[CASE DIGEST] CHAVEZ v.

ONGPIN
(186 SCRA 331)
FACTS

Due to the obsolete real property taxes values, which were still based on the
1978 revision, then President Corazon Aquino issued EO No. 73 in 1986,
which ordered that beginning January 1, 1987, the1984 assessments shall be
the basis of real property tax collection.

Francisco Chavez, in his capacity as a taxpayer and an owner of three

parcels of land, challenged the constitutionality of said EO, arguing that the
law resulted in an unreasonable increase in real property taxes – excessive
increase in real property taxes by 100 percent to 400 percent on
improvement and up to 100 percent on land.

This, he said, amounted to confiscation of property repugnant to the

constitutional guarantee of due process.

RULING

The Supreme Court ruled for the Government.

The SC held that EO No. 73 does not impose new taxes nor increase taxes. It
added that to continue collecting real property taxes based on valuations
arrived at several years ago, in disregard of the increases in the value of real
properties that have occurred since then, is not in consonance with a sound
tax system, thereby resulting in the deprivation of the local government units
of an additional source of revenue.

Fiscal adequacy, which is one of the characteristics of a sound tax system,

requires that sources of revenues must be adequate to meet government
expenditures and their variations.

FACTS

Due to the obsolete real property taxes values, which were still based on the
1978 revision, then President Corazon Aquino issued EO No. 73 in 1986,
which ordered that beginning January 1, 1987, the1984 assessments shall be
the basis of real property tax collection.

Francisco Chavez, in his capacity as a taxpayer and an owner of three

parcels of land, challenged the constitutionality of said EO, arguing that the
law resulted in an unreasonable increase in real property taxes – excessive
increase in real property taxes by 100 percent to 400 percent on
improvement and up to 100 percent on land.

This, he said, amounted to confiscation of property repugnant to the

constitutional guarantee of due process.

RULING

The Supreme Court ruled for the Government.

The SC held that EO No. 73 does not impose new taxes nor increase taxes. It
added that to continue collecting real property taxes based on valuations
arrived at several years ago, in disregard of the increases in the value of real
properties that have occurred since then, is not in consonance with a sound
tax system, thereby resulting in the deprivation of the local government units
of an additional source of revenue.

Fiscal adequacy, which is one of the characteristics of a sound tax system,

requires that sources of revenues must be adequate to meet government
expenditures and their variations.