Swedish Match Phil. Inc. vs.

City Treasurer of Manila

Facts:
Pursuant to Sections 14 and 21 of Ordinance No. 7794 or the Manila Revenue
Code as amended by Ordinance Nos. 7988 and 8011, Swedish Match
Philippines Inc. paid business taxes. Later, it found out that it was not liable
to pay taxes as it constitute double taxation, hence the claim for refund.
Respondent argued that Sections 14 and 21 pertains to two different objects
of tax; thus they are not of the same kind and character. Section 14 is a tax
on manufacturers, assemblers and other processors, while Section 21 applies
to business subject to excise, value-added, or percentage tax. RTC of Manila
and CTA dismissed the petition as elements of double taxation were absent.
Issue:
Whether the imposition of tax under Section 21 of the Manila Revenue Code
constitutes double taxation in view of the tax collected and paid under
Section 14 of the same code.
Held:
Yes. Double taxation is defined as taxing the same person twice by the same
jurisdiction for the same thing. When the court revisit the source of the
power of municipalities and cities to impose a local business tax, it reveals
that business such as respondents already subject to local business tax
under Section 14 of tax Ordinance No. 7794 [which is based on Section
143(a) of the LGC], can no longer be made liable for local business tax under
Section 21 of the same Tax Ordinance [which is based on Section 143(h) of
the LGC]. Section 143(h) may be imposed only on business that are subject
to excise tax, VAT, or percentage tax under the NIRC, and that are not
otherwise specified in preceding paragraphs. Indeed the payment of tax by
respondent under Section 21 falls within the meaning of double taxation.
Therefore, instant petition granted and payments made under Section 21
must be refunded.