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    RA 10701 imposes a 5% transport tax on the purchase and ownership of private vehicles. A group of private vehicle owners sued, arguing the law is unconstitutional. The Supreme Court ruled the law is valid and constitutional. A tax law is not inherently unequal just because it is not equal and uniform in its operation. Tax laws can classify subjects of taxation as long as the standards are substantial, the classification achieves the legislative purpose, it applies equally to present and future conditions, and it applies equally to all those in the same class. RA 10701 meets these requirements.

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    RA 10701 imposes a 5% transport tax on the purchase and ownership of private vehicles. A group of private vehicle owners sued, arguing the law is unconstitutional. The Supreme Court ruled the law is valid and constitutional. A tax law is not inherently unequal just because it is not equal and uniform in its operation. Tax laws can classify subjects of taxation as long as the standards are substantial, the classification achieves the legislative purpose, it applies equally to present and future conditions, and it applies equally to all those in the same class. RA 10701 meets these requirements.

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    7 views1 page

    Tax Abq 6

    Uploaded by

    jinnan
    RA 10701 imposes a 5% transport tax on the purchase and ownership of private vehicles. A group of private vehicle owners sued, arguing the law is unconstitutional. The Supreme Court ruled the law is valid and constitutional. A tax law is not inherently unequal just because it is not equal and uniform in its operation. Tax laws can classify subjects of taxation as long as the standards are substantial, the classification achieves the legislative purpose, it applies equally to present and future conditions, and it applies equally to all those in the same class. RA 10701 meets these requirements.

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    SUGGESTED ANSWERS TO THE 2017 BAR EXAMINATION QUESTIONS IN

    TAXATION AUGUST 8, 2019

    VI. Heeding the pronouncement of the President that the worsening traffic condition in
    the metropolis was a sign of economic progress, the Congress enacted Republic Act
    No. 10701, also

    known as An Act Imposing, a Transport Tax on the Purchase of Private Vehicles. Under
    RA 10701, buyers of private vehicles are required to pay a transport tax equivalent to
    5% of the total purchase price per vehicle purchased. RA 10701 provides that the Land
    Transportation Office (LTO) shall not accept for registration any new vehicles without
    proof of payment of the 5% transport tax. RA 10701 further provide that existing owners
    of private vehicles shall be required to pay a tax equivalent to 5% of the current fair
    market : value of every vehicle registered with the LTO. However, RA 10701 exempts
    owners of public utility vehicles and the Government from the coverage of the 5%
    transport tax. A group of private vehicle owners sue on the ground that the law is
    unconstitutional for contravening the Equal Protection Clause of the Constitution. Rule
    on the constitutionality and validity of RA 10701. (5%). SUGGESTED ANSWER RA
    10701 is valid and constitutional. A levy of tax is not unconstitutional because it is not
    intrinsically equal and uniform in its operation. The uniformity, rule does not prohibit
    classification for purposes of taxation (British American Tobacco v. Jose Isidro N.
    Camacho, G.R. No. 163583, August 20, 2008, 562 SCRA 511). Uniformity of taxation,
    like the kindred concept of equal protection, merely requires that all subjects or objects
    of taxation, similarly situated are to be treated alike both in privileges and liabilities.
    Unifor-. mity does not forfend classification as long as: (1) the standards that are used
    therefore are substantial and not arbitrary, (2) the categorization is germane to achieve
    the legislative purpose, (3) the law applies, all things being equal, to both present and
    future conditions, and (4) the classification applies equally well to all those belonging to
    the same class (Rufino R. Tan v. Ramon R. Del Rosario, Jr., G.R. Nos. 109289 and
    109446, October 13, 1994, 237 SCRA 324, 331). All of the foregoing requirements of a
    valid classification having been net and those which are singled out are a.class. in
    themselves, there is no violation of the “Equal Protection Clause” of the Constitution.

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