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General Principles:
CIR v. Prime Holdings, Inc., G.R. No. 183505, February 26, 2010;
Held: These reveal the legislative intent not to impose VAT on persons already covered
by the amusement tax. This holds true even in the case of cinema/theater operators taxed under
the LGC of 1991 precisely because the VAT law was intended to replace the percentage tax on
certain services. The mere fact that they are taxed by the local government unit and not by the
national government is immaterial. The Local Tax Code, in transferring the power to tax gross
receipts derived by cinema/theater operators or proprietor from admission tickets to the local
government, did not intend to treat cinema/theater houses as a separate class. No distinction
must, therefore, be made between the places of amusement taxed by the national government
and those taxed by the local government.
of giving "change" to thousands of motorists in order to meet the exact toll rate would be
a logistical nightmare. Thus, according to them, the VAT on tollway operations is not
administratively feasible.33
HELD: Administrative feasibility is one of the canons of a sound tax system. It
simply means that the tax system should be capable of being effectively administered
and enforced with the least inconvenience to the taxpayer. Non-observance of the
canon, however, will not render a tax imposition invalid "except to the extent that
specific constitutional or statutory limitations are impaired."34 Thus, even if the
imposition of VAT on tollway operations may seem burdensome to implement, it is not
necessarily invalid unless some aspect of it is shown to violate any law or the
Constitution.
Here, it remains to be seen how the taxing authority will actually implement the
VAT on tollway operations. Any declaration by the Court that the manner of its
implementation is illegal or unconstitutional would be premature. Although the
transcript of the August 12, 2010 Senate hearing provides some clue as to how the BIR
intends to go about it,35 the facts pertaining to the matter are not sufficiently established
for the Court to pass judgment on. Besides, any concern about how the VAT on tollway
operations will be enforced must first be addressed to the BIR on whom the task of
implementing tax laws primarily and exclusively rests. The Court cannot preempt the
BIRs discretion on the matter, absent any clear violation of law or the Constitution.
Chamber of Real Estate and Builders Association, Inc. v. The Hon.
Executive Secretary Alberto Romulo, G.R. No. 160756, (March 9, 2010)
Taxes are the lifeblood of the government. Without taxes, the government can neither
exist nor endure. The exercise of taxing power derives its source from the very existence of the
State whose social contract with its citizens obliges it to promote public interest and the
common good.33
revenue measure as unconstitutional (for being violative of the due process clause) on
the mere allegation of arbitrariness by the taxpayer.41 There must be a factual
foundation to such an unconstitutional taint.42 This merely adheres to the authoritative
doctrine that, where the due process clause is invoked, considering that it is not a fixed
rule but rather a broad standard, there is a need for proof of such persuasive character.43
Petitioner is correct in saying that income is distinct from capital.44 Income means all
the wealth which flows into the taxpayer other than a mere return on capital. Capital is a
fund or property existing at one distinct point in time while income denotes a flow of
wealth during a definite period of time.45 Income is gain derived and severed from
capital.46 For income to be taxable, the following requisites must exist:
(1) there must be gain;
(2) the gain must be realized or received and
(3) the gain must not be excluded by law or treaty from taxation.47
Certainly, an income tax is arbitrary and confiscatory if it taxes capital because capital is
not income. In other words, it is income, not capital, which is subject to income tax.
However, the MCIT is not a tax on capital.
Silkair vs. CIR, G.R. No. 184398, Feb. 25, 2010;
CIR v. Fortune Tobacco Corporation, G.R. No. 180006, Sep. 28, 2011)
Philippine Airlines, Inc. v. Commissioner of Internal Revenue, G.R. No. 198759, July 1,
2013 (Indirect tax);
Swedish Match Co. vs. Treasurer of the City of Manila, G.R, 181277 July 3, 2013; (direct
duplicate taxation);
City of Pasig v. Republic (G.R. 185023, August 24, 2011)
Atlas Consolidated Mining and Development Corporation v. CIR, G.R. No. 159471,
January 26, 2011);
CIR v. Pilipinas Shell Petroleum Corporation, G.R. 188497, April 25, 2012)
CIR v. Ariete, G.R. No. 164152, January 21, 2010); (interpretation cannot be extended by
implication);
People v. Sandiganbayan 467 SCRA 137, 2005)(tax pyramiding)
Ormoc Sugar Company, Inc. vs. The Treasurer of Ormoc City, et al, 22 SCRA 603)