1. Manila Memorial Park, Inc. and La Funeraria Paz-Sucat, Inc. vs.

Secretary of DSWD
(G.R. No. 175356, December 3, 2013)

FACTS: RA 7432 was passed into law (amended by RA 9257), granting senior citizens 20% discount on
certain establishments.

To implement the tax provisions of RA 9257, the Secretary of Finance and the DSWD issued its own Rules
and Regulations.

Hence, this petition.

Petitioners are not questioning the 20% discount granted to senior citizens but are only assailing the
constitutionality of the tax deduction scheme prescribed under RA 9257 and the implementing rules and
regulations issued by the DSWD and the DOF.

Petitioners posit that the tax deduction scheme contravenes Article III, Section 9 of the Constitution, which
provides that: "private property shall not be taken for public use without just compensation."

Respondents maintain that the tax deduction scheme is a legitimate exercise of the State’s police power.

ISSUE: Whether the legally mandated 20% senior citizen discount is an exercise of police power or eminent
domain.

RULING: The 20% senior citizen discount is an exercise of police power.

It may not always be easy to determine whether a challenged governmental act is an exercise of police
power or eminent domain. The judicious approach, therefore, is to look at the nature and effects of the
challenged governmental act and decide on the basis thereof.

The 20% discount is intended to improve the welfare of senior citizens who, at their age, are less likely to be
gainfully employed, more prone to illnesses and other disabilities, and, thus, in need of subsidy in
purchasing basic commodities. It serves to honor senior citizens who presumably spent their lives on
contributing to the development and progress of the nation.

In turn, the subject regulation affects the pricing, and, hence, the profitability of a private establishment.

The subject regulation may be said to be similar to, but with substantial distinctions from, price control or
rate of return on investment control laws which are traditionally regarded as police power measures.

The subject regulation differs there from in that (1) the discount does not prevent the establishments from
adjusting the level of prices of their goods and services, and (2) the discount does not apply to all customers
of a given establishment but only to the class of senior citizens. Nonetheless, to the degree material to the
resolution of this case, the 20% discount may be properly viewed as belonging to the category of price
regulatory measures which affect the profitability of establishments subjected thereto. On its face, therefore,
the subject regulation is a police power measure.

2. Drugstores Association of the Philippines, Inc., et al. vs. National Council on Disability Affairs, et al.
(G.R. No. 194561, September 14, 2016)

FACTS: RA 7277 mandates a 20% on purchase of medicines in favor of persons with disabilities.

ISSUE: Is this an instance of eminent domain?

HELD: No, this is not an exercise of eminent domain. This is an exercise of police power to promote the
welfare of the people, especially those who have less in life. Consequently, there is no need for just
compensation. The law leaves reasonable and viable economic usefulness; hence, there is no “taking.”

ISSUE: Does the law violate the reasonable means test (due process), considering it only requires an ID?

HELD: No, it does not violate due process. The implementation is reasonable because, before a person is
issued a PWD ID, he must first show a medical certificate of his disability if it is not apparent by the naked
eye.

ISSUE: Does the law violate equal protection because it only targets retailers and not all players in the drug
industry?

HELD: No, it does not violate equal protection because the distinction between retailers and manufacturers,
etc. is real and substantial. Equal protection is not an iron-clad rule.

3. Gerochi, et al. vs. Department of Energy, et al.

(G.R. No. 159796, July 17, 2007)

FACTS:

On June 8, 2001 Congress enacted RA 9136 or the Electric Power Industry Act of 2001. Petitioners Romeo
P. Gerochi and company assail the validity of Section 34 of the EPIRA Law for being an undue delegation
of the power of taxation. Section 34 provides for the imposition of a “Universal Charge” to all electricity
end users after a period of (1) one year after the effectively of the EPIRA Law. The universal charge to be
collected would serve as payment for government debts, missionary electrification, equalization of taxes and
royalties applied to renewable energy and imported energy, environmental charge and for a charge to
account for all forms of cross subsidies for a period not exceeding three years. The universal charge shall be
collected by the ERC on a monthly basis from all end users and will then be managed by the PSALM Corp.
through the creation of a special trust fund.

ISSUE:

Whether or not there is an undue delegation of the power to tax on the part of the ERC

HELD:

No, the universal charge as provided for in section 34 is not a tax but an exaction of the regulatory power
(police power) of the state. The universal charge under section 34 is incidental to the regulatory duties of the
ERC, hence the provision assailed is not for generation of revenue and therefore it cannot be considered as
tax, but an execution of the states police power thru regulation.

Moreover, the amount collected is not made certain by the ERC, but by the legislative parameters provided
for in the law (RA 9136) itself, it therefore cannot be understood as a rule solely coming from the ERC. The
ERC in this case is only a specialized administrative agency which is tasked of executing a subordinate
legislation issued by congress; which before execution must pass both the completeness test and the
sufficiency of standard test. The court in appreciating Section 34 of RA 9136 in its entirety finds the said
law and the assailed portions free from any constitutional defect and thus deemed complete and sufficient in
form.
4. Pambansang Koalisyon ng mga Samahang Magsasaka at Manggagawa sa Niyugan (PKSMMN), et al.
vs. Executive Secretary, et al.
(G.R. Nos. 147036-37, April 10, 2012)

FACTS: These are consolidated petitions to declare unconstitutional certain presidential decrees and
executive orders of the martial law era and under the incumbency of Pres. Estrada relating to the raising and
use of coco-levy funds, particularly: Section 2 of P.D. 755, (b)Article III, Section 5 of P.D.s 961 and 1468,
(c) E.O. 312, and (d) E.O. 313.

On June 19, 1971 Congress enacted R.A. 6260 that established a Coconut Investment Fund (CI Fund) for
the development of the coconut industry through capital financing. Coconut farmers were to capitalize and
administer the Fund through the Coconut Investment Company (CIC) whose objective was, among others,
to advance the coconut farmers interests. For this purpose, the law imposed a levy ofP0.55on the coconut
farmers first domestic sale of every 100 kilograms of copra, or its equivalent, for which levy he was to get a
receipt convertible into CIC shares of stock.

In 1975 President Marcos enacted P.D. 755 which approved the acquisition of a commercial bank for the
benefit of the coconut farmers to enable such bank to promptly and efficiently realize the industry's credit
policy. Thus, the PCA bought 72.2% of the shares of stock of First United Bank, headed by Pedro
Cojuangco. Dueto changes in its corporate identity and purpose, the banks articles of incorporation were
amended in July 1975, resulting in a change in the banks name from First United Bank United Coconut
Planters Bank (UCPB).

In November 2000 then President Joseph Estrada issued Executive Order (E.O.) 312, establishing a Sagip
Niyugan Program which sought to provide immediate income supplement to coconut farmers and encourage
the creation of a sustainable local market demand for coconut oil and other coconut products. The Executive
Order sought to establish aP1-billion fund by disposing of assets acquired using coco-levy funds or assets of
entities supported by those funds. A committee was created to manage the fund under this program. A
majority vote of its members could engage the services of a reputable auditing firm to conduct periodic
audits.

At about the same time, President Estrada issued E.O. 313, which created an irrevocable trust fund known
as the Coconut Trust Fund (the Trust Fund).This aimed to provide financial assistance to coconut farmers, to
the coconut industry, and to other agri-related programs. The shares of stock of SMC were to serve as the
Trust Funds initial capital. These shares were acquired with CII Funds and constituted approximately 27%
of the outstanding capital stock of SMC.E.O. 313 designated UCPB, through its Trust Department, as the
Trust Funds trustee bank. The Trust Fund Committee would administer, manage, and supervise the
operations of the Trust Fund. The Committee would designate an external auditor to do an annual audit or as
often as needed but it may also request the Commission on Audit (COA) to intervene.

To implement its mandate, E.O. 313 directed the Presidential Commission on Good Government, the Office
of the Solicitor General, and other government agencies to exclude the 27% CIIF SMC shares from Civil
Case 0033, entitled Republic of the Philippines v. Eduardo Cojuangco, Jr., et al., which was then pending
before the Sandiganbayan and to lift the sequestration over those shares.

On January 26, 2001, however, former President Gloria Macapagal-Arroyo ordered the suspension of E.O.s
312 and 313. This notwithstanding, on March 1, 2001 petitioner organizations and individuals brought the
present action in G.R. 147036-37 to declare E.O.s 312 and 313 as well as Article III, Section 5 of P.D. 1468
unconstitutional. On April 24, 2001 the other sets of petitioner organizations and individuals instituted G.R.
147811 to nullify Section 2 of P.D. 755 and Article III, Section 5 of P.D.s 961 and 1468 also for being
unconstitutional.
ISSUES: Are the coco-levy funds public funds?
Are (a) Section 2 of P.D. 755, (b)Article III, Section 5 of P.D.s 961 and 1468, (c) E.O. 312, and (d) E.O. 313
unconstitutional?
Have petitioners legal standing to bring the same to court?

HELD: Coco-levy funds are public funds. The Court was satisfied that the coco-levy funds were raised
pursuant to law to support a proper governmental purpose. They were raised with the use of the police and
taxing powers of the State for the benefit of the coconut industry and its farmers in general. The COA
reviewed the use of the funds. The BIR treated them as public funds and the very laws governing coconut
levies recognize their public character.

The Court has also recently declared that the coco-levy funds are in the nature of taxes and can only be used
for public purpose. Taxes are enforced proportional contributions from persons and property, levied by the
State by virtue of its sovereignty for the support of the government and for all its public needs. Here, the
coco-levy funds were imposed pursuant to law, namely, R.A. 6260 and P.D. 276.The funds were collected
and managed by the PCA, an independent government corporation directly under the President. And, as the
respondent public officials pointed out, the pertinent laws used the term levy, which means to tax, in
describing the exaction.

R.A. 6260 and P.D. 276 did not raise money to boost the governments general funds but to provide means
for the rehabilitation and stabilization of a threatened industry, the coconut industry, which is so affected
with public interest as to be within the police power of the State. The funds sought to support the coconut
industry, one of the main economic backbones of the country, and to secure economic benefits for the
coconut farmers and farm workers.

Lastly, the coco-levy funds are evidently special funds. Its character as such fund was made clear by the fact
that they were deposited in the PNB (then a wholly owned government bank) and not in the Philippine
Treasury.

***

The Court has already passed upon this question in Philippine Coconut Producers Federation, Inc.
(COCOFED) v. Republic of the Philippines. It held as unconstitutional Section 2 of P.D. 755 for effectively
authorizing the PCA to utilize portions of the CCS Fund to pay the financial commitment of the farmers to
acquire UCPB and to deposit portions of the CCS Fund levies with UCPB interest free. And as there also
provided, the CCS Fund, CID Fund and like levies that PCA is authorized to collect shall be considered as
non-special or fiduciary funds to be transferred to the general fund of the Government, meaning they shall
be deemed private funds.

In any event, such declaration is void. There is ownership when a thing pertaining to a person is completely
subjected to his will in everything that is not prohibited by law or the concurrence with the rights of another.
An owner is free to exercise all attributes of ownership: the right, among others, to possess, use and enjoy,
abuse or consume, and dispose or alienate the thing owned. The owner is free to waive all or some of these
rights in favor of others. But in the case of the coconut farmers, they could not, individually or collectively,
waive what have not been and could not be legally imparted to them.

Section 2 of P.D. 755, Article III, Section 5of P.D. 961, and Article III, Section 5 of P.D. 1468 completely
ignore the fact that coco-levy funds are public funds raised through taxation. And since taxes could be
exacted only for a public purpose, they cannot be declared private properties of individuals although such
individuals fall within a distinct group of persons.
These assailed provisions, which removed the coco-levy funds from the general funds of the government
and declared them private properties of coconut farmers, do not appear to have a color of social justice for
their purpose. The levy on copra that farmers produce appears, in the first place, to be a business tax judging
by its tax base. The concept of farmers-businessmen is incompatible with the idea that coconut farmers are
victims of social injustice and so should be beneficiaries of the taxes raised from their earnings.

On another point, in stating that the coco-levy fund shall not be construed or interpreted, under any law or
regulation, as special and/or fiduciary funds, or as part of the general funds of the national government,
P.D.s 961 and 1468 seek to remove such fund from COA scrutiny.

This is also the fault of President Estrada’s E.O. 312 which deals with P1 billion to be generated out of the
sale of coco-fund acquired assets. E.O. 313 has a substantially identical provision governing the
management and disposition of the Coconut Trust Fund capitalized with the substantial SMC shares of stock
that the coco-fund acquired.

But, since coco-levy funds are taxes, the provisions of P.D.s 755,961 and 1468 as well as those of E.O.s 312
and 313 that remove such funds and the assets acquired through them from the jurisdiction of the COA
violate Article IX-D, Section 2(1) of the 1987 Constitution. Section 2(1) vests in the COA the power and
authority to examine uses of government money and property. The cited P.D.s and E.O.s also contravene
Section 2 of P.D. 898 (Providing for the Restructuring of the Commission on Audit), which has the force of
a statute. And there is no legitimate reason why such funds should be shielded from COA review and audit.
The PCA, which implements the coco-levy laws and collects the coco-levy funds, is a government-owned
and controlled corporation subject to COA review and audit.

E.O. 313 suffers from an additional infirmity. Apparently, it intends to create a trust fund out of the coco-
levy funds to provide economic assistance to the coconut farmers and, ultimately, benefit the coconut
industry. But on closer look, E.O. 313 strays from the special purpose for which the law raises coco-levy
funds in that it permits the use of coco-levy funds for improving productivity in other food areas.

Clearly, E.O.313 above runs counter to the constitutional provision which directs that 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.
Assisting other agriculturally-related programs is way off the coco-funds objective of promoting the general
interests of the coconut industry and its farmers.

A final point, the E.O.s also transgress P.D. 1445, Section 84(2), the first part by the previously mentioned
sections of E.O. 313 and the second part by Section 4 of E.O. 312 and Sections 6 and 7 of E.O. 313. E.O.
313 vests the power to administer, manage, and supervise the operations and disbursements of the Trust
Fund it established (capitalized with SMC shares bought out of coco-levy funds) in a Coconut Trust Fund
Committee.

Section 4 of E.O. 312 does essentially the same thing. It vests the management and disposition of the
assistance fund generated from the sale of coco-levy fund-acquired assets into a Committee of five
members.

In effect, the provision transfers the power to allocate, use, and disburse coco-levy funds that P.D. 232
vested in the PCA and transferred the same, without legislative authorization and in violation of P.D. 232, to
the Committees mentioned above. An executive order cannot repeal a presidential decree which has the
same standing as a statute enacted by Congress.

***
The Court has to uphold petitioners right to institute these petitions. The petitioner organizations in these
cases represent coconut farmers on whom the burden of the coco-levies attaches. It is also primarily for their
benefit that the levies were imposed.

The individual petitioners, on the other hand, join the petitions as taxpayers. The Court recognizes their
right to restrain officials from wasting public funds through the enforcement of an unconstitutional statute.
This so-called taxpayers suit is based on the theory that expenditure of public funds for the purpose of
executing an unconstitutional act is a misapplication of such funds.

The petition in G.R.147036-37 is granted; The petition in G.R. 147811 is partially granted; the following are
declared void: a) E.O. 312; and b) E.O. 313.

Section 2 of P.D. 755 and Article III, Section 5 of P.D.s 961 and 1468 have been previously
unconstitutional.

5. Francia vs. Intermediate Appellate Court (G.R. No. 67649, June 28, 1988)

FACTS: Engracio Francia was the owner of a 328 square meter land in Pasay City. In October 1977, a
portion of his land (125 square meter) was expropriated by the government for P4,116.00. The expropriation
was made to give way to the expansion of a nearby road.

It also appears that Francia failed to pay his real estate taxes since 1963 amounting to P2,400.00. So in
December 1977, the remaining 203 square meters of his land was sold at a public auction (after due notice
was given him). The highest bidder was a certain Ho Fernandez who paid the purchase price of P2,400.00
(which was lesser than the price of the portion of his land that was expropriated).

Later, Francia filed a complaint to annul the auction sale on the ground that the selling price was grossly
inadequate. He further argued that his land should have never been auctioned because the P2,400.00 he
owed the government in taxes should have been set-off by the debt the government owed him (legal
compensation). He alleged that he was not paid by the government for the expropriated portion of his land
because though he knew that the payment therefor was deposited in the Philippine National Bank, he never
withdrew it.

ISSUE: Whether or not the tax owed by Francia should be set-off by the “debt” owed him by the
government.

HELD: No. As a rule, set-off of taxes is not allowed. There is no legal basis for the contention. By legal
compensation, obligations of persons, who in their own right are reciprocally debtors and creditors of each
other, are extinguished (Art. 1278, Civil Code). This is not applicable in taxes. There can be no off-setting
of taxes against the claims that the taxpayer may have against the government. A person cannot refuse to
pay a tax on the ground that the government owes him an amount equal to or greater than the tax being
collected. The collection of a tax cannot await the results of a lawsuit against the government.

The Supreme Court emphasized: A claim for taxes is not such a debt, demand, contract or judgment as is
allowed to be set-off under the statutes of set-off, which are construed uniformly, in the light of public
policy, to exclude the remedy in an action or any indebtedness of the state or municipality to one who is
liable to the state or municipality for taxes. Neither are they a proper subject of recoupment since they do
not arise out of the contract or transaction sued on.

Further, the government already Francia. All he has to do was to withdraw the money. Had he done that, he
could have paid his tax obligations even before the auction sale or could have exercised his right to redeem
– which he did not do.
Anent the issue that the selling price of P2,400.00 was grossly inadequate, the same is not tenable. The
Supreme Court said: “alleged gross inadequacy of price is not material when the law gives the owner the
right to redeem as when a sale is made at public auction, upon the theory that the lesser the price, the easier
it is for the owner to effect redemption.” If mere inadequacy of price is held to be a valid objection to a sale
for taxes, the collection of taxes in this manner would be greatly embarrassed, if not rendered altogether
impracticable. “Where land is sold for taxes, the inadequacy of the price given is not a valid objection to the
sale.” This rule arises from necessity, for, if a fair price for the land were essential to the sale, it would be
useless to offer the property. Indeed, it is notorious that the prices habitually paid by purchasers at tax sales
are grossly out of proportion to the value of the land.

6. Domingo vs. Garlitos (8 SCRA 443, G.R. No. L-18994, June 29, 1963)

FACTS:
In the 1960 case of Domingo v Moscoso, the Supreme Court declared as final and executory the order for
the payment by the estate of the late Walter Scott Price of estate and inheritance taxes, charges and
penalties, amounting to P40,058.55 issued by the Court of First Instance – Leyte. The fiscal then presented a
petition for the execution of the judgment before the Court of First Instance – Leyte.

The petition was denied as the execution is not justifiable as the government is indebted to the estate under
administration in the amount of P 262,200. Hence, the present petition for certiorari and mandamus.

ISSUE:
Is execution proper?

RULING:
No. The tax and the debt are compensated. The court having jurisdiction of the estate had found that the
claim of the estate against the government has been recognized and an amount of P262,200 has already been
appropriated by a corresponding law (RA 2700). Under the circumstances, both the claim of the
Government for the inheritance taxes and the claim of the intestate for services rendered have already
become overdue and demandable as well as fully liquidated.

Compensation, therefore, takes place by operation of law, in accordance with Article 1279 and 1290 of the
Civil Code, and both debts are extinguished to their concurrent amounts. If the obligation to pay taxes and
the taxpayer’s claim against the government are both overdue, demandable, as well as fully liquidated,
compensation takes place by operation of law and both obligations are extinguished to their concurrent
amounts.

7. Diaz vs. Secretary of Finance (G.R. No. 193007, July 19, 2011)

Tollway fees are not taxes. — As can be seen, the discussion in the MIAA case on toll roads and toll fees
was made, not to establish a rule that tollway fees are user’s tax, but to make the point that airport lands and
buildings are properties of public dominion and that the collection of terminal fees for their use does not
make them private properties. Tollway fees are not taxes. Indeed, they are not assessed and collected by the
BIR and do not go to the general coffers of the government. It would of course be another matter if
Congress enacts a law imposing a user’s tax, collectible from motorists, for the construction and
maintenance of certain roadways. The tax in such a case goes directly to the government for the
replenishment of resources it spends for the roadways. This is not the case here. What the government seeks
to tax here are fees collected from tollways that are constructed, maintained, and operated by private tollway
operators at their own expense under the build, operate, and transfer scheme that the government has
adopted for expressways. Except for a fraction given to the government, the toll fees essentially end up as
earnings of the tollway operators.
8. Gomez vs. Palomar (25 SCRA 827, October 29, 1968)

Facts:
Petitioner questions the constitutionality of the statute, claiming that R.A. 1635 otherwise known as as the
Anti-TB Stamp Law, is violative of the equal protection clause of the Constitution because it constitutes
mail users into a class for the purpose of the tax while leaving untaxed the rest of the population and that
even among postal patrons the statute discriminatory grant exemptions.

Moreover, petitioner contends that the statutory classification of taxpayers has no relation to the object
sought by the Anti-TB law.

Issue:
Whether or not the Anti-Tb law violates the equal protection clause of the constitution.

Ruling:
No, Supreme Court reiterated that the legislature has the inherent power to select the subjects of taxation
and to grant exemptions. The reason for this is that traditionally, classification has been a device for fitting
tax programs to local needs and usages in order to achieve an equitable distribution of the tax burden. The
legislative classifications must be reasonable is of course undenied in this case.

The classification of mail users is not without any reason. It is based on ability to pay, let alone the
enjoyment of a privilege, and on administrative convenience. The classification is likewise based on
considerations of administrative convenience. For it is now a settled principle of law that "consideration of
practical administrative convenience and cost in the administration of tax laws afford adequate ground for
imposing a tax on a well recognized and defined class. Lastly, mail users were already a class by themselves
even before the enactment of the statue and all that the legislature did was merely to select their class.
Legislation is essentially empiric and Republic Act 1635, as amended, no more than reflects a distinction
that exists in fact. As Mr. Justice Frankfurter said, "to recognize differences that exist in fact is living law; to
disregard [them] and concentrate on some abstract identities is lifeless logic."

Petitioner's assertions that statutory classification of mail users must bear some reasonable relationship to
the end sought to be attained, and that absent such relationship the selection of mail users is constitutionally
impermissible does not hold water. This is altogether a different proposition, since explained by the court
"that while the principle that there must be a reasonable relationship between classification made by the
legislation and its purpose is undoubtedly true in some contexts, it has no application to a measure whose
sole purpose is to raise revenue, so long as the classification imposed is based upon some standard capable
of reasonable comprehension, be that standard based upon ability to produce revenue or some other
legitimate distinction, equal protection of the law has been afforded."

9. Pascual vs. Secretary of Public Works (110 Phil. 331, December 29, 1960)

Facts:
Governor Wenceslao Pascual of Rizal instituted this action for declaratory relief, with injunction, upon the
ground that RA No. 920, which appropriates funds for public works particularly for the construction and
improvement of Pasig feeder road terminals. Some of the feeder roads, however, as alleged and as contained
in the tracings attached to the petition, were nothing but projected and planned subdivision roads, not yet
constructed within the Antonio Subdivision, belonging to private respondent Zulueta, situated at Pasig,
Rizal; and which projected feeder roads do not connect any government property or any important premises
to the main highway. The respondents' contention is that there is public purpose because people living in the
subdivision will directly be benefitted from the construction of the roads, and the government also gains
from the donation of the land supposed to be occupied by the streets, made by its owner to the government.
Issue:
Whether or not the incidental gains by the public be considered "public purpose" for the purpose of
justifying an expenditure of the government

Ruling:
No. It is a general rule that the legislature is without power to appropriate public revenue for anything but a
public purpose. It is the essential character of the direct object of the expenditure which must determine its
validity as justifying a tax, and not the magnitude of the interest to be affected nor the degree to which the
general advantage of the community, and thus the public welfare, may be ultimately benefited by their
promotion. Incidental to the public or to the state, which results from the promotion of private interest and
the prosperity of private enterprises or business, does not justify their aid by the use public money.
The test of the constitutionality of a statute requiring the use of public funds is whether the statute is
designed to promote the public interest, as opposed to the furtherance of the advantage of individuals,
although each advantage to individuals might incidentally serve the public.

10. Sison vs. Ancheta (130 SCRA 654, July 25, 1984)

Facts: Section 1 of BP Blg 135 amended the Tax Code and petitioner Antero M. Sison, as taxpayer, alleges
that "he would be unduly discriminated against by the imposition of higher rates of tax upon his income
arising from the exercise of his profession vis-a-vis those which are imposed upon fixed income or salaried
individual taxpayers. He characterizes said provision as arbitrary amounting to class legislation, oppressive
and capricious in character. It therefore violates both the equal protection and due process clauses of the
Constitution as well asof the rule requiring uniformity in taxation.

Issue: Whether or not the assailed provision violates the equal protection and due process clauses of the
Constitution while also violating the rule that taxes must be uniform and equitable.

Held: The petition is without merit.

On due process - it is undoubted that it may be invoked where a taxing statute is so arbitrary that it finds no
support in the Constitution. An obvious example is where it can be shown to amount to the confiscation of
property from abuse of power. Petitioner alleges arbitrariness but his mere allegation does not suffice and
there must be a factual foundation of such unconsitutional taint.
On equal protection - it suffices that the laws operate equally and uniformly on all persons under similar
circumstances, both in the privileges conferred and the liabilities imposed.
On the matter that the rule of taxation shall be uniform and equitable - this requirement is met when the tax
operates with the same force and effect in every place where the subject may be found." Also, :the rule of
uniformity does not call for perfect uniformity or perfect equality, because this is hardly unattainable."
When the problem of classification became of issue, the Court said: "Equality and uniformity in taxation
means that all taxable articles or kinds of property of the same class shall be taxed the same rate. The taxing
power has the authority to make reasonable and natural classifications for purposes of taxation..." As
provided by this Court, where "the differentation" complained of "conforms to the practical dictates of
justice and equity" it "is not discriminatory within the meaning of this clause and is therefore uniform."

11. Abakada Guro Party List vs. Ermita (G.R. No. 168056, September 1, 2005)

Facts:
ABAKADA GURO Party List, et al., filed a petition for prohibition 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 provisions contain a provision which 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.

Issues:
Whether or not there is a violation of Article VI, Section 24 of the Constitution.

Whether or not there is undue delegation of legislative power in violation of Article VI Sec 28(2) of the
Constitution.

Whether or not there is a violation of the due process and equal protection of the Constitution.

Ruling:
No, the revenue bill exclusively originated in the House of Representatives, the Senate was acting within its
constitutional power to introduce amendments to the House bill when it included provisions in Senate Bill
No. 1950 amending corporate income taxes, percentage, and excise and franchise taxes.

No, there is no undue delegation of legislative power but only of the discretion as to the execution of a law.
This is constitutionally permissible. Congress does not abdicate its functions or unduly delegate power when
it describes what job must be done, who must do it, and what is the scope of his authority; in our complex
economy that is frequently the only way in which the legislative process can go forward. In this case, it is
not a delegation of legislative power but a delegation of ascertainment of facts upon which enforcement and
administration of the increased rate under the law is contingent.

No, 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 State’s 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.

12. Mactan Cebu International Airport Authority vs. City of Lapu-Lapu (G.R. No. 181756, June 15, 2015)

13. Tolentino vs. Secretary of Finance (235 SCRA 630, August 25, 1994)

14. Tolentino vs. Secretary of Finance (G.R. No. 115455, October 30, 1995)

15. British American Tobacco vs. Camacho (G.R. No. 163583, August 20, 2008 and April 15, 2009)

16. Lung Center of the Philippines vs. Quezon City (G.R. No. 144104, June 29, 2004)