TAXATION I

CASES

PART ONE: GENERAL PRINCIPLES

Definition of Taxation and Taxes

 CIR vs. Algue, G.R. No. L-28896, February 17, 1988

 Mactan Cebu International Airport vs. Marcos, G.R. No. 120082 September 11, 1996

Theory and Basis of Taxation

1. Lifeblood Theory
 CIR vs. Algue, G.R. No. L-28896, February 17, 1988
 CIR v. Cebu Portland Cement Company, G.R. No. L-29059 December 15, 1987

2. Necessity Theory
 Philippine Guaranty Co. Inc. v. CIR, G.R. No. L-22074, September 6, 1965

3. Benefits-Protection Theory (Symbiotic relationship)

 CIR vs. Algue, G.R. No. L-28896, February 17, 1988
 Lorenzo v. Posadas, G.R. No. L-43082, June 18, 1937

4. Jurisdiction over subject and objects

PURPOSE OF TAXATION
 
REVENUE OR FISCAL
 PAL v. Edu, G.R. No. L-41383, August 15, 1988

SUMPTUARY PURPOSE OF TAXATION

 Lutz v. Araneta, G.R. No. 7859, December 22, 1955
 Southern Cross Cement Corp., v. Secretary of Finance et.al. (G.R. No. 158540, July 8,
2004

NATURE OF TAXING POWER

 CREBA vs. Executive Secretary Romulo, GR No. 160756, March 9, 2010

INHERENT POWERS OF THE STATE:

Power to Tax

Police Power
 Lutz v. Araneta, G.R. No. 7859, December 22, 1955
 Planters Products, Inc. v. Fertiphil Corporation, G.R. No. 166006, March 14, 2008
 Southern Cross Cement Corporation v. Cement Manufacturers Association of the
Philippines, G.R. No. 158540, August 3, 2005
 Gerochi v. Department of Energy, G.R. No. 159796, July 17, 2007
 Planters Products, Inc. v. Fertiphil Corporation, G.R. No. 166006, March 14, 2008
 Ermita-Malate Hotel And Motel Operators Association, Inc., Hotel Del Mar Inc. And Go
Chiu v. The Honorable City Mayor of Manila, G.R. No. L-24693, July 31, 1967
 Republic v. Bacolod-Murcia Milling Co., Inc., L-19824-26, July 9, 1966
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 Tio v. Videogram Regulatory Board, G.R. No. 75697, June 19, 1987
 Caltex Philippines, Inc. v. Commission on Audit, G.R. No. 92585, May 8, 1992).

Power of Eminent Domain

 CIR vs. Central Luzon Drug Corp., G.R. No. 159647, April 15, 2005

BASIC PRINCIPLES OF A SOUND TAX SYSTEM

Fiscal Adequacy
 Chavez v. Ongpin, etc., al, G.R. No. 76778, June 6, 1990)
Theoretical Justice
Administrative Feasibility
 Diaz vs. Secretary G.R. No. 193007, 19 July 2011

CONSTITUTIONAL PROVISIONS ON TAXATION

LIMITATIONS ON THE POWER TO TAX
 CIR v. Tokyo Shipping Co. Ltd., G.R. No. L-68252 May 26, 1995

INHERENT LIMITATIONS
1. Public Purpose
 Pascual v. Secretary of Public Works, G.R. No. L-10405, December 29, 1960
 Lutz v. Araneta, supra
 Gomez v. Palomar, G.R. No. L-23645, October 29, 1968
 Bagatsing, etc., et al. v. Ramirez, etc., et al., L-41631, December 17, 1976
 Caltex Philipines, Inc. v. Commission on Audit, G.R. No. 92585, May 8, 1992
 Mendoza Santos & Co. v. Municipality of Meycauayan, 94 Phil 1047
 Gaston v. Republic Planters Bank, G.R. No. L-77194 March 15, 1988

2. Non-delegability of taxing power

(a) Delegation to the President (Tariff Powers)
 Southern Cross Cement Corporation v. Cement Manufacturers Association of The
Philippines, G.R. No. 158540, August 3, 2005

(b) Delegation to local governments (Local Taxing power)

 Pepsi-Cola Bottling Co. of the Phil. Inc v. Municipality of Tanauan, Leyte, et al., L-
31156, February 27, 1976
 Quezon City, et al. v. ABS-CBN Broadcasting Corporation, G.R. No. 162015, March 6,
2006

(c) Delegation to administrative agencies (Administrative Matters)

 Abakada Guro Party List (Formerly AASJAS) Officers Samson S. Alcantara and Ed
Vincent S. Albano v. The Honorable Executive Secretary G.R. No. 168056 September 1,
2005

3. Territoriality or situs of taxation

 Iloilo Bottlers Inc. v. City of Iloilo, G.R. No. L-52019, August 19, 1988
 CIR v. Marubeni Corporation, G.R. No. 137377, December 18, 2001
 Reagan v. CIR, G.R. No. L-26379, December 27, 1969
 Commissioner of Internal Revenue v. Juliane Baier-Nickel, G.R. No. 153793, August 29,
2006
 Commissioner of Internal Revenue v. Japan Air Lines, Inc., G.R. No. 60714, March 6,
1991
 The Municipality of Jose Panganiban, Province of Camarines Norte, etc. v. The Shell
Company of the Philippines, Ltd., G.R. No. L-18349, July 30, 1966
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 Commissioner of Internal Revenue v. American Express International, Inc. (Philippine

Branch), G.R. No. 152609, June 29, 2005

4. Tax exemption of government entities

 Mactan Cebu International Airport Authority v. Marcos, G.R. No. 120082, September 11,
1996
 Manila International Airport Authority v. CA, G.R. No. 155650, July 20, 2006

5. Recognition of International Comity.

CONSTITUTIONAL LIMITATIONS
PROVISIONS DIRECTLY AFFECTING TAXATION
Uniformity and equality of taxation (Art. VI, Sec. 28(1))
 Tan v. Del Rosario, Jr., et al., G.R. No. 109289, October 3, 1994
 Villanueva v. City of Iloilo, G.R. No. L-26521, December 28, 1968
 Eastern Theatrical Co., Inc. v. Alfonso, et al., G.R. No. L-1104, May 31, 1949
 Kapatiran ng mga Naglilingkod sa Pamahalaan ng Pilipinas, Inc. v. Hon. Bienvenido
Tan, G.R. No. 81311, June 30, 1988
 Reyes v. Almanzor, et al., G.R. Nos. L-49839-46, April 26, 1991)
 PAL v. Secretary of Finance, G.R. No. 115852, October 30, 1995)

Grant by Congress of authority to the President to impose tariff rates (Art. VI, Sec. 28(2))
 Southern Cross Cement Corporation v. Cement Manufacturers Association of the
Philippines, G.R. No. 158540, August 3, 2005

Prohibition against taxation of religious, charitable entities, and educational entities (Art. VI,
Sec. 28(3)).
 Lladoc v. Commissioner of Internal Revenue, et al., L-19201, June 16, 1965
 Abra Valley College, Inc. v. Aquino, L-39086, June 15, 1988).
 The Roman Catholic Bishop of Nueva Segovia v. Provincial Board of Ilocos Norte, G.R.
No. L-27588, December 31, 1927
 Herrera v. Quezon City Board of Assessment Appeals, L-15270, September 30, 1961;
CIR v. Bishop of the Missionary District of the Philippine Islands, L-19445, August 31,
1965
 The Province of Abra v. Hernando, etc., et al., L-49336, August 31, 1981
 Lung Center of the Philippines v. Quezon City, G.R. No. 144104, June 29, 2004
 Commissioner of Internal Revenue v. St. Luke's Medical Center, Inc. G.R. No. 195909
September 26, 2012)

Prohibition against taxation of non-stock, non-profit educational institutions (Art. XIV, Sec.
4(3)&(4)
 Commissioner of Internal Revenue v. Court of Appeals, et al., G.R. No. 12403, October
14, 1998
 Commissioner of Internal Revenue v. St. Luke's Medical Center, Inc. G.R. No. 195909
September 26, 2012)
 Commissioner of Internal Revenue v. De La Salle University, Inc., G.R. No. 196596,
November 9, 2016

Majority vote of Congress for grant of tax exemption (Art. VI, Sec. 28(4))
 John Hay Peoples Alternative Coalition, et al. v. Victor Lim, et al., G. R. No. 119775,
October 24, 2003

Prohibition on use of tax levied for special purpose (Art. VI, Sec. 29(3))
 Pambansang Koalisyon ng mga Samahang Magsasaka at Manggagawa sa Niyugan v.
Executive Secretary G.R. Nos. 147036-37, April 10, 2012
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President's veto power on appropriation, revenue, tariff bills (Art. VI, Sec. 27(2))
 Commissioner of Internal Revenue v. Hon. Court of Tax Appeals, G.R. No. L-47421, May
14, 1990)

Exemption from real property taxes

 Commissioner of Internal Revenue v. St. Luke's Medical Center, Inc. G.R. No. 195909
September 26, 2012)