ISSUE #1: Does the prohibition against cross-border transfer apply to appropriation and not to savings?

FACTS: The respondents assail the pronouncement of unconstitutionality of cross-border transfers

made by the President. They submit that Section 25(5), Article VI of the Constitution prohibits only the
transfer of appropriation, not savings. They relate that cross-border transfers have been the practice in
the past, being consistent with the Presidents role as the Chief Executive.35

RULING: No. The prohibition against cross-border transfer applies to savings but not to the
appropriations. This is pursuant to Section 25 Paragraph 5 of Article VI in the 1987 Constitution which
states that No law shall be passed authorizing any transfer of appropriations; however, the President,
the President of the Senate...may, by law, be authorized to augment any item in the general
appropriations law for their respective offices from savings in other items of their respective
appropriations.

ISSUE #2: In an appropriation measure, is there a constitutional requirement for Congress to create
allotment classes within an item?

FACTS: The respondents posited that the Court has erroneously invalidated all the DAP-funded projects
by overlooking the difference between an item and an allotment class, and by concluding that they do
not have appropriation cover; and that such error may induce Congress and the Executive (through the
DBM) to ensure that all items should have at least P1 funding in order to allow augmentation by the
President.

RULING: No. There is no constitutional requirement for Congress to create allotment classes within an
item. The item referred to by Section 25(5) of the Constitution is the last and indivisible purpose of a
program in the appropriation law, which is distinct from the expense category or allotment class. There
is no specificity, indeed, either in the Constitution or in the relevant GAAs that the object of
augmentation should be the expense category or allotment class. In the same vein, the President cannot
exercise his veto power over an expense category; he may only veto the item to which that expense
category belongs to. Further, in Nazareth v. Villar, it was clarified that there must be an existing item,
project or activity, purpose or object of expenditure with an appropriation to which savings may be
transferred for the purpose of augmentation. Accordingly, so long as there is an item in the GAA for
which Congress had set aside a specified amount of public fund, savings may be transferred thereto for
augmentation purposes.

LA SUERTE CIGARETTE v. CIR, G.R. No. 125346, Nov. 11, 2014

FACTS: The consolidated case involves the taxability of stemmed leaf tobacco imported and locally
purchased by cigarette manufacturers for use as raw material in the manufacture of their cigarettes.
This is composed of six petitions for review of several decisions of the Court of Appeals, involving three
cigarette manufacturers and the Commissioner of Internal Revenue. G.R. No. 125346 is an appeal5 from
the Court of Appeals (Sixth Division) that reversed the Court of Tax Appeals decision7 and held
petitioner La Suerte Cigar & Cigarette Factory (La Suerte) liable for deficiency specific tax on its purchase
of imported and locally produced stemmed leaf tobacco and sale of stemmed leaf tobacco to Associated
Anglo-American Tobacco Corporation (AATC) during the period from January 1, 1986 to June 30, 1989.

ISSUE: Whether the imposition of excise tax on stemmed leaf tobacco under Section 141 of the 1986 Tax
Code constitutes double taxation?

RULING: No. The contention that the cigarette manufacturers are doubly taxed because they are paying
the specific tax on the raw material and on the finished product in which the raw material was a part is
found to be devoid of merit. The Court ruled that for double taxation in the objectionable or prohibited
sense to exist, "the same property must be taxed twice, when it should be taxed but once.""Both taxes
must be imposed on the same property or subject- matter, for the same purpose, by the same. . . taxing
authority, within the same jurisdiction or taxing district, during the same taxing period, and they must
be the same kind or character of tax." At all events, there is no constitutional prohibition against double
taxation in the Philippines. It is something not favored, but is permissible, provided some other
constitutional requirement is not thereby violated, such as the requirement that taxes must be uniform.
In this case, there is no double taxation in the prohibited sense because the specific tax is imposed by
explicit provisions of the Tax Code on two different articles or products: (1) on the stemmed leaf
tobacco; and (2) on cigar or cigarette.