Professional Documents
Culture Documents
FACTS:
Before R.A. No. 9337 took effect, petitioners ABAKADA GURO Party List, et
al., filed a petition for prohibition on May 27, 2005 questioning the
constitutionality of Sections 4, 5 and 6 of R.A. No. 9337, amending Sections
106, 107 and 108, respectively, of the National Internal Revenue Code (NIRC).
Section 4 imposes a 10% VAT on sale of goods and properties, Section 5
imposes a 10% VAT on importation of goods, and Section 6 imposes a 10% VAT on
sale of services and use or lease of properties. These questioned provisions
contain a uniformp ro v is o authorizing the President, upon recommendation
of the Secretary of Finance, to raise the VAT rate to 12%, effective January
1, 2006, after specified conditions have been satisfied. Petitioners argue
that the law is unconstitutional.
ISSUES:
RULING:
3. The power of the State to make reasonable and natural classifications for
the purposes of taxation has long been established. Whether it relates to the
subject of taxation, the kind of property, the rates to be levied, or the
amounts to be raised, the methods of assessment, valuation and collection,
the States power is entitled to presumption of validity. As a rule, the
judiciary will not interfere with such power absent a clear showing of
unreasonableness, discrimination, or arbitrariness.
Tan vs. Del Rosario
Facts:
Issue:
Is the contention meritorious?
Ruling:
Issue:
Whether or not RA 7496 violates the aforestated provision of the constitution
Held:
The SC ruled in the negative. The said law is not arbitrary; it is germane to
the purpose of the law and; applies to all things of equal conditions and of
same class.
It is neither violative of equal protection clause due to the existence of
substantial difference between one who practice his profession alone and one
who is engaged to proprietorship. Further, the SC said that RA 7496 is just
an amendatory provision of the code of taxpayers where it classifies
taxpayers in to four main groups: Individuals, Corporations, Estate under
Judicial Settlement and Irrevocable Trust. The court would have appreciated
the contention of the petitioner if RA 7496 was an independent law. But since
it is attached to a law that has already classified taxpayers, there is no
violation of equal protection clause.
CALTEX PHILIPPINES VS CA
G.R. 925585 MAY 8, 1992
FACTS:
In 1989, COA sent a letter to Caltex directing it to remit to OPSF its
collection of the additional tax on petroleum authorized under PD 1956 and
pending such remittance, all of its claims from the OPSF shall be held in
abeyance. Petitioner requested COA for the early release of its reimbursement
certificates from the OPSF covering claims with the Office of Energy Affairs.
COA denied the same.
ISSUE:
Whether or not petitioner can avail of the right to offset any amount that it
may be required under the law to remit to the OPSF against any amount that it
may receive by way of reimbursement.
RULING:
It is a settled rule that a taxpayer may not offset taxes due from the claims
that he may have against the government. Taxes cannot be the subject of
compensation because the government and taxpayer are not mutually debtors and
creditors of each other and a claim for taxes is not such a debt, demand,
contract or judgment as is allowed to be set-off.
The oil companies merely acted as agents for the government in the latters
collection since taxes are passed unto the end-users, the consuming public.
FACTS:
The Philippine Sugar Estate Development Company had earlier appointed Algue
as its agent, authorizing it to sell its land, factories and oil
manufacturing process. Pursuant to such authority, Alberto Guevara, Jr.,
Eduardo Guevara, Isabel Guevara, Edith, O'Farell, and Pablo Sanchez, worked
for the formation of the Vegetable Oil Investment Corporation, inducing other
persons to invest in it. Ultimately, after its incorporation largely through
the promotion of the said persons, this new corporation purchased the PSEDC
properties. For this sale, Algue received as agent a commission of P126,
000.00, and it was from this commission that the P75, 000.00 promotional fees
were paid to the a forenamed individuals.
The petitioner contends that the claimed deduction of P75, 000.00 was
properly disallowed because it was not an ordinary reasonable or necessary
business expense. The Court of Tax Appeals had seen it differently. Agreeing
with Algue, it held that the said amount had been legitimately paid by the
private respondent for actual services rendered. The payment was in the form
of promotional fees.
ISSUE:
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.