7/23/2019 292 Sison v Ancheta

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SISON v ANCHETA130 SCRA 654July 25, 1984Tax on Po!"##$onal#

%ACTS&

Petitioner Sison assails the constitutionality of B.P. 135 which amended the National Internal

Revenue Code of 199. !ccordin" to the statute# a hi"her ta$ im%ost a"ainst income derived

%rofessional income will &e im%osed as o%%osed to the re"ular income earners. Petitioner Sison

files a ta$%ayer's suit and alle"e that he &e unduly discriminated a"ainst &y the im%osition of

hi"her ta$ rates arisin" from his %rofession as a"ainst those which are im%osed u%on fi$ed

income or salaries individual ta$%ayers. Petitioner contest that the said law is a trans"ression in

re"ard to e(ual %rotection of the law and due %rocess clauses of the constitutional# as well as the

rule on e(uita&ility and uniformity in ta$ation.

ISS'ES&

)hetherB.P. 135 violates the due %rocess and e(ual %rotection clauses of the Constitution.

HE()&

No. *he Su%reme Court ruled that the %ower to ta$ is an inherent %ower of the state and has to&e availed of to assure the %erformance of vital state functions. *a$es are +ust %ro%ortionatecontri&utions of the citi,ens# levied &y that state in virtue of its soverei"nty for the su%%ort if the"overnment and all %u&lic needs. *a$es are the life&lood of the "overnment- their %rom%t andcertain availa&ility is of the essence. !s stated in Section / !rticle 0 of the Constitution 2*herule of ta$ation shall &e uniform and e(uita&le. *he Su%reme Court however said that the ruleon uniformity does not call for %erfect e(uality# for the reason that this is hardly achieva&le.

4(uality and uniformity in ta$ation means that all ta$a&le articles or inds of %ro%erty of thesame class shall &e ta$ed at the same rate. *he ta$in" %ower has the authority to maereasona&le and natural classifications for %ur%oses of ta$ation- it is not discriminatory withinthe meanin" of this clause and is therefore uniform. *here is (uite a similarity then to thestandard of e(ual %rotection for all that is re(uired is that the ta$ 2a%%lies e(ually to all %ersons#firms and cor%orations %laced in similar situation.

In the case at &ar# Petitioner Sison failed to tae into consideration the distinction &etween a ta$

rate and a ta$ &ase. *here is no le"al o&+ection to a &roader ta$ &ase or ta$a&le income &y

eliminatin" all deducti&le items and at the same time reducin" the a%%lica&le ta$ rate. *a$%ayers

may &e classified into different cate"ories. In the case of the "ross income ta$ation em&odied in

BP 135# the discerni&le &asis of classification is the susce%ti&ility of the income to the a%%lication

of "enerali,ed rules removin" all deducti&le items for all ta$%ayers within the class and fi$in" a

set of reduced ta$ rates to &e a%%lied to all of them. *a$%ayers who are reci%ients ofcom%ensation income are set a%art as a class. !s there is %ractically no overhead e$%ense# these

ta$%ayers are not entitled to mae deductions for income ta$ %ur%oses &ecause they are in the

same situation more or less.In the case of professionals in the practice of their calling and

businessmen, there is no uniformity in the costs or expenses necessary to produce their income.

It would not &e +ust then to disre"ard the dis%arities &y "ivin" all of them ,ero deduction and

indiscriminately im%ose on all alie the same ta$ rates on the &asis of "ross income.

Prepared by: Juan Samuel Ismael Loyola 1