Arellano University School of Law

Syllabus for Taxation Law 1

Part I: General Principles of Taxation
Under Atty. Ana C. Miranda
Tuesdays (Section 25) and Thursdays (Section 22), 5:30 – 8:30PM

I. GENERAL PRINCIPLES

A. Definition and Attributes of Taxation

1. Doctrine of Symbiotic Relationship
 CIR v. Algue, Inc., L-28896, 17 Feb. 1998, 158 SCRA 9
2. Doctrine of Unjust Enrichment as Applied to Government
 BPI Family Savings Bank v. CA, L-122480, 12 April 2000

B. Nature of Taxation
1. Taxation as an inherent attribute of sovereignty
2. Taxation as legislative in character
• Scope of legislative power to tax

C. Characteristics of Taxation

D. Power of taxation as distinguished from Police Power and Eminent Domain

E. Purpose of Taxation
1. Revenue
2. Non-revenue
a. Regulation
b. Promotion of General Welfare
 Lutz v. Araneta, 98 Phil 148; Osmena v. Orbos, 31 March 1993
c. Reduction of Social Inequity
d. Encourage Economic Growth
e. Protectionism

F. Principles of Sound Tax System

1. Fiscal Adequacy
 Abakada Guro v. Ermita, GR No. 168056, 01 Sept. 2005
2. Theoretical Justice – Section 28 (1) of the 1987 Constitution
a. Uniformity
 Abakada Guro v. Ermita, GR No. 168056, 01 Sept. 2005
b. Equitability and Progressivity
 Reyes v. Almanzor, 196 SCRA 322
 PAL v. Sec. of Finance, GR No. 115852, 25 Aug. 1994
c. Regressivity
 Tolentino v. Sec. of Finance & CIR, GR No. 11545, 249 SCRA 248
3. Administrative Feasibility

G. Theory and Basis of Taxation

1. Lifeblood Theory
 Cebu Portland Cement v. CTA, GR No. L-290059, 15 Dec. 1987, 156 SCRA 535

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 Arellano University School of Law
Syllabus for Taxation Law 1
Part I: General Principles of Taxation
Under Atty. Ana C. Miranda
Tuesdays (Section 25) and Thursdays (Section 22), 5:30 – 8:30PM

 Bull v. United States, 295 U.S. 247

2. Necessity Theory
3. Benefits-Protection Theory (Symbiotic Relationship)
4. Jurisdiction over subject and objects
 CIR v. Juliane Baier-Nickel, GR No. 153793, 29 Aug. 2006

H. Doctrines in taxation
1. Construction and interpretation of tax laws, rules, and regulations
 CIR vs. CA, Central Vegetable Mfg. & CTA, GR No. 107135, 23 Feb. 1999
 Luzon Stevedoring v. CTA, GR No. 30232, 29 July 1988, 163 SCRA 647
 CIR v. Gotamco & Sons, GR No. 31092, 27 Feb. 1987, 148 SCRA 36
 CIR v. CA and Ateneo de Manila, GR No. 115349, 18 Apr 1997, 271 SCRA 605
2. Prospectivity of tax laws
 Hydro Resources v. CA, GR No. L-80276, 21 Dec. 1990, 192 SCRA 604
 Central Azucarera de Don Pedro v. CTA, GR Nos. L-23236 and L-23254, 31 May
1967
 Lorenzo v. Posadas 64 Phil 353, GR No. 43082, 18 June 1937
 Smietanka v. First Trust Savings Bank, 257 US 602
 CIR v. Benguet Corp, 463 SCRA 28 (2005) GR Nos. 134587 & 134588, 08 July
2005
 CIR v. Burmeisters & Wain Scandinavian, GR No. 153205, 22 January 2007
3. Imprescriptibility of taxes
 CIR v. Ayala Securities Corp., GR No. L-29485, 21 Nov. 1989
4. Double taxation
 Pepsi Cola v. Tanauan, 69 SCRA 460, GR No. L-31156, 27 Feb. 1976
 CIR v. SC Johnson & Sons, 309 SCRA 87, GR No. 127105, 25 June 1999
a. Strict v. Broad Sense
b. Constitutionality of Double Taxation
c. Modes of Eliminating Double Taxation
 Carlos Super Drug v. DSWD, GR No. 166494, 29 June 2007
d. Treaties with Other States
5. Escape from taxation
a. Shifting of tax burden
b. Tax avoidance
c. Tax evasion
 CIR v. Rufino, GR No. L-33665-68, 27 Feb. 1987, 148 SCRA 42
 Delpher Trades Corp v. IAC, GR No. L-69259, 26 Jan. 1988, 157 SCRA 349
 CIR v. Benigno Toda, GR No. 147188, 14 Sept. 2004, 438 SCRA 290
6. Exemption from taxation
a. Meaning of and Basis of Tax Exemption
b. Nature of Tax Exemption
c. Kinds of Tax Exemption
d. Grounds for Tax Exemption
e. Revocation of Tax Exemption

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 Arellano University School of Law
Syllabus for Taxation Law 1
Part I: General Principles of Taxation
Under Atty. Ana C. Miranda
Tuesdays (Section 25) and Thursdays (Section 22), 5:30 – 8:30PM

 Province of Misamis Oriental v. Cagayan Electric, GR No. 45355, 12 Jan.

1990, 181 SCRA 38
 CIR v. ROH Auto Products Phils. & CTA, GR No. 108358, 20 Jan. 1995, 240
SCRA 368
 Maceda v. Macaraeg, 197 SCRA 77
 CIR v. DLSU, GR No. 196596, 09 Nov. 2016
7. Compensation and Set-off
 Francia v. IAC, GR No L-67649, 28 June 1988
 Caltex Phils. v. COA, GR No. 92585, 08 May 1992
 Philex Mining v. CIR, GR No. L-125704, 28 Aug. 1998
 CIR v. Esso Standard, GR No. L-28502-03, 18 Apr. 1989
8. Doctrine of Equitable Recoupment
 UST v. Collector, GR No. L-11280; Collector v. UST, GR No. L-112274, 28 Nov.
1958, 104 Phil 1062
 Domingo v. Garlitos, 8 SCRA 443
 Republic v. Mambulao Lumber, GR No. L-17725, 28 Feb. 1962
9. Compromise and its requisites
10. Tax amnesty vs. Tax exemption
 People v. Casteneda, GR No. L-46881, 15 Sept. 1988
 Florer v. Sheridan, 137 Ind. 28, 36 NE 365

I. Sources of Tax Laws

J. Inherent and Constitutional Limitations of Taxation

1. Inherent Limitations
a. Public Purpose
• Tests in determining public purpose in taxation
b. Inherently Legislative
• Exceptions
• Tests of Valid Delegation
c. Territoriality – Situs of Taxation
d. International Comity
 CIR v. Mitsubishi Metal Corp, 181 SCRA 214, 22 Jan. 1990
e. Exemption of Government Entities, Agencies and Instrumentalities
 Board of Assessment of Appeals of Laguna v. CTA, GR No. L-35683, 07 May
1987
2. Constitutional Limitations
a. Provisions Directly Affecting Taxation
i. Prohibition against imprisonment for non-payment of tax
ii. Uniformity and equality of taxation
 Commissioner v. Lingayen Gulf Elec. Co., GR No. L-23771, 4 August 1988
iii. Grant of Congress of authority to the President to impose tariff rates
(Section 28, par. 2, Article VI, 1987 Constitution)
iv. Prohibition against taxation of religious, charitable entities, and

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 Arellano University School of Law
Syllabus for Taxation Law 1
Part I: General Principles of Taxation
Under Atty. Ana C. Miranda
Tuesdays (Section 25) and Thursdays (Section 22), 5:30 – 8:30PM

educational entities
 Lung Center of the Phil v. Quezon City, GR No. 144104, 29 June 2004
 Province of Abra vs. Hernando, GR No. L-49336, 31 Aug. 1981
 Abra Valley v. Aquino, GR No. L-39086, 15 June 1988
v. Prohibition against taxation of non-stock, non-profit institutions
vi. Majority vote of Congress for grant of tax exemption [Article VI, Section
28(4))
vii. Prohibition on the use of tax levied for special purpose [Section 29 (3),
Article VI]

viii. President veto power on appropriation, revenue and tariff bills [Section
27 (2), Article VI]
ix. Non-impairment of jurisdiction of the Supreme Court (Section 2, Article
VIII)
x. Grant of power to the local government to create its own sources of
revenue (Section 5, Article X)
xi. Flexible Tariff Clause (Section 28, Article VI and Section 401 TCC)
xii. Exemption from real property taxes (Section 234 of LGC)

b. Provisions Indirectly Affecting Taxation

i. Due Process
 Kapatiran v. CIR, GR No. L-81311, 30 June 1988
 Sison v. Ancheta, GR No. 59431, 25 July 1984
 Reyes v. Almanzor, GR Nos. L-49839-46, 26 Apr. 1991, 196 SCRA 322
ii. Equal Protection
 Ormoc Sugar Central v. Ormoc City, GR No. L-23794, 17 Feb. 1968
 Victoria Milling Co., Inc. v. Municipality of Victoria, GR No. L-21183, 27
Sept. 1968
 Tiu v. CA, GR No. 127410, 20 Jan. 1999, 301 SCRA 279
iii. Religious Freedom
 Tolentino v. The Secretary of Finance, et al. GR No. 115455, 30 Oct. 1995
iv. Non-impairment of obligations of contracts
 Mactan Cebu International Airport v. Marcos, GR No. 120082, 11 Sept.
1996
 Cagayan Electric Power and Light Co., Inc v. CIR, GR No. L-60126
 Meralco v. Province of Laguna, GR No. 131359, 05 May 1999

K. Stages of Taxation
 CIR v. Botelho Shipping Corp, GR Nos. L-21633-34, 29 June 1967
 Tan v. del Rosario, GR No. 109289, 03 Oct. 1994

L. Essential Characteristics of Taxes

M. Requisites of a Valid Tax

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 Arellano University School of Law
Syllabus for Taxation Law 1
Part I: General Principles of Taxation
Under Atty. Ana C. Miranda
Tuesdays (Section 25) and Thursdays (Section 22), 5:30 – 8:30PM

N. Tax against Other Forms of Exactions (Toll, License Fee, Special Assessment,
Debt)
 Procter and Gamble v. Mun. of Jagna, GR No. L-24265, 28 Dec. 1979, 94 SCRA 894
 Golden Ribbon Lumber v. City of Butuan, GR No. 18534, 24 Dec. 1964, 12 SCRA
611
 City of Ozamis v. Lumapas, GR No. L-30727, 15 July 1975, 65 SCRA 33
 CIR v. Prieto, GR No. L-13912, 30 Sept. 1960, 109 Phil. 592

O. Kinds of Taxes
1. As to Object (Personal, Property and Excise)
2. As to Burden or Incidence (Direct and Indirect)
 Maceda v. Macaraig, G.R. No. 88291, 31 May 1991
 Silkair v. CIR, G.R. No. 184398, 25 Feb. 2010
3. As to Tax Rates (Specific Tax, Ad Valorem Tax and Mixed)
 Tan vs. Municipality of Pagbilao, G.R. No. L-14264, 30 Apr. 1963
4. As to Purpose (General and Special)
 Philippine Airlines v. Edu, G.R. No. L- 41383, 15 Aug. 1988
 Esso Standard Eastern, Inc. vs. CIR, G.R. Nos. L-28508-9, 07 July 1989
 Lozano v. Energy Regulatory Board, G.R. Nos. 95119-21, 18 Dec. 1990
5. As to Scope or Authority to Impose (National and Local)
 Meralco Securities Industrial Corporation v. Central Board Of Assessment
Appeals, G.R. No. L-46245, 31 May 1982
6. As to Graduation (Progressive, Regressive, and Proportionate)

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