TAXATION NOTES

BY

ATTY. ROBERTO A. DEMIGILLO

FOR CLASS USE ONLY

1. UNIFORMITY MEANS THAT ALL PROPERTY BELONGING TO SAME

CLASS SHALL BE TAXED ALIKE.

2. THE RULE OF UNIFORM TAXATION DOES NOT DEPRIVE CONGRESS

OF THEPOWER TO CLASSIFY SUBJECTS OF TAXATION AND ONLY
DEMANDS UNIFORMITY WITHIN THE PARTICULAR CLASS.

3. THE CONSTITUTION DOES NOT PROHIBIT THE IMPOSITION OF

INDIRECT TAXES, WHICH ARE REGRESSIVE. THE PROVISION SIMPLY
MEANS THAT DIRECT TAXES ARE TO BE PREFERRED AND INDIRECT
TAXES SHOULD BE MINIMIZED AS MUCH AS POSSIBLE. OTHERWISE,
SALES TAXES, WHICH THE OLDEST FORM OF INDIRECT TAXES, WILL
BE PROHIBITED. THEMANDATE OF CONGRESS IS NOT TO PRESCRIBE
BUT TO EVOLVE A PROGRESSIVE SYSTEM OF TAXATION . TOLENTINO
VS SEC. OF FINANCE.

4. THE PRIMARY USE OF THE LOT AND BUILDING IS THE TEST TO

DETERMINEIF THEY ARE EXEMPT FROM TAX AND NOT FOR MERE
INCIDENTAL USE. THE PHRASE ‘EXCLUSIVELY USED FOR
EDUCATIONAL PURPOSES’ EXTENDS TO FACILITIES WHICH ARE
INCIDENTAL TO AND REASONABLE NECESSARY FOR THE
ACCOMPLISHMENT OF THE MAIN PURPOSE. ABRA VALLEY COLLEGE
V. AQUINO.

5. A CHARITABLE INSTITUTION DOES NOT LOSE ITS CHARACTER AS

SUCH AND ITS EXEMPTION FROM TAXES SIMPLY BECAUSE IT
DERIVES INCOME FROM PAYING PATIENTS OR RECEIVING SUBSIDIES
FROM THE GOVERNMENT SO LONG AS THE MONEY IS DEVOTED
ALTOGETHER TO THE CHARITABLE OBJECT WHICH IT IS INTENDED
TO ACHIEVE. HOWEVER, THE POTIONS OF ITS REAL PROPERTY THAT
ARE LEASED TO PRIVATE ENTITIES ARE NOT EXEMPT FROM REAL
PROPERTY TAXES AS THESE ARE NOT ACTUALLY, DIRECTLY AND
EXCLUSIVELY USED FOR CHARITABLE PURPOSE. LUNG CENTER V
QUEZON CITY.

6. THE POWER TO GRANT TAX EXEMPTION IS VESTED IN CONGRESS

AND TO A CERTAIN EXTENT IN LOCAL LEGISLATIVE BODIES.

7. TAX IS CONSIDERED FOR PUBLIC PURPOSE IF THE PROCEEDS

THEREOF ARE USED FOR THE SUPPORT OF GOVERNMENT OR FOR
SOME ORGANIZED OBJECT OF GOVERNMENT OR FOR THE WELFARE
OF THE COMMUNITY.
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8. THE REQUIREMENT OF TERRITORIALITY IN TAXATION MEANS

THAT THE POWER TO TAX OPERATES ONLY WITHIN
THETERRITORIAL JURISDICTION OF THE TAXING AUTHORITY. IT
CANNOT BE EXERCISED BEYOND THE BOUNDARIES EXCEPT UNDER
CERTAIN CIRCUMSTANCES. . MANILA GAS V. COLLECTOR.

9. THETAXABLE SITUS OF REAL PROPERTIES IS THE PLACE WHERE

THE PROPERTY IS SITUATED. HOWEVER, WITH RESPECT TO
INTANGIBLE PERSONAL PROPERTIES, THE SITUS FOLLOWS THE
DOMICILE OF THE OWNER UNDER THE PRINCIPLE OF MOBILIA
SEQUANTUR PERSONAM.

10. COOPERATIVES INCLUDING THEIR MEMBERS, DESERVE A

PREFERENTIAL TAX TREATMENT BECAUSE OF THE VITAL ROLE
THEY PLAY IN THE ATTAINMENT OF ECONOMIC DEVELOPMENT AND
SOCIAL JUSTICE. DUMAGUETE CREDICT COOPERATIVE V CIR.

11. CONTRACTUAL TAX EXEMPTIONS IN THE REAL SENSE OF THE

TERM AND WHERE THE NON IMPAIRMENT CLAUSE OF THE
CONSTITUTION CAN RIGHTLY BE INVOKED, ARE THOSE AGREED TO
BY THE TAXING AUTHORITY IN CONTRACTS, SUCH AS THOSE
CONTAINED IN GOVERNMENT BONDS OR DEBENTURES, LAWFULLY
ENTERED INTO BY THEM UNDER ENABLING LAWS IN WHICH THE
GOVERNMENT, ACTING INITS PRIVATE CAPACITY, SHEDS ITS CLOAK
OFAUTHORITY AND WAIVES ITS GOVERNMENTAL IMMUNITY.

12. CONTRACTUAL TAX EXEMPTIONS ARE NOT TO BE CONFUSED

WITH TAX EXEMPTIONS GRANTED UNDER FRANCHISES.

13. EXEMPTIONS FROM TAXATION ARE CONSTRUED IN STRICTISSIMI

JURIS AGAINST THE TAXPAYER AND LIBERALLY IN FAVOR OF THE
TAXING AUTHORITY PRIMIARILY BECAUSE TAXES ARE THE
LIFEBLOOD OF THE OGVERNMENT AND THEIR PROMPT AND CERTAIN
AVAILABILITY IS AN IMPERIOUS NEED. PROVINC OF TARLAC V
FERNANDO ALCANTARA.

14. WHEN ADDITIONAL TAXES ARE LAID ON THE SAME SUBJECT BY

THE SAME TAXING JURISDICTION DURING THE SAME TAXING PERIOD
AND FOR THE SAME PURPOSE, THERE IS DOUBLE TAXATION.

15. THE MIAA IS NOT A GOVERNMENT OWNED OR CONTROLLED

CORPORATION BUT AN INSTRUMENTALITY OF THE NATIONAL
GOVERNMENT AND THUS EXEMPT FORM LOCAL TAXATION. THE
REAL PROPERTIES OF MIAA ARE OWNED BY THE REPUBLIC OF THE
PHILIPPINES AND THUS EXEMPT FROM REAL ESTATE TAX.

16. READ CITY ASSESSOR OF CEBU CITY V ASSOCIATION OF

BENEVOLA DE CEBU, JUNE 8, 2007