1) The case involved a dispute over business taxes assessed by the Municipality of Navotas against Petron Corporation for the sale of petroleum products.
2) Section 133(h) of the Local Government Code prohibits local governments from imposing excise taxes on items taxed under the National Internal Revenue Code, including petroleum products, as well as "taxes, fees or charges on petroleum products."
3) The Supreme Court ruled in favor of Petron, finding that Section 133(h) prohibits all types of taxes on petroleum products by local governments, including business taxes. The law makes no distinction between different types of taxes, so the court should not either.
1) The case involved a dispute over business taxes assessed by the Municipality of Navotas against Petron Corporation for the sale of petroleum products.
2) Section 133(h) of the Local Government Code prohibits local governments from imposing excise taxes on items taxed under the National Internal Revenue Code, including petroleum products, as well as "taxes, fees or charges on petroleum products."
3) The Supreme Court ruled in favor of Petron, finding that Section 133(h) prohibits all types of taxes on petroleum products by local governments, including business taxes. The law makes no distinction between different types of taxes, so the court should not either.
1) The case involved a dispute over business taxes assessed by the Municipality of Navotas against Petron Corporation for the sale of petroleum products.
2) Section 133(h) of the Local Government Code prohibits local governments from imposing excise taxes on items taxed under the National Internal Revenue Code, including petroleum products, as well as "taxes, fees or charges on petroleum products."
3) The Supreme Court ruled in favor of Petron, finding that Section 133(h) prohibits all types of taxes on petroleum products by local governments, including business taxes. The law makes no distinction between different types of taxes, so the court should not either.
1RLASURLR MANULL 1. LNRIQULZ of the MUNIPALI1Y OI NAVO1AS, ML1RO MANILA G.R. JS888J, J6 April 2006, SLCOND DIVISION, (1inga, J.)
ectiov 1;b) of tbe CC reaa. a. fottor.: ec. 1. Covvov ivitatiov. ov tbe 1aivg Porer. of ocat Corervvevt |vit.. |vte.. otberri.e roriaea bereiv, tbe eerci.e of tbe taivg orer. of rorivce., citie., vvviciatitie., ava aravga,. .batt vot eteva to tbe ter, of tbe fottorivg: ;b) ci.e tae. ov articte. evvveratea vvaer tbe ^atiovat vtervat Rerevve Coae, a. avevaea, ava tae., fee. or cbarge. ov etrotevv roavct.;
riaevtt,, ectiov 1 re.cribe. tbe tivitatiov. ov tbe caacit, of tocat gorervvevt vvit. to eerci.e tbeir taivg orer. otberri.e gravtea to tbev vvaer tbe CC. .arevtt,, aragrab ;b) of tbe ectiov vevtiov. tro /iva. of tae. rbicb cavvot be ivo.ea b, tocat gorervvevt vvit., vavet,: eci.e tae. ov articte. evvveratea vvaer tbe ^atiovat vtervat Rerevve Coae ;^RC), a. avevaea; ava tae., fee. or cbarge. ov etrotevv roavct..
1he power o a municipality to impose business taxes is proided or in Section 143 o the LGC. Under the proision, a municipality is authorized to impose business taxes on a whole host o business actiities. Suice it to say, unless there is another proision o law which states otherwise, Section 143, broad in scope as it is, would undoubtedly coer the business o selling diesel uels, or any other petroleum product or that matter.
In accordance to the New Naotas Reenue Code or Ordinance 92-03, petitioner Petron Corporation ,PL1RON, was assessed a total tax o P6,259,08.62. Petron iled a letter protest arguing that it is exempt rom paying local business taxes as proided by Article 232 ,h, o the Implementing Rules o the Local Goernment Code.
1he letter-protest was denied. A Complaint or Cancellation o Assessment was iled beore the Regional 1rial Court ,R1C, o Malabon. 1he R1C dismissed the Complaint and required Petron to pay the assessed tax. A Motion or Reconsideration was iled but it was later denied by the court. 1hus, PL1RON eleated the case to the SC.
ISSUL:
\hether or not a local goernment unit is empowered under the Local Goernment Code o 1991 to impose business taxes on persons or entities engaged in the sale o petroleum
HLLD:
Petition GRAN1LD.
Section 133,h, o the LGC reads as ollows:
Sec. J33. Common Limitations on the 1axing Powers of Local Government Units. - Unless otherwise proided herein, the exercise o the taxing powers o proinces, cities, municipalities, and Barangays shall not extend to the ley o the ollowing:
xxx
,h, Lxcise taxes on articles enumerated under the National Internal Reenue Code, as amended, and taxes, ees or charges on petroleum products,
Lidently, Section 133 prescribes the limitations on the capacity o local goernment units to exercise their taxing powers otherwise granted to them under the LGC. Apparently, paragraph ,h, o the Section mentions two kinds o taxes which cannot be imposed by local goernment units, namely: excise taxes on articles enumerated under the National Internal Reenue Code ,NIRC,, as amended,` and taxes, ees or charges on petroleum products.`
1he power o a municipality to impose business taxes is proided or in Section 143 o the LGC. Under the proision, a municipality is authorized to impose business taxes on a whole host o business actiities. Suice it to say, unless there is another proision o law which states otherwise, Section 143, broad in scope as it is, would undoubtedly coer the business o selling diesel uels, or any other petroleum product or that matter.
Section 133,h, proides two kinds o taxes which cannot be imposed by local goernment units: excise taxes on articles enumerated` under the NIRC, as amended, and taxes, ees or charges on petroleum products.` 1here is no doubt that among the excise taxes on articles enumerated under the NIRC are those leied on petroleum products, per Section 148 o the NIRC.
Section 133,h, states that local goernment units shall not extend to the ley o xxx taxes, ees or charges on petroleum products.` Lnriquez and Municipality o Naotas assert that the phrase taxes, ees or charges on petroleum products` pertains to the imposition o direct or excise taxes on petroleum products, and not business taxes. I the phrase actually pertains to excise taxes, then it would be an exercise in utter redundancy, since the preceding phrase already prohibits the imposition o excise taxes on articles already subject to such taxes under the NIRC, such as petroleum products. 1here would be no sense on the part o the Legislature to twice emphasize in the same sentence that excise taxes on petroleum products are beyond the pale o local goernment taxation.
1he Court concedes that a tax on a business is distinct rom a tax on the article itsel, or or that matter, that a business tax is distinct rom an excise tax. loweer, such distinction is immaterial insoar as the latter part o Section 133,h, is concerned, or the phrase taxes, ees or charges on petroleum products` does not qualiy the kind o taxes, ees or charges that could withstand the absolute prohibition imposed by the proision. It would hae been a dierent matter had Congress, in crating Section 133,h,, barred excise taxes` or direct taxes,` or any category o taxes only, or then it would be understood that only such speciied taxes on petroleum products could not be imposed under the prohibition. 1he absence o such a qualiication leads to the conclusion that all sorts o taxes on petroleum products, including business taxes, are prohibited by Section 133,h,. \here the law does not distinguish, the Court should not distinguish.
DRUGSTORES ASSOCIATION OF THE PHILIPPINES, INC. AND NORTHERN LUZON DRUG CORPORATION, Petitioners, v. NATIONAL COUNCIL ON DISABILITY AFFAIRS DEPARTMENT OF HEALTH