universal application of the laws on all persons or things without distinction. This might in fact sometimes result in unequal protection. What the clause requires is equality among equals as determined according to a valid classification. By classification is meant the grouping of persons or things similar to each other in certain particulars and different from all others in these same particulars.
{Abakada Guro Party List v. Ermita, 469 SCRA 1,140) CLASSIFICATION, WHEN PROPER
The power to select the subjects of taxation and apportion the public burden among them includes the power to make classifications. The inequalities which result from the singling out of one particular class for taxation or exemption infringe no constitutional limitation.60
"1 Cooley 558-562.
•"Lutz v. Araneta, G.R. No. L-7859, D e c e m b e r 2 2 , 1 9 5 5 , 98 Phil. 148.
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However, for classification to be valid, the following requisites must concur:
a. it must be based on substantial distinction;
b. it must apply both to present and future condi-tions;
c. it must be germane to the purposes of the law;
d. it must apply equally to all members of the same class. (Ormoc Sugar Company, Inc. v. The Treasurer ofOrmoc City, et al., 22 SCRA 603)
The principle of equality admits of classification or dis-tinction as long as they are based upon real and substantial differences between the persons, property, or privileges and those not taxed must bear some reasonable relation to the object of purpose of legislation, or to some permissible gov-ernmental policy or legitimate end of government. (Matic, Jr., Taxation in the Philippines, Vol. 1, pp. 79-80)
Classification freeze provision under R.A. 9334 does not violate the equal protection and uniformity of taxation clauses under the Constitution
A legislative classification that is reasonable does not offend the constitutional guaranty of the equal protection of the laws. The classification is considered valid and reasonable provided that: (1) it rests on substantial distinctions; (2) it is germane to the purpose of the law; (3) it applies, all things being equal, to both present and future conditions; and (4) it applies equally to all those belonging to the same class.
The first, third and fourth requisites are satisfied. The classification freeze provision was inserted in the law for reasons of practicality and expediency. That is, since a new brand was not yet in existence at the time of the passage of R.A. 8240, then Congress needed a uniform mechanism to fix the tax bracket of a new brand. The current net retail price, similar to what was used to classify the brands under Annex "D" as of October 1, 1996, was thus the logical and practical choice. Further, with the amendments introduced by R.A. 9334, the freezing of the tax classifications now
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expressly applies not just to Annex "D" brands but to newer brands introduced after the effectivity of R.A. 8240 on January 1, 1997 and any new brand that will be introduced in the future.
xxx xxx
The classification freeze provision uniformly applies to all newly introduced brands in the market, whether imported or locally manufactured. It does not purport to single out imported cigarettes in order to unduly favor locally produced ones. Further, BAT's evidence was anchored on the alleged unequal tax treatment between old and new brands which involves a different frame of reference vis-a-vis local and imported products. BAT has, therefore, failed to clearly prove its case, both factually and legally, within the parameters of the GATT.
At any rate, even assuming arguendo that BAT was able to prove that the classification freeze provision violates the GATT, the outcome would still be the same. The GATT is a treaty duly ratified by the Philippine Senate and under Article VII, Section 21 of the Constitution, it merely acquired the status of a statute. Applying the basic principles of statutory construction in case of irreconcilable conflict between statutes, R.A. 8240, as amended by R.A. 9334, would prevail over the GATT either as a later enactment by Congress or as a special law dealing with the taxation of sin products. [British American Tobacco v. Camacho, 562 SCRA 511 (2008)]
CASES FOR STUDY
BENJAMIN GOMEZ v. ENRICO PALOMAR, et al.
25 SCRA 827
Petitioner questions the constitutionality of the statute as well as the implementing administrative orders issued implementing the special Anti-TB stamp required by R.A. 1635, contending that it violates the equal protection clause of the Constitution as well as the rule of uniformity and equality in taxation.
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HELD:
R.A. 1635 is valid.
It is claimed that R.A. 1635, otherwise known as the Anti-TB Stamp Law, is violative of the equal pro-tection 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 discrirninatorily grants exemptions.
HELD:
It is settled that the legislature has the inherent power to select the subject of taxation and to grant exemptions. The classification of mail users is based on the ability to pay, the enjoyment of a privilege and on administrative convenience. Tax exemptions have never been thought of as raising issues under the equal protection clause.
Moreover, the imposition of a flat rate rather than a graduated tax does not infringe the rule of uniformity and equality of taxation. A tax need not be measured by the weight of the mail or the extent of the service rendered. Considerations of administrative convenience and cost afford an adequate ground for classification. The same considerations may induce the legislature to impose a flat tax which in effect is a charge for the transaction, operating equally on all persons within the class regardless of the amount involved.
EASTERN THEATRICAL CO. v.
VICTOR ALFONSO