Double taxation

The contention that the cigarette manufacturers are doubly taxed

because they are paying the specific tax on the raw material and on the
finished product in which the raw material was a part is also devoid of
merit.

For double taxation in the objectionable or prohibited sense to

exist, “the same property must be taxed twice, when it should be taxed
but once.”[204] “[B]oth taxes must be imposed on the same property
or subject- matter, for the same purpose, by the same . . . taxing
authority, within the same jurisdiction or taxing district, during the
same taxing period, and they must be the same kind or character of
tax.”[205]

At all events, there is no constitutional prohibition against double

taxation in the Philippines.[206] This court has explained in Pepsi-Cola
Bottling Company of the Philippines, Inc. v. Municipality of Tanauan,
Leyte:[207]
 There is no validity to the assertion that the delegated authority
can be declared unconstitutional on the theory of double taxation. It
must be observed that the delegating authority specifies the limitations
and enumerates the taxes over which local taxation may not be
exercised. The reason is that the State has exclusively reserved the
same for its own prerogative. Moreover, double taxation, in general, is
not forbidden by our fundamental law, since We have not adopted as
part thereof the injunction against double taxation found in the
Constitution of the United States and some states of the Union. Double
taxation becomes obnoxious only where the taxpayer is taxed twice for
the benefit of the same governmental entity or by the same jurisdiction
for the same purpose, but not in a case where one tax is imposed by
the State and the other by the city or municipality.[208] ( mphasis
supplied, citations omitted)

“It is something not favored, but is permissible, provided some

other constitutional requirement is not thereby violated, such as the
requirement that taxes must be uniform.”[209]

Excise taxes are essentially taxes on property[210] because they

are levied on certain specified goods or articles manufactured or
produced in the Philippines for domestic sale or consumption or for any
other disposition, and on goods imported. In this case, there is no
double taxation in the prohibited sense because the specific tax is
imposed by explicit provisions of the Tax Code on two different articles
or products: (1) on the stemmed leaf tobacco; and (2) on cigar or
cigarette.[211]

([2014V1059E] [3/3] LA SUERTE CIGAR & CIGARETTE FACTORY,

PETITIONER, VS. COURT OF APPEALS AND COMMISSIONER OF
INTERNAL REVENUE, RESPONDENTS. / [2014V1060E] COMMISSIONER
OF INTERNAL REVENUE, PETITIONER, VS. FORTUNE TOBACCO
CORPORATION, RESPONDENT. / [2014V1061E] COMMISSIONER OF
INTERNAL REVENUE, PETITIONER, VS. LA SUERTE CIGAR & CIGARETTE
FACTORY, RESPONDENT. / [2014V1062E] STERLING TOBACCO
CORPORATION, PETITIONER, VS. COMMISSIONER OF INTERNAL
REVENUE, RESPONDENT. / [2014V1063E] LA SUERTE CIGAR &
CIGARETTE FACTORY, PETITIONER, VS. COMMISSIONER OF INTERNAL
REVENUE, RESPONDENT. / [2014V1064E] LA SUERTE CIGAR &
CIGARETTE FACTORY, PETITIONER, VS. COMMISSIONER OF INTERNAL
REVENUE, RESPONDENT., G.R. No. 125346/G.R. No. 136328-29/G.R. No.
144942/G.R. No. 148605/G.R. No. 158197/G.R. No. 165499, 2014 Nov
11, En Banc)
 ([2014V1059E] [3/3] LA SUERTE CIGAR & CIGARETTE FACTORY,
PETITIONER, VS. COURT OF APPEALS AND COMMISSIONER OF
INTERNAL REVENUE, RESPONDENTS. / [2014V1060E] COMMISSIONER
OF INTERNAL REVENUE, PETITIONER, VS. FORTUNE TOBACCO
CORPORATION, RESPONDENT. / [2014V1061E] COMMISSIONER OF
INTERNAL REVENUE, PETITIONER, VS. LA SUERTE CIGAR & CIGARETTE
FACTORY, RESPONDENT. / [2014V1062E] STERLING TOBACCO
CORPORATION, PETITIONER, VS. COMMISSIONER OF INTERNAL
REVENUE, RESPONDENT. / [2014V1063E] LA SUERTE CIGAR &
CIGARETTE FACTORY, PETITIONER, VS. COMMISSIONER OF INTERNAL
REVENUE, RESPONDENT. / [2014V1064E] LA SUERTE CIGAR &
CIGARETTE FACTORY, PETITIONER, VS. COMMISSIONER OF INTERNAL
REVENUE, RESPONDENT., G.R. No. 125346/G.R. No. 136328-29/G.R. No.
144942/G.R. No. 148605/G.R. No. 158197/G.R. No. 165499, 2014 Nov
11, En Banc)