries. upon the exercise of the privilege of receiving the properties. Quezon City (Exhibit "F-1".27 In 1957 to 1959. the imposition of which on property used exclusively for religious purposes. Inc. Fr. and predecessor of herein petitioner. 1965 FACTS: Sometime in 1957. p. 1958. but an excise tax imposed on the transfer of property by way of gift inter vivos.R. Luke’s Hospital.00 in cash to Rev. Sta. appurtenant thereto. Catherine's Hospital". Crispin Ruiz. the Director of the Bureau of Hospitals authorized the petitioners to establish and operate the "St. considering the fact that the Constitution exempts petitioner from taxation RULING: Section 22 (3). On March 3. and (3) the articles so imported must have been donated for the use of the organization. L-19201 June 16.

possesses and is the owner of a parcel of land in the municipality of San Nicolas. In the center is the remainder of the churchyard and the church. the base of which still be seen. The plaintiff filed this action for the recovery of the sum paid by to the defendants by way of land tax. 1954 and 1955. in the sense. was illegal. In other words. which affirmed the decision of the City Assessor. under protest. the exemption in favor of property used exclusively for charitable or educational purposes is "not limited to property actually indispensable" therefor. containing an area off 1. include not only the land actually occupied by the church. building and other improvements occupied by the St. but also the adjacent ground destined to the ordinary incidental uses of man. As required by the defendants. After an inspection of the premises in question and after a careful study of the case. ISSUE Whether or not the lots of petitioner are exempted from land tax RULING The exemption in favor of the convent in the payment of the land tax (sec. ISSUE: Whether or not the lot. aside from "out-charity patients" who come only for consultation. containing a total area of 8. however. that the admission of pay-patients does not detract from the charitable character of a hospital. the Quezon City Assessor notified the petitioners that the aforesaid properties were reclassified from exempt to "taxable" and thus assessed for real property taxes. and the fact that it admits pay-patients does not bar it from claiming that it is devoted exclusively to benevolent purposes. Subsequently.624 square meters. the exemption from real property taxes was granted effective the years 1953. therefore. . and the funds derived from payments made by patients able to pay are devoted to the benevolent purposes of the institution. which represent almost two-thirds (2/3) of the bed capacity of the hospital. The building involved in this case is principally used as a hospital. the petitioners sent a letter to the Quezon City Assessor requesting exemption from payment of real estate tax on the lot. Catherine Hospital are exempt from the real property tax. The petitioners appealed the assessment to the Quezon City Board of Assessment Appeals. On the north is an old cemetery with two of its walls still standing. a charitable institution. alleging that the collection of this tax is illegal. The lower court absolved the defendants from the complaint in regard to the lot adjoining convent and declared that the tax collected on the lot. the mere fact that a profit has been made will not deprive the hospital of its benevolent character" Moreover. the petitioners instituted the instant appeal. RULING: It is well settled. PROVINCIAL BOARD OF ILOCOS NORTE G. it being admitted that the income derived from pay-patients is devoted to the improvement of the charity wards. A motion for reconsideration thereof was denied. Ilocos Norte. which formerly was the cemetery and on the portion where the lower stood. building and other improvements comprising the hospital stating that the same was established for charitable and humanitarian purposes and not for commercial gain. Both parties appealed from this judgment. the convent and an adjacent lot used for a vegetable garden. but extends to facilities which are "incidental to and reasonably necessary for" the accomplishment of said purposes. 344 [c] Administrative Code) refers to the home of the parties who presides over the church and who has to take care of himself in order to discharge his duties. in which there is a stable and a well for the use of the convent.L-27588 December 31. if all its funds are devoted "exclusively to the maintenance of the institution" as a "public charity".RNo.955 square meters. 1927 FACTS: The plaintiff.28 about January 3. on July 3. the St. In therefore must. Catherine's Hospital is. the Roman Catholic Apostolic Church. From this decision. On the south side is a part of the churchyard. and a portion where formerly stood a tower. the land tax on the lot adjoining the convent and the lot which formerly was the cemetery with the portion where the tower stood. all four sides of which face on public streets. 1953. BISHOP OF NUEVA SEGOVIA v. Within the purview of the Constitutional exemption from taxation. represented by the Bishop of Nueva Segovia. 1925 the plaintiff paid. where rendering charity is its primary object.

01 including surcharge and interest. which conducts various programs and activities that are beneficial to the public. be subject to the tax imposed by the same Code. What is meant by actual.R. like restaurants and canteen operators. On July 2. an income of P676. those portions of its real property that are leased to private entities are not exempt from real property taxes as these are not actually. both the land and the hospital building of the petitioner were assessed for real property taxes in the amount of P4. direct and exclusive use of the property for charitable purposes is the direct .259. private respondent earned.R. and to medical or professional practitioners who use the same as their private clinics for their patients whom they charge for their professional services. the commissioner of internal revenue (CIR) issued an assessment to private respondent." the exemption does not apply to income derived "xxx from any of their properties. or from any of their activities conducted for profit. filed a letter dated October 8. Private respondent formally protested the assessment and. In due course. No. is being leased for commercial purposes to a private enterprise known as the Elliptical Orchids and Garden Center. In the instant case. 1998 FACTS: Private Respondent YMCA is a non-stock. directly and exclusively used for charitable purposes. among others. 144104 June 29. the CTA issued this ruling in favor of the YMCA: ISSUE: Whether or not the YMCA is exempted from rental income derived from the lease of its properties RULING Petitioner argues that while the income received by the organizations enumerated in Section 27 (now Section 26) of the NIRC is. without any special pronouncement as to costs.L-124043 October 14.00 from parking fees collected from non-members. non-profit institution. exempted from the payment of tax "in respect to income received by them as such. predicated on its claim that it is a charitable institution. deficiency expanded withholding taxes on rentals and professional fees and deficiency withholding tax on wages. Almost one-half of the entire area on the left side of the building along Quezon Avenue is vacant and idle. for canteen and small store spaces. RULING: Even as we find that the petitioner is a charitable institution.No. In 1980.QUEZON CITY and CONSTANTINO P.615. On June 7. 1985. Court of Appeals and YMCA G. educational and charitable objectives. ISSUE: Whether or not the petitioner’S real properties are exempted from realty tax exemptions. 1989.29 The judgment appealed from is reversed in all it parts and it is held that both lots are exempt from land tax and the defendants are ordered to refund to plaintiff whatever was paid as such tax. especially the young people. ROSAS G.80 from leasing out a portion of its premises to small shop owners. and P44. while a big portion on the right side. 2004 FACTS: The petitioner. for deficiency income tax. LUNG CENTER OF THE PHILIPPINES vs. at the corner of Quezon Avenue and Elliptical Road. pursuant to its religious. in the total amount of P415. the CIR denied the claims of YMCA. a non-stock and non-profit entity is the registered owner of a parcel of land where erected in the middle of the aforesaid lot is a hospital known as the Lung Center of the Philippines.829. 1984. Contesting the denial of its protest. the exemption claimed by the YMCA is expressly disallowed by the very wording of the last paragraph of then Section 27 of the NIRC which mandates that the income of exempt organizations (such as the YMCA) from any of their properties. In reply. 1993. real or personal. real or personal.860 by the City Assessor of Quezon City but the former filed a Claim for Exemption from real property taxes with the City Assessor.554. regardless of the disposition made of such income xxx" We agree with the commissioner. Commissioner of Internal Revenue v. the YMCA filed a petition for review at the Court of Tax Appeals (CTA) on March 14. as a supplement to its basic protest. A big space at the ground floor is being leased to private parties. as a rule.

27. INC. M. The difference between the two ordinances clearly lies in the tax rate of the soft drinks produced: in Ordinance No. From 1958 to 1963. Procter and Gamble Philippines Manufacturing Corp. In 1964. the same property must be taxed twice. unconstitutional as an undue delegation of taxing authority as well as to declare Ordinances Nos.) of volume capacity. the Ordinances does not constitute double taxation. the petitioner does not enjoy any property tax exemption privileges for its real properties as well as the building constructed thereon.' The CFI of Leyte rendered judgment "dismissing the complaint and upholding the constitutionality of [Section 2. 23 and 27 is denominated as "municipal production tax. A tax on the company’s products is different from the tax on the privilege of storing copra in a bodega situated within the territorial boundary of the municipality. 2264-the Local Autonomy Act. In 1954. as it amounts to double taxation. storage fees. 1963. 23 and 27 constitute double taxation and impose percentage or specific taxes? RULING: No. 1976 FACTS: On February 14. If the intentions were otherwise. vs. where it stores copra purchased in the municipality and ships the same for its manufacturing and other operations. 1962. a claim for exemption from tax payments must be clearly shown and based on language in the law too plain to be mistaken. null and void. No. THE MUNICIPAL MAYOR. ISSUE: Whether the Ordinance is void.30 and immediate and actual application of the property itself to the purposes for which the charitable institution is organized. 23. 2264] declaring Ordinance Nos. it is one centavo (P0. The petitioner contends Ordinances Nos. levies and collects "on soft drinks produced or manufactured within the territorial jurisdiction of this municipality a tax of ONE CENTAVO (P0. Petitioner maintains a “bodega” in the municipality of Jagna. Bohol. U. Under Section 2 of Presidential Decree No. M. the company paid the municipality. it filed suit. Hence this petition. 1823. which was the prevailing law when the Ordinance is actually a municipal license tax or fee on persons. Such fees imposed do not amount to double taxation.S. For double taxation to exist. Republic Act No. MUNICIPALITY OF TANAUAN. No. the Municipal Council of Jagna enacted Ordinance 4. margarine and other similar products. ISSUES: Do Ordinances Nos. allegedly under protest.S. and if not. LEYTE. that it be declared ultra vires and void." The tax imposed in both Ordinances Nos. wherein it prayed that the Ordinance be declared inapplicable to it. O. Hence. No. Leyte. Pepsi-Cola Bottling Company commenced a complaint before the Court of First Instance of Leyte for that court to declare Section 2 of Republic Act No. 23. it was 1/16 of a centavo for every bottle corked. when it should be taxed but once. 23 and 27 constitute double taxation because these two ordinances cover the same subject matter and impose practically the same tax rate and impose percentage or specific taxes. R. firms and corporations exercising the privilege of storing copra within the municipality’s territorial jurisdiction. ET AL. vs.01) on each gallon (128 fluid ounces. in Ordinance No.) of volume capacity. U. the same should have been among the enumeration of tax exempt privileges under Section 2. the plaintiff-appellant. 27. series of 1962. Municipality of Jagna G. 23 and 27. G. is a consolidated corporation of Procter and Gamble Trading Company engaged in the manufacture of soap. No. RULING: The validity of the Ordinance must be upheld pursuant to the broad authority conferred upon municipalities by Commonwealth Act 472 (promulgated 1939). of the municipality of Tanauan. L-24265 28 December 1979 FACTS: Petitioner Procter and Gamble Philippines Manufacturing Corp.R. L-31156 February 27. which was approved on October 28. 23 and 27 legal.01) on each gallon (128 fluid ounces. O. imposing storage fees of all exportable copra deposite in the bodega within the jurisdiction of the municipality of Jagna. PEPSI-COLA BOTTLING COMPANY OF THE PHILIPPINES. The intention of the Municipal ." On the other hand. levies and collects "from soft drinks producers and manufacturers a tai of one-sixteenth (1/16) of a centavo for every bottle of soft drink corked. edible oil.

aggregately containing 43 apartments.31 Council of Tanauan in enacting Ordinance No. 1974. ISSUE: Whether or not the "Deed of Exchange" of the properties executed by the Pachecos on the one hand and the Delpher Trades Corporation on the other was meant to be a contract of sale. within the same jurisdiction or taxing district. Pelagia Pacheco. and unconstitutional for being violative of the rule as to uniformity of taxation and for depriving said plaintiffs of the equal protection clause of the Constitution.500. vs. that with the passage of Republic Act 2264. No. On August 3. with the conformity and consent of lessors Delfin Pacheco and Pelagia Pacheco. It is a well-settled rule that a license tax may be levied upon a business or occupation although the land or property used in connection therewith is subject to property tax. . in the aforementioned court. while the other appellees and the same Remedios S.R.169 square meters of real estate in the Municipality of Polo (now Valenzuela). enacted Ordinance 11. the same property and providing that during the existence or after the term of this lease the lessor should he decide to sell the property leased shall first offer the same to the lessee and the letter has the priority to buy under similar conditions. it had acquired the authority or power to enact an ordinance similar to that previously declared by this Court as ultra vires (taxing tenement houses). FACTS: Delfin Pacheco and his sister. On the ground that it was not given the first option to buy the property. believing. even without words to that effect. On March 30. of the City of Iloilo. be declared "invalid for being beyond the powers of the Municipal Council of the City of Iloilo to enact. although imposed by the same taxing authority. 1962 and April 24. or taxing authority. the appellees Eusebio Villanueva and Remedios S.CITY OF ILOILO G. L-26521 December 28. Inc. Villanueva are owners of five tenement houses. January 26. and operates as a repeal of the latter. No. 1966. In Iloilo City. respondent Hydro Pipes Philippines. assigned its rights and obligations under the contract of lease in favor of Hydro Pipes Philippines. 1968 FACTS: On January 15. The lower court's decision was affirmed on appeal by the Intermediate Appellate Court.000. series of 1960. for the same purpose. Province of Bulacan (now Metro Manila). Government. series of 1960. In order to constitute double taxation in the objectionable or prohibited sense the same property must be taxed twice when it should be taxed but once. Inc. IAC G. by the same State.00. 27 is thus clear: it was intended as a plain substitute for the prior Ordinance No. Villanueva are owners of ten apartments. both taxes must be imposed on the same property or subject-matter." and that the City be ordered to refund the amounts collected from them under the said ordinance.. 1976. EUSEBIO VILLANUEVA. during the same taxing period. Delpher Trades Corporation vs.R. illegal because it imposes double taxation? RULING: There is no double taxation. ISSUE: Is Ordinance 11. praying that Ordinance 11.1 the lower court rendered judgment declaring the ordinance illegal. obviously. Inc. On July 11. 1964. and they must be the same kind or character of tax. 23. respectively. The said co-owners leased to Construction Components International Inc. a deed of exchange was executed between lessors Delfin and Pelagia Pacheco and defendant Delpher Trades Corporation whereby the former conveyed to the latter the leased property together with another parcel of land for 2. series of 1960 which taxes those involve in the business of renting apartment houses. the plaintiffs-appellees filed a complaint.500 shares of stock of defendant corporation with a total value of P1. were the owners of 27.. a complaint for reconveyance of Lot. The Court of First Instance of Bulacan ruled in favor of the plaintiff. 1095 in its favor." It has been shown that a real estate tax and the tenement tax imposed by the ordinance. are not of the same kind or character. and an amended complaint. On January 3. No. 1960 the municipal board of Iloilo City. lessee Construction Components International. otherwise known as the Local Autonomy Act. 1988. ET AL. L-69259. against the City of Iloilo.

represented by special co-administrators Lorna Kapunan and Mario Luza Bautista. Inc. Toda.R. Consequently. which paid.32 RULING: We rule for the petitioners. Toda G. received a Notice of Assessment from the CIR for deficiency income tax for the year 1989. of the Internal Revenue Code.R. The records do not point to anything wrong or objectionable about this "estate planning" scheme resorted to by the Pachecos. by means which the law permits. Toda.. Heng Tong Textiles Co. the Pachecos became stockholders of the corporation by subscription.. Three and a half years later Toda died. Commissioner of Internal Revenues vs. It ruled that even assuming that a pre-conceived scheme was adopted by CIC. which in no way affected the role of the petitioner as the importer. RULING: Petitioner excepts to the conclusion of the Court of Tax Appeals and avers that the importation papers were placed in the name of the petitioner only for purposes of accommodation. "The essence of the stock subscription is an agreement to take and pay for original unissued shares of a corporation. Jr. In its decision the CTA held that the Commissioner failed to prove that CIC committed fraud to deprive the government of the taxes due it. Vs CIR G. on the ground that it was the real importer of the goods and did not pay the taxes due on the basis of the gross selling prices thereof. On 27 January 1995. An attempt to minimize one's tax does not necessarily constitute fraud. the corresponding advance sales tax under section 183(b) of the Internal Revenue Code. No. in turn. Section 183(a). the CTA declared that the Estate is not liable for deficiency of income tax. paragraph 3. The goods were withdrawn from Customs by Pan. . (RMI) for P200 million. The Commissioner dismissed the protest. Inc. sold the same property on the same day to Royal Match Inc.991% of its outstanding capital stock.Asiatic Commercial Co. It is a settled principle that a taxpayer may diminish his liability by any means which the law permits.. The Court of Appeals affirmed the decision of the CTA. and that the petitioner was not in a financial position to make the importations in question. who. Toda purportedly sold the property for P100 million to Rafael A. Jr. 2004 FACTS: On 2 March 1989. The assessment for the deficiency was made against the petitioner. What they really did was to invest their properties and change the nature of their ownership from unincorporated to incorporated form by organizing Delpher Trades Corporation to take control of their properties and at the same time save on inheritance taxes. the same constituted mere tax avoidance. 147188. These circumstances show nothing but a private arrangement between the petitioner and Pan-Asiatic Commercial. On 29 March 1994. in exchange for their properties. September 14. L-19737. The assessment was appealed to the Board of Tax Appeals. ISSUE: Whether or not petitioner was guilty of fraud so as to warrant the imposition of a penalty of 50% on the deficiency. the Delpher Trades Corporation is a business conduit of the Pachecos.500 original unissued no par value shares of stocks of the Delpher Trades Corporation. 1968. that is. in the name of the petitioner. the BIR sent an assessment notice and demand letter to the CIC for deficiency income tax for the year 1989. No." Heng Tong Textiles Co. and there was affirmed in its decision dated February 28. to sell the Cibeles Building. The arrangement resorted to does not by itself alone justify the penalty imposed.. On 30 August 1989. the Estate filed a petition for review with the CTA.58. the Estate of Benigno P. The deficiency taxes in question were assessed on importations of textiles from abroad. speaks of willful neglect to file the return or willful making of a false or fraudulent return. Hence. "The legal right of a taxpayer to decrease the amount of what otherwise could be his taxes or altogether avoid them. the Pachecos acquired 2. Altonaga. to introduce the petitioner to textile suppliers abroad. Hence. 253.123." In effect. whence the case was transferred to the Court of Tax Appeals upon its organization in 1954. In the case at bar. cannot be doubted. FACTS: In 1952 the Collector of Internal Revenue assessed against the petitioner deficiency sales taxes and surcharges for the year 1949 and the first four months of 1950 in the aggregate sum of P89. On 15 February 1996. Inc. The Commissioner filed a petition for review with the Court of Appeals. August 26. CIC authorized Benigno P. 1952. formed or to be formed.. and not tax evasion. The Estate thereafter filed a letter of protest.. President and owner of 99. as amended by Republic Act No. this recourse to the SC.

INC. pursuant to the Sec.e. Such scheme is tainted with fraud. on account of which the respondent Commission of Internal Revenue assessed against. . the CTA granted the claim. on the other hand. Hence. RULING: At the outset.186 of the National Internal Revenue Code. Being included in the purchase price of the oil products. ISSUE: Whether or not petitioner is entitled to the refund of 25% of the amount of specific taxes it actually paid on various refined and manufactured mineral oils. or the non-payment of tax when it is shown that a tax is due. petitioner elevated the matter to the Court of Appeals. Altonaga’s sole purpose of acquiring and transferring title of the subject properties on the same day was to create a tax shelter. CIR G. but it computed the refund based on rates deemed paid under RA 1435. In regard to the other purchases. Doubtless. it must be construed strictissimi juris against the grantee. Hence. and demanded from. A tax cannot be imposed unless it is supported by the clear and express language of a statute. 1980 to January 31.923. RA 1435.70. The sales to the NPC amounted to P145. the petitioner the payment of P12.11. once the tax is unquestionably imposed. the execution of the two sales was calculated to mislead the BIR with the end in view of reducing the consequent income tax liability. and (3) a course of action or failure of action which is unlawful. is in the nature of a tax exemption. while those to the VOA amounted to P1. i.”or “deliberate and not accidental”.” “willfull. Insisting that the basis for computing the refund should be the increased rates prescribed by Sections 153 and 156 of the NIRC.” Since the partial refund authorized under Section 5. 1998. from CIC to Altonaga. from various oil companies. COMMISSIONER OF INTERNAL REVENUE and COURT OF TAX APPEALS G. No.. the specific taxes paid by the oil companies were eventually passed on to the petitioner in this case. July 23. FACTS: From July 1. petitioner filed at the CTA a petition for review.R. On January 20. the payment of less than that known by the taxpayer to be legally due. and without business purpose and economic substance. The sale to him was merely a tax ploy. The CTA rendered its decision finding petitioner entitled to a partial refund of specific taxes in the reduced amount of P2. 1967 FACTS: The petitioner is a corporation engaged in the manufacture and sale of oxygen and acetylene gases. petitioner’s claim of refund on the basis of the specific taxes it actually paid must expressly be granted in a statute stated in a language too clear to be mistaken. The Court of Appeals affirmed the CTA Decision.866. Davao Gulf Lumber Corporation vs. Said oil companies paid the specific taxes imposed on the sale of said products. RULING: Tax evasion connotes the integration of three factors: (1) the end to be achieved. L-19707 August 17. 1983.. this petition for review.60 as deficiency sales tax and surcharge. vs. The scheme resorted to by CIC in making it appear that there were two sales of the subject properties.” in “bad faith. It made various sales of its products to the National Power Corporation and to the Voice of America an agency of the United States Government. Petitioner filed before Respondent CIR a claim for refund in the amount of P120.33 ISSUE: Whether or not this is a case of tax evasion or tax avoidance. “[a] claim of exemption from tax payments must be clearly shown and based on language in the law too plain to be mistaken.R. i. a sham. No. refined and manufactured mineral oils as well as motor and diesel fuels. and then from Altonaga to RMI cannot be considered a legitimate tax planning. PHILIPPINE ACETYLENE CO. which was enacted to provide means for increasing the Highway Special Fund.683. representing 25% of the specific taxes actually paid on the above-mentioned fuels and oils that were used by petitioner in its operations as forest concessionaire. All these factors are present in the instant case. 117359. it must be stressed that petitioner is entitled to a partial refund under Section 5 of RA 1435.15. (2) an accompanying state of mind which is described as being “evil. and not on the higher rates actually paid by petitioner under the NIRC..910.e. 1982 petitioner purchased.825.

D.34 The petitioner denied liability for the payment of the tax on the ground that both the NPC and the VOA are exempt from taxation. with interests and surcharges. No. are exempt under Article V from taxation. it accepts sponsorships for its research activities from international organizations.R. ISSUE: Is Ateneo de Manila University. and advising it that all its claims for reimbursements from the OPSF shall be held in abeyance pending such remittance. Sales of goods to any other party even if it be an agency of the United States. 1956. such as the VOA.516. which has no legal personality separate and distinct from that of private respondent. 1983. private foundations and government agencies. et al G. Only sales made "for exclusive use in the construction. Courts of Tax Appeal. through its auxiliary unit or branch — the Institute of Philippine Culture — performing the work of an independent contractor and. Unsatisfied. however. ISSUE: Is the petitioner exempt from paying tax on sales it made to the 1) NPC and the 2) VOA because both entities are exempt from taxation? RULING: 1) No. Private respondent filed in the Court of Tax Appeals a petition for review of the said letter-decision of the petitioner which rendered a decision in its favor and ordered the tax assessment cancelled. 1997 FACTS: Ateneo de Manila is an educational institution with auxiliary units and branches all over the Philippines. upon private respondent’s request for reinvestigation. Commission on Audit G. found no evidence that Ateneo's Institute of Philippine Culture ever sold its services for a fee to anyone or was ever engaged in a business apart from and independently of the academic purposes of the university. Caltex Philippines.R. 1983. or even to the quartermaster but for a different purpose. 1987 and 1988. It explained that to fall under its coverage. They may however fall as gifts or donations which are tax-exempt" as shown by private respondent's compliance with the requirement of Section 123 of the National Internal Revenue Code providing for the exemption of such gifts to an educational institution. Occasionally. The IPC is a Philippine unit engaged in social science studies of Philippine society and culture. Inc. maintenance.043. the Court of Tax Appeals accurately and correctly declared that the “funds received by the Ateneo de Manila University are technically not a fee. 2) No.97 for alleged deficiency contractor's tax the value of which was later on. (CPI) to remit to the Oil Price Stabilization Fund (OPSF) its collection of the additional tax on petroleum products pursuant to P. operation or defense of the bases. as well as unremitted collections of the above tax covering the years 1986. thus.41. One such auxiliary unit is the Institute of Philippine Culture (IPC). Moreover. The Court." in a word. private respondent received from petitioner Commissioner of Internal Revenue a demand letter dated June 3. v. 1992 FACTS: Respondent Commission on Audit (COA) directed petitioner Caltex Philippines. COA . reduced to P46. 92585 May 8. On July 8. assessing private respondent the sum of P174. SC hold that the tax imposed by section 186 of the National Internal Revenue Code is a tax on the manufacturer or producer and not a tax on the purchaser except probably in a very remote and inconsequential sense. only sales to the quartermaster. Accordingly its levy on the sales made to tax-exempt entities like the NPC is permissible. subject to the three percent contractor's tax levied by then Section 205 of the National Internal Revenue Code? RULING: No. are not free from the payment of the tax. Commissioner of Internal Revenue vs. The Supreme Court held that Ateneo de Manila University is not subject to the contractor’s tax. 115349 April 18. No. Inc. Section 205 of the National Internal Revenue Code requires that the independent contractor be engaged in the business of selling its services.

ISSUE: Whether or not tugboats are included in the term “cargo vessels” which are exempted from compensating tax under article 190 of the National Internal Revenue Code. . RULING: No. L-30232 July 29. constitute a single vessel. under protest. COURT OF TAX APPEALS and the HONORABLE COMMISSIONER OF INTERNAL REVENUE G. no plausible pretense being entertained to justify non-compliance. rivers and canals. “a diesel or steam power vessel designed primarily for moving large ships to and from piers for towing barges and lighters in harbors. contract or judgment as is allowed to be set off. LUZON STEVEDORING CORPORATION vs. the assessed compensating tax. COMMISSIONER OF INTERNAL REVENUE G. the need for interpretation is obviated. L-53961 June 30. Taxes cannot be the subject of compensation because the Government and the taxpayer are not mutually creditors and debtors of each other and a claim for taxes is not such a debt.R.35 further directed petitioner oil company to desist from further offsetting the taxes collected against outstanding claims for 1989 and subsequent periods. 1987 FACTS: National Development Company (NDC) is a domestic corporation with principal offices in Manila. No. it filed a Petition for Review with the Court of Tax Appeals in order to be granted a refund. Unable to secure a tax refund from the Commissioner of Internal Revenue. Thus. It is settled that a taxpayer may not offset taxes due from claims that he may have against the Government. It entered into contracts in Tokyo with several Japanese shipbuilding companies for the construction of twelve ocean-going vessels. Taxes may be levied for a regulatory purpose such as to provide means for the rehabilitation and stabilization of a threatened industry which is affected with public interest. On the other hand. Its motion for reconsideration of the eventual decision of the COA on the matter having been denied. No. tugboats are not included in the term “cargo vessels” which are exempted from compensating tax under article 190 of the National Internal Revenue Code. No. the tugboat and a barge loaded with cargoes with the former towing the latter for loading and unloading of a vessel in part. 1988 FACTS: Herein petitioner imported various engine parts and other equipment for which it paid. No. Petitioner contends that tugboats are included in the term “cargo vessels” which are exemped from compensating tax under article 190 of the National Internal Revenue Code. CPI imputes that respondent commission erred in preventing the former from exercising the right to offset its remittances against the reimbursement vis-à-vis the OPSF. The Supreme Court explained that under the definition of tugboat. NATIONAL DEVELOPMENT COMPANY vs.” Which clearly do not fall under the categories of passenger and/or cargo vessels. ISSUE: Whether or not the amounts due to the OPSF from petitioner may be offset against the latter’s outstanding claims from said fund? RULING: No. a concern which is within the police power of the State to address. respondent contends that "tugboats" are not "Cargo vessel" because they are neither designed nor used for carrying and/or transporting persons or goods by themselves but are mainly employed for towing and pulling purposes. He argues that in legal contemplation. The Court further ruled that taxation is no longer envisioned as a measure merely to raise revenue to support the existence of the Government.R. demand. Accordingly. All that has to be done is to apply it in every case that falls within its terms. it is a cardinal principle of statutory construction that where a provision of law speaks categorically. it concludes that the engines. spare parts and equipment imported by it and used in the repair and maintenance of its tugboats are exempt from compensating tax.

HON.R. No. G. transformers. Furthermore there is no "plain and unambiguous terms" declaring petitioner MERALCO exempt from paying a compensating tax on its imports of poles. In two separate occasions. petitioner has not established a clear waiver therein of the right to tax interests. There is nothing in Section 29(b)[4] of the Tax Code exempting the interests from taxes. One who claims to be exempt from the payment of a particular tax must do so under clear and unmistakable terms found in the statute. In the case at bar. The last clause of paragraph 9 merely reaffirms. the Court is not aware whether or not the tax exemption provisions contained in Par. 1991 and G. ERNESTO M. Charles M. Fourteen promissory notes were signed for the balance by the NDC and. and operate an electric light. MANILA ELECTRIC COMPANY vs. the imposition of the deficiency taxes on the NDC is a penalty for its failure to withhold the same from the Japanese shipbuilders. therefore. MERALCO claims for a refund alleging that it was exempted from such compensating tax based on paragraph 9 of its franchise.. It is not the NDC that is being taxed. and insulators for use in the operation of its business. wares. 484 of the Philippine Commission of 1902 was incorporated in the municipal franchise granted because no admissible copy of Ordinance of the said Board was ever presented in evidence by the petitioner. guaranteed by the Republic of the Philippines. No. No. goods. Nos. RULING: No. the engaging in an occupation. heat. 1993 FACTS: . The petitioner argues that the Japanese shipbuilders were not subject to tax under the Tax Code. Hence. 88291 June 8. No tax was withheld. The Collector of Customs. After the vessels were delivered. The Commissioner of Internal Revenue held that the interest remitted to the Japanese shipbuilders on the unpaid balance of the purchase price of the vessels acquired by petitioner is subject to income tax under the Tax Code. wires. Swift and later assumed and taken over by petitioner to construct. and power system in the City of Manila and its suburbs. Part Two of Act No. Petitioner should be held liable. A compensating tax is not a property tax but an excise tax imposed on the performance of an act. as Deputy of Commissioner of Internal Revenue.36 Initial payments were made in cash and through irrevocable letters of credit. Thereafter. MACEDA vs.R. transformers. In effect. MERALCO imported copper wires. Petitioner contends that the interest payments were obligations of the Republic of the Philippines and that the promissory notes of the NDC were government securities exempt from taxation under Section 29(b)[4] of the Tax Code. 9. the NDC remitted to the shipbuilders in Tokyo the interest on the balance of the purchase price. 1975 FACTS: MERALCO is the holder of a franchise by the Municipal Board of the City of Manila to Mr. No. maintain. RULING: No. L-29987s and L-23847 October 22. It was the income of the Japanese shipbuilders and not the Republic of the Philippines that was subject to the tax the NDC did not withhold. JR. remaining payments and the interests thereon were remitted in due time by the NDC to Tokyo. 88291 May 31. levied and collected a compensating tax for the said importation. et al. ISSUE: Whether or not petitioner is exempted to pay compensating tax for its purchase or receipt of commodities. Any doubt concerning this question must be resolved in favor of the taxing power. CATALINO MACARAIG. Commissioner of Internal Revenue G. The court stated that MERALCO's claim for exemption from the payment of the compensating tax is not clear or expressed. No. or merchandise outside the Philippines. and insulators. what has been expressed in the first sentence that petitioner is exempted from payment of property tax. ISSUE: Whether petitioner should not be held liable due to the undertaking signed by the Secretary of Finance and because the interest payments were obligations of the Republic of the Philippines and that the promissory notes of the NDC were government securities exempt from taxation under Section 29(b)[4] of the Tax Code as alleged by petitioner. Tax exemptions cannot be merely implied but must be categorically and unmistakably expressed.R. or the enjoyment of a privilege. as required by the shipbuilders. Furthermore in the said undertaking. this appeal. Tax exemptions are strictly construed against the taxpayer.

Which Were Made Possible By Their Availing of the Non-Existing Exemption of National Power Corporation (NPC) from Indirect Taxes. upon recommendation of the FIRB to restore. In 1986. therefore. as member of the Philippine Senate introduced as Resolution Directing the Senate Blue Ribbon Committee. Petitioner. Also in G. no part thereof was recovered from the sale of electricity produced. and THE COURT OF TAX APPEALS G. Section 11 of that Agreement provides. its assets. Resulting Recently in Their Obtaining A Tax Refund Totalling P1. ISSUE: Whether or not respondent NPC is legally entitled to the questioned tax and duty refunds. Several laws were enacted granting NPC tax and duty exemption privileges such as taxes." Thereafter. partially or totally. income and other properties shall be: (a) exempt from all direct and indirect taxes. It succinctly exempts NPC from "all forms of taxes. particularly Caltex (Phils. regardless of the period of delivery. The point is that while these levies were in fact paid to the government. (Gotamco for short). duties.37 Commonwealth Act No. fees. licenses.55 Billion From the Department of Finance. No. WHO. should be exempted from any taxes in connection with the construction of the World Health Organization office building because such can be considered as an indirect tax to WHO. the Commissioner of Internal Revenue sent a letter of demand to Gotamco demanding payment of for the 3% contractor's tax plus surcharges on the gross receipts it received from the WHO in the construction of the latter's building. fees. 88291 the Supreme Court ruled in favor of respondents. duties. 88291 the Supreme Court ruled in favor of exempting NPC to the said taxes. Opinion opined that "the power conferred upon Fiscal Incentives Review Board constitute undue delegation of legislative power and. as of our most recent information.) Inc. An agreement was entered into between the Republic of the Philippines and the said Organization on July 22. cities and municipalities "directly or indirectly. The WHO issued a certification that the bid of John Gotamco & Sons. Pilipinas Shell and Petrophil. as well as the other United Nations offices stationed in Manila. Jr.55 B in claims represent amounts for which the oil suppliers and NPC are "out-of-pocket. the construction contract was awarded to John Gotamco & Sons. Subsequently. supersedeas bonds. imposts. as well as costs and service fees including filing fees.R. some P1. In Aid of Legislation. imposts. No. COMMISSIONER OF INTERNAL REVENUE vs. No. to conduct a Formal and Extensive Inquiry into the Reported Massive Tax Manipulations and Evasions by Oil Companies." on all petroleum products used by NPC in its operation.D. In G. and taxes. Thereafter investigations were made for the refund of the tax payments of the NPC which includes Millions of pesos Tax refund. BIR ruled that the exemption privilege enjoyed by NPC under said section covers only taxes for which it is directly liable and not on taxes which are only shifted to it. A bidding was held for the building construction. NPC under the provisions of its Revised Charter retains its exemption from duties and taxes imposed on the petroleum products purchased locally and used for the generation of electricity.Thereafter. the exemption withdrawn. 1931 withdrew all tax exemption privileges granted in favor of government-owned or controlled corporations including their subsidiaries but empowered the President and/or the then Minister of Finance. However P. The WHO informed the bidders that the building to be constructed belonged to an international organization exempted from the payment of all fees. 1987 FACTS: The World Health Organization (WHO for short) is an international organization which has a regional office in Manila. As a consequence. and that therefore their bids "must take this into account and should not include items for such taxes. BIR Commissioner Tan. unconstitutional. that "the Organization. INC. However. No. However. its provinces.” The WHO decided to construct a building to house its own offices. 120 created the NPC as a public corporation to undertake the development of hydraulic power and the production of power from other sources. states that all deliveries of petroleum products to NPC are tax exempt. Inc. There would have to be specific order to the Bureaus concerned for the resumption of the processing of these claims. the FIRB issued several Resolutions in different occasions restoring the tax and duty exemption privileges of NPC indefinite period due to the restoration of the tax exemption privileges of NPC. 1951. respondents Finance Secretary and the Executive Secretary declared that "NPC under the provisions of its Revised Charter retains its exemption from duties and taxes imposed on the petroleum products purchased locally and used for the generation of electricity. licenses and other payments to Government agencies.R.. inter alia. The Commissioner of . No. appeal bonds. charges and restrictions of the Republic of the Philippines. No. NPC applied with the BIR for a "refund of Specific Taxes paid on petroleum products. 1987. On August 6.R. L-31092 February 27. 938 amended the tax exemption of NPC by simplifying the same law in general terms. No. RULING: Yes." the NPC electric power rates did not carry the taxes and duties paid on the fuel oil it used. the Secretary of Justice. JOHN GOTAMCO & SONS. Presidential Decree No. in any court or administrative proceedings.

contractor’s and income taxes. deficiency expanded withholding taxes on rentals and professional fees and deficiency withholding tax on wages. Court of Appeals and YMCA G. The 3% contractor’s tax imposed upon petitioner is covered by the “direct and indirect tax exemption” granted to WHO. the Court of Appeals denied the Commissioner’s motion for reconsideration. . real or personal. 1998 FACTS: Private Respondent YMCA is a non-stock. No. 1985.38 Internal Revenue contends that the 3% contractor's tax is not a direct nor an indirect tax on the WHO. No. educational and charitable objectives. The CTA ruled in favor of the YMCA. Thus. This was affirmed by the Supreme Court en banc on December 4. although it is payable by the petitioner. which conducts various programs and activities that are beneficial to the public. and thus not covered by the tax exemption agreement ISSUE: Whether or not the said 3% contractor’s tax imposed upon petitioner is covered by the “direct and indirect tax exemption” granted to WHO by the government. for deficiency income tax. non-profit institution.R. while indirect taxes are those that are demanded in the first instance from one person in the expectation and intention that he can shift the burden to someone else. petitioner cannot be held liable for such contractor’s tax. The Supreme Court explained that direct taxes are those that are demanded from the very person who. it is intended or desired. the appellate court reversed itself and promulgated the first assessed resolution dated September 28. October 14. The Commissioner of Internal Revenue issued an assessment to private respondent. RULING: The Court ruled that the exemption claimed by the YMCA is expressly disallowed by the very wording of the last paragraph of then Section 27 of the NIRC which mandates that the income of exempt organizations (such as the YMCA) from any of their properties. especially the young people. finding merit in YMCA’s motion for reconsideration .R. contract of Appeals which initially decided in its favor by reinstating the assessment of deficiency fixed. filed a letter dated October 8. RULING: Yes.01 including surcharge and interest. Private respondent formally protested the assessment and. However.615. Commissioner of Internal Revenue vs. 1987 FACTS: The Chief Justice has previously issued a directive to the Fiscal Management and Budget Office to continue the deduction of withholding taxes from salaries of the Justices of the Supreme Court and other members of the judiciary. pursuant to its religious. in the total amount of P415. Hence. 1995 granting said motion of YMCA by affirming the CTA’s decision in toto. Because the last paragraph of said section unequivocally subjects to tax the rent income of the YMCA from its real property. the Commissioner denied the claims of YMCA. L-78780. ISSUE: Whether or not the rental income of YMCA on its real estate is subject to tax. On February 29. 124043. July 23. In reply. The Commissioner elevated the case to the Court of Appeals which initially decided in its favor by reinstating the assessment of deficiency fixed. should pay them. as a supplement to its basic protest. While it is true that the contractor's tax is payable by the contractor. 1996. YMCA filed a petition for review at the Court of Tax Appeals. Commissioner of Internal Revenue G. 1987. the Court is duty-bound to abide strictly by its literal meaning and to refrain from resorting to any convoluted attempt at construction. be subject to the tax imposed by the same Code. Nitafan vs. the latter can shift its burden on the WHO. but a tax that is primarily due from the contractor. However in the last analysis it is the owner of the building that shoulders the burden of the tax because the same is shifted by the contractor to the owner as a matter of self-preservation. it is an indirect tax against the WHO because.

all with stations in Manila. They contend that this constitutes diminution of salary contrary to Section 10. 54908 and G. the Court deemed it best to settle the issue through judicial pronouncement. which provides that the salary of the members of the Supreme Court and judges of lower courts shall be fixed by law and that “during their continuance in office. Province of Abra vs. David do not apply anymore. and ordered the respondent judge. Article VII of the 1973 Constitution. August 31. without costs. set aside the June 19. Meer and Endencia vs. There must be proof of the actual and direct use of the lands. Although such intent was somehow and inadvertently not clearly set forth in the final text of the 1987 Constitution. Article VIII of the 1987 Constitution.R. entered into a Loan and Sale Contract with Atlas Consolidated Mining and Development Coporation whereby Mitsubishi lent $20. from making any deduction of withholding taxes from their salaries. National Capital Judicial Region. Exemption from taxation is not favored and is never presumed. Justices and judges are not only the citizens whose income has been reduced in accepting service in government and yet subject to income tax. ISSUE: Whether or not the properties of the Bishop of Bangued are tax-exempt. Judge Hernando of the CFI Abra presided over the case. of the RTC. There was an allegation of lack of jurisdiction and of lack of cause of action. the deliberations of the 1986 Constitutional Commission negate the contention that the intent of the framers is to revert to the original concept of “non-diminution” of salaries of judicial officers. buildings. L-49336. the doctrine in Perfecto v. Herein. No. Hernando G. He filed an action for declaratory relief. RULING: The salaries of members of the Judiciary are subject to the general income tax applied to all taxpayers. 1978 resolution. paragraph 3. The case was remanded to the lower court for a trial on merits. which should have compelled the judge to accord a hearing to the province rather than deciding the case immediately in favor of the Bishop. or whoever is acting on his behalf.R. They seek to prohibit and/or perpetually enjoin the Commissioner of Internal Revenue and the Financial Officer of the Supreme Court. the judge accepted at its face the allegation of the Bishop instead of demonstrating that there is compliance with the constitutional provision that allows an exemption.R. based on lack of jurisdiction.” With the filing of the petition. It was followed by a summary judgment granting the exemption without hearing the side of the petitioner. it must be strictly construed against the taxpayer. to hear the case on merit. and improvements for religious (or charitable) purposes to be exempted from taxation. 1981 FACTS: The provincial assessor made a tax assessment on the properties of the Roman Catholic Bishop of Bangued. January 22. ISSUE: Whether or not the salaries of judges are subject to tax. 1990 FACTS: Mitsubishi Metal Corporation. The Supreme Court dismissed the petition for prohibition. which was denied. 80041. The bishop claims tax exemption from real estate tax based on the provisions of Section 17. Such is true also of Cabinet members and all other employees. Mitsubishi Metal Corporation G. their salary shall not be decreased. even if it had dealt with the matter administratively. so that if granted. 19 and 53. No. The Supreme Court granted the petition.000. The petitioner province filed a motion to dismiss. Commissioner of Internal Revenue vs. No. a Japanese corporation licensed to do business in the Philippines. respectively.39 Petitioners are the duly appointed and qualified Judges presiding over Branches 52. Hence.000 for the expansion of the latter’s mines. RULING: The 1935 and the 1973 Constitutions differ in language as to the exemption of religious property from taxes as they should not only be “exclusively” but also “actually” and “directly” used for religious purposes. particularly the installation of a new concentrator for copper .

The Supreme Court held that Respondent John Gotamco and Sons.595. it is an indirect tax. not having been acted upon by the BIR. its assets. representing the 3% contractor's tax plus surcharges on the gross receipts it received from the WHO in the construction of the latter's building.972. the Commissioner of Internal Revenue sent a letter of demand to Gotamco demanding payment of P16.143. RULING: No. The taxability of a party cannot be blandly glossed over on the basis of a supposed “broad.970. not on the owner of the building. Section 32 [B][7][a]. Since this tax has no bearing upon the WHO. No. .966. Hence. Such governmental status of Eximbank was the basis of Mitsubishi’s claim for exemption from paying tax on the interest payments pursuant to Section 29 (b) (8) (A) (now. pragmatic analysis” alone without substantial supportive evidence.40 production. Thereafter. Thus.40. 1976. Inc. it cannot be deemed an indirect taxation upon it.79. undertook to sell to Mitsubishi all of the copper concentrates produced by said machine for 15 years. finding no reversible error committed by the respondent Court of Tax Appeals. The burden of proof rests upon the party claiming exemption to prove that it is in fact covered by the exemption so claimed. the latter gave interest payments for 1974 and 1975 amounting to P13.000. a Japanese Government financing institution which financed the loan. Mitsubishi applied for and was granted a loan by the Export.00. income and other properties shall be exempt from all direct and indirect taxes. Inc. Mitsubishi then filed a petition contending that Mitsubishi was a mere agent of Eximbank. That claim. For this purpose. RULING: It is settled that laws granting exemption from tax are construed strictissimi juris against the taxpayer and liberally in favor of the taxing power. with the corresponding 15% tax thereon withheld and remitted to the Government as required by the Tax Code. Inc. L-31092 February 27.Import Bank of Japan (Eximbank) and a consortium of Japanese banks. After inviting bids. Mitsubishi filed a claim for tax credit of the sum of P1. ISSUE: Whether or not John Gotamco & Sons. ISSUE: taxation Whether or not the interest income from the loans extended to Atlas by Mitsubishi is excludible from gross income and thus exempt from withholding tax. should pay the 3% contractor's tax under Section 191 of the National Internal Revenue Code. The CTA granted the tax credit in favor of Mitsubishi. Respondent Gotamco appealed the Commissioner's decision to the Court of Tax Appeals. It explained that direct taxes are those that are demanded from the very person who. should pay them. which later executed a waiver in favor of Atlas. G. It is the WHO that will pay the tax indirectly through the contractor and it certainly cannot be said that 'this tax has no bearing upon the World Health Organization. When the WHO decided to construct a building to house its own offices in Manila. Petitioner maintains the position that the contractor's tax is a tax due primarily and directly on the contractor. And it is an indirect tax on the WHO because. lest governmental operations suffer due to diminution of much needed funds. the latter can shift its burden on the WHO. Inc. for the stipulated price of P370. As agreed upon between Mitsubishi and Atlas. in turn. 1987 FACTS: The World Health Organization (WHO) entered into a Host Agreement with the Republic of the Philippines which provides that "the Organization.01 representing the tax withheld on the interest payment. the Supreme Court affirmed the appealed decision. On March 5. although it is payable by the petitioner. is not required to pay the 3% contractor’s tax under the National Internal Revenue Code. it is intended or desired. while indirect taxes are those that are demanded in the first instance from one person in the expectation and intention that he can shift the burden to someone else.R. petitioner brought the case to the Supreme Court. the contract was awarded to respondent John Gotamco & Sons. which onus private respondents have failed to discharge. which after trial rendered a decision. Taxation is the rule and exemption is the exception. 1997 NIRC). The contractor's tax is of course payable by the contractor but in the last analysis it is the owner of the building that shoulders the burden of the tax because the same is shifted by the contractor to the owner as a matter of self-preservation. in favor of Gotamco and reversed the Commissioner's decision. Accordingly. it entered into a further agreement with the Government that it may import into the country materials and fixtures required for the construction free from all duties and taxes. Commissioner of Internal Revenue vs Gotamco and Sons. Atlas.

Inc. RULING: No. Jr.R. ISSUE: Whether or not PLDT is exempted to pay the local franchise tax. However. or immunity to all telecommunications entities. Congress intended it to operate as a blanket tax exemption to all telecommunications entities. goods. Respondent City of Davao withheld action on the application pending payment by petitioner of the local franchise tax in the amount of P3. in approving §23 of R. and merchandise to the plaintiff Exchange. ISSUE: Whether or not merchandise is relieved from said tax when it is sold to the Army or Navy of the United States for resale to individuals by means or through the post exchanges or ship's stores RULING: No. the Supreme Court held that Petitioner PLDT is not exempted from the local franchise tax because it does not appear that. 7925. 122605 April 30. Court of Appeals G. privilege. City of Davao G.R. The Supreme Court ruled that merchandise is not exempted from taxes when it is sold to the Army of the United States for resale. soldiers and the civilian employees of the Army. Inc. City Treasurer of Davao. No.. exemption. 1930 FACTS: Petitioner Thirty-first Infantry Post Exchange is an agency within the United States Army. No. wares.A. even though they be sold through said exchanges by the intervention of officers of the Army and Navy. It explained that although The revenue laws at that time provided that "no specific tax shall be collected on any articles sold and delivered directly to the United States Army or Navy for actual use or issue by the Army or Navy.. Contending that the merchandises are exempted from taxes.72 for the first to the fourth quarter of 1999. Collector of Internal Revenue of the Philippine Islands. vs. Juan Posadas. respondent Adelaida B. 2001 FACTS: . It is different if Congress enacts a law specifically granting uniform advantages.41 31st Infantry Post Exchange vs. the Court is not inclined to believe that goods sold to the soldiers and sailors of the Army and Navy. It explained that the acceptance of petitioner's theory would result in absurd consequences. denied the protest and claim for tax refund of petitioner. PLDT vs. No. All of the goods sold to and purchased by the petitioner are intended for resale to and are in fact resold to the officers.681. 33403 September 4. petitioner brought the case before the Supreme Court. Petitioner contended that it was exempted from the payment of franchise tax based on an opinion of the Bureau of Local Government Finance (BLGF) citing Section 23 of RA 7925 which provides equality of treatment in the telecommunication industry.R. are goods sold directly to the United States Army or Navy for actual use or issue by the Army or Navy. Petitioner protested the assessment of the local franchise tax and requested a refund of the franchise tax paid by it for the year 1997 and the first to the third quarters of 1998. Nevertheless. and his predecessors in that office. and any taxes which have been paid on articles so sold and delivered for such use or issue shall be refunded upon such sale and delivery. Sea-Land Services. under the control of the officers of the Army. Furthermore. The effect of the demand and collection of taxes was to increase the cost thereof to the plaintiff Exchange. 2001 FACTS: Petitioner Philippine Long Distance Telephone Co. 143867 August 22. have collected from the merchants who made the sales of the commodities. No. Barcelona.985. and their families. Posadas G. the court emphasized that tax exemptions are highly disfavored. (PLDT) applied for a Mayor's Permit to operate its Davao Metro Exchange. favor. taxes at the rate of one and one-half per centum on the gross value in money of the commodities.

551. government be interpreted as directly related to the defense and security of the Philippine territories. respondent province enacted Laguna Provincial Ordinance No. A franchise partakes the nature of a grant which is beyond the purview of the non-impairment clause of the Constitution. alteration or repeal by Congress as and when the common good so requires. Truly. however. a written claim for refund was filed with the BIR. an American international shipping company licensed by the Securities and Exchange Commission to do business in the Philippines entered into a contract with the United States Government to transport military household goods and effects of U. MERALCO was likewise granted a franchise by the National Electrification Administration to operate an electric light and power service in the Municipality of Calamba. The Supreme Court held that the petitioner is not included in the tax exemption provided in the RP-US Military Bases Agreement.D.5% as required in Section 25 (a)(2) of the National Internal Revenue Code (NIRC) in relation to Article 9 of the RP-US Tax Treaty. fees and charges. consistent with the basic policy of local autonomy.S. RULING: Yes. military personnel falls within the tax exemption provided in Article XII. These contractual tax exemptions. . “Local Government Code of 1991.12. under protest. On 19 January 1983. heat and power within their concerned areas. is explicit that no franchise for the operation of a public utility shall be granted except under the condition that such privilege shall be subject to amendment. 1999 FACTS: Province of Laguna by virtue of existing laws then in effect. 551 already included the franchise tax imposed by the Provincial Tax Ordinance.S. A formal claim for refund was thereafter sent by MERALCO to the Provincial Treasurer of Laguna claiming that the franchise tax it had paid and continued to pay to the National Government pursuant to P. tax exemptions of this kind may not be revoked without impairing the obligations of contracts." Neither could the performance of this service to the U. subject to the limitations expressed therein. before the said claim for refund could be acted upon by public respondent Commissioner of Internal Revenue. 131359. amounting to P870. Laguna. of the 1987 Constitution. which then amounted to P19. ISSUE: Whether or not the tax exemption should be withdrawn to give way to the authoritative language of the Local Government Code specifically providing for the withdrawal of such exemption without violating the Constitutiion. issued resolutions through their respective municipal councils granting franchise in favor of petitioner Manila Electric Company (“MERALCO”) for the supply of electric light. It explained that although the Military Bases agreement provides that no US national shall be liable to pay income tax in the Philippines in respect of any profits derived under a contract made in the United States with the government of the United States in connection with the construction. Indeed. MERALCO contended that the imposition of a franchise tax under Section 2.42. are not to be confused with tax exemptions granted under franchises. 01-92. PROVINCE OF LAGUNA G. Section 11.S.D.R. maintenance. Petitioner MERALCO paid the tax. operation and defense of the bases.S. On 12 September 1991. May 5. petitioner filed a petition for review with the Court of Tax Appeals (CTA) to judicially pursue its claim for refund and to stop the running of the two-year prescriptive period under the then Section 243 of the NIRC. Claiming that it paid the aforementioned income tax by mistake.520. maintenance. Pursuant to the provisions of the Code. SEA-LAND filed with the Bureau of Internal Revenue (BIR) the corresponding corporate Income Tax Return (ITR) and paid the income tax due thereon of 1. No. 01-92. MANILA ELECTRIC COMPANY VS. RULING: No.628. operation and defense of the bases it is obvious that the transport or shipment of household goods and effects of U. Article XII. military personnel is not included in the term "construction. contravened the provisions of Section 1 of P.093.” was enacted enjoining(directing) local government units to create their own sources of revenue and to levy taxes. ISSUE: Whether or not the income that petitioner derived from services in transporting the household goods and effects of U. insofar as it concerned MERALCO. The CTA rendered its decision denying SEA-LAND’s claim for refund of the income tax it paid in 1984. Respondent Provincial Treasurer sent a demand letter to MERALCO for the corresponding tax payment. like its precursor provisions in the 1935 and the 1973 Constitutions.42 Petitioner Sea-Land Service Incorporated (SEA-LAND).09 of Laguna Provincial Ordinance No. However. military personnel assigned to the Subic Naval Base. paragraph 4 of the RP-US Military Bases Agreement.

6958. except as provided in the said section. Petitioners contend that the SSEZ encompasses (1) the City of Olongapo. then. 120082. Mr. without reasonable or valid standards. which is to turn the former military base to productive use for the benefit of the Philippine economy. EO 97-A. 97-A confining the application of R. It has thereby excluded the residents of the first two components of the zone from enjoying the benefits granted by the law. upon the effectivity of the LGC. at this time the business activities outside the “secured area” are not likely to have any impact in achieving the purpose of the law. MACTAN CEBU INTERNATIONAL AIRPORT VS. . management and supervision of the Mactan International Airport in the Province of Cebu and the Lahug Airport in Cebu City. In the first. x x x and such other airports as may be established in the Province of Cebu x x x” (Sec. Since the time of its creation. we find real and substantive distinctions between the circumstances obtaining inside and those outside the Subic Naval Base. we are talking of billion-peso investments and thousands of new jobs. It was also asserted that it is an instrumentality of the government performing governmental functions. specifying the area within which the tax-and-duty-free privilege was operative. definitely none of such magnitude. narrowed down the area within which the special privileges granted to the entire zone would apply to the present “fenced-in former Subic Naval Base” only. 1994. including government-owned or controlled corporations. hardly any reasonable basis to extend to them the benefits and incentives accorded in RA 7227. exemptions from payment of real property taxes granted to natural or juridical persons. 1-95. demanded payment for realty taxes on several parcels of land belonging to the petitioner. NO. Officer-in-Charge.R.The President issued Executive Order No. On October 26. thereby justifying a valid and reasonable classification. however. Petitioner objected to such demand for payment as baseless and unjustified. Rather. In a Resolution dated June 27. Eustaquio B. Office of the Treasurer of the City of Cebu. 3. On the other hand. only local. petitioner MCIAA enjoyed the privilege of exemption from payment of realty taxes in accordance with Section 14 of its Charter On October 11. this Court referred the matter to the Court of Appeals. and the petitioner is. 1996 FACTS: Petitioner Mactan Cebu International Airport Authority (MCIAA) was created by virtue of Republic Act No. September 11. It has effectively discriminated against them. No. We rule in favor of the constitutionality and validity of the assailed EO. (2) the Municipality of Subic in Zambales. efficient and effective control. pursuant to Revised Administrative Circular No.R. COURT OF APPEALS G. There is. neither is it discriminatory. On the one hand. 1994. claiming in its favor the aforecited Section 14 of RA 6958 which exempts it from payment of realty taxes. mandated to “principally undertake the economical. undoubtedly. 1995. Said Order is not violative of the equal protection clause.43 TIU VS. ISSUE: Whether the provisions of Executive Order No. a government-owned corporation. the petitioners challenged before this Court the constitutionality of EO 97-A for allegedly being violative of their right to equal protection of the laws. in the second. in contravention of the equal protection guarantee. Cesa.A. Since the last paragraph of Section 234 unequivocally withdrew. 127410. 7227 granting tax and duty incentives only to businesses and residents within the secured area and excluding the residents of the zone outside of the secured area is discriminatory or not. RULING: No. Section 12 thereof created the Subic Special Economic Zone and granted thereto special privileges. the economic impact will be national. 1999 FACTS: Congress passed into law RA 7227. There are substantial differences between the big investors who are being lured to establish and operate their industries in the so-called “secured area” and the present business operators outside the area. JANUARY 20. and (3) the area formerly occupied by the Subic Naval Base. However. citing Section 133 of the Local Government Code of 1991 which puts limitations on the taxing powers of local government units. 97-A (EO 97-A). ISSUE: Can the City of Cebu demand payment of realty taxes on several parcels of land belonging to the petitioner? RULING: Yes. RA 6958). Even more important. MARCOS G. according to them.

They must be referring to Section 13 par. Said circumstances are all present in the case at bar. maintenance. Basco vs PAGCOR G.D. operation or defense. amended or modified.R. and the income derived is from the U.R. RULING: The City of Manila. No. has been withdrawn. as well as fees. rules and regulations.R. Military Base in the Philippines in connection with its construction. 70116-19.S. decrees. April 26. income or otherwise.S. as amended. 1869 is violative of the principle of local autonomy. 1991 . XII par. and incomes are solely derived from salaries from the U.S. 91649. operation. L-69344. Thus. maintenance. inconsistent therewith.D. government by reason of their employment in the U. civilian employees in the U. The private respondents are citizens of the United States. To attain these objectives PAGCOR is given territorial jurisdiction all over the Philippines. R. 2 of PI-US Military Bases Agreement of 1947). Bases in the Philippines.D. Under its Charter's repealing clause. 1983. Government (Art. August 12. 1869 constitutes a waiver of the right of the city of Manila to impose taxes and legal fees to PAGCOR. executive orders.D. No. 2. inclusive of interests and penalties. of the bases. PAGCOR was created under P. 6958. whether National or Local.44 it necessarily follows that its exemption from such tax granted it in Section 14 of its Charter.S. 1991 FACTS: On July 11. Nos. COMMISSIONER OF INTERNAL REVENUE vs. that the exemption clause in P.FRANK ROBERTSON G. Republic vs IAC G. Likewise. ISSUE: Whether or not the public respondent erred in holding that private respondents are exempted from paying Philippine income tax. In order to avail oneself of the tax exemption under the RP-US Military Bases Agreement: he must be a national of the United States employed in connection with the construction. and defense. (2) of P.A. being a mere Municipal corporation has no inherent right to impose taxes. RULING: The law and the facts of the case are so clear that there is no room left for Us to doubt the validity of private respondents' defense. of the RP-US Military Bases Agreement of 1947. We find no justifiable reason to disturb the findings and rulings of the lower court in its decision. 1869 constitutes a waiver of the right of the City of Manila to impose taxes and legal fees. The Charter of the City of Manila is subject to control by Congress. May 14.D. 1986 FACTS: The question involving this case is the scope of the tax exemption provision in Article XII. Par. are accordingly repealed." The Court a quo after due hearing. But petitioners contend that P. charges or levies of whatever nature. 1869 which exempts PAGCOR." ISSUE: Whether or not P. residing in the Philippines by reason of such employment. Its "power to tax" therefore must always yield to a legislative act which is superior having been passed upon by the state itself which has the "inherent power to tax". rendered its judgment in favor of respondents cancelling and setting aside the assessments for deficiency income taxes of respondents for the taxable years 1969-1972. holders of American passports and admitted as Special Temporary Visitors under Section 9 (a) visa of the Philippine Immigration Act of 1940. all laws. 1869 to enable the Government to regulate and centralize all games of chance authorized by existing franchise or permitted by law. No. as the franchise holder from paying any "tax of any kind or form. "the Charter or statute must plainly show an intent to confer that power or the municipality cannot assume it".

A tax amnesty. 64. but the motion was denied.45 FACTS: On April 15. the Republic of the Philippines.117. 370 evidenced by the Government's Official Receipt No. Consequently. 23. 108358. particularly to give tax evaders. since the latter have already paid almost the equivalent amount to the Government by way of amnesty taxes under P. even if there was an existing assessment against the latter at the time he paid the amnesty tax. If. being a general pardon or intentional overlooking by the State of its authority to impose penalties on persons otherwise guilty of evasion or violation of a revenue or tax law. respondent R.O. Availing itself of the amnesty. respectively.D. the Government is estopped from collecting the difference between the deficiency tax assessment and the amount already paid by them as amnesty tax.08 against the Pastor spouses were correct. for the taxable years 1981 to 1985. and in this sense. No.71. petitioner Commissioner of Internal Revenue.157. 1973 under P.410.117. 1975. 41. January 20. . under E.D. through the Bureau of Internal Revenue.D. but an amnesty. 41 had not been intended to include 1981-1985 tax liabilities already assessed (administratively) prior to 22 August 1986. Inc.O. the law could have simply so provided in its exclusionary clauses. RULING: Even assuming that the deficiency tax assessment of P17. Commissioner of Internal Revenue vs CA G. commenced an action to collect from the spouses Antonio Pastor and Clara Reyes-Pastor deficiency income taxes for the years 1955 to 1959. 1980.O. and were granted not merely an exemption. The Pastors filed a motion to dismiss the complaint. They contended that they had availed of the tax amnesty under P. as the Commissioner argues. 23. The taxpayer wrote back to state that since it had been able to avail itself of the tax amnesty. 1995 FACTS: On 22 August 1986. 1052388. On August 2. dated 04 November 1986. Prior to this availment. 41. It did not. 54.400 or 10% of their reported untaxed income under P.. its coverage expanded. they filed an answer admitting there was an assessment against them of P17. 213 and 370 and had paid the corresponding amnesty taxes amounting to P10.20 or 20% of the reported untaxed income under P. ISSUE: Whether or not the payment of deficiency income tax under the tax amnesty and its acceptance by the Government operated to divest the Government of the right to further recover from the taxpayer. later amended to include estate and donor's taxes and taxes on business. dated 17 November 1986.O. and.08 for income tax deficiency but denying liability therefor. assessed the latter deficiency income and business taxes for its fiscal years ended 30 September 1981 and 30 September 1982 in an aggregate amount of P1. Auto Products Philippines. the deficiency tax notice should forthwith be cancelled and withdrawn. RULING: The period of the amnesty was later extended to 05 December 1986 from 31 October 1986 by E. prejudicial thereto. E. 213. and paid the corresponding amnesty taxes due.951. ISSUE: Whether or not the position taken by the Commissioner coincides with the meaning and intent of E.H. in October 1986 and November 1986. E. on the ground that Revenue Memorandum Order 4-87. The conclusion is unavoidable. for their past tax failings.O. 213. and a final payment on October 26. the Government is in estoppel to demand and compel further payment of income taxes by them.O. P2. had construed the amnesty coverage to include only assessments issued by the Bureau of Internal Revenue after the promulgation of the executive order on 22 August 1986 and not to assessments theretofore made. No. filed.D. to include estate and honors taxes and taxes on business. in a communication received by private respondent on 13 August 1986.D. The request was denied by the Commissioner. implementing E.O.R. partakes of an absolute forgiveness or waiver by the Government of its right to collect what otherwise would be due it. who wish to relent and are willing to reform a chance to do so and thereby become a part of the new society with a clean slate. 41 was promulgated declaring a one-time tax amnesty on unpaid income taxes. and it is that the executive order has been designed to be in the nature of a general grant of tax amnesty subject only to the cases specifically excepted by it. its Tax Amnesty Return and Supplemental Tax Amnesty Return.'s Nos.

R.46 Hilado vs Collector of Internal Revenue GR L-9408. Assuming that the loss (deductible item) represents a portion of the 75% of his war damage claim. or from robbery. there was no law which Hilado could claim for the destruction of his properties during the battle for the liberation of the Philippines. storms. 108524. the latter merely sell copra. the deductions were disallowed. There is a material or substantial difference between coconut farmers and copra producers. Petitioner claims that RMC No. February 6. shipwreck or other casualty. which implemented VAT Ruling 190-90. the sale of agricultural food products in their original state is exempt from VAT at all stages of production or distribution. The argument has no merit. they are subject to 10% VAT on the sale of services. 47-91 is discriminatory and violative of the equal protection clause of the Constitution. 1997 FACTS: . 1994 FACTS: Petitioner Misamis Oriental Association of Coco Traders. although both sell copra in its original state. through the Collector. The petitioner alleges that prior to the issuance of Revenue Memorandum Circular 47-91 on June 11. 1991. ISSUE: Whether RMC No. The reclassification had the effect of denying to the petitioner the exemption it previously enjoyed when copra was classified as an agricultural food product under §103(b) of the NIRC. copra was classified as agricultural food product under $ 103(b) of the National Internal Revenue Code and. Such tax laws are deemed to be laws of the occupied territory and not of the occupying enemy. The former produce and sell copra. traders and dealers are not. 47-91 is violative of the equal protection clause because while coconut farmers and copra producers are exempt. the amount would be at most a proper deduction of his 1950 gross income (not on his 1951 gross income) as the last installment and notice of discontinuation of payment by the War Damage Commission was made in 1950. He is claiming a deductible item of P12. No. Under the Philippine Rehabilitation Act of 1948. and copra traders and dealers. G. on the one hand. individually or collectively. Inc. Commissioner of Internal Revenue vs. or embezzlement are deductible in the year of actual loss or destruction of said property. Under Sec. Department of Finance Secretary G. theft. ISSUE: Whether or not Hilado can claim compensation for destruction of his property during the war under the laws in effect at that time. 47-91 on various grounds. As of the end of 1945. on the other. Subsequently. Inc. is a domestic corporation whose members.837. are engaged in the buying and selling of copra in Misamis Oriental. Thereafter. No. therefore. exempt from VAT at all stages of production or distribution. 1956 FACTS: Emilio Hilado filed his income tax return for 1951 with the treasurer of Bacolod City. RULING: The court ruled in the negative. The Constitution does not forbid the differential treatment of persons so long as there is a reasonable basis for classifying them differently. the Secretary of Finance. Misamis Oriental Association of Coco Traders.65 from his gross income under the General Circular V-123 issued by the Collector of Internal Revenue. Petitioner challenges RMC No. It is not true that oil millers are exempt from VAT. RULING: Philippines Internal Revenue Laws are not political in nature and as such were continued in force during the period of enemy occupation and in effect were actually enforced by the occupation government. 103(b) of the NIRC. November 10. Court of Appeals and Alhambra Industries. It provided that losses of property which occurred in World War II from fires. October 31. Petitioners add that oil millers do not enjoy tax credit out of the VAT payment of traders and dealers. the payment of claims by the War Damage Commission depended upon its discretions non-payment of which does not give rise to any enforceable right. 117982. issued General Circular V-139 which revoked and declared void Circular V-123. inc.R. vs. Pursuant to § 102 of the NIRC.

A. However. Pending the hearing of the said cases. On 7 May 1991 private respondent received a letter dated 26 April 1991 from the Commissioner of Internal Revenue assessing it deficiency Ad Valorem Tax (AVT) in the amount P 488. operates an electric power plant serving the adjoining municipalities of Lingayen and Binmaley.R. heat. the legislative franchise (R. established. or collected by any authority whatsoever.. a general provision of law insofar as the imposition of the ad valorem tax on cigar and cigarettes is concerned. ISSUE: Whether Sec.. 127 (b) to the wholesale price of cigar and cigarette products for purposes of computing the ad valorem tax is patently erroneous. No.. Republic Act (R. (2) Whether or not the respondent taxpayer is liable for the fixed and deficiency percentage taxes in the amount of P3. 1958." Thus. Thus. 3843 was passed on June 22. 142 (d) of the Tax Code. 142 (d) of the Tax Code.) No. shall be collected.41 representing deficiency franchise taxes and surcharges for the years 1946 to 1954 applying the franchise tax rate of 5% on gross receipts. 1988 FACTS: The respondent taxpayer. In his letters dated July 25 and August 28.396. any provision of law to the contrary notwithstanding. Inc G. Private respondent filed a protest against the proposed assessment with a request that the same be withdrawn and cancelled. is a domestic corporation engaged in the manufacture and sale of cigar and cigarette products. by virtue of R. well-entrenched is the rule that rulings and circulars..025.A. or national. effective from the date the original municipal franchise was granted. pursuant to the municipal franchise granted it by their respective municipal councils. Petitioner denied such protest. no other tax and/or licenses other than the franchise tax of two per centum on the gross receipts . 3843 provided that the private respondent should pay only a 2% franchise tax on its gross receipts. RULING: R. nature or description levied. now or in the future .A. the application of Sec. No. (2) BIR Ruling 017-91 dated 11 February 1991 which included back the VAT in computing the tax base for purposes of the fifteen percent (15%) ad valorem tax. 3843) exempted the grantee from all kinds of taxes . it made an overpayment of the franchise tax. and. municipal.62. is the applicable law in the instant case as it specifically applies to the manufacturer's wholesale price of cigar and cigarette products and not Sec.No. ISSUES: (1) Whether or not the 5% franchise tax prescribed in Section 259 of the National Internal Revenue Code assessed against the private respondent on its gross receipts realized before the effectivity of R.. On November 21. Accordingly. and August 9. and power system in the same municipalities of Pangasinan and comes with it a tax equal to two per centum of the gross receipts from electric current sold or supplied under this franchise. both in the province of Pangasinan. granting to the private respondent a legislative franchise for the operation of the electric light. Inc. 1955. Commissioner of Internal Revenue vs. the Commissioner denied the request of the private respondent. the Bureau of Internal Revenue (BIR) assessed against and demanded from the private respondent the total amount of P19. August 4. BIR Ruling 473-88 is void ab initio as it contravenes the express provisions of Sec. and effective further upon the date the original franchise was granted. 3843. 127 (b). 142 being a specific provision applicable to cigar and cigarettes must prevail over Sec. L-23771. Lingayen Gulf Electric Power Co. 127 (b) of the Tax Code which applies in general to the wholesale of goods or domestic products.No. Consequently. the private respondent was liable to pay only the 2% franchise tax. 1958 to the petitioner Commissioner. "in lieu of any and all taxes and/or licenses of any kind..A. Inc. the private respondent protested the said assessment and requested for a conference with a view to settling the liability amicably.96 for the period before the approval of its municipal franchises.293. provincial.. which provides for the inclusion of the VAT in the tax base for purposes of computing the 15% ad valorem tax. Lingayen Gulf Electric Power Co. 1 963. the appeal to the respondent Court of Tax Appeals. 3843 is collectible. The private respondent requested for a reinvestigation of the case on the ground that instead of incurring a deficiency liability. rules and regulations promulgated by the Commissioner of Internal Revenue would have no retroactive application if to so apply them would be prejudicial to the taxpayers. In its letters dated July 2. As to the second issue.A. RULING: Sec.47 Alhambra Industries. The dispute arose from the discrepancy in the taxable base on which the excise tax is to apply on account of two incongruous BIR Rulings: (1) BIR Ruling 473-88 dated 4 October 1988 which excluded the VAT from the tax base in computing the fifteen percent (15%) excise tax due. The BIR is now ordered to refund private respondent of the collected taxes form the latter. No.

No. January 28. the last year that petitioner had withheld taxes under General Circular No. which was very much more than the amount rightfully due from it. Herein . ISSUES: Whether Revenue Memorandum Circular 4-71. during the period covered by the instant case.48 other than the 2% tax from the date the original franchise was granted. However. RA 5431 amended Section 24 (b) of the Tax Code increasing the tax rate from 30% to 35% and revising the tax basis from “such amount” referring to rents.ended December 31. PBcom filed for a tax refund. In implementing Section 4(b) of the Tax Code. Section 230 of the National Internal Revenue Code of 1977 provides for the two year period for filing a claim for refund or credit. therefore. petitioner filed a petition for review with the Court of Tax Appeals. the private respondent should no longer be made to pay for the deficiency tax in the amount of P3. Philippine Bank of Commerce (PBcom) v. Subsequently. ABS-CBN Broadcasting Corp. revoking General Circular V-334. dutifully withheld and turned over to the BIR 30% of ½ of the film rentals paid by it to foreign corporations not engaged in trade or business in the Philippines. When the Acting Commissioner of Internal Revenue issued a memorandum changing the prescriptive period of two years to ten years. ISSUE: Did the CTA erred in denying the plea for tax refund on the ground of prescription? RULING: No.” In 1971. The Court of Appeal affirmed in toto the ruling of the CTA.36. Hence. the Commissioner issued a letter of assessment and demand for deficiency withholding income tax for years 1965 to 1968. the private respondent paid the amount of P34. where the Commissioner did not act upon. RULING: Rulings or circulars promulgated by the Commissioner have no retroactive application where to so apply them would be prejudicial to taxpayers. ABS-CBN Broadcasting Corp. may be retroactively applied. the company does not fall under any of them. before February 24. L-52306. October 12. 1948.the prejudice the company of the retroactive application of Memorandum Circular 4-71 is beyond question. The assessment and demand on petitioner to pay deficiency withholding income tax was also made three years after 1968 for a period of time commencing in 1965. did not cover the period before the franchise was granted. petitioner corporation was engaged in the business of telecasting local as well as foreign films acquired from foreign corporations not engaged in trade or business within the Philippines for which petitioner paid rentals after withholding income tax of 30%of one-half of the film rentals. The company requested for reconsideration. The exemption.R. the Commissioner issued General Circular V-334.025. 1961. Pending investigation of the BIR. No.184.e. 1981 FACTS: During the period pertinent to this case. 1948. Court of Tax Appeals G. V-334. to “gross income. PBcom suffered losses so that when it filed its Annual Income Tax for the year. 112024. The last year that the company withheld taxes pursuant to the Circular was in 1968. Commissioner of Internal Revenue (CIR) G. 1946 to February 29. It was issued only in 1971. On August 7. vs. such circular created a clear inconsistency with the provision of . Pursuant thereto.98 for the period from January 1. 1946 to December 31. Petitioner contended that the two year period has been changed to ten years upon a memorandum issued by the Commissioner of Internal Revenue. The relaxation of revenue regulation by a memorandum issued by the BIR is not warranted as it disregards the two year period set by law. 016. Insofar as the enumerated exceptions are concerned.R. etc. On 27 June 1908.00. 1999 FACTS: Petitioner PBcom paid its quarterly income tax for the first and second quarters of 1985 totalling to Php5. that is from January 1. The company was no longer in a position to withhold taxes due from foreign corporations because it had already remitted all film rentals and had no longer control over them when the new circular was issued. i. Petitioner also earned rental income for both 1985 and 1986 and the corresponding tax thereof was with held and remitted by the lessees to the BIR. 1986. or three years after 1968. it reported a net loss and declared no tax payable for the year. The CTA denied the tax refund on the ground that application for refund must be made within two years from the payment of tax as provided by the National Internal Revenue Code. as pointed out by the respondent court in its findings.954. 1987 or after more than two years from payment of taxes.

petitioners herein are precluded from increasing monthly rentals and in ejecting the lessees. The Clearance Vessel to a Foreign Port issued by the District Collector of Customs support such finding. unwarranted. Soriamont Agency paid the required income and common carrier taxes for its transaction with Nasutra. Moreover. it has been stressed that the assessors . Incorporated. in finding the value of the property. rather it legislated guidelines contrary to the statute passed by the congress. Private respondent. Almonzor G. Consequently. 1991 FACTS: The National legislature enacted R. that it failed to prove that it did not realize any receipt from its charter agreement and it suppressed evidence when it did not present its charter agreement. The act also suspended article 1673 of the Civil Code thereby disallowing ejectment of lessees. Due to the failure of petitioner to act promptly on the matter. April 26. but it was denied by the CTA. May 26. it is conceded that the proprietary of one. have to consider all the circumstances and elements of value and must exercise a prudent discretion in reaching conclusions. RULING: We find no merit in the petition. filed a claim for tax credit before the petitioner Commissioner of Internal Revenue for erroneous payment. the BIR did not simply interpret the law. The respondent Court of Tax Appeals held that sufficient evidence has been adduced by private respondent proving that it derived no receipt from its charter agreement with Nasutra. as against the other would depend on several factors.A. Reyes v. hence. It is unquestionable that both the Comparable Sales Approach and the Income Approach are generally acceptable methods of appraisal for taxation purposes. This entailed an increase in the tax rates prompting petitioners to file a Memorandum of Disagreement with the Board of Tax Assessment Appeals averring that the reassessment was excessive. Petitioner filed a motion for reconsideration. confiscatory and unconstitutional considering that the tax imposed upon them is greater than the annual income derived from the property. hence this petition. the BIR examiner and its appellate division both recommended the approval of private respondent’s claim of tax refund. In so doing. ISSUE: Did the board err in adopting the comparable sales approach in fixing the assessed value of the properties? RULING: The petition is impressed with merit. . the vessel found no sugar for loading. 1995 FACTS: Private Respondent is a foreign corporation represented in the Philippines by Soriamont Steamship Agencies. The Board of tax Assessment Appeals considered the assessment valid and the same was affirmed by the Central Board of Assessment appeals. therefore.R. inequitable. L-49839 – 46. ISSUE: Whether or not private respondent failed to prove that it derived no receipt from its charter agreement. It owns and operates tramper vessel M/V Gardenia. Nasutra chartered M/V Gardenia to load raw sugar in the Philippines.R. where the rental does not exceed Php300. However. not entitled to a refund. 6359 which prohibits an increase in monthly rentals of dwelling unit or land on which another’s dwelling is located. These prohibitions were made absolute by the filing of Presidential Decree 20. hence this petition contending that private respondent has the burden of proof to support its claim of refund. However. They also argued that the income approach should have been used in determining the land values instead of the comparable sales approach.LTD G. Commissioner of Internal Revenue v. L-68252. upon arrival. as early as 1923. The respondent city assessor of Manila reassessed the value of the petitioners’ properties based on the scheduled market value thereof. No.00. Tokyo Shipping Co. Nos. private respondent filed a petition for review before the Court of Tax Appeals (CTA) which favoured the tax credit. Hence.49 Section 230 of NIRC.

Upon verification through his lawyer. 1988 FACTS: On January 14. on December 5. ISSUE: Did the Collector of Internal Revenue correctly disallow the deduction claimed by private respondent Algue as legitimate business expense in its Income Tax Return? RULING: We agree with respondent court that the amount of promotional fee was not excessive and was reasonable. and the Court of Tax Appeals G. Since 1963 up to 1977 inclusive. 000.116. 1977. Francia was not present during the auction sale since he was in Iligan City at that time helping his uncle ship bananas. The Intermediate Appellate Court affirmed the decision of the lower court in toto. in the light of public policy.00 has been extinguished by legal compensation is correct claiming that the government owed him P4. allowing the deduction of the disputed amount in the Income Tax Return of private respondent. his property was sold at public auction pursuant the Real Property Tax Code in order to satisfy a tax delinquency of P2. Algue refused to receive it on the ground of pending protest until it was finally informed that the BIR was not taking any action on the protest. Francia failed to pay his real estate taxes. A person cannot refuse to pay a tax on the ground that the government owes him an amount equal to or greater than the tax being collected. 1977. Ho Fernandez was the highest bidder for the property. Francia received a notice of hearing “In re: Petition for Entry of New Certificate of Title" filed by Ho Fernandez. contract or judgment as is allowed to be set-off under the statutes of set-off. to exclude the remedy in an action or any indebtedness of the state or municipality to one who is liable to the state . Hence. L-67649. The collection of a tax cannot await the results of a lawsuit against the government. We have consistently ruled that there can be no off-setting of taxes against the claims that the taxpayer may have against the government. Thelower court rendered a decision against his favor. After four days from its receipt. The finding of respondent court is in accordance with the provision of the Tax Code on deductions from gross income. 1978. ENGRACIO FRANCIA vs. received a letter from the petitioner assessing it a delinquency income tax for the year 1958 and 1959. Algue filed a letter of protest which was stamped and received by the petitioner. The solicitor general is correct in saying that the burden to prove the validity of claimed deduction is on the tax payer. seeking the cancellation of TCT and the issuance in his name of a new certificate of title. Thus. 1979. No. Francia filed a complaint to annul the auction sale. A claim for taxes is not such a debt.R.50 Commissioner of Internal Revenue v. On October 15. 1988 FACTS: Engracio Francia is the registered owner of a residential lot and a two-story house located in Pasay City. L – 28896. The CTA ruled in favour of Algue holding that the Php75. which are construed uniformly. demand. Algue. 1977. this petition for review. hence.400. a domestic corporation engaged in engineering. Inc. the private respondent. private respondent received a warrant of distraint and levy. The auction sale and the final bill of sale were both annotated at the back of TCT No. On March 3. It therefore filed a petition for review of the decision of the Commissioner of Internal Revenue (CIR) with the Court of Tax Appeals. a 125 square meter portion of Francia's property was expropriated by the Republic for the sum of P4. February 17.116.00 when a portion of his land was expropriated on October 15. 4739 (37795) by the Register of Deeds.R. On March 20.400.00. 1965. construction and other allied activities. The private respondent has proved this.00 in dispute shall be considered as deductible from income it being in the form of promotional expense and contrary to petitioner’s contention that it was not an ordinary and reasonable business expense. June 28. Francia discovered that a Final Bill of Sale had been issued in favor of Ho Fernandez by the City Treasurer on December 11. Despite the protest. No. INTERMEDIATE APPELLATE COURT G. ISSUE: Whether or not the contention of Francia that his tax delinquency of P2. RULING: This principal contention of the petitioner has no merit. 1979.00.. The amount in dispute was necessary and reasonable in the light of the efforts of the respondent corporation to induce investors.

Such an assessment was contested by respondent before the Court of Tax Appeals which ruled in its favor. 1963 FACTS: This is a petition for certiorari and mandamus against respondent judge seeking to annul certain orders of the court and for an order in this Court to direct respondent to execute the judgment in favor of the Government against the estate of Walter Scott Price for internal revenue taxes. according to the Court of Tax Appeals. 1961. to hold that petitioner should not repose an interest on the aforesaid sum of P13.33. Domingo vs. It is made clear.155. now the petitioner. as an inheritance tax.707. It thus sought a refund from the Commissioner of Internal Revenue. 1962. 1961. in an earlier provision found in the same section that if in any preceding year.83 as 1% monthly interest on the aforesaid amount of P13. June 29. DOMINGO vs. Judge S. Neither are they a proper subject of recoupment since they do not arise out of the contract or transaction sued on. filed on January 13. ISSUE: Whether or not the Court of Tax Appeals erred when it absolved respondent corporation "from liability to pay the sum of P1. HON.512. The National Internal Revenue Code provides that interest upon the amount determined as a deficiency shall be assessed and shall be paid upon notice and demand from the Commissioner of Internal Revenue at the specified. 1962. is for the claimant to present a claim before the probate . for which it paid on the same day. No. petitioner Commissioner of Internal Revenue assessed against the respondent the amount of P1. setting forth its income tax liability to the tune of P97." In order to enforce the claims against the estate the fiscal presented a petition dated June 21.368.00. Hence this petition for review. There is no question respondent was entitled to a refund. Inc. issued by the Court of First Instance of Leyte in. GARLITOS G.R. INC. 1962. January 30. C.058. Inc. respondent Itogon-Suyoc Mines. amounting to P40. however.55. charges and penalties. On May 17. The petition was. the taxpayer was entitled to a refund of any amount due as tax.R. to the court below for the execution of the judgment. its income tax return for the fiscal year 19591960. RULING: The petition to set aside the above orders of the court below and for the execution of the claim of the Government against the estate must be denied for lack of merit.04 and a tax due thereon amounting to P26.51 or municipality for taxes.20 representing alleged tax credit for overpayment of the preceding fiscal year 19591960. L-18994.155. Hon. denied by the court which held that the execution is not justifiable ISSUE: Whether or not the petitioner has the clear right to execute the judgment for taxes against the estate of the deceased Walter Scott Price. if not yet refunded. ITOGON-SUYOC MINES. but deducting the amount of P13. It declared a taxable income of P114. special proceedings No.41. G. MELECIO R.20 from January 16. the amount of P13. G.345. reporting therein a net loss of P331. such amount. 0n December 18. 1962 to December 31. The ordinary procedure by which to settle claims of indebtedness against the estate of a deceased person.83 as 1% monthly interest for delinquency in the payment of income tax for the fiscal year 1960-1961. this Court declared as final and executory the order for the payment by the estate of the estate and inheritance taxes. filed its income tax return for the fiscal year 1960-1961.155. L-14674. 1969 FACTS: Respondent Itogon-Suyoc Mines. petitioner filed an amended income tax return. LORENZO C. Moscoso. L-25299. On February 14. The basis for such an assessment was the absence of legal right to deduct said amount before the refund or tax credit thereof was approved by petitioner Commissioner of Internal Revenue. That it had a right to do according to the law. it deducted the said amount from the tax that it had to pay.R. 14 entitled "In the matter of the Intestate Estate of the Late Walter Scott Price. No.” RULING: It could not be error for the Court of Tax Appeals.20 as the first installment of the income tax due. "unfair and unjust" to do so. however." It would be. 1961. considering the admitted fact of overpayment.512. COMMISSIONER OF INTERNAL REVENUE vs. July 29. entitling respondent to refund. Instead of waiting for the sum involved to be delivered to it.20 "which after all was paid to and received by the government even before the incidence of the tax in question. No. may be deducted from the tax to be paid.310. It appears that in Melecio R. 1960.155.

Ltd. if it cannot be refunded.00 per square meter. Inc v. MAMBULAO LUMBER COMPANY. the Republic of the Philippines should refund said amount. however. the amount of P0. August 1. Docketed as Civil No. and both debts are extinguished to the concurrent amount. of which 30 million was given as downpayment. 97787. in addition to the regular forest charges provided under Section 264 of Commonwealth Act 466 known as the National Internal Revenue Code. No. takes place by operation of law. to the making and enforcing of which. cut out and removed from any public forest for commercial purposes.900. (Ortigas) for the acquisition of four parcels of land located in Ugong Norte. and are the positive acts of the government.37. The Anti-Graft League of the Philippines. Another ground for denying the petition is the fact that the court having jurisdiction of the estate had found that the claim of the estate against the Government has been recognized and an amount of P262.R. 1948 to December 29. Pasig. Three deeds of absolute sale were executed on April 22 and May 9.802. ISSUE: Whether or not the sum of P9. therefore.50 paid by defendant company to plaintiff as reforestation charges from 1947 to 1956 may be set off or applied to the payment of the sum of P4. the complaint alleged that the Province violated one of the terms of its contracts .50 on each cubic meter of timber. 1956.177 square meters of land to the Province at P110. RULING: The court find defendants claim devoid of any merit. The total amount of the reforestation charges paid by Mambulao Lumber Company is P9. 1996 FACTS: Acting upon an authority granted by the Office of the President. Compensation.50. and that if not so used.127. L-17725. 1962 FACTS: There are three causes of action in this case in which the defendants admitted all these three liabilities with an aggregate amount of P4. the same should be refunded to him.08 to the Republic of the Philippines for 'reforestation charges'. Ortigas filed before Branch 151 of the Regional Trial Court of Pasig an action for rescission of contract plus damages with preliminary injunction against the Province. 1988. ET AL. the personal consent of individual taxpayers is not required.00 per square meter or a total of P134. 1948. at least it should be compensated with what Mambulao Lumber Company owed the Republic of the Philippines for reforestation charges.R. The reason on which the general rule is based. The projected construction.37 as forest charges due and owing from defendant to plaintiff. 2700). These reforestation were paid to the plaintiff in pursuance of Section 1 of Republic Act 115 which provides that there shall be collected. 1947 to June 24. therefore. San Juan G.00 per square meters. and it is the contention of the defendant that since the Republic of the Philippines has not made use of those reforestation charges collected from it for reforesting the denuded area of the land covered by its license. the Province was able to negotiate with respondent Ortigas & Co.00. that the petitioner has no clear right to execute the judgment for taxes against the estate of the deceased Walter Scott Price. Act No. 1975. Though such liabilities are admitted it interposed the defense though exhibits that from July 31.52 court so that said court may order the administrator to pay the amount thereof. said defendant paid P927.. both the claim of the Government for inheritance taxes and the claim of the intestate for services rendered have already become overdue and demandable is well as fully liquidated. The said property was eventually sold to Valley View Realty Development Corporation (Valley View) for P700. based on grounds of public policy is well-settled that no set-off is admissible against demands for taxes levied for general or local governmental purposes. It is clear. defendant Mambulao Lumber Company paid to the Republic of the Philippines P8. REPUBLIC OF THE PHILIPPINES vs. Note that there is nothing in the law which requires that the amount collected as reforestation charges should be used exclusively for the reforestation of the area covered by the license of a licensee or concessionaire.. 802. 55904.200. Under the above circumstances. after learning about the sale.523. The said property was eventually sold to Valley View Realty Development Corporation (Valley View) for P700. is that taxes are not in the nature of contracts between the party and party but grow out of a duty to. G.127. February 28. The general rule. in accordance with the provisions of Articles 1279 and 1290 of the Civil Code. No..200 has already been appropriated for the purpose by a corresponding law (Rep. never materialized because of the decimation of the Province’s resources brought about by the creation of the Metro Manila Commission (MMC) in 1976. or.52 for 'reforestation charges' and for the period commencing from April 30. whereby Ortigas transferred its ownership over a total of 192. On May 10.

a law is violated or some irregularity is committed. through Chairman Caparas. PCGG. Jr. They lack basis in fact and in law. although the public has been given the opportunity to view and appreciate these paintings when they were placed on exhibit. No. requesting her for authority to sign the proposed Consignment Agreement between the Republic of the Philippines through PCGG and Christie. L-59068 January 27. vs. disbursement of public funds was only made in 1975 when the Province bought the lands from Ortigas at P110. Undeniably.53 with Ortigas by selling the subject lots which were intended to be utilized solely as a site for the construction of the Rizal Technological Colleges and the Rizal Provincial Hospital.al. however.T. Manson and Woods International. signed the Consignment Agreement with Christie's of New York. which may be enjoined at the request of a taxpayer. These paintings legally belongs to the foundation or corporation or the members thereof. and that the petitioner is directly affected by the alleged ultra vires act. A taxpayer's suit can prosper only if the governmental acts being questioned involve disbursement of public funds upon the theory that the expenditure of public funds by an officer of the state for the purpose of administering an unconstitutional act constitutes a misapplication of such funds. no such unlawful spending has been shown.R. In the case at bar. In other words. that public funds are disbursed by a political subdivision or instrumentality and in doing so. Mateo A. and consequently no locus standi. 1993 FACTS: All thirty-five (35) petitioners in this Special Civil Action for Prohibition and Mandamus with Prayer for Preliminary Injunction and/or Restraining Order seek to enjoin the Presidential Commission on Good Government (PCGG) from proceeding with the auction sale scheduled on 11 January 1991 by Christie's of New York of the Old Masters Paintings and 18th and 19th century silverware seized from Malacañang and the Metropolitan Museum of Manila and placed in the custody of the Central Bank. ISSUE: Is the present action a taxpayer’s suit? RULING: Petitioner and respondents agree that to constitute a taxpayer’s suit. On 9 August 1990. Aquino. as alleged in the petition. wrote then President Corazon C. No.R. 674.. petitioner. COMELEC G.00 per square meter in line with the objectives of P. petitioner would somehow be adversely affected by an illegal use of public money. two requisites must be met. Inc. even as a taxpayer. then President Aquino. PCGG. as a taxpayer. On 15 August 1990.D. concerning the scheduled sale on 11 January 1991 of eighty-two (82) Old Masters Paintings and antique silverware seized from Malacañang and the Metropolitan Museum of Manila alleged to be part of the ill-gotten wealth of the late President Marcos. 1983 FACTS: . through former Executive Secretary Catalino Macaraig. G. Lozada vs. On 14 August 1990. When. Joya et. representing the Government of the Republic of the Philippines. an occasion personal to them Not every action filed by a taxpayer can qualify to challenge the legality of official acts done by the government. petitioner has absolutely no cause of action. 96541 August 24. then Chairman of PCGG. Similarly. Caparas. cannot question the transaction validly executed by and between the Province and Ortigas for the simple reason that it is not privy to said contract. authorized Chairman Caparas to sign the Consignment Agreement allowing Christie's of New York to auction off the subject art pieces for and in behalf of the Republic of the Philippines. namely. his relatives and cronies. the pieces of antique silverware were given to the Marcos couple as gifts from friends and dignitaries from foreign countries on their silver wedding and anniversary. as in the case at bar. ISSUE: Can petitioners as taxpayer’s challenge the validity of the acts of the PCGG? RULING: No. in the instant case.

which may include a legislative enactment or statute. opposes the petition alleging. involves no expenditure of public funds. The respondent COMELEC. Metro Manila. as a taxpayer. Igot as a representative suit for and in behalf of those who wish to participate in the election irrespective of party affiliation. as is allegedly its ministerial duty under the constitutional provision above cited. to compel the respondent COMELEC to call a special election to fill up existing vacancies numbering twelve (12) in the Interim Batasan Pambansa. petitioners may not file the instant petition. Lozada and Romeo B. represented by counsel.54 This is a petition for mandamus filed by Jose Mari Eulalio C. for nowhere therein is it alleged that tax money is being illegally spent. who desires to run for the position in the Batasan Pambansa. while petitioner Romeo B. and therefore. involves the illegal expenditure of public money that the so-called taxpayer suit may be allowed. that petitioners lack standing to file the instant petition for they are not the proper parties to institute the action ISSUE: As taxpayers. The act complained of is the inaction of the COMELEC to call a special election. substantially. Petitioner Lozada claims that he is a taxpayer and a bonafide elector of Cebu City and a transient voter of Quezon City. It is only when an act complained of. Igot alleges that. he has standing to petition by mandamus the calling of a special election as mandated by the 1973 Constitution. . may the petitioners file the instant petition? RULING: As taxpayers.