Lawyerly

GR No. 163653

2011-07-19

CIR v. FILINVEST DEVELOPMENT CORPORATION

PEREZ, J.

Even if we were, therefore, to accord precipitate credulity to the CIR's bare assertion that FDC had deducted substantial interest expense from its gross income, there would still be no factual basis for the imputation of theoretical interests on the subject advances and assess deficiency income taxes thereon. More so, when it is borne in mind that, pursuant to Article 1956 of the Civil Code of the Philippines, no interest shall be due unless it has been expressly stipulated in writing. Considering that taxes, being burdens, are not to be presumed beyond what the applicable statute expressly and clearly declares, [48] the rule is likewise settled that tax statutes must be construed strictly against the government and liberally in favor of the taxpayer. [49] Accordingly, the general rule of requiring adherence to the letter in construing statutes applies with peculiar strictness to tax laws and the provisions of a taxing act are not to be extended by implication. [50] While it is true that taxes are the lifeblood of the government, it has been held that their assessment and collection should be in accordance with law as any arbitrariness will negate the very reason for government itself. [51]

GR No. 166620

2010-04-20

ATTY. SYLVIA BANDA v. EDUARDO R. ERMITA

LEONARDO-DE CASTRO, J.

Buklod ng Kawaning EIIB v. Zamora,[18] where the Court upheld as valid then President Joseph Estrada's Executive Order No. 191 "deactivating" the Economic Intelligence and Investigation Bureau (EIIB) of the Department of Finance, hewed closely to the reasoning in Larin. The Court, among others, also traced from the General Appropriations Act[19] the President's authority to effect organizational changes in the department or agency under the executive structure, thus: We adhere to the precedent or ruling in Larin that this provision recognizes the authority of the President to effect organizational changes in the department or agency under the executive structure. Such a ruling further finds support in Section 78 of Republic Act No. 8760. Under this law, the heads of departments, bureaus, offices and agencies and other entities in the Executive Branch are directed (a) to conduct a comprehensive review of their respective mandates, missions, objectives, functions, programs, projects, activities and systems and procedures; (b) identify activities which are no longer essential in the delivery of public services and which may be scaled down, phased-out or abolished; and (c) adopt measures that will result in the streamlined organization and improved overall performance of their respective agencies. Section 78 ends up with the mandate that the actual streamlining and productivity improvement in agency organization and operation shall be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President. x x x.[20] (Emphasis ours)

GR No. 186242

2009-12-23

GOVERNMENT SERVICE INSURANCE SYSTEM v. CITY TREASURER

VELASCO JR., J.

In Mactan Cebu International Airport Authority v. Marcos,[15] the Court held that the express withdrawal by the LGC of previously granted exemptions from realty taxes applied to instrumentalities and government-owned and controlled corporations (GOCCs), such as the Mactan-Cebu International Airport Authority. In City of Davao v. RTC, Branch XII, Davao City,[16] the Court, citing Mactan Cebu International Airport Authority, declared the GSIS liable for real property taxes for the years 1992 to 1994 (contested real estate tax assessment therein), its previous exemption under PD 1146 being considered withdrawn with the enactment of the LGC in 1991.

GR No. 170532

2009-04-24

PROVINCIAL ASSESSOR OF MARINDUQUE v. CA

AUSTRIA-MARTINEZ, J.

Title II of R.A. No. 7160 governs the administration, appraisal, assessment, levy and collection of real property tax. Section 234 thereof grants exemption from real property taxation based on ownership, character or usage. As the Court explained in Mactan Cebu International Airport Authority v. Marcos,[45] to wit:Section 234 of the LGC provides for the exemptions from payment of real property taxes and withdraws previous exemptions therefrom granted to natural and juridical persons, including government-owned and controlled corporations, except as provided therein.

GR No. 166408

2008-10-06

QUEZON CITY v. ABS-CBN BROADCASTING CORPORATION

REYES, R.T., J.

Taxes are what civilized people pay for civilized society. They are the lifeblood of the nation. Thus, statutes granting tax exemptions are construed stricissimi juris against the taxpayer and liberally in favor of the taxing authority. A claim of tax exemption must be clearly shown and based on language in law too plain to be mistaken. Otherwise stated, taxation is the rule, exemption is the exception.[26] The burden of proof rests upon the party claiming the exemption to prove that it is in fact covered by the exemption so claimed.[27]

GR No. 155491

2008-09-16

SMART COMMUNICATIONS v. CITY OF DAVAO

NACHURA, J.

On July 19, 2002, the RTC rendered its Decision[11] denying the petition. The trial court noted that the ambiguity of the "in lieu of all taxes" provision in R.A. No. 7294, on whether it covers both national and local taxes, must be resolved against the taxpayer.[12] The RTC ratiocinated that tax exemptions are construed in strictissimi juris against the taxpayer and liberally in favor of the taxing authority and, thus, those who assert a tax exemption must justify it with words too plain to be mistaken and too categorical not to be misinterpreted.[13] On the issue of violation of the non-impairment clause of the Constitution, the trial court cited Mactan Cebu International Airport Authority v. Marcos,[14] and declared that the city's power to tax is based not merely on a valid delegation of legislative power but on the direct authority granted to it by the fundamental law. It added that while such power may be subject to restrictions or conditions imposed by Congress, any such legislated limitation must be consistent with the basic policy of local autonomy.[15]

GR NO. 159796

2007-07-17

ROMEO P. GERICHI v. DEPARTMENT OF ENERGY (DOE)

NACHURA, J.

The power to tax is an incident of sovereignty and is unlimited in its range, acknowledging in its very nature no limits, so that security against its abuse is to be found only in the responsibility of the legislature which imposes the tax on the constituency that is to pay it.[30] It is based on the principle that taxes are the lifeblood of the government, and their prompt and certain availability is an imperious need.[31] Thus, the theory behind the exercise of the power to tax emanates from necessity; without taxes, government cannot fulfill its mandate of promoting the general welfare and well-being of the people.[32]

GR NO. 168557

2007-02-16

FELS ENERGY v. PROVINCE OF BATANGAS

CALLEJO, SR., J.

It must be pointed out that the protracted and circuitous litigation has seriously resulted in the local government's deprivation of revenues. The power to tax is an incident of sovereignty and is unlimited in its magnitude, acknowledging in its very nature no perimeter so that security against its abuse is to be found only in the responsibility of the legislature which imposes the tax on the constituency who are to pay for it.[57] The right of local government units to collect taxes due must always be upheld to avoid severe tax erosion. This consideration is consistent with the State policy to guarantee the autonomy of local governments[58] and the objective of the Local Government Code that they enjoy genuine and meaningful local autonomy to empower them to achieve their fullest development as self-reliant communities and make them effective partners in the attainment of national goals.[59]

GR No. 119286

2004-10-13

PASEO REALTY v. CA

TINGA, J,

Taxation is a destructive power which interferes with the personal and property rights of the people and takes from them a portion of their property for the support of the government. And since taxes are what we pay for civilized society, or are the lifeblood of the nation, the law frowns against exemptions from taxation and statutes granting tax exemptions are thus construed strictissimi juris against the taxpayer and liberally in favor of the taxing authority. A claim of refund or exemption from tax payments must be clearly shown and be based on language in the law too plain to be mistaken. Elsewise stated, taxation is the rule, exemption therefrom is the exception.[32]

GR No. 143076

2003-06-10

PHILIPPINE RURAL ELECTRIC COOPERATIVES ASSOCIATION v. SECRETARY

PUNO, J.

(e) Machinery and equipment used for pollution control and environmental protection. Except as provided herein, any exemption from payment of real property tax previously granted to, or presently enjoyed by, all persons, whether natural or juridical, including all government-owned or controlled corporations are hereby withdrawn upon the effectivity of this Code.[25] In Mactan Cebu International Airport Authority v. Marcos,[26] this Court held that the limited and restrictive nature of the tax exemption privileges under the Local Government Code is consistent with the State policy to ensure autonomy of local governments and the objective of the Local Government Code to grant genuine and meaningful autonomy to enable local government units to attain their fullest development as self-reliant communities and make them effective partners in the attainment of national goals. The obvious intention of the law is to broaden the tax base of local government units to assure them of substantial sources of revenue.

	GR No. 163653 2011-07-19	CIR v. FILINVEST DEVELOPMENT CORPORATION PEREZ, J.
Even if we were, therefore, to accord precipitate credulity to the CIR's bare assertion that FDC had deducted substantial interest expense from its gross income, there would still be no factual basis for the imputation of theoretical interests on the subject advances and assess deficiency income taxes thereon. More so, when it is borne in mind that, pursuant to Article 1956 of the Civil Code of the Philippines, no interest shall be due unless it has been expressly stipulated in writing. Considering that taxes, being burdens, are not to be presumed beyond what the applicable statute expressly and clearly declares, [48] the rule is likewise settled that tax statutes must be construed strictly against the government and liberally in favor of the taxpayer. [49] Accordingly, the general rule of requiring adherence to the letter in construing statutes applies with peculiar strictness to tax laws and the provisions of a taxing act are not to be extended by implication. [50] While it is true that taxes are the lifeblood of the government, it has been held that their assessment and collection should be in accordance with law as any arbitrariness will negate the very reason for government itself. [51]
	GR No. 166620 2010-04-20	ATTY. SYLVIA BANDA v. EDUARDO R. ERMITA LEONARDO-DE CASTRO, J.
Buklod ng Kawaning EIIB v. Zamora,[18] where the Court upheld as valid then President Joseph Estrada's Executive Order No. 191 "deactivating" the Economic Intelligence and Investigation Bureau (EIIB) of the Department of Finance, hewed closely to the reasoning in Larin. The Court, among others, also traced from the General Appropriations Act[19] the President's authority to effect organizational changes in the department or agency under the executive structure, thus: We adhere to the precedent or ruling in Larin that this provision recognizes the authority of the President to effect organizational changes in the department or agency under the executive structure. Such a ruling further finds support in Section 78 of Republic Act No. 8760. Under this law, the heads of departments, bureaus, offices and agencies and other entities in the Executive Branch are directed (a) to conduct a comprehensive review of their respective mandates, missions, objectives, functions, programs, projects, activities and systems and procedures; (b) identify activities which are no longer essential in the delivery of public services and which may be scaled down, phased-out or abolished; and (c) adopt measures that will result in the streamlined organization and improved overall performance of their respective agencies. Section 78 ends up with the mandate that the actual streamlining and productivity improvement in agency organization and operation shall be effected pursuant to Circulars or Orders issued for the purpose by the Office of the President. x x x.[20] (Emphasis ours)
	GR No. 186242 2009-12-23	GOVERNMENT SERVICE INSURANCE SYSTEM v. CITY TREASURER VELASCO JR., J.
In Mactan Cebu International Airport Authority v. Marcos,[15] the Court held that the express withdrawal by the LGC of previously granted exemptions from realty taxes applied to instrumentalities and government-owned and controlled corporations (GOCCs), such as the Mactan-Cebu International Airport Authority. In City of Davao v. RTC, Branch XII, Davao City,[16] the Court, citing Mactan Cebu International Airport Authority, declared the GSIS liable for real property taxes for the years 1992 to 1994 (contested real estate tax assessment therein), its previous exemption under PD 1146 being considered withdrawn with the enactment of the LGC in 1991.
	GR No. 170532 2009-04-24	PROVINCIAL ASSESSOR OF MARINDUQUE v. CA AUSTRIA-MARTINEZ, J.
Title II of R.A. No. 7160 governs the administration, appraisal, assessment, levy and collection of real property tax. Section 234 thereof grants exemption from real property taxation based on ownership, character or usage. As the Court explained in Mactan Cebu International Airport Authority v. Marcos,[45] to wit:Section 234 of the LGC provides for the exemptions from payment of real property taxes and withdraws previous exemptions therefrom granted to natural and juridical persons, including government-owned and controlled corporations, except as provided therein.
	GR No. 166408 2008-10-06	QUEZON CITY v. ABS-CBN BROADCASTING CORPORATION REYES, R.T., J.
Taxes are what civilized people pay for civilized society. They are the lifeblood of the nation. Thus, statutes granting tax exemptions are construed stricissimi juris against the taxpayer and liberally in favor of the taxing authority. A claim of tax exemption must be clearly shown and based on language in law too plain to be mistaken. Otherwise stated, taxation is the rule, exemption is the exception.[26] The burden of proof rests upon the party claiming the exemption to prove that it is in fact covered by the exemption so claimed.[27]
	GR No. 155491 2008-09-16	SMART COMMUNICATIONS v. CITY OF DAVAO NACHURA, J.
On July 19, 2002, the RTC rendered its Decision[11] denying the petition. The trial court noted that the ambiguity of the "in lieu of all taxes" provision in R.A. No. 7294, on whether it covers both national and local taxes, must be resolved against the taxpayer.[12] The RTC ratiocinated that tax exemptions are construed in strictissimi juris against the taxpayer and liberally in favor of the taxing authority and, thus, those who assert a tax exemption must justify it with words too plain to be mistaken and too categorical not to be misinterpreted.[13] On the issue of violation of the non-impairment clause of the Constitution, the trial court cited Mactan Cebu International Airport Authority v. Marcos,[14] and declared that the city's power to tax is based not merely on a valid delegation of legislative power but on the direct authority granted to it by the fundamental law. It added that while such power may be subject to restrictions or conditions imposed by Congress, any such legislated limitation must be consistent with the basic policy of local autonomy.[15]
	GR NO. 159796 2007-07-17	ROMEO P. GERICHI v. DEPARTMENT OF ENERGY (DOE) NACHURA, J.
The power to tax is an incident of sovereignty and is unlimited in its range, acknowledging in its very nature no limits, so that security against its abuse is to be found only in the responsibility of the legislature which imposes the tax on the constituency that is to pay it.[30] It is based on the principle that taxes are the lifeblood of the government, and their prompt and certain availability is an imperious need.[31] Thus, the theory behind the exercise of the power to tax emanates from necessity; without taxes, government cannot fulfill its mandate of promoting the general welfare and well-being of the people.[32]
	GR NO. 168557 2007-02-16	FELS ENERGY v. PROVINCE OF BATANGAS CALLEJO, SR., J.
It must be pointed out that the protracted and circuitous litigation has seriously resulted in the local government's deprivation of revenues. The power to tax is an incident of sovereignty and is unlimited in its magnitude, acknowledging in its very nature no perimeter so that security against its abuse is to be found only in the responsibility of the legislature which imposes the tax on the constituency who are to pay for it.[57] The right of local government units to collect taxes due must always be upheld to avoid severe tax erosion. This consideration is consistent with the State policy to guarantee the autonomy of local governments[58] and the objective of the Local Government Code that they enjoy genuine and meaningful local autonomy to empower them to achieve their fullest development as self-reliant communities and make them effective partners in the attainment of national goals.[59]
	GR No. 119286 2004-10-13	PASEO REALTY v. CA TINGA, J,
Taxation is a destructive power which interferes with the personal and property rights of the people and takes from them a portion of their property for the support of the government. And since taxes are what we pay for civilized society, or are the lifeblood of the nation, the law frowns against exemptions from taxation and statutes granting tax exemptions are thus construed strictissimi juris against the taxpayer and liberally in favor of the taxing authority. A claim of refund or exemption from tax payments must be clearly shown and be based on language in the law too plain to be mistaken. Elsewise stated, taxation is the rule, exemption therefrom is the exception.[32]
	GR No. 143076 2003-06-10	PHILIPPINE RURAL ELECTRIC COOPERATIVES ASSOCIATION v. SECRETARY PUNO, J.
(e) Machinery and equipment used for pollution control and environmental protection. Except as provided herein, any exemption from payment of real property tax previously granted to, or presently enjoyed by, all persons, whether natural or juridical, including all government-owned or controlled corporations are hereby withdrawn upon the effectivity of this Code.[25] In Mactan Cebu International Airport Authority v. Marcos,[26] this Court held that the limited and restrictive nature of the tax exemption privileges under the Local Government Code is consistent with the State policy to ensure autonomy of local governments and the objective of the Local Government Code to grant genuine and meaningful autonomy to enable local government units to attain their fullest development as self-reliant communities and make them effective partners in the attainment of national goals. The obvious intention of the law is to broaden the tax base of local government units to assure them of substantial sources of revenue.

MACTAN CEBU INTERNATIONAL AIRPORT AUTHORITY v. FERDINAND J. MARCOS