General Principles of Taxation
A. Definition
a. Define taxation
B. Nature
a. Inherent power of the state
· National Power Corporation v. City of Cabanatuan, GR No.
149110, 9 April 2003.
b. Legislative power
· Sarasola v. Trinidad, GR No. L-14595, 11 October 1919.
· CIR v. Santos, GR No. 119252, 18 August 1997.
C. Characteristics of Taxation
a. Refer to inherent limitations of taxation below
D. Theory and Basis of Taxation
a. Lifeblood Theory (Algue case)
b. Necessity Theory
c. Benefits-Protection Theory (Algue case)
d. Jurisdiction over subjects and objects (Roxas & Tokyo
Shipping Cases)
· CIR v. Pineda, GR No. L-22734, 15 September 1967.
· CIR v. Algue, Inc., GR No. L-28896, 17 February 1988.
· National Power Corporation v. City of Cabanatuan, GR No.
149110, 9 April 2003.
· Gerochi v. Department of Energy, GR No. 159796, 17 July 2007.
· Roxas v. Court of Tax Appeals, GR No. L-25043, 26 April 1968.
· CIR v. Tokyo Shipping Co. Ltd., GR No. L-68252, 26 May 1995.
· Pilipinas Shell Petroleum Corporation v. CIR, GR No. 172598, 21
December 2007.
E. Purposes/Objectives of Taxation
a. Revenue
b. Non-revenue/regulatory
1. Enumerate non-revenue objectives of taxation
· Lutz v. Araneta, GR No. L-‐7859, 22 December 1955.
· Tio v. Videogram Regulatory Board, GR No. L-‐75697, 18 June
1987.
· Philippine Airlines, Inc. v. Edu, GR No. L-‐41383, 15 August
1988.
· Caltex Philippines, Inc. v. Commission on Audit, GR No. 92585,
8 May 1992.
· Tolentino v. Secretary of Finance, GR No. 115544, 25 August
1994.
· Tolentino v. Secretary of Finance, GR No. 115544, 30 October
1995.
· British American Tobacco v. Camacho, GR No. 163583, 15 April
2009.
· Philippine Coconut Producers Federation, Inc. (COCOFED) v.
Presidential Commission on Good Government, GR No. 75713, 2
October 1989.
· Philippine Health Care Providers, Inc. v. CIR, GR No. 167330, 18
September 2009.
F. Scope of legislative taxing power
a. What is the scope of legislature’s taxing power?
· Tan v. del Rosario, GR Nos. 109289 and 109446, 3 October 1994.
G. Aspects of Taxation (Stages)
a. Levy
b. Assessment and collection
c. Payment
H. Basic principles of Sound Tax System (Canons of
Taxation)
a. Fiscal adequacy
b. Theoretical Justice
c. Administrative feasibility
· Chavez v. Ongpin, GR No. 76778, 6 June 1990.
· Diaz v. Secretary of Finance, GR No. 193007, 19 July 2011.
I. Limitations
a. Constitutional
· General Constitutional Limitations
1. Due Process
· Pepsi-Cola Bottling Co. of the Philippines, Inc. v. Municipality of
Tanauan, Leyte, GR No. L-31156, 27 February 1976.
· Sison v. Ancheta, GR No. L-59431, 25 July 1984.
· Tan v. del Rosario, GR Nos. 109289 and 109446, 3 October 1994.
2. Equal Protection
· Sison v. Ancheta, GR No. L-59431, 25 July 1984.
· Tan v. del Rosario, GR Nos. 109289 and 109446, 3 October 1994.
· British American Tobacco v. Camacho, GR No. 163583, 20
August 2008.
3. Religious Freedom
· American Bible Society v. City of Manila, GR No. L-9637, 30
April 1957.
4. Non-impairment of contracts
· Tolentino v. Secretary of Finance, GR No. 115544, 25 August
1994.
· Manila Electric Company v. Province of Laguna, GR No. 131359,
5 May 1999.
· Inherent
1. Public purpose
· PepsiCola Bottling Co. of the Philippines, Inc. v. Municipality of
Tanauan, Leyte, GR No. L-31156, 27 February 1976.
· Lutz v. Araneta, GR No. L-7859, 22 December 1955.
· Tio v. Videogram Regulatory Board, GR No. L-75697, 18 June
1987.
· Citizens’ Alliance for Consumer Protection v. Energy Regulatory
Board, GR Nos. L-78888-90, 23 June 1988.
2. Non-delegability of power to tax
· People v. Vera, GR No. L-45685, 16 November 1937.
· Basco v. Philippine Amusements and Gaming Corporation, GR
No. 91649, 14 May 1991.
· Manila Electric Company v. Province of Laguna, GR No. 131359,
5 May 1999.
3. Territoriality
· Iloilo Bottlers, Inc. v. City of Iloilo, GR No. L-52019, 19 August
1988.
4. Tax exemption of the state
· Maceda v. Macaraig, GR No. 88291, 31 May 1991.
· Manila International Airport Authority v. Court of Appeals, GR
No. 155650, 20 July 2006.
5. Principle of comity
· Tañada v. Angara, GR No. 118295, 2 May 1997.
J. Classification
a. According to scope
· Philippine Basketball Association v. Court of Appeals, GR No.
119122, 8 August 2000.
· Smart Communications, Inc. v. City of Davao, GR No. 155491, 21
July 2009.
b. According to who shoulders the tax burden
· Contex Corporation v. CIR, GR No. 151135, 2 July 2004.
· Silkair (Singapore) Pte. Ltd. v. CIR, GR Nos. 171383 and 172379, 14
November 2008.
· Diaz v. Secretary of Finance, GR No. 193007, 19 July 2011.
c. According to subject matter
· Association of Customs Brokers, Inc. v. City of Manila, GR No. L-
4376, 22 May 1953.
· Villanueva v. City of Iloilo, GR No. L-26521, 28 December 1968.
d. According to manner of computing the tax
· Republic Cement Corporation v. CIR, GR No. L-20660, 13 June
1968.
e. According to purpose
· Lutz v. Araneta, GR No. L-7859, 22 December 1955.
· Tio v. Videogram Regulatory Board, GR No. L-75697, 18 June 1987.
f. According to graduation of tax rates
· Tolentino v. Secretary of Finance, GR No. 115544, 25 August 1994.
· Tolentino v. Secretary of Finance, GR No. 115544, 30 October 1995.
· British American Tobacco v. Camacho, GR No. 163583, 15 April
2009.
K. Tax as distinguished from other forms of exaction
a. License Fee
· Cuunjieng v. Patstone, GR No. 16254, 21 February 1922.
· Physical Therapy Organization of the Philippines v. Municipal
Board of the City of Manila, GR No. L‐10448, 30 August 1957.
· Victorias Milling Co., Inc. v. Municipality of Victorias, Negros
Occidental, GR No. L-21183, 27 September 1968.
· Progressive Development Corporation v. Quezon City, GR No.
36081, 24 April 1989.
b. Special Assessment
· Apostolic Prefect of the Mountain Province v. Treasurer of Baguio,
GR No. L-47252, 18 April 1941.
c. Penalty
· Republic v. Patanao, GR No. L‐22356, 21 July 1967.
d. Debt
· Caltex Philippines, Inc. v. Commission on Audit, GR No. 92585, 8
May 1992.
· Domingo v. Garlitos, GR No. L‐18994, 29 June 1963.