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power of taxation by the state is plenary. Comprehensive and supreme, the principal check
Inherent Limitations upon its abuse resting in the responsibility of the members of the legislature to their
constituents. However, there are two kinds of limitations on the power of taxation: the inherent
i. Public purpose limitations and the constitutional limitations.
Esso Standard Eastern, Inc. v. Acting Comissioner of Customs SUPREME COURT`S RULING:
18 SCRA 488 The ₱10 levy under LOI No. 1465 is too excessive to serve a mere regulatory purpose.
ISSUE: The levy, no doubt, was a big burden on the seller or the ultimate consumer. It increased the
Are the imported pump parts exempt from the payment of special import tax? price of a bag of fertilizer by as much as five percent.45 A plain reading of the LOI also supports
the conclusion that the levy was for revenue generation. The LOI expressly provided that the
PETITIONER’S CONTENTION: levy was imposed "until adequate capital is raised to make PPI viable."
Petitioner's ground is that the imported articles "consist of equipment and spare parts
for its own exclusive use and therefore were exempt from special import tax", by the terms of Taxes are exacted only for a public purpose. The ₱10 levy is unconstitutional because it was
Section 6, Republic Act 1394. not for a public purpose. The levy was imposed to give undue benefit to PPI.
SUPREME COURT`S RULING: An inherent limitation on the power of taxation is public purpose. Taxes are exacted only for a
By Section 1 of Republic Act 1394, a special import tax is imposed "on all goods, public purpose. They cannot be used for purely private purposes or for the exclusive benefit of
articles or products imported or brought into the Philippines" during the period from 1956 up private persons.46 The reason for this is simple. The power to tax exists for the general welfare;
to and including 1965 in accordance with the schedule of rates therein provided. Exempt from hence, implicit in its power is the limitation that it should be used only for a public purpose. It
this tax, by express mandate of Section 6 of the same law, inter alia, are "machinery, equipment, would be a robbery for the State to tax its citizens and use the funds generated for a private
accessories, and spare parts, for the use of industries, miners, mining enterprises, planters and purpose. As an old United States case bluntly put it: "To lay with one hand, the power of the
farmers". government on the property of the citizen, and with the other to bestow it upon favored
individuals to aid private enterprises and build up private fortunes, is nonetheless a robbery
State has granted in express terms certain exemptions, those are the exemptions to be because it is done under the forms of law and is called taxation."47
considered, and no more. Since the law states that, to be tax exempt, equipment and spare parts
should be "for the use of industries", the coverage herein should not be enlarged to include The term "public purpose" is not defined. It is an elastic concept that can be hammered to fit
equipment and spare parts for use in dispensing gasoline at retail. In comparable factual modern standards. Jurisprudence states that "public purpose" should be given a broad
backdrop, this Court has held that tax exemption in connection with the manufacture of interpretation. It does not only pertain to those purposes which are traditionally viewed as
asbestos roof does not extend to the installation thereof.7 essentially government functions, such as building roads and delivery of basic services, but
also includes those purposes designed to promote social justice. Thus, public money may now
be used for the relocation of illegal settlers, low-cost housing and urban or agrarian reform.
Planters Products, Inc. v. FertiPhil Corp., While the categories of what may constitute a public purpose are continually expanding in light
G.R. No. 166006 14 March 2008 of the expansion of government functions, the inherent requirement that taxes can only be
ISSUE: exacted for a public purpose still stands. Public purpose is the heart of a tax law. When a tax
Whether or not LOI 1465, CONSTITUTES A VALID LEGISLATION PURSUANT law is only a mask to exact funds from the public when its true intent is to give undue benefit
TO THE EXERCISE OF TAXATION AND POLICE POWER FOR PUBLIC PURPOSES. and advantage to a private enterprise, that law will not satisfy the requirement of "public
purpose."
PETITIONER’S CONTENTION:
It is apparent that the imposition of ₱10 per fertilizer bag sold in the country by LOI
1465 is purportedly in the exercise of the power of taxation. It is a settled principle that the
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by the devotion of taxes to public purposes. Any other view would preclude the levying of
Bagatsing v. Ramirez taxes except as they are used to compensate for the burden on those who pay them and would
74 SCRA 306 involve the abandonment of the most fundamental principle of government — that it exists
ISSUE: primarily to provide for the common good.15
Whether entrusting of the collection of the fees does not destroy the public purpose
of Ordinance No. 7522. Nor is the rule of uniformity and equality of taxation infringed by the imposition of a flat rate
rather than a graduated tax. A tax need not be measured by the weight of the mail or the extent
PETITIONER’S CONTENTION: of the service rendered. We have said that considerations of administrative convenience and
The contention is that the market stall fees imposed in the disputed ordinance are cost afford an adequate ground for classification. The same considerations may induce the
diverted to the exclusive private use of the Asiatic Integrated Corporation since the collection legislature to impose a flat tax which in effect is a charge for the transaction, operating equally
of said fees had been let by the City of Manila to the said corporation in a "Management and on all persons within the class regardless of the amount involved.
Operating Contract."
Pascual vs. Secretary of Public Works
SUPREME COURT`S RULING: 110 Phil 331
Ordinance No. 7522 was not made for the corporation but for the purpose of raising ISSUE:
revenues for the city. That is the object it serves. The entrusting of the collection of the fees Whether or not R.A. No. 920 is unconstitutional due to one said subdivision not
does not destroy the public purpose of the ordinance. So long as the purpose is public, it does being for public purpose.
not matter whether the agency through which the money is dispensed is public or private. The
right to tax depends upon the ultimate use, purpose and object for which the fund is raised. It PETITIONER’S CONTENTION:
is not dependent on the nature or character of the person or corporation whose intermediate Petitioner’s contend that such law is unconstitutional, as well as null and void ab initio,
agency is to be used in applying it. The people may be taxed for a public purpose, although it for the construction of the projected feeder roads in question with public funds would greatly
be under the direction of an individual or private corporation. 18 enhance or increase the value of the aforementioned subdivision of respondent Zulueta, "aside
from relieving him from the burden of constructing his subdivision streets or roads at his own
Gomez vs. Palomar expense"; that the construction of said projected feeder roads was then being undertaken by the
24 SCRA 827 Bureau of Public Highways; and that, unless restrained by the court, the respondents would
continue to execute, comply with, follow and implement the aforementioned illegal provision
ISSUE: of law, "to the irreparable damage, detriment and prejudice not only to the petitioner but to the
Whether or not the constitutionality of Republic Act 1635 violates the equal protection Filipino nation."
clause of the Constitution as well as the rule of uniformity and equality of taxation.
SUPREME COURT`S RULING:
PETITIONER’S CONTENTION: The legal feasibility of appropriating public funds for a public purpose, the principle
The petitioner further argues that the tax in question is invalid, first, because it is not according to Ruling Case Law, is this:
levied for a public purpose as no special benefits accrue to mail users as taxpayers, and second,
because it violates the rule of uniformity in taxation. It is a general rule that the legislature is without power to appropriate public revenue for
anything but a public purpose. . . . It is the essential character of the direct object of the
SUPREME COURT`S RULING: expenditure which must determine its validity as justifying a tax, and not the magnitude of the
The eradication of a dreaded disease is a public purpose, but if by public purpose the interest to be affected nor the degree to which the general advantage of the community, and
petitioner means benefit to a taxpayer as a return for what he pays, then it is sufficient answer thus the public welfare, may be ultimately benefited by their promotion. Incidental to the public
to say that the only benefit to which the taxpayer is constitutionally entitled is that derived from or to the state, which results from the promotion of private interest and the prosperity of private
his enjoyment of the privileges of living in an organized society, established and safeguarded
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enterprises or business, does not justify their aid by the use public money. (25 R.L.C. pp. 398- are oppressive in character. If objective and methods are alike constitutionally valid, no
400; Emphasis supplied.) reason is seen why the state may not levy taxes to raise funds for their prosecution and
attainment. Taxation may be made the implement of the state's police power.
The rule is set forth in Corpus Juris Secundum in the following language:
Ferrer v. Bautista
In accordance with the rule that the taxing power must be exercised for public purposes only, 760 SCRA 652
discussed supra sec. 14, money raised by taxation can be expended only for public purposes ISSUE:
and not for the advantage of private individuals. (85 C.J.S. pp. 645-646; emphasis supplied.) Whether or not Ordinance Nos. SP-2095, S-2011 and SP-2235, S-2013 on the
Socialized Housing Tax and Garbage Fee is unconstitutional for collection of fees.
Explaining the reason underlying said rule, Corpus Juris Secundum states:
PETITIONER’S CONTENTION:
Generally, under the express or implied provisions of the constitution, public funds may be The petitioner contends that in the Socialized Housing Tax, the city has no power to
used only for public purpose. The right of the legislature to appropriate funds is correlative impose the tax. The SHT violates the rule on equality because it burdens real property owners
with its right to tax, and, under constitutional provisions against taxation except for public with expenses to provide funds for the housing of informal settlers.The SHT is confiscatory
purposes and prohibiting the collection of a tax for one purpose and the devotion thereof to or oppressive.
another purpose, no appropriation of state funds can be made for other than for a public Also, he assails the validity of the garbage fees imposition because it violates the rule on double
purpose. taxation. It violates the rule on equality because the fees are collected from only domestic
households and not from restaurants, food courts, fast food chains, and other commercial dining
Lutz vs. Araneta places that spew garbage much more than residential property owners.
98 Phil 148
G.R. No. L-7859, 22 December 1955 SUPREME COURT`S RULING:
ISSUE: 1st ordinance: Socialized Housing Tax of Quezon City is valid.
Whether or not Commonwealth Act No. 567 is unconstitutional in the imposition of
tax collection. Cities have the power to tax
It must be noted that local government units such as cities has the power to tax. The collection
PETITIONER’S CONTENTION: for the socialized housing tax is valid. It must be noted that the collections were made to accrue
Petitioner’s contend that such collection of tax is unconstitutional and void, being to the socialized housing programs and projects of the city.
levied for the aid and support of the sugar industry exclusively.
The imposition was for a public purpose (exercise of power of taxation + police power)
SUPREME COURT`S RULING: In this case, there was both an exercise of the power to tax (primary) and police power
The protection of a large industry constituting one of the great sources of the state's (incidental). Removing slum areas in Quezon City is not only beneficial to the underprivileged
wealth and therefore directly or indirectly affecting the welfare of so great a portion of the and homeless constituents but advantageous to the real property owners as well.
population of the State is affected to such an extent by public interests as to be within the The situation will improve the value of the their property investments, fully enjoying the same
police power of the sovereign. in view of an orderly, secure, and safe community, and will enhance the quality of life of the
poor, making them law-abiding constituents and better consumers of business products.
The protection and promotion of the sugar industry is a matter of public concern, it follows
that the Legislature may determine within reasonable bounds what is necessary for its There is no violation of the rule on equality
protection and expedient for its promotion. Here, the legislative discretion must be allowed Note: There is a substantial distinction between: real property owner and an informal settler. In
fully play, subject only to the test of reasonableness; and it is not contended that the means fact, the Supreme Court said that the disparity is so obvious. It is inherent in the power to tax
provided in section 6 of the law (above quoted) bear no relation to the objective pursued or
Page 4 of 10
that a State is free to select the subjects of taxation. Inequities which result from a singling out There is no substantial distinction between an occupant of a lot, on one hand, and an occupant
of one particular class for taxation or exemption infringe no constitutional limitation. of a unit in a condominium, socialized housing project or apartment, on the other hand.
Most likely, garbage output produced by these types of occupants is uniform and does not vary
All these requisites are complied with: An ordinance based on reasonable classification does to a large degree; thus, a similar schedule of fee is both just and equitable.
not violate the constitutional guaranty of the equal protection of the law. The requirements for
a valid and reasonable classification are: (1) it must rest on substantial distinctions; (2) it must The garbage fees or rates are unjust and inequitable
be germane to the purpose of the law; (3) it must not be limited to existing conditions only; and A resident of a 200 sq. m. unit in a condominium or socialized housing project has to pay twice
(4) it must apply equally to all members of the same class. the amount than a resident of a lot similar in size; unlike unit occupants, all occupants of a lot
with an area of 200 sq. m. and less have to pay a fixed rate of Php100.00; and the same amount
The ordinance is not oppressive or confiscatory of garbage fee is imposed regardless of whether the resident is from a condominium or from a
The ordinance is also not oppressive since the tax rate being imposed is consistent with the socialized housing project.
UDHA (Urban Development and Housing Act of 1992). While the law authorizes LGUs to
collect SHT on properties with an assessed value of more than P50,000.00, the questioned The classifications are not germane to the purpose of the ordinance
ordinance only covers properties with an assessed value exceeding P100,000.00. As well, the The declared purpose is: "promoting shared responsibility with the residents to attack their
ordinance provides for a tax credit equivalent to the total amount of the special assessment paid common mindless attitude in over-consuming the present resources and in generating waste."
by the property owner beginning in the sixth (6th) year of the effectivity of the ordinance.
Instead of simplistically categorizing the payee into land or floor occupant of a lot or unit of a
2nd ordinance: The imposition of garbage fee is invalid. condominium, socialized housing project or apartment, respondent City Council should have
considered factors that could truly measure the amount of wastes generated and the appropriate
Note: There was no violation of double taxation but there was a violation of the rule on equity. fee for its collection. Factors include, among others, household age and size, accessibility to
waste collection, population density of the barangay or district, capacity to pay, and actual
There is no violation of double taxation: the garbage fees are not taxes occupancy of the property.
In Progressive Development Corporation v. Quezon City, the Court declared that:
"if the generating of revenue is the primary purpose and regulation is merely incidental, the
imposition is a tax; but if regulation is the primary purpose, the fact that incidentally revenue Taxpayer’s Suit
is also obtained does not make the imposition a tax." Tolentino v. Comelec
41 SCRA 702
Contention of Ferrer: that the imposition of garbage fee is tantamount to double taxation ISSUE:
because garbage collection is a basic and essential public service that should be paid out from Whether or not the Organic Resolution No. 1 of the 1971 Constitutional Convention
property tax, business tax, transfer tax, amusement tax, community tax certificate, other taxes, violative to the Constitution.
and the IRA of the Quezon City Government. All these are valid taxes. The garbage fees are
license fees PETITIONER’S CONTENTION:
Petitioner, Arturo Tolentino, filed a petition for prohibition, its main thrust being that
Footnote: In order to constitute double taxation in the objectionable or prohibited sense the Organic Resolution No. 1 and the necessary implementing resolutions subsequently approved
same property must be taxed twice when it should be taxed but once; both taxes must be have no force and effect as laws in so far as they provide for the holding of a plebiscite co-
imposed on the same property or subject-matter, for the same purpose, by the same State, incident with the senatorial elections, on the ground that the calling and holding of such a
Government, or taxing authority, within the same jurisdiction or taxing district, during the same plebiscite is, by the Constitution, a power lodged exclusively in Congress as a legislative body
taxing period, and they must be the same kind or character of tax. and may not be exercised by the Convention, and that, under Article XV Section 1 of the 1935
Constitution, the proposed amendment in question cannot be presented to the people for
There is a violation of the rule on equality: no substantial distinction
Page 5 of 10
ratification separately from each and all other amendments to be drafted and proposed by the validity of the Decrees appropriating said funds. Moreover, as regards taxpayer's suits, this
Constitution. Court enjoys that open discretion to entertain the same or not. 7 For the present case, We
deem it sound to exercise that discretion affirmatively so that the authority upon which the
SUPREME COURT’S RULING: disputed Decrees are predicated may be inquired into.
All the amendments to be proposed by the same Convention must be submitted to the
people in a single "election" or plebiscite. Jumamil v. Café
G. R No. 144570
In order that a plebiscite for the ratification of a Constitutional amendment may be validly held,
it must provide the voter not only sufficient time but ample basis for an intelligent appraisal of ISSUE:
the nature of the amendment per se but as well as its relation to the other parts of the Whether or not the taxpayers have legal interest in the controversy and are entitled to
Constitution with which it has to form a harmonious whole. declaratory relief.
In the present context, where the Convention has hardly started considering the merits, if not PETITIONER’S CONTENTION:
thousands, of proposals to amend the existing Constitution, to present to the people any single Whether or not a special civil action for declaratory relief can be filed in relation to a
proposal or a few of them cannot comply with this requirement. contract by persons who are not parties thereto. Under Sec. 1 of Rule 64 of the Rules of Court,
any person interested under a deed, will, contract, or other written instruments may bring an
Convention validly pass any resolution providing for the taking of private property without action to determine any question of the contract, or validly arising under the instrument for a
just compensation or for the imposition or exacting of any tax, impost or assessment, or declare declaratory (sic) of his rights or duties thereunder. Since contracts take effect only between the
war or call the Congress to a special session, suspend the privilege of the writ of habeas corpus, parties (Art. 1311) it is quite plain that one who is not a party to a contract can not have the
pardon a convict or render judgment in a controversy between private individuals or between interest in it that the rule requires as a basis for declaratory reliefs (PLUM vs. Santos, 45 SCRA
such individuals and the state, in violation of the distribution of powers in the Constitution. 147).
themselves within the limits of the Constitution and the laws and that they have not abused the
discretion given to them, the Supreme Court may brush aside technicalities of procedure and
take cognizance of the suit.34 LRTA vs. CBAA
G.R. No. 127316, 12 October 2000
Pascual v. Secretary of Public Works ISSUE:
110 Phil. 331 Whether or not the Petitioner is Exempted from Payment of Real Property Taxes.
ISSUE:
Whether or not the taxpayers have the right to contest the validity of a law which
would affect them. PETITIONER’S CONTENTION:
Petitioner contends that the carriageways and passenger terminal stations including the
PETITIONER’S CONTENTION: land where it is constructed on the ground that the same are not real properties under the Real
Petitioner’s contend that it is well-stated that the validity of a statute may be contested Property Tax Code, and if the same are real property, theseare for public use/purpose, therefore,
only by one who will sustain a direct injury in consequence of its enforcement. Yet, there are exempt from realty taxation.
many decisions nullifying, at the instance of taxpayers, laws providing for the disbursement of
public funds, 5upon the theory that "the expenditure of public funds by an officer of the State SUPREME COURT’S RULING:
for the purpose of administering an unconstitutional act constitutes a misapplication of such Under the Real Property Tax Code, real property "owned by the Republic of the
funds," which may be enjoined at the request of a taxpayer. Philippines or any of its political subdivisions and any government-owned or controlled
corporation so exempt by its charter, provided, however, that this exemption shall not apply to
SUPREME COURT’S RULING: real property of the abovenamed entities the beneficial use of which has been granted, for
In the determination of the degree of interest essential to give the requisite standing to consideration or otherwise, to a taxable person."12
attack the constitutionality of a statute, the general rule is that not only persons individually
affected, but also taxpayers, have sufficient interest in preventing the illegal expenditure of Executive Order No. 603, the charter of petitioner, does not provide for any real estate tax
moneys raised by taxation and may therefore question the constitutionality of statutes requiring exemption in its favor. Its exemption is limited to direct and indirect taxes, duties or fees in
expenditure of public moneys. connection with the importation of equipment not locally available, as the following provision
shows:
The rule recognizing the right of taxpayers to assail the constitutionality of a legislation "ARTICLE 4
appropriating local or state public funds — which has been upheld by the Federal Supreme TAX AND DUTY EXEMPTIONS
Court (Crampton vs. Zabriskie, 101 U.S. 601) — has greater application in the Philippines than Sec. 8. Equipment, Machineries, Spare Parts and Other Accessories and Materials. - The
that adopted with respect to acts of Congress of the United States appropriating federal funds. importation of equipment, machineries, spare parts, accessories and other materials, including
supplies and services, used directly in the operations of the Light Rails Transit System, not
obtainable locally on favorable terms, out of any funds of the authority including, as stated in
ii. Non- delegability Section 7 above, proceeds from foreign loans credits or indebtedness, shall likewise be
exempted from all direct and indirect taxes, customs duties, fees, imposts, tariff duties,
iii. Exemption of the Government compensating taxes, wharfage fees and other charges and restrictions, the provisions of existing
laws to the contrary notwithstanding."
Even granting that the national government indeed owns the carriageways and terminal
stations, the exemption would not apply because their beneficial use has been granted to
petitioner, a taxable entity.
Page 7 of 10
MCIAA vs. Marcos Finally, even if the petitioner was originally not a taxable person for purposes of real property
G.R. No. 120082, 11 September 1996 tax, in light of the forgoing disquisitions, it had already become even if it be conceded to be an
ISSUE: "agency" or "instrumentality" of the Government, a taxable person for such purpose in view of
Whether or not MCIAA is exempted from paying taxes. the withdrawal in the last paragraph of Section 234 of exemptions from the payment of real
property taxes, which, as earlier adverted to, applies to the petitioner.
PETITIONER’S CONTENTION:
Petitioners claimed that its real properties assessed by respondent City Government of MIAA vs. Paranaque
Cebu are exempted from paying realty taxes in view of the exemption granted under RA 6958 G.R. No. 155650, 20 July 2006
to pay the same (citing Section 14 of RA 6958). ISSUE:
Whether the Airport Lands and Buildings of MIAA are exempt from real estate tax
SUPREME COURT’S RULING: under existing laws.
However, RA 7160 expressly provides that "All general and special laws, acts, city
charters, decress [sic], executive orders, proclamations and administrative regulations, or part PETITIONER’S CONTENTION:
or parts thereof which are inconsistent with any of the provisions of this Code are hereby MIAA Charter has placed the title to the Airport Lands and Buildings in the name of
repealed or modified accordingly." ([f], Section 534, RA 7160). MIAA. However, MIAA points out that it cannot claim ownership over these properties since
the real owner of the Airport Lands and Buildings is the Republic of the Philippines. The MIAA
With that repealing clause in RA 7160, it is safe to infer and state that the tax exemption Charter mandates MIAA to devote the Airport Lands and Buildings for the benefit of the
provided for in RA 6958 creating petitioner had been expressly repealed by the provisions of general public. Since the Airport Lands and Buildings are devoted to public use and public
the New Local Government Code of 1991. service, the ownership of these properties remains with the State. The Airport Lands and
Buildings are thus inalienable and are not subject to real estate tax by local governments.
The "airports" referred to are the "Lahug Air Port" in Cebu City and the "Mactan International
AirPort in the Province of Cebu",36 which belonged to the Republic of the Philippines, then MIAA also points out that Section 21 of the MIAA Charter specifically exempts MIAA from
under the Air Transportation Office (ATO).37 the payment of real estate tax. MIAA insists that it is also exempt from real estate tax under
Section 234 of the Local Government Code because the Airport Lands and Buildings are owned
It may be reasonable to assume that the term "lands" refer to "lands" in Cebu City then by the Republic. To justify the exemption, MIAA invokes the principle that the government
administered by the Lahug Air Port and includes the parcels of land the respondent City of cannot tax itself. MIAA points out that the reason for tax exemption of public property is that
Cebu seeks to levy on for real property taxes. This section involves a "transfer" of the "lands" its taxation would not inure to any public advantage, since in such a case the tax debtor is also
among other things, to the petitioner and not just the transfer of the beneficial use thereof, with the tax creditor.
the ownership being retained by the Republic of the Philippines.
SUPREME COURT’S RULING:
This "transfer" is actually an absolute conveyance of the ownership thereof because the Under Section 2(10) and (13) of the Introductory Provisions of the Administrative
petitioner's authorized capital stock consists of, inter alia "the value of such real estate owned Code, which governs the legal relation and status of government units, agencies and offices
and/or administered by the airports."38 Hence, the petitioner is now the owner of the land in within the entire government machinery, MIAA is a government instrumentality and not a
question and the exception in Section 234(c) of the LGC is inapplicable. government-owned or controlled corporation. Under Section 133(o) of the Local Government
Code, MIAA as a government instrumentality is not a taxable person because it is not subject
Moreover, the petitioner cannot claim that it was never a "taxable person" under its Charter. It to "[t]axes, fees or charges of any kind" by local governments. The only exception is when
was only exempted from the payment of real property taxes. The grant of the privilege only in MIAA leases its real property to a "taxable person" as provided in Section 234(a) of the Local
respect of this tax is conclusive proof of the legislative intent to make it a taxable person subject Government Code, in which case the specific real property leased becomes subject to real estate
to all taxes, except real property tax.
Page 8 of 10
tax. Thus, only portions of the Airport Lands and Buildings leased to taxable persons like tax.12 In this case, only those portions of the NAIA Pasay properties which are leased to taxable
private parties are subject to real estate tax by the City of Parañaque. persons like private parties are subject to real property tax by the City of Pasay.
Under Article 420 of the Civil Code, the Airport Lands and Buildings of MIAA, being devoted
to public use, are properties of public dominion and thus owned by the State or the Republic of
the Philippines. Article 420 specifically mentions "ports x x x constructed by the State," which Republic v. Parañaque,
includes public airports and seaports, as properties of public dominion and owned by the G.R. No. 191109, July 18, 2012,
Republic. As properties of public dominion owned by the Republic, there is no doubt 677 SCRA 246
whatsoever that the Airport Lands and Buildings are expressly exempt from real estate tax ISSUE:
under Section 234(a) of the Local Government Code. This Court has also repeatedly ruled that Whether or not the PRA is EXEMPTED FROM PAYMENT OF REAL PROPERTY
properties of public dominion are not subject to execution or foreclosure sale. TAX UNDER SECTIONS 234(A) AND 133(O) OF REPUBLIC ACT 7160 OR THE LOCAL
GOVERNMENT CODE.
Another rule is that a tax exemption is strictly construed against the taxpayer claiming the See Resolution in the First National Tax Association cited in International Comity
exemption. However, when Congress grants an exemption to a national government in Taxation by Clyde J. Crobaugh, University of Chicago Press, p. 269.
instrumentality from local taxation, such exemption is construed liberally in favor of the
national government instrumentality. As this Court declared in Maceda v. Macaraig, Jr.: This concept holds that between and among nations there is mutual courtesy and reciprocity.
It is a basic principle in international law that all states are equally sovereign. Each state
MCIAA v. Lapu-Lapu, observes co-equal sovereignty by not taxing the properties, income or effects of fellow states.
G.R. No. 181756, 15 June 2015
ISSUE: Embassies or consular offices of foreign government in the Philippines including
international organizations and their non-Filipino staff are not subject to Philippine taxation.
WHETHER OR NOT PETITIONER IS A GOVERNMENT INSTRUMENTALITY
EXEMPT FROM PAYING REAL PROPERTY TAXES
all performed in the Philippines because some of them were completed in Japan in accordance any source." Since the two cases treat of a different subject matter, the decision in one cannot
with the provisions of the contracts. be res judicata to the other.