, Cebu

CASE ANALYSIS PAPER

Date: 2/9/2020

Name : RHODA C. SANTILLAN

Program : MBA-HRMD
Subject : PHILOSOPHY OF BUSINESS (BM 215)
Professor : ROEL A. MONSANTO, Ph.D.

CITY OF MANILA vs. COCA-COLA BOTTLERS PHILIPPINES, INC. - CTA, Double Taxation
Title of the Case

PROCEEDINGS/DETAILS OF THE CASE:

(1) NO. Petitioner complied with the reglementary period for filing the petition. From April 20,
2007, Petitioner had 30 days, or until May 20, 2007, within which to file their Petition for Review with
the CTA. The Motion for Extension filed by the petitioners on May 18, 2007, prior to the lapse of the 30-
day period on 20 May 2007, in which they prayed for another extended period of 10 days, or until 30
May 2007, to file their Petition for Review was, in reality, only the first Motion for Extension of
petitioners. Thus, when Petitioner filed their Petition via registered mail their Petition for Review on 30
May 2007, they were able to comply with the period for filing such a petition.

(2) YES. There is indeed double taxation if respondent is subjected to the taxes under both Sections 14
and 21 of the tax ordinance since these are being imposed: (1) on the same subject matter — the
privilege of doing business in the City of Manila; (2) for the same purpose — to make persons
conducting business within the City of Manila contribute to city revenues; (3) by the same taxing
authority — petitioner City of Manila; (4) within the same taxing jurisdiction — within the territorial
jurisdiction of the City of Manila; (5) for the same taxing periods — per calendar year; and (6) of the
same kind or character — a local business tax imposed on gross sales or receipts of the business.

FACTS OF THE CASE:

Respondent paid the local business tax only as manufacturers as it was expressly exempted from
the business tax under a different section and which applied to businesses subject to excise VAT or
percentage tax under the Tax Code. The City of Manila subsequently amended the ordinance by deleting
the provision exempting businesses under the latter section if they have already paid taxes under a
different section in the ordinance. This amending ordinance was later declared by the Supreme Court
null and void. Respondent then filed a protest on the ground of double taxation. RTC decided in favour
of Respondent and the decision was received by Petitioner on April 20, 2007. On May 4, 2007, Petitioner
filed with the CTA a Motion for Extension of Time to File Petition for Review asking for a 15-day
extension or until May 20, 2007 within which to file its Petition. A second Motion for Extension was filed
on May 18, 2007, this time asking for a 10-day extension to file the Petition. Petitioner finally filed the
Petition on May 30, 2007 even if the CTA had earlier issued a resolution dismissing the case for failure to
timely file the Petition.

PROBLEMS:

(1) Has Petitioner’s the right to appeal with the CTA lapsed?
(2) Does the enforcement of the latter section of the tax ordinance constitute double taxation?

RECOMMENDATIONS:

Paying tax is part of the social responsibility of any organization. Businesses benefit from
infrastructure, security, education, health and social peace, they use resources, and so paying taxes is
the first they do to be able to maintain the services that make business possible at all. Companies,
claiming that corporate social responsibility is important for them, have been revealed as avoiding the
complex system in avoiding paying their fair share of taxes. Today we see that paying tax is already
being looked at as an element of corporate responsibility, so it is interesting to ask the question: how
might this develop in the future? The recession and the financial crisis have deepened the lack of public
trust in business and led to much wider public interest in what tax companies pay. There is no
universally agreed definition of “corporate responsibility”. For the leading companies in the area, we
suggest it is simply about how their business adds value, now and in the future, for shareholders, but
also for other stakeholders, including employees, customers, government and the wider community.
Johnson and Johnson, the US-based worldwide consumer healthcare group, state this clearly, in Our
Credo, a set of operating principles that they have followed for over 60 years. In the Credo, they put
their responsibility to shareholders after that to customers, employees and communities, believing that
if they follow these principles, the business will survive and shareholders will receive a fair long-term
return. Paying tax into public finances is clearly part of how business contributes to society. Looked at
simply, company’s affect the community in three dimensions–social, environmental and economic.
Paying tax is clearly part of the economic dimension, and how companies contribute to the creation of
prosperity and to stability. Taxes provide essential public revenues for governments to meet economic
and social objectives. Other aspects of the economic dimension include creating jobs and employment,
and generating business for suppliers. We need business to understand its social responsibility that the
main task and objective for a business is not to generate extra income and to become rich and transfer
the money abroad, but to look and evaluate what a businessman has done for the country, for the
people, on whose account he or she has become so rich.