Abakada Guro Partylist vs Ermita

R.A. No. 9337 Does Not Violate Article VI, Section 24 of the Constitution on Exclusive Origination of Revenue Bills
Sec. 24. All appropriation, revenue or tariff bills, bills authorizing increase of the public debt, bills of local application, and
private bills shall originate exclusively in the House of Representatives but the Senate may propose or concur with
amendments.
it is not the law but the revenue bill which is required by the Constitution to "originate exclusively" in the House of
Representatives. It is important to emphasize this, because a bill originating in the House may undergo such extensive
changes in the Senate that the result may be a rewriting of the whole. . . . At this point, what is important to note is that, as
a result of the Senate action, a distinct bill may be produced. To insist that a revenue statute and not only the bill
which initiated the legislative process culminating in the enactment of the law must substantially be the same
as the House bill would be to deny the Senates power not only to "concur with amendments" but also to
"propose amendments." It would be to violate the coequality of legislative power of the two houses of Congress and in
fact make the House superior to the Senate.
No Undue Delegation of Legislative Power
there must be a showing that the delegation itself is valid. It is valid only if the law (a) is complete in itself, setting forth
therein the policy to be executed, carried out, or implemented by the delegate; 41 and (b) fixes a standard the limits of
which are sufficiently determinate and determinable to which the delegate must conform in the performance of his
functions.42 A sufficient standard is one which defines legislative policy, marks its limits, maps out its boundaries and
specifies the public agency to apply it. It indicates the circumstances under which the legislative command is to be
effected.43 Both tests are intended to prevent a total transference of legislative authority to the delegate, who is not
allowed to step into the shoes of the legislature and exercise a power essentially legislative. 44
A distinction has rightfully been made between delegation of power to make the laws which necessarily involves
a discretion as to what it shall be, which constitutionally may not be done, and delegation of authority or
discretion as to its execution to be exercised under and in pursuance of the law, to which no valid objection can
be made/
Clearly, the legislature may delegate to executive officers or bodies the power to determine certain facts or conditions, or
the happening of contingencies, on which the operation of a statute is, by its terms, made to depend, but the legislature
must prescribe sufficient standards, policies or limitations on their authority
The case before the Court is not a delegation of legislative power. It is simply a delegation of ascertainment of facts upon
which enforcement and administration of the increase rate under the law is contingent. The legislature has made the
operation of the 12% rate effective January 1, 2006, contingent upon a specified fact or condition. It leaves the entire
operation or non-operation of the 12% rate upon factual matters outside of the control of the executive.
No discretion would be exercised by the President. Highlighting the absence of discretion is the fact that the word shall is
used in the common proviso. The use of the word shall connotes a mandatory order. Its use in a statute denotes an
imperative obligation and is inconsistent with the idea of discretion. 53 Where the law is clear and unambiguous, it must be
taken to mean exactly what it says, and courts have no choice but to see to it that the mandate is obeyed

Bagatsing vs Ramirez
There is no question that the Revised Charter of the City of Manila is a special act since it relates only to the City of
Manila, whereas the Local Tax Code is a general law because it applies universally to all local governments. Blackstone
defines general law as a universal rule affecting the entire community and special law as one relating to particular persons
or things of a class. 1 And the rule commonly said is that a prior special law is not ordinarily repealed by a subsequent
general law. In regard, therefore, to ordinances in general, the Revised Charter of the City of Manila is doubtless
dominant, but, that dominant force loses its continuity when it approaches the realm of "ordinances levying or imposing
taxes, fees or other charges" in particular. There, the Local Tax Code controls. Here, as always, a general provision must
give way to a particular provision. 3 Special provision governs. a charter must yield to the constitution and general laws of

the state, it is to have read into it that general law which governs the municipal corporation and which the corporation
cannot set aside but to which it must yield. When a city adopts a charter, it in effect adopts as part of its charter general
law of such character.

British America Tobacco

"at any rate, it is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been
repeatedly held that 'inequalities which result from a singling out of one particular class for taxation, or exemption infringe
no constitutional limitation.
Further, it does not necessarily follow that newer brands cannot compete against older brands because price is not the
only factor in the market as there are other factors like consumer preference, brand loyalty, etc. In other words, even if the
newer brands are priced higher due to the differential tax treatment, it does not mean that they cannot compete in the
market especially since cigarettes contain addictive ingredients so that a consumer may be willing to pay a higher price for
a particular brand solely due to its unique formulation

Diaz vs Secretary of Finance

Petitioners argue that a toll fee is a "users tax" and to impose VAT on toll fees is tantamount to taxing a tax.
The charging of fees to the public does not determine the character of the property whether it is for public dominion or not.
Article 420 of the Civil Code defines property of public dominion as "one intended for public use." Even if the government
collects toll fees, the road is still "intended for public use" if anyone can use the road under the same terms and conditions
as the rest of the public. The charging of fees, the limitation on the kind of vehicles that can use the road, the speed
restrictions and other conditions for the use of the road do not affect the public character of the road.
The collection of such fees does not change the character of MIAA as an airport for public use. Such fees are often
termed users tax. This means taxing those among the public who actually use a public facility instead of taxing all the
public including those who never use the particular public facility. A users tax is more equitable a principle of taxation
mandated in the 1987 Constitution
Tollway fees are not taxes. Indeed, they are not assessed and collected by the BIR and do not go to the general coffers of
the government. What the government seeks to tax here are fees collected from tollways that are constructed,
maintained, and operated by private tollway operators at their own expense under the build, operate, and transfer scheme
that the government has adopted for expressways. In sum, fees paid by the public to tollway operators for use of the
tollways, are not taxes in any sense. A tax is imposed under the taxing power of the government principally for the
purpose of raising revenues to fund public expenditures
Consequently, VAT on tollway operations is not really a tax on the tollway user, but on the tollway operator. Under Section
105 of the Code, 31 VAT is imposed on any person who, in the course of trade or business, sells or renders services for a
fee. In other words, the seller of services, who in this case is the tollway operator, is the person liable for VAT. The latter
merely shifts the burden of VAT to the tollway user as part of the toll fees.

Domingo vs Garlitos
the Court orders that the payment of inheritance taxes in the sum of P40,058.55 due the Collector of Internal Revenue as
ordered paid by this Court on July 5, 1960 in accordance with the order of the Supreme Court promulgated July 30, 1960
in G.R. No. L-14674, be deducted from the amount of P262,200.00 due and payable to the Administratrix Simeona K.
Price, in this estate, the balance to be paid by the Government to her without further delay.
claim of the estate against the Government has been recognized and an amount of P262,200 has already been
appropriated for the purpose by a corresponding law (Rep. Act No. 2700). Under the above circumstances, both the claim
of the Government for inheritance taxes and the claim of the intestate for services rendered have already become
overdue and demandable is well as fully liquidated. Compensation, therefore, takes place by operation of law, in
accordance with the provisions of Articles 1279 and 1290 of the Civil Code, and both debts are extinguished to the
concurrent amount, thus:

ART. 1200. When all the requisites mentioned in article 1279 are present, compensation takes effect by operation of law,
and extinguished both debts to the concurrent amount, eventhough the creditors and debtors are not aware of the
compensation.

Francia vs IAC
By legal compensation, obligations of persons, who in their own right are reciprocally debtors and creditors of each other,
are extinguished (Art. 1278, Civil Code). The circumstances of the case do not satisfy the requirements provided by Article
1279, to wit:
(1) that each one of the obligors be bound principally and that he be at the same time a principal creditor of the other;
xxx xxx xxx
(3) that the two debts be due.
We have consistently ruled that there can be no off-setting of taxes against the claims that the taxpayer may have against
the government. A person cannot refuse to pay a tax on the ground that the government owes him an amount equal to or
greater than the tax being collected. The collection of a tax cannot await the results of a lawsuit against the government.
A claim for taxes is not such a debt, demand, contract or judgment as is allowed to be set-off under the statutes of set-off,
which are construed uniformly, in the light of public policy, to exclude the remedy in an action or any indebtedness of the
state or municipality to one who is liable to the state or municipality for taxes. Neither are they a proper subject of
recoupment since they do not arise out of the contract or transaction sued on. ... (80 C.J.S., 7374). "The general rule
based on grounds of public policy is well-settled that no set-off admissible against demands for taxes levied for general or
local governmental purposes. The reason on which the general rule is based, is that taxes are not in the nature of
contracts between the party and party but grow out of duty to, and are the positive acts of the government to the making
and enforcing of which, the personal consent of individual taxpayers is not required.

Gerochi, et al Department of Energy

SECTION 5. The Supreme Court shall have the following powers:
1. Exercise original jurisdiction over cases affecting ambassadors, other public ministers and consuls, and over petitions
for certiorari, prohibition, mandamus, quo warranto, and habeas corpus.
2. Review, revise, reverse, modify, or affirm on appeal or certiorari, as the law or the rules of court may provide, final
judgments and orders of lower courts in:
(a) All cases in which the constitutionality or validity of any treaty, international or executive agreement, law, presidential
decree, proclamation, order, instruction, ordinance, or regulation is in question.
police power is the power of the state to promote public welfare by restraining and regulating the use of liberty and
property.33 It is the most pervasive, the least limitable, and the most demanding of the three fundamental powers of the
State. The justification is found in the Latin maxims salus populi est suprema lex (the welfare of the people is the supreme
law) and sic utere tuo ut alienum non laedas (so use your property as not to injure the property of others). As an inherent
attribute of sovereignty which virtually extends to all public needs, police power grants a wide panoply of instruments
through which the State, as parens patriae, gives effect to a host of its regulatory powers.34 We have held that the power
to "regulate" means the power to protect, foster, promote, preserve, and control, with due regard for the interests, first and
foremost, of the public, then of the utility and of its patrons.
The conservative and pivotal distinction between these two powers rests in the purpose for which the charge is made. If
generation 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 revenue is incidentally raised does not make the imposition a tax.

it can be gleaned that the assailed Universal Charge is not a tax, but an exaction in the exercise of the State's police
power. Public welfare is surely promoted.
Moreover, it is a well-established doctrine that the taxing power may be used as an implement of police power. All that is
required for the valid exercise of this power of subordinate legislation is that the regulation be germane to the objects and
purposes of the law and that the regulation be not in contradiction to, but in conformity with, the standards prescribed by
the law. These requirements are denominated as the completeness test and the sufficient standard test.
Under the first test, the law must be complete in all its terms and conditions when it leaves the legislature such that when
it reaches the delegate, the only thing he will have to do is to enforce it. The second test mandates adequate guidelines or
limitations in the law to determine the boundaries of the delegate's authority and prevent the delegation from running riot.
The Court finds that the EPIRA, read and appreciated in its entirety, in relation to Sec. 34 thereof, is complete in all its
essential terms and conditions, and that it contains sufficient standards. As to the second test, this Court had, in the past,
accepted as sufficient standards the following: "interest of law and order;" 51 "adequate and efficient instruction;"52 "public
interest;"53 "justice
and
equity;"54 "public
convenience
and
welfare;"55 "simplicity,
economy
and
56
57
efficiency;" "standardization and regulation of medical education;" and "fair and equitable employment
practices."58 Provisions of the EPIRA such as, among others, "to ensure the total electrification of the country and the
quality, reliability, security and affordability of the supply of electric power" 59 and "watershed rehabilitation and
management"60 meet the requirements for valid delegation, as they provide the limitations on the ERCs power to
formulate the IRR. These are sufficient standards.

Gomez vs Palomar
While the principle that there must be a reasonable relationship between classification made by the legislation and its
purpose is undoubtedly true in some contexts, it has no application to a measure whose sole purpose is to raise
revenue ... So long as the classification imposed is based upon some standard capable of reasonable comprehension, be
that standard based upon ability to produce revenue or some other legitimate distinction, equal protection of the law has
been afforded. The classification is likewise based on considerations of administrative convenience. For it is now a settled
principle of law that "consideration of practical administrative convenience and cost in the administration of tax laws afford
adequate ground for imposing a tax on a well recognized and defined class." 9 In the case of the anti-TB stamps,
undoubtedly, the single most important and influential consideration that led the legislature to select mail users as subjects
of the tax is the relative ease and convenienceof collecting the tax through the post offices.
The eradication of a dreaded disease is a public purpose, but if by public purpose the petitioner means benefit to a
taxpayer as a return for what he pays, then it is sufficient answer to say that the only benefit to which the taxpayer is
constitutionally entitled is that derived from his enjoyment of the privileges of living in an organized society, established
and safeguarded by the devotion of taxes to public purposes. Any other view would preclude the levying of taxes except
as they are used to compensate for the burden on those who pay them and would involve the abandonment of the most
fundamental principle of government that it exists primarily to provide for the common good.

Lutz vs Araneta
CONSTITUTIONAL LAW; TAXATION; POWER OF STATE TO LEVY TAX IN AND SUPPORT OF SUGAR INDUSTRY.
As the protection and promotion of the sugar industry is a matter of public concern the Legislature may determine within
reasonable bounds what is necessary for its protection and expedient for its promotion. Here, the legislative must be
allowed full play, subject only to the test of reasonableness; and it is not contended that the means provided in section 6 of
Commonwealth Act No. 567 bear no relation to the objective pursued or are oppressive in character. If objective an
methods are alike constitutionally valid, no reason is seen why the state may not levy taxes to raise funds for their
prosecution and attainment. Taxation may be made the implement. Taxation may be made the implement of the states
police power.
It is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been repeatedly held

that "inequalities which result from a singling out of one particular class for taxation or exemption infringe no constitutional
limitation.
This Court can take judicial notice of the fact that sugar production in one of the great industries of our nation, sugar
occupying a leading position among its export products; that it gives employment to thousands of laborers in fields and
factories; that it is a great source of the states wealth, is one of the important sources of foreign exchange needed by our
government, and is thus pivotal in the plans of a regime committed to a policy of currency stability. Its promotion,
protection and advancement, therefore redounds greatly to the general welfare. Hence it was competent for the legislature
to find that the general welfare demanded that the sugar industry should be stabilized in turn; and in the wide field of its
police power, the law-making body could provide that the distribution of benefits therefrom be readjusted among its
components to enable it to resist the added strain of the increase in taxes that it had to sustain. The protection of a large
industry constituting one of the great sources of the states wealth and therefore directly or indirectly affecting the welfare
of so great a portion of the population of the State is affected to such an extent by public interests as to be within the
police power of the sovereign.
Mactan Cebu International Airport vs City of Lapu-Lapu
From the [1996 MCIAA] ruling, it is acknowledged that, under Section 133 of the LGC, instrumentalities were generally
exempt from all forms of local government taxation, unless otherwise provided in the Code. On the other hand, Section
232 "otherwise provided" insofar as it allowed local government units to levy an ad valorem real property tax, irrespective
of who owned the property. At the same time, the imposition of real property taxes under Section 232 is, in turn, qualified
by the phrase "not hereinafter specifically exempted." The exemptions from real property taxes are enumerated in Section
234 of the Code which specifically states that only real properties owned by the Republic of the Philippines or any of its
political subdivisions are exempted from the payment of the tax. Clearly, instrumentalities or GOCCs do not fall within the
exceptions under Section 234 of the LGC.
The MCIAA and the MIAA are similarly situated. They are both, as will be demonstrated, GOCCs, commonly engaged in
the business of operating an airport. They are the owners of airport properties they respectively maintain and hold title
over these properties in their name. These entities are both owned by the State, and denied by their respective charters
the absolute right to dispose of their properties without prior approval elsewhere. Both of them are not empowered to
obtain loans or encumber their properties without prior approval the prior approval of the President. The petitioner is an
instrumentality of the government; thus, its properties actually, solely and exclusively used for public purposes, consisting
of the airport terminal building, airfield, runway, taxiway and the lots on which they are situated, are not subject to real
property tax and respondent City is not justified in collecting taxes from petitioner over said properties.
MIAA is a government instrumentality vested with corporate powers to perform efficiently its governmental functions. MIAA
is like any other government instrumentality, the only difference is that MIAA is vested with corporate powers. The terminal
fees MIAA charges to passengers, as well as the landing fees MIAA charges to airlines, constitute the bulk of the income
that maintains the operations of MIAA. The collection of such fees does not change the character of MIAA as an airport for
public use. Such fees are often termed users tax. This means taxing those among the public who actually use a public
facility instead of taxing all the public including those who never use the particular public facility. A users tax is more
equitable - a principle of taxation mandated in the 1987 Constitution.
The Airport Lands and Buildings of MIAA x x x are properties of public dominion because they are intended for public use.
As properties of public dominion, they indisputably belong to the State or the Republic of the Philippines. 76 (Emphases
supplied, citations omitted.)
The Court also held in the 2006 MIAA case that airport lands and buildings are outside the commerce of man.
As properties of public dominion, the Airport Lands and Buildings are outside the commerce of man. The Court has ruled
repeatedly that properties of public dominion are outside the commerce of man.

Manila Memorial Park vs Secretary of DSWD

When the law says that the cost of the discount may be claimed as a tax credit, it means that the amount when claimed

 shall be treated as a reduction from any tax liability, plain and simple
Second, the law cannot be amended by a mere regulation. In fact, a regulation that "operates to create a rule out of
harmony with the statute is a mere nullity;" it cannot prevail. It is a cardinal rule that courts "will and should respect the
contemporaneous construction placed upon a statute by the executive officers whose duty it is to enforce it x x x." In the
scheme of judicial tax administration, the need for certainty and predictability in the implementation of tax laws is crucial.
Our tax authorities fill in the details that "Congress may not have the opportunity or competence to provide." The
regulations these authorities issue are relied upon by taxpayers, who are certain that these will be followed by the courts.
In case of conflict, the law must prevail. A "regulation adopted pursuant to law is law." Conversely, a regulation or any
portion thereof not adopted pursuant to law is no law and has neither the force nor the effect of law.
Based on the afore-stated DOF Opinion, the tax deduction scheme does not fully reimburse petitioners for the discount
privilege accorded to senior citizens. This is because the discount is treated as a deduction, a tax-deductible expense that
is subtracted from the gross income and results in a lower taxable income. Stated otherwise, it is an amount that is
allowed by law to reduce the income prior to the application of the tax rate to compute the amount of tax which is due.
Being a tax deduction, the discount does not reduce taxes owed on a peso for peso basis but merely offers a fractional
reduction in taxes owed. Theoretically, the treatment of the discount as a deduction reduces the net income of the private
establishments concerned.
Police power is the inherent power of the State to regulate or to restrain the use of liberty and property for public welfare. 58
The only limitation is that the restriction imposed should be reasonable, not oppressive. 59
In other words, to be a valid exercise of police power, it must have a lawful subject or objective and a lawful method of
accomplishing the goal.60
Under the police power of the State, "property rights of individuals may be subjected to restraints and burdens in order to
fulfill the objectives of the government."61
The State "may interfere with personal liberty, property, lawful businesses and occupations to promote the general welfare
[as long as] the interference [is] reasonable and not arbitrary." 62
Eminent domain, on the other hand, is the inherent power of the State to take or appropriate private property for public
use.63
The Constitution, however, requires that private property shall not be taken without due process of law and the payment of
just compensation.
The 20% senior citizen discount is an exercise of police power.
Thus, we now look at the nature and effects of the 20% discount to determine if it constitutes an exercise of police power
or eminent domain. The 20% discount is intended to improve the welfare of senior citizens who, at their age, are less likely
to be gainfully employed, more prone to illnesses and other disabilities, and, thus, in need of subsidy in purchasing basic
commodities. It may not be amiss to mention also that the discount serves to honor senior citizens who presumably spent
the productive years of their lives on contributing to the development and progress of the nation. This distinct cultural
Filipino practice of honoring the elderly is an integral part of this law. As to its nature and effects, the 20% discount is a
regulation affecting the ability of private establishments to price their products and services relative to a special class of
individuals, senior citizens, for which the Constitution affords preferential concern. The 20 percent discount required by the
law to be given to senior citizens is a tax credit, not merely a tax deduction from the gross income or gross sale of the
establishment concerned. A tax credit is used by a private establishment only after the tax has been computed; a tax
deduction, before the tax is computed. RA 7432 unconditionally grants a tax credit to all covered entities. Thus, the
provisions of the revenue regulation that withdraw or modify such grant are void. Basic is the rule that administrative
regulations cannot amend or revoke the law.

Planters Products vs Fertiphil Corporation

there are two kinds of limitations on the power of taxation: the inherent limitations and the constitutional limitations.

One of the inherent limitations is that a tax may be levied only for public purposes:
The power to tax can be resorted to only for a constitutionally valid public purpose. By the same token, taxes may not be
levied for purely private purposes, for building up of private fortunes, or for the redress of private wrongs. They cannot be
levied for the improvement of private property, or for the benefit, and promotion of private enterprises, except where the
aid is incident to the public benefit. It is well-settled principle of constitutional law that no general tax can be levied except
for the purpose of raising money which is to be expended for public use. Tested by the standards of constitutionality as set
forth in the afore-quoted jurisprudence, it is quite evident that LOI 1465 insofar as it imposes the amount of P10 per
fertilizer bag sold in the country and orders that the said amount should go to the defendant Planters Product, Inc. is
unlawful because it violates the mandate that a tax can be levied only for a public purpose and not to benefit, aid and
promote a private enterprise such as Planters Product, Inc
Vast as the power is, however, it must be exercised within the limits set by the Constitution, which requires the
concurrence of a lawful subject and a lawful method. Thus, our courts have laid down the test to determine the validity of a
police measure as follows: (1) the interests of the public generally, as distinguished from those of a particular class,
requires its exercise; and (2) the means employed are reasonably necessary for the accomplishment of the purpose and
not unduly oppressive upon individuals.
Police power and the power of taxation are inherent powers of the State. These powers are distinct and have different
tests for validity. Police power is the power of the State to enact legislation that may interfere with personal liberty or
property in order to promote the general welfare, 39 while the power of taxation is the power to levy taxes to be used for
public purpose. The main purpose of police power is the regulation of a behavior or conduct, while taxation is revenue
generation. The "lawful subjects" and "lawful means" tests are used to determine the validity of a law enacted under the
police power.40 The power of taxation, on the other hand, is circumscribed by inherent and constitutional limitations.

Sison vs. Ancheta

Now for equal protection. The applicable standard to avoid the charge that there is a denial of this constitutional mandate
whether the assailed act is in the exercise of the lice power or the power of eminent domain is to demonstrated that the
governmental act assailed, far from being inspired by the attainment of the common weal was prompted by the 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. Favoritism and undue preference
cannot be allowed
, it is inherent in the power to tax that a state be free to select the subjects of taxation, and it has been repeatedly held that
'inequalities which result from a singling out of one particular class for taxation, or exemption infringe no constitutional
limitation
"The rule of uniformity does not call for perfect uniformity or perfect equality, because this is hardly attainable.

Tio vs Videogram Regulatory Board

2

An act having a single general subject, indicated in the title, may contain any number of provisions, no matter how
diverse they may be, so long as they are not inconsistent with or foreign to the general subject, and may be considered in
furtherance of such subject by providing for the method and means of carrying out the general object."
The public purpose of a tax may legally exist even if the motive which impelled the legislature to impose the tax was to
favor one industry over another. 11
The grant in Section 11 of the DECREE of authority to the BOARD to "solicit the direct assistance of other agencies and
units of the government and deputize, for a fixed and limited period, the heads or personnel of such agencies and units to
perform enforcement functions for the Board" is not a delegation of the power to legislate but merely a conferment of
authority or discretion as to its execution, enforcement, and implementation. "The true distinction is between the
delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring
authority or discretion as to its execution to be exercised under and in pursuance of the law. The first cannot be done; to
the latter, no valid objection can be made

Tolentino vs Secretary of Finance

Indeed, what the Constitution simply means is that the initiative for filing revenue, tariff, or tax bills, bills authorizing an
increase of the public debt, private bills and bills of local application must come from the House of Representatives on the
theory that, elected as they are from the districts, the members of the House can be expected to be more sensitive to the
local needs and problems
What Congress is required by the Constitution to do is to "evolve a progressive system of taxation." This is a directive to
Congress, just like the directive to it to give priority to the enactment of laws for the enhancement of human dignity and
the reduction of social, economic and political inequalities (Art. XIII, 1), or for the promotion of the right to "quality
education" (Art. XIV, 1). These provisions are put in the Constitution as moral incentives to legislation, not as judicially
enforceable rights.