Sison vs Ancheta (1984)

February 15, 2013 markerwins Tax Law

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

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

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