USA College of Law

Case Name Sison vs Ancheta, 130 SCRA 655 (1984)

Topic Power of Taxation/ Equal Protection/Uniformity in taxation
Case No. |
G.R. No. L-59431 July 25, 1984
Date
Ponente FERNANDO, C.J.
Equality and uniformity in taxation means that all taxable articles or kinds of property of
the same class shall be taxed at the same rate. The taxing power has the authority to
make reasonable and natural classifications for purposes of taxation. Where the
Doctrine
differentitation conforms to the practical dictates of justice and equity, similar to the
standards of equal protection, it is not discriminatory within the meaning of the clause
and is therefore uniform.
https://lawphil.net/judjuris/juri1984/jul1984/gr_l59431_1984.html
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RELEVANT FACTS:

Batas Pambansa 135 (act amending NIRC as it provided a graduated tax table - eg. higher income higher
tax rate) was enacted. Sison, as taxpayer, alleged that its provision (Section 1) unduly discriminated
against him by the imposition of higher rates upon his income as a professional, that it amounts to class
legislation, and that it transgresses against the equal protection and due process clauses of the
Constitution as well as the rule requiring uniformity in taxation.

ISSUE: Whether BP 135 violates the due process and equal protection clauses, and the rule on
uniformity in taxation.
RULING:
No.

The power to tax, an inherent prerogative, has to be availed of to assure the performance of vital state
functions. It is the source of the bulk of public funds. To praphrase a recent decision, taxes being the
lifeblood of the government, their prompt and certain availability is of the essence.

There is a need for proof of such persuasive character as would lead to a conclusion that there was a
violation of the due process and equal protection clauses. Absent such showing, the presumption of
validity must prevail. Equality and uniformity in taxation means that all taxable articles or kinds of
property of the same class shall be taxed at the same rate. The taxing power has the authority to make
reasonable and natural classifications for purposes of taxation. Where the differentiation conforms to the
practical dictates of justice and equity, similar to the standards of equal protection, it is not discriminatory
within the meaning of the clause and is therefore uniform. Taxpayers may be classified into different
categories, such as recipients of compensation income as against professionals. Recipients of
compensation income are not entitled to make deductions for income tax purposes as there is no
practically no overhead expense, while professionals and businessmen have no uniform costs or
expenses necessary to produce their income. There is ample justification to adopt the gross system of
income taxation to compensation income, while continuing the system of net income taxation as regards
professional and business income.

RULING

WHEREFORE, the petition is dismissed. Costs against petitioner

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