PURPOSE / OBJECTIVES OF TAXATION General/Fiscal/Revenue PHILIPPINE COCONUT PRODUCERS FEDERATION, INC. (COCOFED), MANUEL V. DEL ROSARIO, DOMINGO P.

ESPINA, SALVADOR P. BALLARES, JOSELITO A. MORALEDA, PAZ M. YASON, VICENTE A. CADIZ, CESARIA DE LUNA TITULAR, and RAYMUNDO C. DE VILLA, Petitioners, -versusREPUBLIC OF THE PHILIPPINES, Respondent. DANILO S. URSUA, Petitioner, -versus- REPUBLIC OF THE PHILIPPINES, Respondent. G.R. No. 177857-58, January 24, 2012 FACTS: Coconut Investment Fund was created under Republic Act No. 6260 in 1971. The source of the said fund was a Php 0.55 levy, Php 0.02 was placed at the disposition of the COCOFED, the recognized national association of coconut producers declared by the PCA. Cocofund receipts were ought to be issued to every copra seller. By virtue of P.D. No. 755 which permitted the use of the fund for the acquisition of a commercial bank for the benefit of coconut farmers and the distribution of the shares of the stock of the bank it [PCA] acquired free to the coconut farmers (Sec.2). The PCA bought the 72.2% of FUBs outstanding capital stock from Pedro Cojuangco in behalf of the coconut farmers and the rest of the fund was deposited to the UCPB interest free.Thus it PCA acquired First United Bank, which later named United Coconut Planters Bank UCPB). This shares of stock was later become subject of sequestration, which was allowed by the Sandiganbayan by ruling in a Partial Summary Judgment 755 were unconstitutional. Hence this Petition. ISSUE/S WHETHER OR NOT THE COCONUT LEVY FUND PARTAKES THE NATURE OF TAXES. WHAT IS THE PORPOSE OF THE COCONUT LEVY FUND? that the Coconut Levy Funds are prima facie public funds and that Section 1 and 2 of PD No.

RULING: The funds were generated by virtue of statutory enactments by the proper legislative authorities and for public purpose. Coconut Levy was imposed in the exercise of the States inherent power of taxation. Thus, it partakes the nature of taxes. Thus, the SC cannot allow the conversion of special funds into a private fund for the benefit of private individuals. Under Article VI, Section 29 (3), All money collected on any tax levied for a special purpose shall be treated as a special fund and paid out for such purpose only. If the purpose for which a special fund was created has been fulfilled or abandoned, the balance, if any, shall be transferred to the general funds of the Government. Supreme Court held that the coconut industry is one of the great economic pillars of our nation, and coconuts and their by products occupy a leading position among the countries export products. Taxation is done not merely to raise revenues to support the government, but also to provide means for the rehabilitation and the stabilization of a threatened industry, which is so affected with public interest. Fund in particular was created for the protection of the entire coconut industry, and more importantly for the consuming public.