TAX 1 – JARREviewer

WHAT ARE TAXES?

In the very opening sentence of Cooley on Taxation (3d ed.) we find it stated that
"TAXES ARE THE ENFORCED PROPORTIONAL CONTRIBUTIONS FROM
PERSONS AND PROPERTY, LEVIED BY THE STATE BY VIRTUE OF ITS
SOVEREIGNTY FOR THE SUPPORT OF GOVERNMENT AND FOR ALL
PUBLIC NEEDS. [Fitch v. Wisconsin Tax Commission, citing Cooley on Taxation (3rd
ed.)]

Every tax has three elements, namely: (a) it is an enforced proportional contribution
from persons and properties; (b) it is imposed by the State by virtue of its sovereignty; and
(c) it is levied for the support of the Government. [Republic v. COCOFED]

Taxes are classified into national and local. National taxes are those levied by the
National Government, while local taxes are those levied by the LGUs. [Aban, Law of Basic
Taxation in the Philippines, Revised Ed. 2001, p. 27.]

WHAT IS TAXATION?

It is the power by which the sovereign raises revenue to defray the necessary
expenses of government. [Milwaukee v. Milwaukee & ST Corp.]

DISTINGUISH TAX FROM OTHER FORMS OF EXACTIONS.

The test to determine if an imposition is tax or not rests primarily on its purpose. If
the generating of revenue is the primary purpose and regulation is merely incidental,
the imposition is a tax; but if regulation is the primary purpose, the fact that
incidentally revenue is also obtained does not make the imposition a tax. [Progressive
Development Corporation v. Quezon City]

THEORIES OF TAXATION

LIFEBLOOD THEORY -- Taxing the people and their property is essential to the
very existence of government. [CIR v SOLIDBANK CORPORATION]

NECESSITY THEORY -- The power to tax emanates from necessity; without

taxes, the government cannot fulfill its mandate of promoting the general
welfare and well-being of the people [Gerochi v DOE]

BENEFITS-RECEIVED THEORY – Every person who is able to must contribute

his share in the running of the government. The government for its part, is
expected to respond in the form of tangible and intangible benefits intended to
improve the lives of the people and enhance their moral and material values.
This symbiotic relationship is the rationale of taxation and should dispel the
erroneous notion that it is an arbitrary method of exaction by those in the seat of
power. [CIR v Algue]

PRINCIPLES OF A SOUND TAX SYSTEM – a sound tax system has F.A.T.

 FISCAL ADEQUACY – The sources of revenue should be adequate to meet
government expenditures and their variations.

ADMINISTRATIVE FEASIBILITY – The tax system should be capable of being

effectively administered and enforced with the least inconvenience to the
taxpayer.

THEORETICAL JUSTICE – The tax system should be fair to the average

taxpayer and based upon the ability to pay.

LIMITATIONS OF THE POWER TO TAX

INHERENT LIMITATIONS
1. Taxes must be exacted for PUBLIC PURPOSE.
2. The power to tax is INHERENTLY LEGISLATIVE in nature.
3. GOVERNMENT entities, agencies, and instrumentalities are generally EXEMPT
FROM TAXATION.
4. INTERNATIONAL COMITY This is a limitation founded on reciprocity designed
to maintain harmonious and productive relationships among the various states. Par
in parem non habet imperium (sovereign equality among states)
CONSTITUTIONAL LIMITATIONS
1. Prohibition against imprisonment for non-payment of poll tax;
2. Uniformity and equality of taxation;
3. Grant by Congress of authority to the President to impose tariff rates;
4. Prohibition against taxation of religious, charitable entities, and educational entities;
5. Prohibition against taxation of non-stock, non-profit educational institutions;
6. Majority vote of Congress for grant of tax exemption;
7. Prohibition on use of tax levied for special purpose;
8. President’s veto power on appropriation, revenue, tariff bills;
9. Non-impairment of jurisdiction of the Supreme Court;
10. Grant of power to the local government units to create its own sources of revenue;
11. Flexible tariff clause;
12. Exemption from real property taxes; and
13. No appropriation or use of public money for religious purposes.
REQUISITES OF A VALID TAX

For tax to be valid, the following requisites must concur:

1. It must be for a PUBLIC PURPOSE;
2. Rule of taxation should be UNIFORM;
3. The person or property taxed is WITHIN THE JURISDICTION OF THE TAXING
AUTHORITY;
4. Assessment and collection is IN CONSONANCE WITH THE DUE PROCESS
CLAUSE;
5. The tax MUST NOT INFRINGE ON THE INHERENT AND CONSTITUTIONAL
LIMITATIONS of the power of taxation.
 DOUBLE TAXATION (strict and broad sense)

There is double taxation when the same taxpayer is taxed twice when he should be taxed
only once.

It is double taxation in the strict sense when the two taxes are imposed on the same subject
matter, for the same purpose, by the same taxing authority, within the same
jurisdiction, during the same taxing period; and the taxes must be of the same kind or
character.

There is double taxation in the broad sense or if any of the elements for direct duplicate
taxation is absent.

Double taxation in its strict sense is undoubtedly unconstitutional. In the broad sense,
not necessarily so.

HOW TAX BURDEN IS SHIFTED

The incidence of taxation may be shifted as to who shall bear the burden of taxation. This
happens in the collection of indirect taxes (VAT, Percentage Tax, & Excise Tax), where
the liability (Impact) for the payment of the tax falls on one person but the burden
(Incidence) thereof can be shifted or passed on to another.

Example:

When the seller passes on the tax to his buyer, he, in effect, shifts the tax burden,
not the liability to pay it, to the purchaser as part of the price of goods sold or
services rendered.

More examples:
o Forward Shifting – the burden of tax is shifted from a factor of production to
the ultimate purchaser or consumer (Vat, Percentage)
o Backward Shifting – the burden of the tax is transferred from the consumer
or purchaser through the factors of distribution to the factor of production.
o Onward Shifting – the tax is shifted two or more times either backward or
forward.

TAX AVOIDANCE & TAX EVASION

A taxpayer has the legal right to decrease the amount of what otherwise would be his
taxes or altogether avoid them by means which the law permits. This is called TAX
AVOIDANCE. It is the use of legal means to reduce tax liability. However, this method
should be used by the taxpayer in good faith and at arms-length.

Contrariwise, TAX EVASION is "a scheme used outside of those lawful means." It
"connotes fraud thru the use of pretenses and forbidden devices to lessen or defeat
taxes." To constitute tax evasion, the following factors must be proven: "(1) the end to be
achieved, i.e., the payment of less than that known by the taxpayer to be legally due, or the
non-payment of tax when it is shown that a tax is due; (2) an accompanying state of mind
which is described as being "evil," in "bad faith," "willful," or "deliberate and not
accidental"; and (3) a course of action or failure of action which is unlawful."

In other words, the payment of lesser taxes does not necessarily constitute tax evasion. In
tax evasion, the taxpayer acts to minimize taxes in the context of fraud, which must be
proven by clear and convincing evidence and cannot be based on mere speculation.

DEFINITION OF INCOME

Income – all wealth which flows to the taxpayer other than a mere return on capital.

Income includes earnings, lawfully or unlawfully acquired, without consensual recognition,

express or implied, of an obligation to repay and without restriction as their disposition.

It may be received in the form of cash, property, service, or a combination of the three.

DIFFERENCE IN NET AND GROSS TAXABLE INCOME

Gross Income – all income derived from whatever source, whether legal or illegal.

Net Income or Taxable Income – means the pertinent items of gross income specified in the
Tax Code, less the deductions and/or personal and additional exemptions, if any, authorized
for such types of income by the Tax Code or other special laws [Sec. 31, NIRC].

Total Taxable Income = Gross Income – Deductions & Exemptions

ORDINARY and CAPITAL ASSETS

There are two types of properties from which income may be derived: (1) ordinary assets;
(2) capital assets.

Ordinary assets refer to properties used in connection with the trade or business of the tax
payer. In contrast, capital assets refer to the taxpayer’s properties which are not connected
used with his trade or business.

In short, a taxpayer’s properties used in connection with his trade or business are
considered ordinary assets. Properties used otherwise are capital assets.

OTHER TYPES OF TAXES

VALUE-ADDED TAX

VAT is a tax imposed on any person who, in the course of trade or business, sells
barters, exchanges, leases goods or properties, renders services, and any person who
imports goods. [Sec. 105, NIRC as Amended by RA 10963]

It is an indirect tax and the amount of tax may be shifted or passed on to the buyer,
transferee or lessee of the goods, properties or services.
 The phrase ‘in the course of trade or business’ means the regular conduct or pursuit
of a commercial or an economic activity, including transactions incidental thereto, by any
person regardless of whether or not the person engaged therein is a nonstock, nonprofit
private organization (irrespective of the disposition of its net income and whether or not it
sells exclusively to members or their guests), or government entity.

Services, as defined in this Code rendered in the Philippines by non-resident foreign

persons, shall be considered as being course of trade or business.

PERCENTAGE TAX

A percentage tax is a national tax measured by a certain percentage of the gross

selling price or gross value in money of goods sold, bartered or imported; or of the gross
receipts or earnings derived by any person engaged in the sale of services. (GR. 256973)

ESTATE TAXES

Estate Tax is a tax on the right of the deceased person to transmit his/her estate to
his/her lawful heirs and beneficiaries at the time of death and on certain transfers, which are
made by law as equivalent to testamentary disposition.

It is not a tax on property. It is a tax imposed on the privilege of transmitting

property upon the death of the owner.

The Estate Tax is based on the laws in force at the time of death notwithstanding the
postponement of the actual possession or enjoyment of the estate by the beneficiary.

Who files the estate tax?

The estate tax return is filed by the executor, or administrator, or any of the legal heir/s of
the decedent, whether resident or non-resident of the Philippines.

DONOR’S TAX

Donor’s Tax is a tax on a donation or gift, and is imposed on the gratuitous

transfer of property between two or more persons who are living at the time of the
transfer. It shall apply whether the transfer is in trust or otherwise, whether the gift is
direct or indirect and whether the property is real or personal, tangible or intangible.

DESTINATION PRINCIPLE

The tax treatment of export sales is based on the Cross Border Doctrine and
Destination Principle of the Philippine VAT system. Under the DESTINATION
PRINCIPLE, goods and services are taxed only in the country where these are
consumed. In this regard, the CROSS BORDER DOCTRINE mandates that no VAT shall
be imposed to form part of the cost of goods destined for consumption outside the
territorial border of the taxing authority.

Hence, actual export of goods and services from the Philippines to a foreign country
must be free of VAT; while, those destined for use or consumption within the Philippines
shall be imposed with VAT. Plainly, sales of export products to another producer or to an
export trader are subject to zero percent rate provided the export products are actually
exported and consumed in a foreign country. (GR No. 236325, September 16, 2020)

ZERO RATED vs VAT EXEMPT TRANSACTION

1. When the output tax is equal to the input tax no VAT is required to be paid.
2. When the output tax exceeds the input tax, the excess has to be paid by the taxpayer.
3. When the input tax exceeds the output tax, there is a tax refund or carry-over of the
excess to the succeeding period or periods. The input tax amount has to be greater than the
output tax amount to be entitled to a refund. (G.R. 247341, November 18, 2020)

A Zero-rated sale by a VAT-registered person is a taxable transaction for VAT purposes

but the sale does not result in any output tax. However, the input tax on the purchases of
goods, properties or services related to such zero-rated sale shall be available as tax
credit or refund.

In a VAT exempt sale, the taxpayer/seller does not bill any output tax on his sales to his
customers. As a consequence, the taxpayer is not allowed any credit or refund of the input
taxes paid on purchases.

Simply put, the difference lies in the input tax. In VAT-exempt transactions there is no
input tax credit allowed. In the case of 0% rated transaction of a VAT registered person,
the sale of goods or properties is multiplied by 0% thus his output tax is P 0.00

COMPROMISE vs AMNESTY

A compromise is a contract between the government and the taxpayer to settle the tax
liabilities while tax amnesty operates as a general pardon or intentional overlooking by
the State of its authority to impose penalties on persons otherwise guilty of evasion or
violation of a revenue or tax law.

The CIR has the authority to enter into compromise agreements for deficiency of taxes. Tax
amnesty can only be granted by Congress.

POWERS OF THE COMMISSIONER ON INTERNAL REVENUE

1. Power to Interpret Tax Laws and to Decide Tax Cases – The power to decide
disputed assessments, refunds of internal revenue taxes, fees or other charges,
penalties imposed in relation thereto, or other matters arising under this Code or
other laws or portions thereof administered by the Bureau of Internal Revenue is
vested in the Commissioner, subject to the exclusive appellate jurisdiction of the
Court of Tax Appeals.
2. Power to Obtain Information, and to Summon, Examine, and Take Testimony
of Persons
3. Power to Make Assessments and Prescribe Additional Requirements for Tax
Administration and Enforcement
 SYLLABUS OF CASES

GENERAL PRINCIPLES
Soriano vs. Secretary of Finance, 815 SCRA 316, January 24, 2017
PROSPECTIVITY OF LAWS; THE APPLICATION OF THE LAW WAS PROSPECTIVE,
EVEN IF THE AMENDING LAW TOOK EFFECT AFTER THE CLOSE OF THE
TAXABLE YEAR IN QUESTION, BUT BEFORE THE DEADLINE FOR THE FILING
OF THE RETURN AND PAYMENT OF THE TAXES DUE FOR THAT YEAR. Here, not
only did R.A. 9504 take effect before the deadline for the filing of the return and payment
for the taxes due for taxable year 2008, it took effect way before the close of that taxable year.
Therefore, the operation of the new set of personal and additional exemption in the present
case was all the more prospective.
TAX EXEMPTIONS; LIBERAL INTERPRETATION; We are mindful of the strict
construction rule when it comes to the interpretation of tax exemption laws. The canon is
tempered by several exceptions, one of which is WHEN THE TAXPAYER FALLS WITHIN
THE PURVIEW OF THE EXEMPTION BY CLEAR LEGISLATIVE INTENT. In this
situation, THE RULE OF LIBERAL INTERPRETATION APPLIES IN FAVOR OF THE
GRANTEE AND AGAINST THE GOVERNMENT.
Bureau of Internal Revenue vs. Manila Home Textile, Inc., June 06, 2016
TAXATION; TAX EXEMPTIONS; TAX EXEMPTIONS, WHICH RESPONDENTS
OBVIOUSLY WANT OR DESIRE TO AVAIL OF IN THIS CASE, ARE STRICTISSIMI
JURIS. INDEED, TAXATION IS THE RULE AND TAX EXEMPTION THE
EXCEPTION. Tax exemptions should be granted only by clear and unequivocal provision
of law on the basis of language too plain to be misunderstood. We hold that in this case
respondents have utterly failed to make out even a prima facie for tax exemption in their
favor.
CIR vs. Nippon Express (Phils.) Corporation Sept 16, 2015
TAXATION; IN MATTERS OF TAXATION, THE GOVERNMENT CANNOT BE
ESTOPPED BY THE MISTAKES, ERRORS OR OMISSIONS OF ITS AGENTS FOR
UPON IT DEPENDS THE ABILITY OF THE GOVERNMENT TO SERVE THE PEOPLE
FOR WHOSE BENEFIT TAXES ARE COLLECTED. — It deserves mentioning that the
CIR is not estopped from assailing the validity of the July 27,2011 Tax Credit Certificate.
Manila Electric Company vs. The City Assessor, 765 SCRA 52, August 05, 2015
TAXATION; LOCAL TAXATION; REAL PROPERTY TAX; LOCAL GOVERNMENT
CODE; Section 252 of the Local Government Code(LGC) mandates that “[N]O PROTEST
SHALL BE ENTERTAINED UNLESS THE TAXPAYER FIRST PAYS THE TAX”;
Under the LGC, even when the assessment of the real property is appealed, the real property
tax due on the basis thereof should be paid to and/or collected by the local government unit
(LGU) concerned. —Section 252 of the Local Government Code mandates that “[n]o protest
shall be entertained unless the taxpayer first pays the tax.”
SAME; TAX EXEMPTIONS; THE EVIDENT INTENT OF THE LOCAL
GOVERNMENT CODE (LGC) IS TO WITHDRAW/REPEAL ALL EXEMPTIONS
FROM LOCAL TAXES, UNLESS OTHERWISE PROVIDED BY THE CODE. The limited
and restrictive nature of the tax exemption privileges under the Local Government Code is
consistent with the State policy to ensure autonomy of local governments and the objective
of the Local Government Code to grant genuine and meaningful autonomy to enable local
government units to attain their fullest development as self-reliant communities and make
them effective partners in the attainment of national goals.
SAME; NOT BEING AMONG THE RECOGNIZED EXEMPTIONS FROM REAL
PROPERTY TAX IN SECTION 234 OF THE LOCAL GOVERNMENT CODE (LGC),
then THE EXEMPTION OF THE TRANSFORMERS, ELECTRIC POSTS,
TRANSMISSION LINES, INSULATORS, AND ELECTRIC METERS OF MANILA
ELECTRIC COMPANY (MERALCO) FROM REAL PROPERTY TAX GRANTED
UNDER ITS FRANCHISE WAS AMONG THE EXEMPTIONS WITHDRAWN UPON
THE EFFECTIVITY OF THE LGC on January1, 1998.
SAME; AS BETWEEN THE CIVIL CODE, GENERAL LAW GOVERNING PROPERTY
AND PROPERTY RELATIONS, AND THE LOCAL GOVERNMENT CODE (LGC), A
SPECIAL LAW GRANTING LOCAL GOVERNMENT UNITS (LGUS) THE POWER TO
IMPOSE REAL PROPERTY TAX, THEN THE LATTER SHALL PREVAIL. —
MERALCO insists on harmonizing the aforementioned provisions of the Civil Code and the
Local Government Code. The Court disagrees, however, for this would necessarily mean
imposing additional requirements for classifying machinery as real property for real property
tax purposes not provided for, or even in direct conflict with, the provisions of the Local
Government Code.
SAME; FOR DETERMINING WHETHER MACHINERY IS REAL PROPERTY
SUBJECT TO REAL PROPERTY TAX, THE DEFINITION AND REQUIREMENTS
UNDER THE LOCAL GOVERNMENT CODE (LGC) ARE CONTROLLING.
SAME; DUE PROCESS; THE EXERCISE OF THE POWER OF TAXATION
CONSTITUTES A DEPRIVATION OF PROPERTY UNDER THE DUE PROCESS
CLAUSE, AND THE TAXPAYER’S RIGHT TO DUE PROCESS IS VIOLATED WHEN
ARBITRARY OR OPPRESSIVE METHODS ARE USED IN ASSESSING AND
COLLECTING TAXES. — On the strength of the foregoing observations, we ought to
reiterate our earlier teachings that “in balancing the scales between the power of the State to
tax and its inherent right to prosecute perceived transgressors of the law on one side, and the
constitutional rights of a citizen to due process of law and the equal protection of the laws on
the other, the scales must tilt in favor of the individual, for a citizen’s right is amply protected
by the Bill of Rights under the Constitution.” Thus, while “taxes are the lifeblood of the
government,” the power to tax has its limits, in spite of all its plenitude.
CIR vs. Air Liquide Philippines, Inc., 764 SCRA 385, July 29, 2015
TAXATION; TAX CREDITS; TAX REFUNDS; ALL TAXPAYERS CAN RELY ON
BUREAU OF INTERNAL REVENUE (BIR) RULING NO. DA-489-03 FROM THE TIME
OF ITS ISSUANCE ON DECEMBER 10, 2003 UP TO ITS REVERSAL BY THE
SUPREME COURT (SC) IN CIR V. AICHI, 632 SCRA 422 on October 6,2010, where it
was held that the 120+30-day periods are mandatory and jurisdictional.
IN CASE OF CONFLICTING DOCTRINES, A REVERSAL OF A RULING IS ONLY TO
BE APPLIED PROSPECTIVELY; There is no need for a tax payer to invoke a court ruling
to benefit from the same if it was for a general interpretative rule. A reversal of a Court ruling
is only prospective in application.
 LG Electronics Philippines, Inc. vs. CIR, December 03, 2014
TAXATION; TAX AMNESTY; TAXPAYERS WHO AVAILED THEMSELVES OF THE
TAX AMNESTY PROGRAM ARE ENTITLED TO THE IMMUNITIES AND
PRIVILEGES UNDER SECTION 6 OF THE LAW; (a) The taxpayer shall be immune from
the payment of taxes, as well as additions thereto; (b) The taxpayer’s Tax Amnesty Return
and the SALN as of December 31, 2005 shall not be admissible as evidence in all proceedings
that pertain to taxable year 2005 and prior years; (c) The books of accounts and other records
of the taxpayer for the years covered by the tax amnesty availed of shall not be examined.
SAME; WORDS AND PHRASES; A TAX AMNESTY IS A GENERAL PARDON OR
THE INTENTIONAL OVERLOOKING BY THE STATE OF ITS AUTHORITY TO
IMPOSE PENALTIES ON PERSONS OTHERWISE GUILTY OF VIOLATION OF A
TAX LAW. It partakes of an absolute waiver by the government of its right to collect what
is due it and to give tax evaders who wish to relent a chance to start with a clean slate. A tax
amnesty, much like a tax exemption, is never favored or presumed in law. The grant of a tax
amnesty, similar to a tax exemption, must be construed strictly against the taxpayer and
liberally in favor of the taxing authority.
INCOME TAXATION; WORDS AND PHRASES; In the seminal case of Fisher v. Trinidad,
43 Phil. 973 (1922), the SUPREME COURT(SC) DEFINED INCOME TAX AS “A TAX
ON THE YEARLY PROFITS ARISING FROM PROPERTY, PROFESSIONS, TRADES,
AND OFFICES.”—Income tax is different from withholding tax, with both operating in
distinct systems. In the seminal case of Fisher v. Trinidad, 43 Phil. 973 (1922), this court
defined income tax as “a tax on the yearly profits arising from property, professions, trades,
and offices.” Otherwise stated, income tax is the “tax on all yearly profits arising from
property, professions, trades or offices, OR AS A TAX ON A PERSON’S INCOME,
EMOLUMENTS, PROFITS AND THE LIKE.”
WITHHOLDING TAX; WITHHOLDING TAX IS A METHOD OF COLLECTING
INCOME TAX IN ADVANCE.
Fort Bonifacio Development Corporation vs. CIR, November 19, 2014
TAXATION; TAX CREDITS; TRANSITIONAL INPUT TAX CREDIT; PRIOR
PAYMENT OF TAXES IS NOT REQUIRED FOR A TAXPAYER TO AVAIL OF THE
8% TRANSITIONAL INPUT TAX CREDIT provided in Section 105 of the old National
Internal Revenue Code (NIRC) and that petitioner is entitled to it, despite the fact that
petitioner acquired the Global City property under a tax-free transaction.
Nursery Care Corporation vs. Acevedo, 731 SCRA 280, July 30, 2014
TAXATION; DOUBLE TAXATION; On the basis of the rulings in City of Manila v. Coca-
Cola Bottlers Philippines, Inc., 595 SCRA 299(2009) and Swedish Match Philippines, Inc.
v. The Treasurer of the City of Manila, 700 SCRA 428 (2013), the Court now holds that all
the elements of double taxation concurred
DOUBLE TAXATION; THERE IS DOUBLE TAXATION WHEN THE SAME
TAXPAYER IS TAXED TWICE WHEN HE SHOULD BE TAXED ONLY ONCE FOR
THE SAME PURPOSE BY THE SAME TAXING AUTHORITY WITHIN THE SAME
JURISDICTION DURING THE SAME TAXING PERIOD, AND THE TAXES ARE OF
THE SAME KIND OR CHARACTER. Otherwise described as “direct duplicate taxation,”
the two taxes must be imposed on the same subject matter, for the same purpose, by the same
taxing authority, within the same jurisdiction, during the same taxing period; and the taxes
must be of the same kind or character. DOUBLE TAXATION IS OBNOXIOUS. It is
obnoxious when the taxpayer is taxed twice, when it should be but once.
CIR VS. THE INSULAR LIFE ASSURANCE CO, JUNE 4, 2014
“Time and again, the Court has held that it is a very desirable and necessary judicial practice
that when a court has laid down a principle of law as applicable to a certain state of facts, it
will adhere to that principle and apply it to all future cases in which the facts are substantially
the same. Stare decisis et non quieta movere. Stand by the decisions and disturb not what is
settled. STARE DECISIS SIMPLY MEANS THAT FOR THE SAKE OF CERTAINTY, A
CONCLUSION REACHED IN ONE CASE SHOULD BE APPLIED TO THOSE THAT
FOLLOW IF THE FACTS ARE SUBSTANTIALLY THE SAME, EVEN THOUGH THE
PARTIES MAY BE DIFFERENT. IT PROCEEDS FROM THE FIRST PRINCIPLE OF
JUSTICE THAT, ABSENT ANY POWERFUL COUNTERVAILING
CONSIDERATIONS, LIKE CASES OUGHT TO BE DECIDED ALIKE. Thus, where the
same questions relating to the same event have been put forward by the parties similarly
situated as in a previous case litigated and decided by a competent court, the rule of stare
decisis is a bar to any attempt to relitigate the same issue.”
Coca-Cola Bottlers Philippines, Inc. vs. City of Manila, April 07, 2014
LOCAL GOVERNMENT CODE; LOCAL TAXATION; SECTION 252(C) OF THE
LOCAL GOVERNMENT CODE OF THE PHILIPPINES IS VERY CLEAR THAT “[I]N
THE EVENT THAT THE PROTEST IS FINALLY DECIDED IN FAVOR OF THE
TAXPAYER, THE AMOUNT OR PORTION OF THE TAX PROTESTED SHALL BE
REFUNDED TO THE PROTESTANT, OR APPLIED AS TAX CREDIT AGAINST HIS
EXISTING OR FUTURE TAX LIABILITY. It was not necessary for petitioner to move for
the issuance of the writ of execution because the remedy has already been provided by law.
LOCAL TAXATION; TAX CREDITS; IT COULD NOT HAVE BEEN THE INTENTION
OF THE LAW TO BURDEN THE TAXPAYER WITH GOING THROUGH THE
PROCESS OF EXECUTION under the Rules of Civil Procedure before it may be allowed
to avail its tax credit as affirmed by a court judgment.
Smart Communications, Inc. vs. Municipality of Malvar, Batangas, 2014
TAXATION; COURT OF TAX APPEALS; JURISDICTION; Section 7, paragraph (a), sub-
paragraph (3) of Republic Act (R.A.) NO. 9282 VESTS THE COURT OF TAX APPEALS
WITH THE EXCLUSIVE APPELLATE JURISDICTION OVER “DECISIONS, ORDERS
OR RESOLUTIONS OF THE REGIONAL TRIAL COURTS IN LOCAL TAX CASES
originally decided or resolved by them in the exercise of their original or appellate
jurisdiction.”
SAME; LOCAL TAXATION; LOCAL GOVERNMENT UNITS: THE LOCAL
GOVERNMENT CODE GRANTS MUNICIPALITIES THE POWER TO LEVY TAXES,
FEES, AND CHARGES NOT OTHERWISE LEVIED BY PROVINCES. — Section 5,
Article X of the 1987 Constitution provides that “[e]ach local government unit shall have the
power to create its own sources of revenues and to levy taxes, fees, and charges subject to
such guidelines and limitations as the Congress may provide, consistent with the basic policy
of local autonomy. Such taxes, fees, and charges shall accrue exclusively to the local
government.” Consistent with this constitutional mandate, the LGC grants the taxing powers
to each local government unit.
SAME; SINCE THE MAIN PURPOSE OF ORDINANCE NO. 18 IS TO REGULATE
CERTAIN CONSTRUCTION ACTIVITIES OF THE IDENTIFIED SPECIAL PROJECTS,
which included “cell sites” or telecommunications towers, THE FEES IMPOSED IN
ORDINANCE NO. 18 ARE PRIMARILY REGULATORY IN NATURE, AND NOT
PRIMARILY REVENUE-RAISING; Thus, THE FEES IMPOSED IN ORDINANCE NO.
18 ARE NOT TAXES.
 EXEMPTION FROM REAL PROPERTY TAX

GR 127316,

BASIS OF ASSESSMENT IS ACTUAL USE OF REAL PROPERTY-- LRT carriageways ARE NOT
EXCLUSIVELY FOR PUBLIC USE.

Petitioner is Not Exempt from Payment of Real Property Tax--this exemption shall not apply to real
property of the above named entities the beneficial use of which has been granted, for
consideration or otherwise, to a taxable person.

GR 155650

Since MIAA is neither a stock nor a non-stock corporation, MIAA does not qualify as a government-
owned or controlled corporation.

MIAA IS A GOVERNMENT INSTRUMENTALITY VESTED WITH CORPORATE POWERS to perform

efficiently its governmental functions.

Section 133 of the Local Government Code states that "unless otherwise provided" in the Code,
LOCAL GOVERNMENTS CANNOT TAX NATIONAL GOVERNMENT INSTRUMENTALITIES.

The power to tax which was called by Justice Marshall as the "power to destroy" (Mc Culloch v.
Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the very entity
which has the inherent power to wield it.

GR 171470

THE MACHINERIES AND EQUIPMENT used in a project covered by a BOT agreement, to which it is
a party, IS NOT TAX-EXEMPT.

The power to tax is the most potent INSTRUMENT TO RAISE THE NEEDED REVENUES TO FINANCE
AND SUPPORT MYRIAD ACTIVITIES OF THE LOCAL GOVERNMENT UNITS For the delivery of basic
services essential to the promotion of the general welfare and the enhancement of peace,
progress, and prosperity of the people. [Emphasis supplied.]

This consideration is consistent with the State policy to guarantee the autonomy of local
governments and the objective of the Local Government Code that they enjoy genuine and
meaningful local autonomy to empower them to achieve their fullest development as self-reliant
communities and make them effective partners in the attainment of national goals.