Beruflich Dokumente
Kultur Dokumente
Issue: Whether or not funds of the Municipality of Makati are exempt from
garnishment and levy upon execution.
Held: It is petitioner's main contention that the orders of respondent RTC judge
involved the net amount of P4,965,506.45, wherein the funds garnished by
respondent sheriff are in excess of P99,743.94, which are public fund and thereby
are exempted from execution without the proper appropriation required under the
law. There is merit in this contention. In this jurisdiction, well-settled is the rule that
public funds are not subject to levy and execution, unless otherwise provided for by
statute. Municipal revenues derived from taxes, licenses and market fees, and
which are intended primarily and exclusively for the purpose of financing the
governmental activities and functions of the municipality, are exempt from
execution. Absent a showing that the municipal council of Makati has passed an
ordinance appropriating the said amount from its public funds deposited in their
PNB account, no levy under execution may be validly effected. However, this court
orders petitioner to pay for the said land which has been in their use already. This
Court will not condone petitioner's blatant refusal to settle its legal obligation arising
from expropriation of land they are already enjoying. The State's power of eminent
domain should be exercised within the bounds of fair play and justice.
ISSUE:
Whether or not the Collector of Internal Revenue correctly disallowed the
P75,000.00 deduction claimed by private respondent Algue as legitimate business
expenses in its income tax returns.
RULING:
The Supreme Court agrees with the respondent court that the amount of the
promotional fees was not excessive. The amount of P75,000.00 was 60% of the total
commission. This was a reasonable proportion, considering that it was the payees
who did practically everything, from the formation of the Vegetable Oil Investment
Corporation to the actual purchase by it of the Sugar Estate properties. 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.
Facts: BPI claims for a tax refund of P112,491. As appearing in its 1989 ITR, BPI has
a total of P297,492 refundable taxes. BPI declared in its 1989 ITR that it would apply
the excess withholding tax as a tax credit for the year 1990. Subsequently,
however, BPI claimed for a tax refund since in the year 1990 it suffered losses, thus,
could not have applied said amount as tax credit. The CIR and CTA denied this on
the ground that BPI failed to show its 1990 ITR which would show that the amount
claimed was not applied as a tax credit.
Facts: Tokyo shipping is a foreign corporation which owns and operates a vessel. The
vessel was chartered by a certain Nasutra to load raw sugar in the Phil thru its
representative. Thus, Tokyo Shippings representative made a pre-payment of the
required income and common carriers taxes. Upon arrival at the port, the vessel
found no sugar for loading, thus, claimed for a tax refund. The CIR failed to act
promptly, thus, respondent went to CTA which decided in their favor. The CIR claims
otherwise.
Issue: WON the interest income from the loans extended to Atlas by Mitsubishi is
excludible from gross income taxation.
Held: NO. Mitsubishi secured the loan from Eximbank in its own independent
capacity as a private entity and not as a conduit of Eximbank. Therefore, what the
subject of the 15% withholding tax is not the interest income paid by Mitsubishi to
Eximbank, but the interest income earned by Mitsubishi from the loan to Atlas.
Thus, it does not come within the ambit of Section 29(b)(7)(A), and it is not exempt
from the payment of taxes.
Notes: Findings of fact of the Court of Tax Appeals are entitled to the highest respect
and can only be disturbed on appeal if they are not supported by substantial
evidence or if there is a showing of gross error or abuse on the part of the tax court.
Laws granting exemption from tax are construed strictissimi juris against the
taxpayer and liberally in favor of the taxing power. Taxation is the rule and
exemption is the exception.
ISSUE: Is the contention of the petitioner correct? Is the revenue circular a valid
exemption to the NIRC?
HELD: No. The relaxation of revenue regulations by RMC 7-85 is not warranted as it
disregards the two-year prescriptive period set by law. Basic is the principle that
"taxes are the lifeblood of the nation." The primary purpose is to generate funds for
the State to finance the needs of the citizenry and to advance the common weal.
Due process of law under the Constitution does not require judicial proceedings in
tax cases. This must necessarily be so because it is upon taxation that the
government chiefly relies to obtain the means to carry on its operations and it is of
utmost importance that the modes adopted to enforce the collection of taxes levied
should be summary and interfered with as little as possible.
From the same perspective, claims for refund or tax credit should be exercised
within the time fixed by law because the BIR being an administrative body enforced
to collect taxes, its functions should not be unduly delayed or hampered by
incidental matters.
Sison vs Ancheta
Facts: Batas Pambansa 135 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.
Held: 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.
REYES v. ALMANZOR
GR Nos. L-49839-46, April 26, 1991
196 SCRA 322
FACTS: Petitioners JBL Reyes et al. owned a parcel of land in Tondo which are leased
and occupied as dwelling units by tenants who were paying monthly rentals of not
exceeding P300. Sometimes in 1971 the Rental Freezing Law was passed prohibiting
for one year from its effectivity, an increase in monthly rentals of dwelling units
where rentals do not exceed three hundred pesos (P300.00), so that the Reyeses
were precluded from raising the rents and from ejecting the tenants. In 1973,
respondent City Assessor of Manila re-classified and reassessed the value of the
subject properties based on the schedule of market values, which entailed an
increase in the corresponding tax rates prompting petitioners to file a Memorandum
of Disagreement averring that the reassessments made were "excessive,
unwarranted, inequitable, confiscatory and unconstitutional" considering that the
taxes imposed upon them greatly exceeded the annual income derived from their
properties. They argued that the income approach should have been used in
determining the land values instead of the comparable sales approach which the
City Assessor adopted.
ISSUE: Is the approach on tax assessment used by the City Assessor reasonable?
HELD: No. The taxing power has the authority to make a reasonable and natural
classification for purposes of taxation but the government's act must not be
prompted by a spirit of hostility, or at the very least discrimination that finds no
support in reason. It suffices then that the laws operate equally and uniformly on all
persons under similar circumstances or that all persons must be treated in the same
manner, the conditions not being different both in the privileges conferred and the
liabilities imposed.
Consequently, it stands to reason that petitioners who are burdened by the
government by its Rental Freezing Laws (then R.A. No. 6359 and P.D. 20) under the
principle of social justice should not now be penalized by the same government by
the imposition of excessive taxes petitioners can ill afford and eventually result in
the forfeiture of their properties.
FACTS: The Value-Added Tax [VAT] is levied on the sale, barter or exchange of
goods and properties as well as on the sale or exchange of services. It is equivalent
to 10% of the gross selling price or gross value in money of goods or properties
sold, bartered or exchanged or of the gross receipts from the sale or exchange of
services. Republic Act No. 7716 seeks to widen the tax base of the existing VAT
system and enhance its administration by amending the National Internal Revenue
Code.
These are various suits for certiorari and prohibition challenging the constitutionality
of RA 7716:
In the case at bar, PAL attacks the formal validity of Republic Act No. 7716. PAL
contends that it violates Art. VI, Section 26[1] which provides that "Every bill passed
by Congress shall embrace only one subject which shall be expressed in the title
thereof." It is contended that neither H. No. 11197 nor S. No. 1630 provided for
removal of exemption of PAL transactions from the payment of the VAT and that this
was made only in the Conference Committee bill which became Republic Act No.
7716 without reflecting this fact in its title.
The title of Republic Act No. 7716 is:
AN ACT RESTRUCTURING THE VALUE-ADDED TAX [VAT] SYSTEM, WIDENING ITS TAX
BASE AND ENHANCING ITS ADMINISTRATION, AND FOR THESE PURPOSES
AMENDING AND REPEALING THE RELEVANT PROVISIONS OF THE NATIONAL
INTERNAL REVENUE CODE, AS AMENDED, AND FOR OTHER PURPOSES.
Furthermore, section 103 of RA 7716 states the following:
Section 103. Exempt Transactions.- The following shall be exempt from the valueadded tax:
[q] Transactions which are exempt under special laws, except those granted under
Presidential Decree Nos. 66, 529, 972, 1491, 1590.
The effect of the amendment is to remove the exemption granted to PAL, as far as
the VAT is concerned.
Philippine Airlines [PAL] claims that its franchise under P.D. No. 1590 which makes it
liable for a franchise tax of only 2% of gross revenues "in lieu of all the other fees
and charges of any kind, nature or description, imposed, levied, established,
assessed or collected by any municipal, city, provincial, or national authority or
government agency, now or in the future," cannot be amended by Rep. Act No.
7716 as to make it [PAL] liable for a 10% value-added tax on revenues, because
Sec. 24 of P.D. No. 1590 provides that PAL's franchise can only be amended,
modified or repealed by a special law specifically for that purpose.
ISSUE: Whether or not this amendment of Section 103 of the NIRC is fairly
embraced in the title of Republic Act No. 7716, although no mention is made therein
of P. D. No. 1590
HELD: The court ruled in in the affirmative. The title states that the purpose of the
statute is to expand the VAT system, and one way of doing this is to widen its base
by withdrawing some of the exemptions granted before. To insist that P. D. No. 1590
be mentioned in the title of the law, in addition to Section 103 of the NIRC, in which
it is specifically referred to, would be to insist that the title of a bill should be a
complete index of its content.
The constitutional requirement that every bill passed by Congress shall embrace
only one subject which shall be expressed in its title is intended to prevent surprise
upon the members of Congress and to inform the people of pending legislation so
that, if they wish to, they can be heard regarding it. If, in the case at bar, petitioner
did not know before that its exemption had been withdrawn, it is not because of any
defect in the title but perhaps for the same reason other statutes, although
published, pass unnoticed until some event somehow calls attention to their
existence.
Republic Act No. 7716 expressly amends PAL's franchise [P. D. No. 1590] by
specifically excepting from the grant of exemptions from the VAT PAL's exemption
under P. D. No. 1590. This is within the power of Congress to do under Art. XII,
Section 11 of the Constitution, which provides that the grant of a franchise for the
operation of a public utility is subject to amendment, alteration or repeal by
Congress when the common good so requires.