GENERAL P
GENERAL PRINCIPLES
RINCIPLES OF TAXA
OF TAXATION -
TION - P
PART 2
ART 2
1.
1. G.R. G.R. No. No. 156278 156278 March March 29, 29, 2! 2! PLANTEPLANTERS RS PRO"#CPRO"#CTS, TS, INC.,INC., petitioner, vs. FERTIP$IL CORPORATION,
FERTIP$IL CORPORATION, respondent. D E C I S I O N P#NO,
P#NO, J.: J.:
Before us is a petition for review under Rule 45 assailing the Deision dated !ul" #$, %&&%# of the Court
of 'ppeals in C'().R. S* No. +4-4, and its Resolution dated Dee/er 4, %&&% den"ing petitioner 0s otion for reonsideration.
*etitioner *lanters *roduts, In. 12**I23 and respondent ertiphil Corporation 12ertiphil23 are doesti orporations engaged in the iportation and distri/ution of fertiliers, pestiides and agriultural heials. On the strength of 6etter of Instrution No. #4+5 issued /" then *resident erdinand E. 7aros on !une -, #$85, ertiphil and other doesti orporations engaged in the fertilier /usiness paid *#&.&& for ever" /ag of fertilier sold in the ountr" to the ertilier and *estiide 'uthorit" 1*'3, the governent agen" governing the fertilier industr". *' in turn reitted the aount to **I for its
reha/ilitation, aording to the e9press andate of 6OI No. #4+5.%
'fter the EDS' I revolution in #$8+, the iposition of *#&.&& /" the *' on ever" /ag of fertilier sold was voluntaril" stopped. ertiphil deanded fro **I the refund of *+,+$8,#44.&& whih it paid under 6OI No. #4+5. **I refused. :ene, on Septe/er #4, #$8, ertiphil ;led a olletion and daage suit against *' and **I /efore the Regional <rial Court of 7a=ati Cit" do=eted as Civil Case No. #8-5 deanding refund of the *+,+$8,#44.&&. ert iphil ontended that 6OI No. #4+5 was void and unonstitutional for /eing a glaring e9aple of ron" apitalis as it favored **I onl". **I ;led its answer /ut for failure to attend the pre(trial onferene, it was delared in default and ertiphil was allowed to present evidene e9(parte.
On Nove/er %&, #$$#, the R<C of 7a=ati Cit", Branh #4, deided in favor of ertiphil delaring 6OI No. #4+5 void and unonstitutional. It ordered **I to return the aount whih ertiphil paid thereunder, with twelve perent 1#%>3 interest fro the tie of ?udiial deand. **I0s otion for reonsideration was denied in an Order dated e/ruar" #-, #$$%. :ene, it ;led notie of appeal on e/ruar" %&, #$$%. 't the sae tie, ertiphil oved for e9eution of the deision pending appeal. <he trial ourt granted the otion and a writ of e9eution pending appeal was issued upon the posting
of a suret" /ond /" ertiphil in the aoun t of *+,+$8,&&&.&&. **I assa iled the propr iet" of the e9eution pending appeal /efore the Court of 'ppeals and, thereafter, to this Court. @e resolved the
ase in its favor in our Deision dated Oto/er %%, #$$$ in ).R. No. #&+&5%. - ertiphil was ordered to
return all the properties of **I ta=en in the ourse of e9eution pending appeal or the value thereof, if return is no longer possi/le. 'fter the deision /eae ;nal and e9eutor", **I oved for e9eution /efore the trial ourt and ertiphil0s /an= deposits were aordingl" garnished.
On !anuar" 5, %&&#, ertiphil oved to disiss **I0s appeal fro the trial ourt0s Deision dated Nove/er %&, #$$# iting as grounds the non(pa"ent of the appellate do=et fee and alleged failure of **I to proseute the appeal within a reasona/le tie. <he trial ourt denied the otion in an Order dated 'pril -, %&&# ruling that the pa"ent of the appellate do=et fee within the period for ta=ing an appeal is a new reAuireent under the #$$ Rules of Civil *roedure whih was not "et applia/le when **I ;led its appeal in #$$%. 7oreover, the ourt found that **I did not fail to proseute the appeal within a reasona/le tie.
On 'pril 5, %&&#, the ourt issued another order, upon **I0s otion, direting ertiphil0s /an=s to deliver to the Deput" Sheri the garnished deposits aintained with the and for the lev"ing upon of the suret" /ond posted /" ertiphil.
ertiphil oved to reonsider the Orders dated 'pril - and 5, %&&#, to no avail. :ene, on Oto/er -&, %&&#, it ;led a speial ivil ation for ertiorari with the Court of 'ppeals iputing grave a/use of
disretion on the part of the trial ourt in issuing the two orders. 4 <he Court of 'ppeals partiall"
granted the petition and set aside the Order dated 'pril -, %&&#. It ruled that although **I ;led its appeal in #$$%, the #$$ Rules of Civil *roedure should nevertheless /e followed sine it applies to ations pending and undeterined at the tie of its passage. Due to **I0s failure to pa" the appellate do=et fee for three 1-3 "ears fro the tie the #$$ Rules of Civil *roedure too= eet on !ul" #, #$$ until ertiphil oved to disiss the appeal in %&&#, the trial ourt0s deision /eae ;nal and e9eutor". <he Court of 'ppeals thus disposed of the petition, vi
@:EREORE, the instant petition is *'R<I'66 )R'N<ED and the Order of &- 'pril %&&# of the Regional <rial Court of 7a=ati Cit", Branh #4, is SE< 'SIDE. <he deision of %& Nove/er #$$# of the said
ourt is here/" delared ;nal and e9eutor".
<he Cler= of Court is direted to return to the Regional <rial Court of 7a=ati Cit", Branh #4, the reord of Civil Case No. #-85 1si3 entitled 2ertiphil Corporation vs. *lanters *rodut1s3 In., and ertilier and *estiide 'uthorit",2 for the oputation of the aount due the petitioner ertiphil Corporation pursuant to the %& Nove/er #$$# deision.
SO ORDERED.5
:ene, this petition /" **I.
's a general rule, rules of proedure appl" to ations pending and undeterined at the tie of their passage, hene, retrospetive in nature. :owever, the general rule is not without an e9eption. Retrospetive appliati on is allowed if no vested rights are ipaired.+ <hus, in 6and Ban= of the
*hilippines v. de 6eon our ruling that the appropriate ode of review fro deisions of Speial
'grarian Courts is a petition for review under Se. +& of R.'. No. ++5 and not an ordinar" appeal as Se. +# thereof sees to ipl", was not given retroative appliation. @e held that to give our ruling a retrospetive appliation would pre?udie petitioner0s pending appeals /rought under said Se. +# /efore the Court of 'ppeals at a tie when there was "et no lear pronouneent as to the proper interpretation of the seein gl" oni ting Ses. +& and +#. In ;ne, to appl" the Court0s ruling retroativel" would pre?udie 6B*0s right to appeal /eause its pending appeals would then /e disissed outright on a ere tehnialit" there/" sari;ing the su/stantial erits of the ases. In the instant ase, at the tie **I ;led its appeal in #$$%, all that the rules reAuired for the perfetion of its appeal was the ;ling of a notie of appeal with the ourt whih rendered the ?udgent or order
appealed fro, within ;fteen 1#53 da"s fro notie thereof.8 **I oplied with this reAuireent when it
;led a notie of appeal on e/ruar" %&, #$$% with the R<C of 7a=ati Cit", Branh #4, after reeiving op" of its Order dated e/ruar" #-, #$$% den"ing its otion for reonsideration of the adverse Deision dated Nove/er %&, #$$# rendered in Civil Case No. #8-5. **I0s appeal was therefore alread" perfeted at that tie.
<hus, the #$$ Rules of Civil *roedure whih too= eet on !ul" #, #$$ and whih reAuired that
appellate do=et and other lawful fees should /e paid within the sae period for ta=ing an appeal,$ an
not aet **I0s appeal whih was alread" perfeted in #$$%. 7uh less ould it /e onsidered a ground for disissal thereof sine **I0s period for ta=ing an appeal, li=ewise the period for pa"ent of the appellate do=et fee as now reAuired /" the rules, has long lapsed in #$$%. @hile the right to appeal is statutor", the ode or anner /" whih this right a" /e e9erised is a Auestion of proedure whih a" /e altered and odi;ed onl" when vested rights are not ipaired. #& <hus, failure to pa" the
right, alread" perfeted in #$$%, to have its ase reviewed on appeal. In fat the Court of 'ppeals reognied suh fat when it gave **I a fresh period to pa" the appellate do=et fee in an Order dated 'pril $, %&&% issued in FDG(CH(No. &-&4## direting it to pa" the fee within ;fteen 1#53 da"s fro
reeipt thereof.
<his is not all. @e have also previousl" ruled that failure to pa" the appellate do=et fee does not autoatiall" result in the disissal of an appeal, disissal /eing disretionar" on the part of the
appellate ourt.#% 'nd in deterining whether or not to disiss an appeal on suh ground, ourts have
alwa"s /een guided /" the peuliar legal and eAuita/le irustanes attendant to eah ase. <hus, in
*edrosa v. :ill#- and )egare v. Court of 'ppeals, #4 the appeals were disissed /eause appellants
failed to pa" the appellate do= et fees despite tiel" notie given the /" the Court of 'ppeals and despite its adonitions that the appeals would /e disissed in ase of non(opliane. On the other
hand, the appeal in 7atan Ce/u International 'irport 'uthorit" v. 7angu/at #5 was not disissed
/eause we too= into aount the fat that the #$$ Rules of Civil *roedure had onl" /een in eet for fourteen 1#43 da"s when the Oe of the Soliitor )eneral appealed fro the deision of the R<C of 6apu(6apu Cit" on !ul" #4, #$$ without pa"ing the appellate ourt do=et fees as reAuired /" the new rules. Considering the reen" of the hanges and appellant0s iediate pa"ent of the fees when reAuired to do so, the appeal was not disissed. @e an do no less in the instant ase where **I was not even reAuired under the rules in #$$% to pa" the appellate do=et fees at the tie it ;led its appeal. @e note oreover that **I, li=e the appellant in 7atan, proptl" paid the fees when reAuired to do so for the ;rst tie /" the R<C of 7a=ati in its Order dated 'pril -, %&&#, and infored the Court of 'ppeals of suh opliane when it in turn noti;ed **I that the fees were due, in an Order dated 'pril $, %&&%. <he reed" of appeal /eing an essential part of our ?udiial s"ste, aution ust alwa"s /e o/served so that ever" part"(litigant is not deprived of its right to appeal, /ut rather, given aplest opportunit" for the proper and ?ust disposition of his ause, freed fro the onstraints of tehnialities.#+
:aving so ruled, we shall refrain fro delving into the erits of petitioner0s other ontentions,
disussion of one /eing the proper su/?et of the appeal /efore the Court of 'ppeals,# and the other,
/eing preature at this point.#8
IN HIE@ @:EREO, the petition is )R'N<ED. <he Auestioned Deision dated !ul" #$, %&&% of the Court of 'ppeals in C'().R. S* No. +4-4 and its Resolution dated Dee/er 4, %&&% den"ing petitioner0s otion for reonsideration are SE< 'SIDE.
<he Order dated 'pril -, %&&# of the Regional <rial Court of 7a=ati Cit", Branh #4, in Civil Case No. #8-5 is reinstated, and the Court of 'ppeals is ordered to proeed with the resolution of petitioner0s appeal do=eted as C'().R. CH No. 55&# entitled 2ertiphil Corporation v. *lanters *roduts, In.2 SO ORDERED.
2.
2. G.R. G.R. No. No. 1!911 1!911 A%r&' A%r&' 9, 9, 2( 2( NANATIONATIONAL L PO)ER PO)ER CORPORCORPORAATION,TION, petitioner, vs. CIT* CIT* OF A+ANAT#AN,
OF A+ANAT#AN, respondent. P#NO,
P#NO, J. J.
<his is a petition for review# of the Deision% and the Resolution- of the Court of 'ppeals dated 7arh
#%, %&&# and !ul" #&, %&&#, respetivel", ;nding petitioner National *ower Corporation 1N*C3 lia/le to pa" franhise ta9 to respondent Cit" of Ca/anatuan.
*etitioner is a governent(owned and ontrolled orporation reated under Coonwealth 't No.
#%&, as aended.4 It is tas=ed to underta=e the 2developent of h"droeletri generations of power
and the prodution of eletriit" fro nulear, geotheral and other soures, as well as, the
transission of eletri power on a nationwide /asis.25 Conoitant to its andated dut", petitioner
stations and su/stations for the purpose of developing h"drauli power and suppl"ing suh power to
the inha/itants.+
or an" "ears now, petitioner sells eletri power to the residents of Ca/anatuan Cit", posting a
gross inoe of *#&,8#4,#8.$+ in #$$%. *ursuant to setion - of Ordinane No. #+5($%, 8 the
respondent assessed the petitioner a franhise ta9 aounting to *8&8,+&+.4#, representing 5> of #> of the latterJs gross reeipts for the preeding "ear.$
*etitioner, whose apital sto= was su/sri/ed and paid wholl" /" the *hilippine )overnent,#& refused
to pa" the ta9 asses sent. It argued that the resp ondent has no authorit" to ipose ta9 on governent entities. *etitioner also ontended that as a non(pro;t organiation, it is e9epted fro
the pa"ent of all fors of ta9es, harges, duties or fees## in aordane with se. #- of Rep. 't No.
+-$5, as aended, vi
2Se.#-.Non-proft Character o the Corporation; Exemption rom all Taxes, Duties, Fees,
Imposts and Other Charges ! "o#ernment and "o#ernmental Instrumentalities$- <he Corporation shall /e non(pro;t and shall devote all its return fro its apital investent, as well as e9ess revenues fro its operation, for e9pansion. <o ena/le the Corporation to pa" its inde/tedness and o/ligations and in furtherane and eetive ipleentation of the poli" enuniated in Setion one of this 't, the Corporation is here/" e9ept
1a3 ro the pa"ent of all ta9es, duties, fees, iposts, harges, osts and servie fees in an" ourt or adinistrative proeedings in whih it a" /e a part", restritions and duties to the Repu/li of the *hilippines, its provines, ities, uniipalities and other governent agenies and instruentalitiesK
1/3 ro all inoe ta9e s, franhise ta9es and realt" ta9es to /e paid to the Natio nal )overnent, its provines, ities, uniipalities and other governent agenies and instruentalitiesK
13 ro all iport duties, opensating ta9es and advaned sales ta9, and wharfage fees on iport of foreign goods reAuired for its operations and pro?etsK and
1d3 ro all ta9es, duties, fees, iposts, and all other harges iposed /" the Repu/li of the *hilippines, its provines, ities, uniipalities and other governent agenies and instruentalities, on all petroleu produts used /" the Corporation in the generation,
transission, utiliation, and sale of eletri power.2#%
<he respondent ;led a olletion suit in the Regional <rial Court of Ca/anatuan Cit", deanding that petitioner pa" the assessed ta9 due, plus a surharge eAuivalent to %5> of the aount of ta9, and %>
onthl" interest.#-Respondent alleged that petitionerJs e9eption fro loal ta9es has /een repealed
/" setion #$- of Rep. 't No. #+&,#4 whih reads as follows
2Se. #$-.%ithdra&al o Tax Exemption 'ri#ileges$- Fnless otherwise provided in this Code, ta9
e9eptions or inentives granted to, or presentl" en?o"ed /" all persons, whether natural or ?uridial, inluding governent owned or ontrolled orporations, e9ept loal water distrits,
ooperatives dul" registered under R.'. No. +$-8, non(sto= and non(pro;t hospitals and eduational institutions, are here/" withdrawn upon the eetivit" of this Code.2
On !anuar" %5, #$$+, the trial ourt issued an Order #5 disissing the ase. It ruled that the ta9
e9eption privileges granted to petitioner su/sist despite the passage of Rep. 't No. #+& for the following reasons 1#3 Rep. 't No. +-$5 is a partiular law and it a" not /e repealed /" Rep. 't No. #+& whih is a general lawK 1%3 setion #$- of Rep. 't No. #+& is in the nature of an iplied repeal whih is not favoredK and 1-3 loal governents have no power to ta9 instruentalities of the national governent. *ertinent portion of the Order reads
2<he Auestion of whether a partiular law has /een repealed or not /" a su/seAuent law is a atter of legislative intent. <he lawa=ers a" e9pressl" repeal a law /" inorporating therein repealing provisions whih e9pressl" and spei;all" ite1s3 the partiular law or laws, and portions thereof, that are intended to /e repealed. ' delaration in a statute, usuall" in its repealing lause, that a partiular and spei; law, identi;ed /" its nu/er or title is repealed is an e9press repealK all others are iplied repeal. Se. #$- of R.'. No. #+& is an iplied repealing lause /eause it fails to identif" the at or ats that are intended to /e repealed. It is a well(settled rule of statutor" onstrution that repeals of statutes /" ipliation are not favored. <he presuption is against inonsisten" and repugnan" for the legislative is presued to =now the e9isting laws on the su/?et and not to have enated inonsistent or oniting statutes. It is also a well(settled rule that, generall", general law does not repeal a speial law unless it learl" appears that the legislative has intended /" the latter general at to odif" or repeal the earlier speial law. <hus, despite the passage of R.'. No. #+& fro whih the Auestioned Ordinane No. #+5($% was /ased, the ta9 e9eption privileges of defendant N*C reain.
'nother point going against plainti in this ase is the ruling of the Supree Court in the ase
of(asco #s$ 'hilippine )musement and "aming Corporation, #$ SCR' 5%, where it was held
that
J6oal governents have no power to ta9 instruentalities of the National )overnent. *')COR is a governent owned or ontrolled orporation with an srcinal harter, *D #8+$. 'll of its shares of sto=s are owned /" the National )overnent. 999 Being an instruentalit" of the governent, *')COR should /e and atuall" is e9ept fro loal ta9es. Otherwise, its operation ight /e /urdened, ipeded or su/?eted to ontrol /" ere loal governent.J
6i=e *')COR, N*C, /eing a governent owned and ontrolled orporation with an srcinal harter and its shares of sto=s owned /" the National )overnent, is /e"ond the ta9ing power of the 6oal )overnent. Corollar" to this, it should /e noted here that in the N*C CharterJs delaration of *oli", Congress delared that J999 1%3 the total eletri;ation of the *hilippines through the developent of power fro all servies to eet the needs of industrial developent and dispersal and needs of rural eletri;ation are priar" o/?etives of the
nations whih shall /e pursuedcoordinatel! and supported ! all instrumentalities and
agencies o the go#ernment, inluding its ;nanial institutions.J 1undersoring supplied3. <o allow plainti to su/?et defendant to its ta9(ordinane would /e to ipede the avowed goal of this governent instruentalit".
Fnli=e the State, a it" or uniipalit" has no inherent power of ta9ation. Its ta9ing power is liited to that whih is provided for in its harter or other statute. 'n" grant of ta9ing power is to /e onstrued stritl", with dou/ts resolved against its e9istene.
ro the e9isting law and the rulings of the Supree Court itself, it is ver" lear that the
plainti ould not ipose the su/?et ta9 on the defendant.2#+
On appeal, the Court of 'ppeals reversed the trial ourtJs Order # on the ground that setion #$-, in
relation to setions #- and #5# of the 6)C, e9pressl" withdrew the e9eptions granted to the
petitioner.#8 It ordered the petitioner to pa" the respondent it" governent the following 1a3 the su
of *8&8,+&+.4# representing the franhise ta9 due /ased on gross reeipts for the "ear #$$%, 1/3 the ta9 due ever" "ear thereafter /ased in the gross reeipts earned /" N*C, 13 in all ases, to pa" a surharge of %5> of the ta9 due and unpaid, and 1d3 the su of * #&,&&&.&& as litigation e9pense.#$
On 'pril 4, %&&#, the petitioner ;led a 7otion for Reonsideration on the Court of 'ppealJs Deision. <his was denied /" the appellate ourt,#i*
2<he Court ;nds no erit in N*CJs otion for reonsideration. Its arguents reiterated therein
that the ta9ing power of the provine under 'rt. #- 1sic3 of the 6oal )overnent Code refers
erel" to private persons or orporations in whih ategor" it 1N*C3 does not /elong, and that the 6)C 1R' #+&3 whih is a general law a" not ipliedl" repeal the N*C Charter whih is a speial lawL;nds the answer in Setion #$- of the 6)C to the eet that Jta9 e9eptions or inentives granted to, or presentl" en?o"ed /" all persons, whether natural or ?uridial, inluding governent(owned or ontrolled orporations e9ept loal water distrits 999 are here/" withdrawn.J <he repeal is diret and uneAuivoal, not iplied.
IN HIE@ @:EREO, the otion for reonsideration is here/" DENIED. SO ORDERED.2%&
In this petition for review, petitioner raises the following issues
2'. <:E COFR< O '**E'6S )R'HE6 ERRED IN :O6DIN) <:'< N*C, ' *FB6IC NON(*ROI< COR*OR'<ION, IS 6I'B6E <O *' ' R'NC:ISE <'M 'S I< 'I6ED <O CONSIDER <:'< SEC<ION #- O <:E 6OC'6 )OHERN7EN< CODE IN RE6'<ION <O SEC<ION #-# '**6IES ON6 <O *RIH'<E *ERSONS OR COR*OR'<IONS EN!OIN) ' R'NC:ISE.
B. <:E COFR< O '**E'6S )R'HE6 ERRED IN :O6DIN) <:'< N*CJS EME7*<ION RO7 '66 OR7S O <'MES :'S BEEN RE*E'6ED B <:E *ROHISION O <:E 6OC'6 )OHERN7EN< CODE 'S <:E EN'C< 7EN< O ' 6'<ER 6E)IS 6'<ION, @:IC: IS ' )ENER'6 6'@, C'NNO< BE CONS<RFED <O :'HE RE*E'6ED ' S*ECI'6 6'@.
C. <:E COFR< O '**E'6S )R'HE6 ERRED IN NO< CONSIDERIN) <:'< 'N EMERCISE O *O6ICE *O@ER <:ROF): <'M EME7*<ION S:OF6D *REH'I6 OHER <:E 6OC'6 )OHERN7EN<
CODE.2%#
It is /e"ond dispute that the respondent it" governent has the authorit" to issue Ordinane No. #+5( $% and ipose an annual ta9 on 2/usinesses en?o"ing a franhise,2 pursuant to setion #5# in relation
to setion #- of the 6)C,#i*
2Se. #-.Franchise Tax$ - Not&ithstanding an! exemption granted ! an! la& or other special
la&, the pro#ince ma! impos e a tax on usinesses en+o!ing a ranchise, at a rate not e9eeding ;ft" perent 15&>3 of one pere nt 1#>3 of the gross annua l reeipts for the preeding alendar "ear /ased on the inoing reeipt, or realied, within its territorial ?urisdition.
In the ase of a newl" started /usiness, the ta9 shall not e9eed one(twentieth 1#%&3 of one perent 1#>3 of the apital investent. In the sueeding alendar "ear, regardless of when the /usiness started to operate, the ta9 shall /e /ased on the gross reeipts for the preeding alendar "ear, or an" fration thereof, as provided herein.2 1emphasis supplied3
9 9 9
Se. #5#.cope o Taxing 'o&ers.( E9ept as otherwise provided in this Code, the it", a"
lev" the ta9es, fees, and harges whih the provine or uniipalit" a" ipose 'ro#ided,
ho&e#er , <hat the ta9es, fees and harges levied and olleted /" highl" ur/anied and independent oponent ities shall arue to the and distri/uted in aordane with the provisions of this Code.
<he rates of ta9es that the it" a" lev" a" e9eed the a9iu rates allowed for the provine or uniipalit" /" not ore than ;ft" perent 15&>3 e9ept the rates of professional and auseent ta9es.2
*etitioner, however, su/its that it is not lia/le to pa" an annual franhise ta9 to the respondent it" governent. It ontends that setions #- and #5# of the 6)C in relation to setion #-#, liit the ta9ing power of the respondent it" governent to private entities that are engaged in trade or
oupation for pro;t.%%
Setion #-# 13 of the 6)C de;nes a ranchise as 2a right or privilege, aeted with pu/li interest
whih is onferred upon pri#ate persons or corporations, under suh ters and onditions as the
governent and its politial su/divisions a" ipose in the interest of the pu/li welfare, seurit" and safet".2 ro the phraseolog" of this provision, the petitioner lais that the word 2private2 odi;es the ters 2persons2 and 2orporations.2 :ene, when the 6)C uses the ter 2franhise,2 petitioner su/its that it should refer spei;all" to franhises granted to private natural persons and to private
orporations.%- Ergo, its harter should not /e onsidered a 2franhise2 for the purpose of iposing the
franhise ta9 in Auestion.
On the other hand, setion #-# 1d3 of the 6)C de;nes 2 usiness2 as 2trade or oerial ativit"
regularl" engaged in as eans of livelihood or with a view to pro;t.2 *etitioner lais that it is not engaged in an ativit" for pro;t, in as uh as its harter spei;a ll" provides that it is a 2non(pro;t organiation.2 In an" ase, petitioner argues that the auulation of pro;t is erel" inidental to its operationK all these pro;ts are reAuired /" law to /e hanneled for e9pansion and iproveent of its failities and servies.%4
*etitioner also alleges that it is an instruentalit" of the National )overnent,%5 and as suh, a" not
/e ta9ed /" the respondent it" governen t. It ites the dotrine in (asco #s$ 'hilippine )musement
and "aming Corporatio n%+ where this Court held that loal governents have no power to ta9
instruentalities of the National )overnent,#i*
26oal governents have no power to ta9 instruentalities of the National )overnent. *')COR has a dual role, to operate and regul ate ga/li ng asinos. <he latte r role is governental, whih plaes it in the ategor" of an agen" or instruentalit" of the )overnent. Being an instruentalit" of the )overnent, *')COR should /e and atuall" is e9ept fro loal ta9es. Otherwise, its operation ight /e /urdened, ipeded or su/?eted to ontrol /" a ere loal governent.
J<he states have no power /" ta9ation or otherwise, to retard, ipede, /urden or in an" anner ontrol the operation of onstitutional laws enated /" Congress to arr" into e9eution the powers vested in the federal governent. 1.C Culloch #$ .ar!land, 4 @heat -#+, 4 6 Ed. 5$3J
<his dotrine eanates fro the Jsuprea"J of the National )overnent over loal governents.
J!ustie :oles, spea=ing for the Supree Court, ade referene to the entire a/sene of power on the part of the States to touh, in that wa" 1ta9ation3 at least, the instruentalities of the Fnited States 1!ohnson v. 7ar"land, %54 FS 5#3 and it an /e
agreed thatno state or political sudi#ision can regulate a ederal instrumentalit! in
such a &a! as to pre#ent it rom consummating its ederal responsiilities, or e#en seriousl! urden it rom accomplishment o them .J 1'ntieau,.odern Constitutional /a&, Hol. %, p. #4&, italis supplied3
Otherwise, ere reatures of the State an defeat National poliies thru e9terination of what loal authorities a" pereive to /e undesira/le ativities or enterprise using the power to ta9 as J a tool regulationJ 10$$ #$ anche* , -4& FS 4%3.
<he power to ta9 whih was alled /" !ustie 7arshall as the Jpower to destro"J 1.c Culloch #$ .ar!land,supra3 annot /e allowed to defeat an instruentalit" or reation of the ver" entit"
whih has the inherent power to wield it.2%
*etitioner ontends that setion #$- of Rep. 't No. #+&, withdrawing the ta9 privileges of governent(owned or ontrolled orporations, is in the nature of an iplied repeal. ' speial law, its harter annot /e aended or odi;ed ipliedl" /" the loal governent ode whih is a general law. ConseAuentl", petitioner lais that its e9eption fro all ta9es, fees or harges under its harter
su/sists despite the passage of the 6)C,#i*
2It is a well(settled rule of statutor" onstrution that repeals of statutes /" ipliation are not favored and as uh as possi/le, eet ust /e given to all enatents of the legislature. 7oreover, it has to /e oneded that the harter of the N*C onstitutes a speial law. Repu/li 't No. #+&, is a general law. It is a /asi rule in statutor" onstrution that the enatent of a later legislation whih is a general law annot /e onstrued to have repealed a speial law. @here there is a onit /etween a general law and a speial statute, the speial statute
should prevail sine it evines the legislative intent ore learl" than the general statute.2%8
inall", petitioner su/its that the harter of the N*C, /eing a valid e9erise of polie power, should prevail over the 6)C. It alleges that the power of the loal governent to ipose franhise ta9 is su/ordinate to petitionerJs e9eption fro ta9ationK 2polie power /eing the ost pervasive, the least
liita/le and ost deanding of all powers, inluding the power of ta9ation.2%$
<he petition is without erit.
<a9es are the life/lood of the governent,-& for without ta9es, the governent an neither e9ist nor
endure. ' prinipal attri/ute of sovereignt",-# the e9erise of ta9ing power derives its soure fro the
ver" e9istene of the state whose soial ontrat with its itiens o/liges it to proote pu/li interest and oon good. <he theor" /ehind the e9erise of the power to ta9 eanates fro
neessit"K-% without ta9es, governent annot ful;ll its andate of prooting the general welfare and
well(/eing of the people.
In reent "ears, the inreasing soial hallenges of the ties e9panded the sope of state ativit", and ta9ation has /eoe a tool to realie soial ?ustie and the eAuita/le distri/ution of wealth, eonoi progress and the protetion of loal industries as well as pu/li welfare and siilar
o/?etives.-- <a9ation assues even greater signi;ane with the rati;ation of the #$8 Constitution.
<heneforth, the power to ta9 is no longer vested e9lusivel" on CongressK loal legislative /odies are now given diret authorit" to lev" ta9es, fees and other harges-4 pursuant to 'rtile M, setion 5 of the
#$8 Constitution,#i*
2Setion 5.( Eah 6oal )overnent unit shall have the power to reate its own soures of revenue, to lev" ta9es, fees and harges su/?et to suh guidelines and liitations as the Congress a" provide, onsistent with the /asi poli" of loal autono". Suh ta9es, fees and harges shall arue e9lusivel" to the 6oal )overnents.2
<his paradig shift results fro the realiation that genuine developent an /e ahieved onl" /" strengthening loal autono" and prooting deentraliation of governane. or a long tie, the ountr"Js highl" entralied governent struture has /red a ulture of dependene aong loal governent leaders upon the national leadership. It has also 2dapened the spirit of initiative, innovation and iaginative resiliene in atters of loal developent on the part of loal governent leaders.2-5 <he onl" wa" to shatter this ulture of dependene is to give the 6)Fs a wider role in the
deliver" of /asi servies, and onfer the suient powers to generate their own soures for the purpose. <o ahieve this goal, setion - of 'rtile M of the #$8 Constitution andates Congress to
enat a loal governent ode that will, consistent &ith the asic polic! o local autonom!, set the
guidelines and liitations to this grant of ta9ing powers,#i*
2Setion -. <he Congress shall enat a loal governent ode whih shall provide for a ore responsive and aounta/le loal governent struture instituted through a s"ste of deentraliation with eetive ehaniss of reall, initiative, and referendu, alloate aong the dierent loal governent units their powers, responsi/ilities, and resoures, and provide for the Auali;ations, eletion, appointent and reoval, ter, salaries, powers and funtions and duties of loal oials, and all other atters relating to the organiation and operation of the loal units.2
<o reall, prior to the enatent of the Rep. 't No. #+&,-+ also =nown as the 6oal )overnent Code
of #$$# 16)C3, various easures have /een enated to proote loal autono". <hese inlude the
Barrio Charter of #$5$,- the 6oal 'utono" 't of #$5$,-8 the Deentraliation 't of #$+-$ and the
6oal )overnent Code of #$8-.4& Despite these initiatives, however, the sha=les of dependene on
the national governent reained. 6oal governent units were faed with the sae pro/les that haper their apa/ilitie s to partiipate eetivel " in the national developen t eorts, aong whih are 1a3 inadeAuate ta9 /ase, 1/3 la= of ;sal ontrol over e9ternal soures of inoe, 13 liited authorit" to prioritie and approve developent pro?ets, 1d3 heav" dependene on e9ternal soures of
inoe, and 1e3 liited supervisor" ontrol over personnel of national line agenies.4#
Considered as the ost revolutionar" piee of legislation on loal autono", 4% the 6)C eetivel"
deals with the ;sal onstraints faed /" 6)Fs. It widens the ta9 /ase of 6)Fs to inlude ta9es whih were prohi/ited /" previous laws suh as the iposition of ta9es on forest produts, forest onessionaires, ineral produts, ining operations, and the li=e. <he 6)C li=ewise provides enough e9i/ilit" to ipose ta9 rates in aordane with their needs and apa/ilities. It does not presri/e graduated ;9ed rates /ut erel" spei;es the iniu and a9iu ta9 rates and leaves the
deterination of the atual rates to the respetivesanggunian.
4-One of the ost signi;ant provisions of the 6)C is the reoval of the /lan=et e9lusion of instruentalities and agenies of the national governent fro the overage of loal ta9ation. 'lthough as a general rule, 6)Fs annot ipose ta9es, fees or harges of an" =ind on the National )overnent, its agenies and instruentalities, this rule now adits an e9eption, i.e., when spei; provisions of the 6)C authorie the 6)Fs to ipose ta9es, fees or harges on the aforeentioned entities,#i*
2Setion #--.Common /imitations on the Taxing 'o&ers o the /ocal "o#ernment
0nits.(0nless other&ise pro#ided herein, the e9erise of the ta9ing powers of provines, ities,
uniipalities, andaranga!sshall not e9tend to the lev" of the following
9 9 9
1o3 <a9es, fees, or harges of an" =ind on the Natio nal )over nent, its agen ies and instruentalities, and loal governent units.2 1emphasis supplied3
In view of the afore(Auoted provision of the 6)C, the dotrine in (asco #s$ 'hilippine )musement and
"aming Corporation44 relied upon /" the petitioner to support its lai no longer applies. <o
ephasie, the(asco ase was deided prior to the eetivit" of the 6)C, when no law epowering
the loal governent units to ta9 instruentalities of the National )overnent was in eet. :owever,
as this Court ruled in the ase of .actan Ceu International )irport )uthorit! 1.CI))2 #s$
.arcos,45 nothing prevents Congress fro dereeing that even instruentalities or agenies of the
governent perforing governental funtions a" /e su/?et to ta9.4+ In enating the 6)C, Congress
reviewing the spei; provisions of the 6)C, this Court held that 7CI'', although an instruentalit" of the national governent, was su/?et to real propert" ta9,#i*
2<hus, reading together setions #--, %-%, and %-4 of the 6)C, we onlude that as a general rule, as laid down in setion #--, the ta9ing power of loal governents annot e9tend to the
lev" ofinter alia, Jta9es, fees and harges of an" =ind on the national governent, its agenies
and instruentalities, and loal governent unitsJK however, pursuant to setion %-%, provines, ities and uniipalities in the 7etropolitan 7anila 'rea a" ipose the real propert" ta9 e9ept on, inter alia, Jreal propert" owned /" the Repu/li of the *hilippines or an" of its politial su/divisions e9ept when the /ene;ial use thereof has /een granted for onsideration or otherwise, to a ta9a/le perso n as provided in the ite 1a3 of the ;rst
paragraph of setion #%.J24
In the ase at /ar, setion #5# in relation to setion #- of the 6)C learl" authories the respondent it" governent to ipose on the petitioner the franhise ta9 in Auestion.
In its general signi;ation, a franhise is a privilege onferred /" governent authorit", whih does not /elong to itiens of the ountr" generall" as a atter of oon right. 48 In its spei; sense, a
franhise a" refer to a general or priar" franhise, or to a speial or seondar" franhise. <he forer relates to the right to e9ist as a orporation, /" virtue of dul" approved artiles of inorporation,
or a harter pursuant to a speial law reating the orporation.4$ <he right under a priar" or general
franhise is vested in the individuals who opose the orpor ation and not in the orpo ration
itself.5& On the other hand, the latter refers to the right or privileges onferred upon an e9isting
orporation suh as the right to use the streets of a uniipalit" to la" pipes of tra=s, eret poles or string wires.5# <he rights under a seondar" or speial franhise are vested in the orporation and a"
ordinaril" /e onve"ed or ortgaged under a general power granted to a orporation to dispose of its
propert", e9ept suh speial or seondar" franhises as are harged with a pu/li use.5%
In setion #-# 13 of the 6)C, Congress unista=a/l" de;ned a franhise in the sense of a seondar" or speial franhise. <his is to avoid an" onfusion when the word franhise is used in the onte9t of
ta9ation. 's oonl" used, a ranchise tax is 2a ta9 on the privilege of transating /usiness in the
state and e9erising orporate franhises granted /" the state.2 5- It is not levied on the orporation
sipl" for e9isting as a orporation, upon its propert"54 or its inoe,55 /ut on its e9erise of the rights
or privileges granted to it /" the governent. :ene, a orporation need not pa" franhise ta9 fro
the tie it eased to do /usiness and e9erise its franhise.5+ It is within this onte9t that the phrase
2tax on usinesses en+o!ing a ranchise2 in setion #- of the 6)C should /e interpreted and
understood. Heril", to deterine whether the petitioner is overed /" the franhise ta9 in Auestion, the following reAuisites should onur 1#3 that petitioner has a 2franhise2 in the sense of a seondar" or speial franhiseK and 1%3 that it is e9erising its rights or privileges under this franhise within the territor" of the respondent it" governent.
*etitioner ful;lls the ;rst reAuisite. Coonwealth 't No. #%&, as aended /" Rep. 't No. -$5, onstitutes petitionerJs priar" and seondar" franhises. It serves as the petitionerJs harter, de;ning its oposition, apitaliation, the appointent and the spei; duties of its orporate oers, and its
orporate life span.5 's its seondar" franhise, Coonwealth 't No. #%&, as aended, vests the
petitioner the following powers whih are not availa/le to ordinar" orporations,#i*
29 9 9
1e3 <o ondut investigations and surve"s for the developent of water power in an" part of the *hilippinesK
1f3 <o ta=e water fro an" pu/li strea , river, ree=, la=e , spring or waterfall in the *hilippines, for the purposes spei;ed in this 'tK to interept and divert the ow of waters fro lands of riparian owners and fro persons owning or interested in waters whih are or
a" /e neessar" for said purposes, upon pa"ent of ?ust opensation thereforK to alter, straighten, o/strut or inrease the ow of water in streas or water hannels interseting or onneting therewith or ontiguous to its wor=s or an" part thereof *rovided, <hat ?ust opensation shall /e paid to an" person or persons whose propert" is, diretl" or indiretl", adversel" aeted or daaged there/"K
1g3 <o onstrut, operate and aintain power plants, au9iliar" plants, das, reservoirs, pipes, ains, transission lines, power stations and su/stations, and other wor=s for the purpose of developing h"drauli power fro an" river, ree=, la=e, spring and waterfall in the *hilippines and suppl"ing suh power to the inha/itants thereofK to aAuire, onstrut, install, aintain, operate, and iprove gas, oil, or stea engines, andor other prie overs, generators and ahiner" in plants andor au9iliar" plants for the prodution of eletri powerK to esta/lish, develop, operate, aintain and adinister power and lighting s"stes for the transission and utiliation of its power generationK to sell eletri power in /ul= to 1#3 industrial enterprises, 1%3 it", uniipal or provinial s"stes and other governent institutions, 1-3 eletri ooperatives, 143 franhise holders, and 153 real estate su/divisions 9 9 9K
1h3 <o aAuire, proote, hold, transfer, sell, lease, rent, ortgage, enu/er and otherwise dispose of propert" inident to, or neessar", onvenient or proper to arr" out the purposes for whih the Corporation was reated *rovided, <hat in ase a right of wa" is neessar" for its transission lines, easeent of right of wa" shall onl" /e sought *rovided, however, <hat in ase the propert" itself shall /e aAuired /" purhase, the ost thereof shall /e the fair ar=et value at the tie of the ta=ing of suh propert"K
1i3 <o onstrut wor=s aross, or otherwise, an" strea, waterourse, anal, dith, ue, street, avenue, highwa" or railwa" of private and pu/li ownership, as the loation of said wor=s a" reAuire 999K
1?3 <o e9erise the right of einent doain for the purpose of this 't in the anner provided /" law for instituting ondenation proeedings /" the national, provinial and uniipal governentsK
9 9 9
13 <o ooperate with, and to oordinate its operations with those of the National Eletri;ation 'dinistration and pu/li servie entitiesK
1n3 <o e9erise oplete ?urisdition and ontrol over watersheds surrounding the reservoirs of plants andor pro?ets onstruted or proposed to /e onstruted /" the Corporation. Fpon deterination /" the Corporation of the areas reAuired for watersheds for a spei; pro?et, the Bureau of orestr", the Reforestation 'dinistration and the Bureau of 6ands shall, upon written advie /" the Corporation, forthwith surrender ?urisdition to the Corporation of all areas e/raed within the watersheds, su/?et to e9isting private rights, the needs of waterwor=s s"stes, and the reAuireents of doesti water suppl"K
1o3 In the proseution and aintenane of its pro?ets, the Corporation shall adopt easures to prevent environental pollution and proote the onservation, developent and a9iu
utiliation of natural resoures 999 258
@ith these powers, petitioner eventuall" had the onopol" in the generation and distri/ution of eletriit". <his onopol" was strengthened with the issuane of *res. Deree No. 4&,5$ nationaliing
the eletri power industr". 'lthough E9e. Order No. %#5+& thereafter allowed private setor
partiipation in the generation of eletriit", the transission of eletriit" reains the onopol" of the petitioner.
*etitioner also ful;lls the seond reAuisite. It is operating within the respondent it" governentJs territorial ?urisdition pursuant to the powers grante d to it /" Coonwealth 't No. #%&, as aended. ro its operations in the Cit" of Ca/anatuan, petitioner realied a gross inoe of *#&,8#4,#8.$+ in #$$%. ul;lling /oth reAuisites, petitioner is, and ought to /e, su/?et of the franhise ta9 in Auestion.
*etitioner, however, insists that it is e9luded fro the overage of the franhise ta9 sipl" /eause its sto=s are wholl" owned /" the National )overnent, and its harter harateried it as a 2non( pro;t2 organiation.
<hese ontentions ust neessaril" fail.
<o stress, a franhise ta9 is iposed /ased not on the ownership /ut on the e9erise /" the orporationof a privilege to do /usiness. <he ta9a/le entit" is the orporation whih e9erises the franhise, and not the individual sto=holders. B" virtue of its harter, petitioner was reated as a separate and
distint entit" fro the National )overnent. It an sue and /e sued under its own nae, +# and an
e9erise all the powers of a orporation under the Corporation Code.+%
<o /e sure, the ownership /" the National )overnent of its entire apital sto= does not neessaril" ipl" that petitioner is not engaged in /usiness. Setion % of *res. Deree No. %&%$ +- lassi;es
governent(owned or ontrolled orporations 1)OCCs3 into those perforing governental funtions and those perforing proprietar" funtions,#i*
2' governent(owned or ontrolled orporation is a sto= or a non(sto= orporation,&hether
perorming go#ernmental or proprietar! unctions, whih isdirectl! chartered ! special la& or if organied under the general orporation law is owned or ontrolled /" the governent diretl", or indiretl" through a parent orporation or su/sidiar" orporation, to the e9tent of at
least a a?orit" of its outstanding voting apital sto= 9 9 9.2 1emphases supplied3
)overnental funtions are those pertaining to the adinistration of governent, and as suh, are treated as a/solute o/ligation on the part of the state to perfor while proprietar" funtions are those that are underta=en onl" /" wa" of advaning the general interest of soiet", and are erel" optional
on the governent.+4 Inluded in the lass of )OCCs perforing proprietar" funtions are 2/usiness(
li=e2 entities suh as the National Steel Corporation 1NSC3, the National Developent Corporation 1NDC3, the Soial Seurit" S"ste 1SSS3, the )overnent Servie Insurane S"ste 1)SIS3, and the
National @ater Sewerage 'uthorit" 1N'@'S'3,+5 aong others.
*etitioner was reated to 2underta=e the developent of h"droeletri generation of power and the prodution of eletriit" fro nulear, geotheral and other soures, as well as the transission of
eletri power on a nationwide /asis.2++ *ursuant to this andate, petitioner generates power and sells
eletriit" in /ul=. Certainl", these ativities do not parta= e of the sovereign funtions of the governent. <he" are purel" private and oerial underta=ings, al/eit i/ued with pu/li interest. <he pu/li interest involved in its ativities, however, does not distrat fro the true nature of the
petitioner as a oerial enterprise, in the sae league with siilar pu/li utilities li=e telephone and telegraph opanies, railroad opanies, water suppl" and irrigation opanies, gas, oal or light opanies, power plants, ie plant aong othersK all of whih are delared /" this Court as inistrant
or proprietar" funtions of governent aied at advaning the general interest of soiet".+
' loser reading of its harter reveals that even the legislature treats the harater of the petitionerJs enterprise as a 2/usiness,2 although it liits petitionerJs pro;ts to twelve perent 1#%>3,#i* +8
21n3 @hen essential to the proper adinistration of its orporate aairs or neessar" for the
proper transation of itsusiness or to arr" out the purposes for whih it was organied, to
ontrat inde/tedness and issue /onds su/?et to approval of the *resident upon reoendation of the Seretar" of inaneK
1o3 <o e9erise suh powers and do suh things as a" /e reasona/l" neessar" to arr" out
theusiness and purposes for whih it was organied, or whih, fro tie to tie, a" /e
delared /" the Board to /e neessar", useful, inidental or au9iliar" to aoplish the said purpose 999.21emphases supplied3
It is worth" to note that all other private franhise holders reeiving at least si9t" perent 1+&>3 of its eletriit" reAuireent fro the petitioner are li=ewise iposed the ap of twelve perent 1#%>3 on
pro;ts.+$ <he ain dierene is that the petitioner is andated to devote 2all its returns fro its apital
investent, as well as e9ess revenues fro its operation, for e9pansion2 & while other franhise
holders have the option to distri/ute their pro;ts to its sto=holders /" delaring dividends. @e do not see wh" this fat an /e a soure of dierene in ta9 treatent. In /oth instanes, the ta9a/le entit" is the orporation, whih e9erises the franhise, and not the individual sto=holders.
@e also do not ;nd erit in the petitionerJs ontention that its ta9 e9eptions under its harter su/sist despite the passage of the 6)C.
's a rule, ta9 e9eptions are onstrued strongl" against the laiant. E9eptions ust /e shown to e9ist learl" and ategoriall", and supported /" lear legal provisions.# In the ase at /ar, the
petitionerJs sole refuge is setion #- of Rep. 't No. +-$5 e9epting fro, aong others, 2all inoe ta9es, franhise ta9es and realt" ta9es to /e paid to the National )overnent, its provines, ities, uniipalities and other governent agenies and instruentalities.2 :owever, setion #$- of the 6)C withdrew, su/?et to liited e9eptions, the sweeping ta9 privileges previousl" en?o"ed /" private and pu/li orporations. Contrar" to the ontention of petitioner, setion #$- of the 6)C is an e9press,
al/eit general, repeal of all statutes granting ta9 e9eptions fro loal ta9es.% It reads
2Se. #$-.%ithdra&al o Tax Exemption 'ri#ileges.(0nless other&ise pro#ided in this Code,
tax exemptions or incenti#es granted to, or presentl! en+o!ed ! all persons, &hether natural or +uridical, including go#ernment-o&ned or controlled corporations, e9ept loal water distrits, ooperatives dul" registered under R.'. No. +$-8, non(sto= and non(pro;t hospitals and eduational institutions, are here/" withdrawn upon the eetivit" of this Code.2 1emphases supplied3
It is a /asi preept of statutor" onstrution that the e9press ention of one person, thing, at, or
onseAuene e9ludes all others as e9pressed in the failiar a9i expressio unius est exclusio
alterius$- Not /eing a loal water distrit, a ooperative registered under R.'. No. +$-8, or a non(sto=
and non(pro;t hospital or eduational institution, petitioner learl" does not /elong to the e9eption. It is therefore inu/ent upon the petitioner to point to soe provisions of the 6)C that e9pressl" grant it e9eption fro loal ta9es.
But this would /e an e9erise in futilit". Setion #- of the 6)C learl" states that the 6)Fs an ipose franhise ta9 2not&ithstanding an! exemption granted ! an! la& or other special la&.2 <his partiular
provision of the 6)C does not adit an" e9eption. In Cit! "o#ernment o an 'alo, /aguna #$
3e!es,4 7ER'6COJs e9eption fro the pa"ent of franhise ta9es was /rought as an issue /efore
this Court. <he sae issue was involved in the su/seAuent ase of.anila Electric Compan! #$ 'ro#ince
o /aguna.5 Ruling in favor of the loal governent in /oth instanes, we ruled that the franhise ta9
in Auestion is iposa/le despite an" e9eption en?o"ed /" 7ER'6CO under speial laws,#i* 2It is our view that petitioners orretl" rel" on provisions of Setions #- and #$- of the 6)C to support their position that 7ER'6COJs ta9 e9eption has /een withdrawn. <he e9pliit language of setion #- whih authories the provine to ipose franhise ta9 Jnotwithstanding an" e9eption granted /" an" law or other speial lawJ is all(enopassing
and lear.The ranchise tax is imposale despite an! exemption en+o!ed under special la&s.
ection 456 uttresses the &ithdra&al o extant tax exemption pri#ilege s$ B" stating that unless otherwise provided in this Code, ta9 e9eptions or inentives granted to or presentl"
en?o"ed /" all persons, whether natural or ?uridial, inluding governent(owned or ontrolled orporations e9ept 1#3 loal water distrits, 1%3 ooperatives dul" registered under R.'. +$-8, 1-3 non(sto= and non(pro;t hospitals and eduational institutions, are withdrawn upon the eetivit" of this ode, the o/vious iport is to liit the e9eptions to the three enuerated entities. It is a /asi preept of statutor" onstrution that the e9press ention of one person,
thing, at, or onseAuene e9ludes all others as e9pressed in the failiar a9i expressio
unius est exclusio alterius. In the a/sene of an" provision of the Code to the ontrar", and we ;nd no other provision in point, an" e9isting ta9 e9eption or inentive en?o"ed /" 7ER'6CO under e9isting law was learl" intended to /e withdrawn.
3eading together sections 467 and 456 o the /"C, &e conclude that under the /"C the local go#ernment unit ma! no& impose a local tax at a rate not exceeding 89: o 4: o the gross annual receipts or the preceding calendar ased on the incoming receipts reali*ed &ithin its territorial +urisdiction$ The legislati#e purpose to &ithdra& tax pri#ileges en+o!ed under existing la& or charter is clearl! maniested ! the language used on 1sic2 ections 467 and 456 categoricall! &ithdra&ing such exemption su+ect onl! to the exceptions enumerated$ ince it &ould e not onl! tedious and impractical to attempt to enumerate all the existing statutes pro#iding or special tax exemptions or pri#ileges, the /"C pro#ided or an express, aleit general, &ithdra&al o such exemptions or pri#ileges$ No more uneui#ocal language
could ha#e een used$+ 1emphases supplied3.
It is worth entioning that setion #$% of the 6)C epowers the 6)Fs, through ordinanes dul"
approved, to grant ta9 e9eptions, initiatives or reliefs. But in enating setion - of Ordinane No.
#+5($% whih iposes an annual franhise ta9 2notwithstanding an" e9eption granted /" law or other speial law,2 the respondent it" governent learl" did not intend to e9ept the petitioner fro the overage thereof.
Dou/tless, the power to ta9 is the ost eetive instruent to raise needed revenues to ;nane and support "riad ativities of the loal governent units for the deliver" of /asi servies essential to the prootion of the general welfare and the enhaneent of peae, progress, and prosperit" of the
people. 's this Court o/served in the .actan ase, 2the srcinal reasons for the withdrawal of ta9
e9eption privileges granted to governent(owned or ontrolled orporations and all other units of governent were that suh privilege resulted in serious ta9 /ase erosion and distortions in the ta9
treatent of siilarl" situated enterprises.28 @ith the added /urden of devolution, it is even ore
iperative for governent entities to share in the reAuireents of developent, ;sal or otherwise, /" pa"ing ta9es or other harges due fro the.
IN HIE@ @:EREO, the instant petition is DENIED and the assailed Deision and Resolution of the Court of 'ppeals dated 7arh #%, %&&# and !ul" #&, %&&#, respetivel", are here/" 'IR7ED. SO ORDERED.
(.
(. G.R. NoG.R. No. 168. 16856 S%56 S%/0r /0r 1, 21, 25 5 A+AA"A A+AA"A G#RO PG#RO PART* ART* LIST FLIST For/ror/r'3 AAS'3 AAS4AS4AS OFFICERS SAMSON S. ALCANTARA a E" INCENT S. AL+ANO,
OFFICERS SAMSON S. ALCANTARA a E" INCENT S. AL+ANO, *etitioners, vs. T$ET$E
$ONORA+LE EXEC#TIE SECRETAR* E"#AR"O ERMITA $ONORA+LE SECRETAR* OF $ONORA+LE EXEC#TIE SECRETAR* E"#AR"O ERMITA $ONORA+LE SECRETAR* OF T$E "EPARTMENT OF FINANCE CESAR P#RISIMA a $ONORA+LE COMMISSIONER T$E "EPARTMENT OF FINANCE CESAR P#RISIMA a $ONORA+LE COMMISSIONER OF INTERNAL RE
OF INTERNAL REEN#E G#ILLERMO PARAEN#E G#ILLERMO PARA*NO, 4R.,*NO, 4R., Respondent. 9 ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( 9
G.R. No. 16827 A:#ILINO :. PIMENTEL, 4R., L#ISA P. E4ERCITO-ESTRA"A, 4INGGO* G.R. No. 16827 A:#ILINO :. PIMENTEL, 4R., L#ISA P. E4ERCITO-ESTRA"A, 4INGGO* E. ESTRA"A, PANFILO M. LACSON, ALFRE"O S. LIM, 4AM+* A.S. MA"RIGAL, AN" E. ESTRA"A, PANFILO M. LACSON, ALFRE"O S. LIM, 4AM+* A.S. MA"RIGAL, AN" S
SEERRGGIIO O RR. . OOSSMMEE;;A A IIIIII, , PP&&&&oorr<<, , ==<<.. EXEC#TIE SECRETAR* E"#AR"O R. ERMITA, CESAR . P#RISIMA, SECRETAR* OF EXEC#TIE SECRETAR* E"#AR"O R. ERMITA, CESAR . P#RISIMA, SECRETAR* OF FI
FINANANCNCE, E, G#G#ILILLERLERMO MO L. L. PPARAARA*N*NO, O, 4R.4R., , COCOMMIMMISSSISIONONER ER OF OF T$T$E E +#+#REREA# A# OFOF INTERNAL REEN#E, R<%o.
9 ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( 9
).R. No. #+84+# 'SSOCI'<ION O *I6I*IN'S S:E66 DE'6ERS, INC. represented /" its *resident, ROS'RIO 'N<ONIOK *E<RON DE'6ERS0 'SSOCI'<ION represented /" its *resident, RF<: E. B'RBIBIK 'SSOCI'<ION O C'6<EM DE'6ERS0 O <:E *:I6I**INES represented /" its *resident, 7ERCEDI<'S '. )'RCI'K ROS'RIO 'N<ONIO doing /usiness under the nae and st"le of 2'NB NOR<: S:E66 SERHICE S<'<ION2K 6OFRDES 7'R<INE doing /usiness under the nae and st"le of 2S:E66 )'<E P N. DO7IN)O2K BE<:'ID' <'N doing /usiness under the nae and st"le of 2'DH'NCE S:E66 S<'<ION2K REN'6DO *. 7ON<O' doing /usiness under the nae and st"le of 2NE@ 6'7F'N S:E66 SERHICE S<'<ION2K EREN SO<<O doing /usiness under the nae and st"le of 2RED IE6D S:E66 SERHICE S<'<ION2K DONIC' COR*OR'<ION represented /" its *resident, DESI <O7'CRFK RF<: E. 7'RBIBI doing /usiness under the nae and st"le of 2RQR *E<RON S<'<ION2K *E<ER 7. FN)SON doing /usiness under the nae and st"le of 2C6'SSIC S<'R )'SO6INE SERHICE S<'<ION2K 7'RI'N S:EI6' '. 6EE doing /usiness under the nae and st"le of 2N<E )'SO6INE Q SERHICE S<'<ION2K !F6I'N CES'R *. *OS'D'S doing /usiness under the nae and st"le of 2S<'RC'R)' EN<ER*RISES2K 'DOR'CION 7'EBO doing /usiness under the nae and st"le of 2C7' 7O<ORIS<S CEN<ER2K SFS'N 7. EN<R'<' doing /usiness under the nae and st"le of 26EON'0S )'SO6INE S<'<ION and SERHICE CEN<ER2K C'R7E6I<' B'6DON'DO doing /usiness under the nae and st"le of 2IRS< C:OICE SERHICE CEN<ER2K 7ERCEDI<'S '. )'RCI' doing /usiness under the nae and st"le of 26OR*ED SERHICE CEN<ER2K R:E'7'R '. R'7OS doing /usiness under the nae and st"le of 2R!R'7 *<< )'S S<'<ION2K 7'. IS'BE6 HIO6')O doing /usiness under the nae and st"le of 2HIO6')O(*<< SERHICE CEN<ER2K 7O<ORIS<S0 :E'R< COR*OR'<ION represented /" its Hie( *resident for Operations, !OSE6I<O . 6ORDE6I'K 7O<ORIS<S0 :'RH'RD COR*OR'<ION represented /" its Hie(*resident for Operations, !OSE6I<O . 6ORDE6I'K 7O<ORIS<S0 :ERI<')E COR*OR'<ION represented /" its Hie(*resident for Operations, !OSE6I<O . 6ORDE6I'K *:I6I**INE S<'ND'RD OI6 COR*OR'<ION represented /" its Hie(*resident for Operations, !OSE6I<O . 6ORDE6I'K RO7EO 7'NFE6 doing /usiness under the nae and st"le of 2RO77'N )'SO6INE S<'<ION2K 'N<:ON '6BER< CRF III doing /usiness under the
nae and st"le of 2<RFE SERHICE S<'<ION2, *etitioners, vs.
CESAR . P#RISIMA, & h&< ca%ac&3 a< Scrar3 o> h "%ar/ o> F&ac a CESAR . P#RISIMA, & h&< ca%ac&3 a< Scrar3 o> h "%ar/ o> F&ac a G#
G#ILILLELERMRMO O L. L. PPARARAA*N*NO, O, 4R4R., ., & & h&h&< < caca%a%ac&c&3 3 a< a< CoCo////&<&<<&<&oor r o> o> IIrra'a' R=?,
R=?, Respondent.
9 ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( 9
).R. No. #+84+- R'NCIS !OSE*: ). ESCFDERO, HINCEN< CRISO6O)O, E77'NFE6 !OE6 !. HI66'NFEH', RODO6O ). *6'', D'R6ENE 'N<ONINO(CFS<ODIO, OSC'R ). 7'6'*I<'N, BEN!'7IN C. ')'R'O, !R. !F'N ED)'RDO 7. 'N)'R', !FS<IN 7'RC SB. C:I*ECO, 6ORENCIO ). NOE6, 7F!IH S. :'<'7'N, REN'<O B. 7')<FBO, !OSE*: '. S'N<I')O, <EOIS<O D6. )FIN)ON' III, RF E6I'S C. 6O*E, RODO6O . ')B''NI and <EODORO '. C'SIO, *etitioners, vs. CECESASAR R . . P#P#RIRISISIMAMA, , & & h&h&< < caca%a%ac&c&3 3 a< a< SScrcrarar3 3 o> o> F&F&aacc,, G#ILLER
G#ILLERMO MO L. L. PPARAARA*NO, 4R., *NO, 4R., & & h&< h&< ca%acca%ac&3 a< &3 a< Co//&Co//&<<&o<<&or r o> o> IrIra' R=?,a' R=?, a E"#AR"O R. ERMITA, & h&< ca%ac&3 a< E@c?&= Sc
a E"#AR"O R. ERMITA, & h&< ca%ac&3 a< E@c?&= Scrar3rar3,, Respondent. 9 ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( ( 9
).R. No. #+8-& B'<''N )OHERNOR ENRIFE <. )'RCI', !R.'etitioner, #s$ :ON. EDF'RDO R.
ER7I<', in his apait" as the E9eutive Seretar"K :ON. 7'R)'RI<O <EHES, in his apait" as Seretar" of inaneK :ON. !OSE 7'RIO BFN'), in his apait" as the OIC Coissioner of the Bureau of Internal RevenueK and :ON. '6EM'NDER 'REH'6O, in his apait" as the OIC Coissioner of the Bureau of Custos, Respondent.
D E C I S I O N A#STRIA-MARTINE,
<he e9penses of governent, having for their o/?et the interest of all, should /e /orne /" ever"one, and the ore an en?o"s the advantages of soiet", the ore he ought to hold hiself honored in ontri/uting to those e9penses.
('nne Ro/ert !aAues <urgot 1#%(#8#3 renh statesan and eonoist
7ounting /udget de;it, revenue generation, inadeAuate ;sal alloation for eduation, inreased eoluents for health wor=ers, and wider overage for full value(added ta9 /ene;ts T these are the
reasons wh" Repu/li 't No. $-- 1R.'. No. $--3# was enated. Reasons, the wisdo of whih, the
Court even with its e9tensive onstitutional power of review, annot pro/e. <he petitioners in these ases, however, Auestion not onl" the wisdo of the law, /ut also pereived onstitutional in;rities in its passage.
Ever" law en?o"s in its favor the presuption of onstitutionalit". <heir arguents notwithstanding, petitioners failed to ?ustif" their all for the inval idit" of the law. :ene, R.'. No. $-- is not unonstitutional.
LEGISLATIE $ISTOR* LEGISLATIE $ISTOR*
R.'. No. $-- is a onsolidation of three legislative /ills nael", :ouse Bill Nos. -555 and -&5, and Senate Bill No. #$5&.
House Bill No. 3555
House Bill No. 3555% was introdued on ;rst reading on !anuar" , %&&5. <he :ouse Coittee on @a"s and 7eans approved the /ill, in su/stitution of :ouse Bill No. #4+8, whih Representative 1Rep.3 Eri D. Singson introdued on 'ugust 8, %&&4. <he *resident erti;ed the /ill on !anuar" , %&&5 for iediate enatent. On !anuar" %, %&&5, the :ouse of Representatives approved the /ill on seond and third reading.
House Bill No. 3705
House Bill No. 3705- on the other hand, su/stituted :ouse Bill No. -#&5 introdued /" Rep. Salani/ . Baterina, and :ouse Bill No. --8# introdued /" Rep. !ainto H. *aras. Its 2other /ill2 is :ouse Bill No. -555. <he :ouse Coittee on @a"s and 7eans approved the /ill on e/ruar" %, %&&5. <he *resident also erti;ed it as urgent on e/ruar" 8, %&&5. <he :ouse of Representatives approved the /ill on seond and third reading on e/ruar" %8, %&&5.
7eanwhile, the Senate Coittee on @a"s and 7eans approvedSenate Bill No. 1950Senate Bill No. 19504 on 7arh , %&&5, 2in su/stitution of Senate Bill Nos. #--, #8-8 and #8-, ta=ing into onsideration :ouse Bill Nos. -555 and -&5.2 Senator Ralph ). Reto sponsored Senate Bill No. #--, while Senate Bill Nos. #8-8 and #8- were /oth sponsored /" Sens. ran=lin 7. Drilon, !uan 7. lavier and ranis N. *angilinan. <he *resident erti;ed the /ill on 7arh ##, %&&5, and was approved /" the Senate on seond and third reading on 'pril #-, %&&5.
On the sae date, 'pril #-, %&&5, the Senate agreed to the reAuest of the :ouse of Representatives for a oittee onferene on the disagreeing provisions of the proposed /ills.
Before long, the Conferene Coittee on the Disagreeing *rovisions of :ouse Bill No. -555, :ouse Bill No. -&5, and Senate Bill No. #$5&, 2after having et and disussed in full free and onferene,2 reoended the approval of its report, whih the Senate did on 7a" #&, %&&5, and with the :ouse of Representatives agreeing thereto the ne9t da", 7a" ##, %&&5.
On 7a" %-, %&&5, the enrolled op" of the onsolidated :ouse and Senate version was transitted to the *resident, who signed the sae into law on 7a" %4, %&&5. <hus, ae R.'. No. $--.
!ul" #, %&&5 is the eetivit" date of R.'. No. $--.5 @hen said date ae, the Court issued a teporar" restraining order, eetive iediatel" and ontinuing until further orders, en?oining respondents fro enforing and ipleenting the law.
