Compilation of Case Digests

PART I. General Principles of Taxation

I.

Meaning, Nature, Basis, Characteristics and Purpose of Taxation

A. Meaning of Tax/Taxation
1. Taxation/ act of levying tax/inherent power of the state
2. Tax distinguished from other terms
a. License and regulatory fee
b. Special assessment
c. Toll
d. Penalty
e. Tariff/customs duties
3. Obligation to pay tax vs. Obligation to pay debt
Article 1279, New Civil Code of the Philippines
Cases: Philex Mining v. CIR (GR 125704,August 28, 1998)
Atlas Consolidated v. CTA (CA-GR Sp No. 45436,
Feb.18, 2002)
Exception: Domingo v. Garlitos (8 SCRA 443)
B. Essential Characteristics of Tax
C. Theory and Basis of Taxation
1. Necessity Theory
Cases: Commisioner v. Algue (158 SCRA 9)
NPC v City of Cabanatuan
2. Benefit-Received Principle
Case: Lorenzo v Posadas
D. Purpose/Objectives of Taxation
1. General/Fiscal/Revenue
Cases: Commisioner v. Algue (158 SCRA 9)
PAL v. Edu (164 SCRA 320)
Tolentino v. Secretary of Finance (235 SCRA 630, 249
SCRA 628)
2. Non-revenue / Special or Regulatory
Cases: Osmea v. Orbos (220 SCRA 703)
Caltex v. Commission on Audit
Esso Standard Eastern v Commisioner
E. Survey of Philippine Taxes/Overview of the Philippine Tax
System/Administration
1. Internal Revenue Taxes (NIRC)
2. Local/Municipal Taxes (LGC)
3. Tariff and Duties (TCC)

4. Taxes/Tax Incentives under Special Laws

F. Classification of Taxes
1. As to Scope
a. National Taxes
b. Local Taxes
2. As to who shoulders the burden of the tax
a. Direct Taxes
b. Indirect Taxes
Sec. 105 NIRC
Cases: Tolentino v Sec of Finance
Maceda v Macaraig
Commissioner v. Gotamco
Silkair (Singapore) PTE, LTD., v. Commissioner of
Internal Revenue
3. As to the object of Subject matter of the tax
a. Property
b. Personal
c. Poll / Capitation
d. Excise
Cases: Commissioner v. CA
Villanueva v. City of Iloilo
4. As to the manner of computing the tax
a. Ad Valorem
b. Specific
5. As to the graduation or Rate
a. Proportional / Flat Rate
Sec. 105 NIRC
Case: Allied Banking v. The Quezon City Government
b. Progressive
Sec. 105 (a)(2), NIRC
c. Regressive
6. As to purpose
Case: Chevron Phils. Inc. et al. v. BCDA
G. Aspects of Taxation
1. Levy/ Imposition by the Legislative Body
2. Collection / Administration/ ways and Methods of Collection
Case: CIR v Kudos Metal Corp.
H. Tax Systems
1. Classification
a. Progressive/Regressive System of Taxation
b. Progressive System v. Progressive Rate of Tax
Case: Tolentino v Sec of Finance
2. Basic Principles of a sound tax system/meaning of neutral tax

Cases: Chavez v Ongpin

Taganito Mining Corp v Commissioner
II.

Nature and Limitations of the power of Taxation

A. Nature of the Power of Taxation
1. Inherent in Sovereignty/Distinguished form Police Power and
Eminent Domain
Cases: Roxas v. CTA
Taada v Angara
Land Transportation Office v City of Butuan
2. Exclusively Legislative in Nature
a. Extent of the Legislative Power to Tax
Cases: Tan v. Del Rosario
Commissioner v Santos
b. Cannot be delegated
Cases: Maceda v ERB
Maceda v Macaraig
Basco v PAGCOR
3. Subject to inherent and constitutional limitations
4. Who may question the validity of a tax measure or expenditure of
taxes taxpayers suit\
Cases: Lozada v Commissioner
Maceda v Macaraig
Chavez v PCGG
Gonzales v Narvasa
BAYAN v Executive Secretary
Del Mar v PAGCOR
Miranda v Carreon
B. Inherent Limitations
1. Purpose must be public in nature
Cases: Caltex v Commission on Audit
Pascual v Sec. of Public Works
Tio Videogram Regulatory Board
Gaston v Republic Planter
2. Prohibition against delegation of taxing power/ exceptions
a. Delegation to local governments
Sec. 5 Art X, Constitution
Local Government Code RA7160 Book II
Cases: Basco v. PAGCOR
LTO v City of Butuan
b. Delegation to the President
Sec 28 Art VI Constitution
Sec 401, Tariff and Customs Code
Cases: Garcia v Executive Secretary

c. Delegation to administrative Agencies

Cases: Osmea v Orbos
Commissioner v CA
3. Exemption of government entities/agencies and instrumentality
Sec27 (c)NIRC
RA 9679 HDMF Law of 2009
EO 93 and PD 1931
Cases: Maceda v Macaraig
Mactan Cebu Airport v Marcos
4. International Comity
Cases: Ta