1.

Due process of power to tax

- Must not amount to confiscation of property
- Must be for a public purpose
- Must not violate the inherent limitations of taxation
- Must be within the territorial jurisdiction of taxing authority
- Collection/assessment must not be arbitrary and oppressive
2. Equal protection of laws
- Means that tax laws need not have absolute equality. There can be inequality in taxation
provided that it be based on substantial and valid distinctions or classifications.
- The court held that the tax on Ormoc sugar company was a violation of the equal protection
clause because it only taxed OSC sugar produced and exported by said company, and none
other. This is because a tax law to comply with the equal protection clause, albeit not
absolutely equal, needs to comply with the substantial and valid classifications under the
law, namely that:
1. That the classification be based on substantial distinctions which make a difference
2. That the classification apply to present as well as future conditions
3. That it applies equally to all members of the same class
4. That it must be germane to the purpose of the law
3. Uniformity in taxation – means that all taxable articles or property of the same class should be
taxed at the same rate.
4. Progressive system of taxation – means that taxation is based on the taxpayer’s ability to pay.
Hence, the tax rate goes up as the tax base increases. Thus the higher your income, the higher
your taxes. And the lower your income, the lower your tax.
5. Non-impairment of contracts – it is violated when the government grants tax exemptions on
certain persons, entities or properties but unilaterally revokes said exemption, then the
obligation of contracts is impaired.
- Note however that Congress may revoke tax exemptions granted under the law since the
statute or provision state that it is subject to “repeal or amendment”.
- However if the tax exemptions constitute a binding contract, wherein it is granted for a
consideration, then it is not gratuitous, and can be unilaterally revoked by the state.
However, even if there be a binding contract, yet there is no valuable consideration
attached to said contract, then it is a gratuitous tax exemption and can therefore be
revoked, and will not constitute an impairment on the obligation of contracts.
6. Non-imprisonment of poll tax – or cedula, is also a limitation on the power of taxation. But this
limitation does not include the non-payment of other taxes as the law provides , which are still
subject to civil and criminal obligations if unpaid.
7. all appropriation or revenue bills must originate from the house of representatives – note that it
is not the law, but the revenue bill which is required by the Constitution to originate exclusively
from the house of representatives, hence a bill may undergo extensive changes that could result
to the rewriting of the whole law. To insist that the statute and not just the bill must exclusively
originate in the house of repre, would deny the senate’s power to concur and propose
amendments.
 8. Presidential veto – the president has the power to veto any particular item or items in
appropriation or revenue or tariff bills, but such veto shall not affect the items to which he does
not object.
9. Presidential power to fix tariff rates, custom duties, import and export quotas, tonnage and
wharfage dues subject to the limitations and restrictions set by the law.
10. No tax law shall be passed abridging the freedom of the speech, expression or the press
11. No tax law shall be passed respecting an establishment of religion or prohibiting the free
exercise thereof
12. Exemption from property tax of properties of religious, charitable and educational institutions
under Article VI, Sec. 28 of the Constitution.

exemption of property tax of properties owned by charitable institutions, churches, parsonages,

convents appurtenant thereto, mosques, non-profit and religious cemeteries, and lands, buildings and
improvements which are ADE used for charitable, religious and educational purpose.

What are covered?

1. Charitable institution
- Must prove that:
a) Charitable institution
- How determined?
Whether it exist to carry a purpose which is determined in law to be charitable
Whether it is maintained for gain, profit or private advantage
b) And its real properties are ADE used for charitable purposes
2. Churches, parsonages, convents appurtenant thereto, mosques, non-profit and religious
cemeteries
- Must prove that:
It is said church, etc.
And its real properties are ADE used for given purpose

3. Other lands, buildings and improvements which are ADE for educational, charitable and religious
purposes.

Qualified yes. Petitioner hospital is qualified for tax exemption of its property taxes because it is a
charitable institution, and under the law the term “exclusively used” does not necessarily mean total or
absolute use for religious, charitable and educational purposes. In this case, even if petitioner’s property
is incidentally used for charitable purposes because it accepts paying, as well, as non-paying patients, or
even if it receives subsidies from the government, does not strip its character as a charitable institution,
and the charitable purpose it serves under the law. However, the portions of petitioner’s real property
which is being leased to private entities and commercial purposes is not exempt from real property
taxes as they are not ADE used for charitable purposes.