Punsalan v. Municipal Board of Manila [GR L-4817, 26 May 1954]

Facts: Ordinance 3398 was approved by the municipal board of the City of Manila on 25 July 1950. It imposes a municipal occupation tax on persons exercising various professions in the city and penalizes nonpayment of the tax by a fine of not more than P200 or by imprisonment of not more than 6 months, or by both such fine and imprisonment in the discretion of the court. The ordinance was enacted pursuant to paragraph (1) of section 18 of the Revised Charter of the City of Manila (as amended by RA 409), which empowers the Municipal Board of said city to impose a municipal occupation tax, not to exceed P50 per annum, on persons engaged in the various professions, such as those were Silvestre M. Punsalan, et. al. belong. Punsalan, et. al. (2 lawyers, a medical practitioner, a public accountant, a dental surgeon and a pharmacist) filed a suit in the Court of First Instance (CFI) of Manila in their own behalf and in behalf of other professionals practicing in the City of Manila, calling for the annulment of Ordinance 3398 of the City of Manila together with the provision of the Manila charter authorizing it and the refund of taxes collected under the ordinance but paid under protest (as they have paid their occupation tax under Section 201 of the National Internal Revenue Code [NIRC]). The lower court upheld the validity of the provision of law authorizing the enactment of the ordinance but declared the ordinance itself illegal and void on the ground that the penalty therein provided for non-payment of the tax was not legally authorized. Both parties appealed to the Supreme Court. Issue: Whether professionals in Manila are being subjected to double taxation, in light of the municipal occupation tax imposed against them by the City of Manila. Held: The Legislature may, in its discretion, select what occupations shall be taxed, and in the exercise of that discretion it may tax all, or it may select for taxation certain classes and leave the others untaxed. Manila, as the seat of the National Government and with a population and volume of trade many times that of any other Philippine city or municipality, offers a more lucrative field for the practice of the professions, so that it is but fair that the professionals in Manila be made to pay a higher occupation tax than their brethren in the provinces.The ordinance imposes the tax upon every person "exercising" or "pursuing" any one of the occupations named, but does not say that such person must have his office in Manila. There is no distinction found in the ordinance between professionals having offices in manila and outsiders who have no offices in the city but practice their profession therein. Where one tax is imposed by the state and the other is imposed by the city, the argument against double taxation may not be invoked, as there is nothing inherently obnoxious in the requirement that license fees or taxes be exacted with respect to the same occupation, calling or activity by both the state and the political subdivisions thereof.Lladoc v. Commissioner of Internal Revenue [GR L-19201, 16 June 1965

Facts: Sometime in 1957, the MB Estate Inc., of Bacolod City, donated P10,000.00 in cash to Fr. Crispin Ruiz then parish priest of Victorias, Negros Occidental, and predecessor of Fr. Casimiro Lladoc, for the construction of a new Catholic Church in the locality. The total amount was actually spent for the purpose intended. On 3 March 1958, MB Estate filed the donor's gift tax return. Under date of 29 April 1960, the Commissioner of Internal Revenue issued as assessment for donee's gift tax against the Catholic Parish of Victorias, Negros Occidental, of which petitioner was the priest. The tax amounted to P1,370.00 including surcharges, interest of 1% monthly from 15 May 1958 to 15 June 1960, and the compromise for the late filing of the return. Petitioner lodged a protest to the assessment and requested the withdrawal thereof. The protest and the motion for reconsideration presented to the Commissioner of Internal Revenue were denied. The petitioner appealed to the CTA on 2 November 1960. After hearing, the CTA affirmed the decision of the Commissioner of Internal Revenue except the imposition of compromise penalty of P20. Fr. Lladoc appealed to the Supreme Court. Issue: Whether a donees gift tax may be assessed against the Catholic Church. Held: The phrase "exempt from taxation," as employed in the Constitution supra should not be interpreted to mean exemption from all kinds of taxes. Section 22(3), Art. VI of the Constitution of the Philippines, exempts from taxation cemeteries, churches and personages or convents, appurtenant thereto, and all lands, buildings, and improvements used exclusively for religious purposes. The exemption is only from the payment of taxes assessed on such properties enumerated, as property taxes, as contra-distinguished from excise taxes. A donees gift tax is not a property tax but an excise tax imposed on the transfer of property by way of gift inter vivos. Its assessment was not on the property themselves. It does not rest upon general ownership, but an excise upon the use made of the properties, upon the exercise of the privilege of receiving the properties. The imposition of such excise tax on property used for religious purposes do not constitute an impairment of the Constitution.