PCGG VS.
COJUANGCO (REPUBLIC OF THE PHILIPPINES, represented by the PRESIDENTIAL Taxation is the rule and exemption is the exception. Thus, the exemption may be withdrawn
COMMISSION ON GOOD GOVERNMENT (PCGG) vs COCOFED, et al. and BALLARES, et al,
EDUARDO M. COJUANGCO JR. and the SANDIGANBAYAN)
Based on this definition, a tax has three elements, namely: a) it is an enforced proportional
contribution from persons and properties; b) it is imposed by the State by virtue of its
sovereignty; and c) it is levied for the support of the government.
THEORIES OF TAXATION
COMMISSIONER OF INTERNAL REVENUE, PETITIONER, -versusALGUE, INC., and THE COURT
OF TAX APPEALS, RESPONDENTS. G.R. No. L-28896, FIRST DIVISION, February 17, 1988,
CRUZ, J
It is said that taxes are what we pay for civilization society. Without taxes, the government
would be paralyzed for lack of the motive power to activate and operate it. Hence, despite
the natural reluctance to surrender part of one's hard earned income to the taxing
authorities, every person who is able to must contribute his share in the running of the
government. The government for its part is expected to respond in the form of tangible and
intangible benefits intended to improve the lives of the people and enhance their moral and
material values. This symbiotic relationship is the rationale of taxation and should dispel the
erroneous notion that it is an arbitrary method of exaction by those in the seat of power.
CHARACTERISTICS OF TAXATION
MACTAN CEBU INTERNATIONAL AIRPORT AUTHORITY, petitioner -versus- HON.
FERDINAND J. MARCOS, in his capacity as the Presiding Judge of the Regional Trial Court,
Branch 20, Cebu City, THE CITY OF CEBU, represented by its Mayor HON. TOMAS R.
OSMEÑA, and EUSTAQUIO B. CESA, respondents. G.R. No. 120082, THIRD DIVISION,
September 11, 1996, DAVIDE, JR., J.
at the pleasure of the taxing authority. The only exception to this rule is where the
exemption was granted to private parties based on material consideration of a mutual
nature, which then becomes contractual and is thus covered by the non-impairment clause
of the Constitution.
ANTONIO ROXAS, EDUARDO ROXAS and ROXAS Y CIA., in their own respective behalf and
as judicial co-guardians of JOSE ROXAS, Petitioners, -versus- COURT OF TAX APPEALS and
COMMISSIONER OF INTERNAL REVENUE, Respondents G.R. No. L-25043, EN BANC, April
26, 1968, BENGZON, J.P, J.
The power of taxation is sometimes called also the power to destroy. Therefore it should be
exercised with caution to minimize injury to the proprietary rights of a taxpayer. It must be
exercised fairly, equally and uniformly, lest the tax collector kill the "hen that lays the golden
egg". And, in order to maintain the general public's trust and confidence in the Government
this power must be used justly and not treacherously. It does not conform with Our sense of
justice in the instant case for the Government to persuade the taxpayer to lend it a helping
hand and later on to penalize him for duly answering the urgent call.
PUBLIC PURPOSE
PLANTERS PRODUCTS, INC., Petitioner, vs. FERTIPHIL CORPORATION, Respondent. G.R.
No. 166006, THIRD DIVISION, March 14, 2008, REYES, R.T., J.
An inherent limitation on the power of taxation is public purpose. Taxes are exacted only for
a public purpose. They cannot be used for purely private purposes or for the exclusive
benefit of private persons. The reason for this is simple. The power to tax exists for the
general welfare; hence, implicit in its power is the limitation that it should be used only for a
public purpose. It would be a robbery for the State to tax its citizens and use the funds
generated for a private purpose. As an old United States case bluntly put it: "To lay with one
hand, the power of the government on the property of the citizen, and
NATIONAL POWER CORPORATION, petitioner, vs. THE PROVINCE OF ALBAY, ALBAY
GOVERNOR ROMEO R. SALALIMA, and ALBAY PROVINCIAL TREASURER ABUNDIO M.
NUÑEZ, respondents. G.R. No. 87479, EN BANC, June 4, 1990, SARMIENTO, J
Taxes are the lifeblood of the nation. Their primary purpose is to generate funds for the
State to finance the needs of the citizenry and to advance the common wealth.
CESAR S. GUTIERREZ, ADELINA A. TABANGIN, IN HER CAPACITY AS CHAIRMAN OF THE
BOARD OF TAX (ASSESSMENT) APPEALS OF BAGUIO CITY, AND HON. ESTRELLA B. TANO,
IN HER CAPACITY AS THE CITY ASSESSOR OF THE CITY OF BAGUIO, RESPONDENTS. G.R. No.
169234, SECOND DIVISION, October 2, 2013, PEREZ, J
A taxpayer questioning the correctness of an assessment of real property tax must comply
with the requirement of “payment under protest” since it is a condition sine qua non before
such protest or appeal may be entertained. Moreover, a claim for exemption from payment
of real property taxes does not actually question the assessor’s authority to assess and
collect such taxes, but pertains to the reasonableness or correctness of the assessment by
the local assessor, a question of fact which should be resolved, at the very first instance, by
the LBAA.
COMMISSIONER OF INTERNAL REVENUE, PETITIONER, -versus- BANK OF THE PHILIPPINE
ISLANDS, RESPONDENT. G.R. No. 134062, FIRST DIVISION, April 17, 2007, CORONA, J.
The taxpayer shall be informed in writing of the law and the facts on which the assessment
is made; otherwise, the assessment shall be void.
COMMISSIONER OF INTERNAL REVENUE, PETITIONER, -versus- COURT OF APPEALS,
CITYTRUST BANKING CORPORATION and COURT OF TAX APPEALS, RESPONDENTS. G.R.
No. 106611, SECOND DIVISION, July 21, 1994, REGALADO, J.
It is a long and firmly settled rule of law that the Government is not bound by the errors
committed by its agents. In the performance of its governmental functions, the State cannot
be estopped by the neglect of its agent and officers. Although the Government may
generally be estopped through the affirmative acts of public officers acting within their
authority, their neglect or omission of public duties as exemplified in this case will not and
should not produce that effect.
COMMISSIONER OF INTERNAL REVENUE, PETITIONER, -versus- COURT OF APPEALS,
COURT OF TAX APPEALS and YOUNG MEN'S CHRISTIAN ASSOCIATION OF THE PHILIPPINES,
INC., RESPONDENTS. G.R. No. 124043, FIRST DIVISION, October 14, 1998, PANGANIBAN, J.
Because taxes are the lifeblood of the nation, the Court has always applied the doctrine of
strict in interpretation in construing tax exemptions. Furthermore, a claim of statutory
exemption from taxation should be manifest and unmistakable from the language of the law
on which it is based. Thus, the claimed exemption "must expressly be granted in a statute
stated in a language too clear to be mistaken."
FERDINAND R. MARCOS II, PETITIONER, -versus- COURT OF APPEALS, THE COMMISSIONER
OF THE BUREAU OF INTERNAL REVENUE and HERMINIA D. DE GUZMAN, RESPONDENTS.
G.R. No. 120880, SECOND DIVISION, June 5, 1997, TORRES, JR., J.
Taxes are the lifeblood of the government and should be collected without unnecessary
hindrance. However, such collection should be made in accordance with law as any
arbitrariness will negate the very reason for government itself. It is therefore necessary to
reconcile the apparently conflicting interests of the authorities and the taxpayers so that the
real purpose of taxation, which is the promotion of the common good, may be achieved.
THE PHILIPPINE GUARANTY CO., INC., PETITIONER, -versus- THE COMMISSIONER OF
INTERNAL REVENUE and THE COURT OF TAX APPEALS, RESPONDENTS. G.R. No. L-22074,
EN BANC, April 30, 1965, BENGZON, J.P., J
The power to tax is an attribute of sovereignty. It is a power emanating from necessity. It is a
necessary burden to preserve the State's sovereignty and a means to give the citizenry an
army to resist an aggression, a navy to defend its shores from invasion, a corps of civil
servants to serve, public improvement designed for the enjoyment of the citizenry and
those which come within the State's territory, and facilities and protection which a
government is supposed to provide. Considering that the reinsurance premiums in question
were afforded protection by the government and the recipient foreign reinsurer’s exercised
rights and privileges guaranteed by our laws, such reinsurance premiums and reinsurers
should share the burden of maintaining the state.
PHILEX MINING CORPORATION, PETITIONER, -VERSUS- COMMISSIONER OF INTERNAL
REVENUE, COURT OF APPEALS, and THE COURT OF TAX APPEALS, RESPONDENTS. G.R. No.
125704, THIRD DIVISION, August 28, 1998, ROMERO, J.
In several instances prior to the instant case, we have already made the pronouncement
that taxes cannot be subject to compensation for the simple reason that the government
and the taxpayer are not creditors and debtors of each other. There is a material distinction
between a tax and debt. Debts are due to the Government in its corporate capacity, while
taxes are due to the Government in its sovereign capacity. We find no cogent reason to
deviate from the aforementioned distinction.
ABAKADA GURO PARTY LIST (FORMERLY AASJAS) OFFICERS SAMSON S. ALCANTARA AND
ED VINCENT S. ALBANO, PETITIONERS, -VERSUS THE HONORABLE EXECUTIVE SECRETARY
EDUARDO ERMITA; HONORABLE SECRETARY OF THE DEPARTMENT OF FINANCE CESAR
PURISIMA; AND HONORABLE COMMISSIONER OF INTERNAL REVENUE GUILLERMO
PARAYNO, JR., RESPONDENT. G.R. No. 168056, EN BANC, September 1, 2005, AUSTRIA-
MARTINEZ, J
NO UNDUE DELEGATION OF LEGISLATIVE POWER
The principle of separation of powers ordains that each of the three great branches of
government has exclusive cognizance of and is supreme in matters falling within its own
constitutionally allocated sphere. A logical corollary to the doctrine of separation of powers
is the principle of non-delegation of powers, as expressed in the Latin maxim: potestas
delegata non delegari potest which means "what has been delegated, cannot be delegated."
This doctrine is based on the ethical principle that such as delegated power constitutes not
only a right but a duty to be performed by the delegate through the instrumentality of his
own judgment and not through the intervening mind of another.
DUE PROCESS AND EQUAL PROTECTION CLAUSES
The equal protection clause under the Constitution means that "no person or class of
persons shall be deprived of the same protection of laws which is enjoyed by other persons
or other classes in the same place and in like circumstances."
The equal protection clause does not require the universal application of the laws on all
persons or things without distinction. This might in fact sometimes result in unequal
protection. What the clause requires is equality among equals as determined according to a
valid classification. By classification is meant the grouping of persons or things similar to
each other in certain particulars and different from all others in these same particulars.
UNIFORMITY AND EQUITABILITY OF TAXATION
Uniformity in taxation means that all taxable articles or kinds of property of the same class
shall be taxed at the same rate. Different articles may be taxed at different amounts
provided that the rate is uniform on the same class everywhere with all people at all times.
PROGRESSIVITY OF TAXATION
CHAMBER OF REAL ESTATE AND BUILDERS' ASSOCIATIONS, INC., PETITIONER, -VERSUS-
THE HON. EXECUTIVE SECRETARY ALBERTO ROMULO, THE HON. ACTING SECRETARY OF
FINANCE JUANITA D. AMATONG, AND THE HON. COMMISSIONER OF INTERNAL REVENUE
GUILLERMO PARAYNO, JR., RESPONDENTS. G.R. No. 160756, EN BANC, March 9, 2010,
CORONA, J.
As a general rule, the power to tax is plenary and unlimited in its range, acknowledging in its
very nature no limits, so that the principal check against its abuse is to be found only in the
responsibility of the legislature (which imposes the tax) to its constituency who are to pay it.
Nevertheless, it is circumscribed by constitutional limitations. At the same time, like any
other statute, tax legislation carries a presumption of constitutionality.
CHEVRON PHILIPPINES, INC. (Formerly CALTEX PHILIPPINES, INC.), Petitioner, vs. BASES
CONVERSION DEVELOPMENT AUTHORITY and CLARK DEVELOPMENT CORPORATION,
Respondents. G.R. No. 173863, THIRD DIVISION, September 15, 2010, VILLARAMA, JR., J.
In distinguishing tax and regulation as a form of police power, the determining factor is the
purpose of the implemented measure. If the purpose is primarily to raise revenue, then it
will be deemed a tax even though the measure results in some form of regulation. On the
other hand, if the purpose is primarily to regulate, then it is deemed a regulation and an
exercise of the police power of the state, even though incidentally, revenue is generated.
ABAKADA GURO PARTY LIST (Formerly AASJAS) OFFICERS SAMSON S. ALCANTARA and ED
VINCENT S. ALBANO, Petitioners, vs.THE HONORABLE EXECUTIVE SECRETARY EDUARDO
ERMITA; HONORABLE SECRETARY OF THE DEPARTMENT OF FINANCE CESAR PURISIMA;
and HONORABLE COMMISSIONER OF INTERNAL REVENUE GUILLERMO PARAYNO, JR.,
Respondent. G.R. No. 168056, EN BANC, September 1, 2005, AUSTRIA-MARTINEZ, J.
There is no undue delegation of legislative power but only of the discretion as to the
execution of a law. This is constitutionally permissible. Congress does not abdicate its
functions or unduly delegate power when it describes what job must be done, who must do
it, and what is the scope of his authority; in our complex economy that is frequently the only
way in which the legislative process can go forward.
Basco v. Philippine Amusements and Gaming Corporation:
The states have no power by taxation or otherwise, to retard, impede, burden or in any
manner control the operation of constitutional laws enacted by Congress to carry into
execution the powers vested in the federal government. (MC Culloch v. Maryland, 4 Wheat
316, 4 L Ed. 579)
This doctrine emanates from the "supremacy" of the National Government over local
governments. "Justice Holmes, speaking for the Supreme Court, made reference to the
entire absence of power on the part of the States to touch, in that way (taxation) at least,
the instrumentalities of the United States (Johnson v. Maryland, 254 US 51) and it can be
agreed that no state or political subdivision can regulate a federal instrumentality in such a
way as to prevent it from consummating its federal responsibilities, or even to seriously
burden it in the accomplishment of them." (Antieau, Modern Constitutional Law, Vol. 2, p.
140, emphasis supplied)
The power to tax which was called by Justice Marshall as the "power to destroy" (Mc Culloch
v. Maryland, supra) cannot be allowed to defeat an instrumentality or creation of the very
entity which has the inherent power to wield it.
PROGRESSIVE DEVELOPMENT CORPORATION vs. QUEZON CITY G.R. No. L-36081 April 24,
1989
A LICENSE FEE is imposed in the exercise of the police power primarily for purposes of
regulation, while TAX is imposed under the taxing power primarily for purposes of raising
revenues.If the generating of revenue is the primary purpose and regulation is merely
incidental, the imposition is a tax; but if regulation is the primary purpose, the fact that
incidentally, revenue is also obtained does not make the imposition a tax.
COMPAÑIA GENERAL DE TABACOS DE FILIPINAS vs. CITY OF MANILA, ET AL. G.R. No. L-
16619, June 29, 1963
The license fees imposed by it are essentially for purposes of regulation, and are justified,
considering that the sale of intoxicating liquor is, potentially at least, harmful to public
health and morals, and must be subject to supervision or regulation by the state and by
cities and municipalities authorized to act in the premises.
The free exercise and enjoyment of religious profession and worship, without
discrimination or preference, shall forever be allowed (Section 5, Art. II, 1987 Constitution
AMERICAN BIBLE SOCIETY, Petitioner, -versus- CITY OF MANILA, Respondent G.R. No. L-
9637, EN BANC, April 30, 1957, FELIX, J.
The constitutional guaranty of the free exercise and enjoyment of religious profession and
worship carries with it the right to disseminate religious information. Any restraints of such
right can only be justified like other restraints of freedom of expression on the grounds that
there is a clear and present danger of any substantive evil which the State has the right to
prevent".
It may be true that in the case at bar the price asked for the bibles and other religious
pamphlets was in some instances a little bit higher than the actual cost of the same but this
cannot mean that appellant was engaged in the business or occupation of selling said
"merchandise" for profit. For this reason We believe that the provisions of City of Manila
Ordinance No. 2529, as amended, cannot be applied to appellant, for in doing so it would
impair its free exercise and enjoyment of its religious profession and worship as well as its
rights of dissemination of religious beliefs.
TAX EXEMPTION
COMMISSIONER OF INTERNAL REVENUE, petitioner, vs. COURT OF APPEALS, COURT OF
TAX APPEALS and YOUNG MEN'S CHRISTIAN ASSOCIATION OF THE PHILIPPINES, INC.,
respondents. G.R. No. 124043, FIRST DIVISION, October 14, 1998, PANGANIBAN, J.
Taxes are the lifeblood of the nation; the Court has always applied the doctrine of strict
interpretation in construing tax exemptions. Furthermore, a claim of statutory exemption
from taxation should be manifest and unmistakable from the language of the law on which
it is based.
LUNG CENTER OF THE PHILIPPINES, Petitioner, -versus- QUEZON CITY and CONSTANTINO
P. ROSAS, in his capacity as City Assessor of Quezon City, Respondents G.R. No. 144104,
EN BANC, June 29, 2004, CALLEJO, SR., J.
What is meant by actual, direct and exclusive use of the property for charitable purposes is
the direct and immediate and actual application of the property itself to the purposes for
which the charitable institution is organized. It is not the use of the income from the real
property that is determinative of whether the property is used for tax-exempt purposes.
All appropriation, revenue of tariff bills shall originate from the House of Representatives,
but the Senate may propose or concur with amendments (Section 24, Art.VI, 1987
Constitution)
No law granting any tax exemption shall be passed without the concurrence of a majority of
all the members of the Congress (Section 28[4], Art. VI, 1987 Constitution)
The President shall have the power to veto any particular item or items in an appropriation,
revenue, or tariff bill, but the veto shall not affect the item or items to which he does not
object (Section 27[2], Art. VI, 1987 Constitution)
The Congress may, by law, authorize the President to fix within specified limits, and subject
to such limitations and restrictions as it may impose, tariff rates, import and export quotas,
tonnage and wharfage dues, and other duties or imposts within the framework of the
national development program of the Government (Section 28[2], Art. VI, 1987
Constitution)
PEPSI-COLA BOTTLING COMPANY OF THE PHILIPPINES, INC., plaintiff-appellant, vs.
MUNICIPALITY OF TANAUAN, LEYTE, THE MUNICIPAL MAYOR, ET AL., defendant
appellees. G.R. No. L-31156, EN BANC, February 27, 1976, MARTIN, J.
The power of taxation is an essential and inherent attribute of sovereignty, belonging as a
matter of right to every independent government, without being expressly conferred by the
people. It is a power that is purely legislative and which the central legislative body cannot
delegate either to the executive or judicial department of the government without infringing
upon the theory of separation of powers. The exception, however, lies in the case of
municipal corporations, to which, said theory does not apply.
Legislative powers may be delegated to local governments in respect of matters of local
concern. This is sanctioned by immemorial practice. By necessary implication, the legislative
power to create political corporations for purposes of local self-government carries with it
the power to confer on such local governmental agencies the power to tax. Under the New
Constitution, local governments are granted the autonomous authority to create their own
sources of revenue and to levy taxes. Section 5, Article XI provides: "Each local government
unit shall have the power to create its sources of revenue and to levy taxes, subject to such
limitations as may be provided by law." Withal, it cannot be said that Section 2 of Republic
Act No. 2264 emanated from beyond the sphere of the legislative power to enact and vest
in local governments the power of local taxation.

COMMISSIONER OF INTERNAL REVENUE, Petitioner, vs. FORTUNE TOBACCO

CORPORATION, Respondent. G.R. Nos. 167274-75, SECOND DIVISION, July 21, 2008,
TINGA, J.

The power to tax is inherent in the State, such power being inherently legislative, based on
the principle that taxes are a grant of the people who are taxed, and the grant must be
made by the immediate representatives of the people; and where the people have laid the
power, there it must remain and be exercised.

THE CITY GOVERNMENT OF QUEZON CITY, AND THE CITY TREASURER OF QUEZON CITY,
DR. VICTOR B. ENRIGA, Petitioners, vs. BAYAN TELECOMMUNICATIONS, INC., Respondent.
G.R. No. 162015, SECOND DIVISION, March 6, 2006, GARCIA,J.

The power to tax is primarily vested in the Congress; however, in our jurisdiction, it may be
exercised by local legislative bodies, no longer merely be virtue of a valid delegation as
before, but pursuant to direct authority conferred by Section 5, Article X of the Constitution.
Under the latter, the exercise of the power may be subject to such guidelines and limitations
as the Congress may provide which, however, must be consistent with the basic policy of
local autonomy.