RUFINO R. TAN vs. RAMON R. DEL ROSARIO, JR., as SECRETARY OFFINANCE & JOSE U.

ONG, as
COMMISSIONER OF INTERNAL REVENUE,G.R. No. 109289, October 3, 1994

FACTS:

These two consolidated special civil actions for prohibition challenge, in G.R. No.109289, the
constitutionality of Republic Act No. 7496, also commonly known as the Simplified Net Income Taxation
n Scheme (―SNIT‖), amending certain provisions of the National Internal Revenue Regulations No. 293,
promulgated by public respondents pursuant to said law. Petitioner intimates that Republic Act No.
7496 desecrates the constitutional requirement that taxation ―shall be uniform and equitable‖ in that
the law would now attempt to tax single proprietorships and professionals differently from the manner
it imposes the tax on corporations and partnerships. Petitioners claim to be taxpayer adversely affected
by the continued implementation of the amendatory legislation.

ISSUE:

Does Republic Act No. 7496 violate the Constitution for imposing taxes that are not uniform and
equitable?

RULING:

The Petition is dismissed. Uniformity of taxation, like the kindred concept of equal protection, merely
requires that all subjects or objects of taxation, similarly situated, are to be treated alike both in
privileges and liabilities (Juan Luna Subdivision vs.Sarmiento, 91 Phil. 371). Uniformity does not for fend
classification as long as: (1) the standards that are used therefor are substantial and not arbitrary, (2)
the categorization is germane to achieve the legislative purpose, (3) the law applies, all things being
equal, to both present and future conditions, and (4) the classification applies equally well to all those
belonging to the same class (Pepsi Cola vs. City of Butuan, 24 SCRA 3; Bascovs. PAGCOR, 197 SCRA
771).What may instead be perceived to be apparent from the amendatory law is the legislative intent to
increasingly shift the income tax system towards the schedular approach in the income taxation of
individual taxpayers and to maintain, by and large, the present global treatment on taxable
corporations. We certainly do not view this classification to be arbitrary and in appropriate. Having
arrived at this conclusion, the plea of petitioner to have the law declared unconstitutional for being
violative of due process must perforce fail. The due process clause may correctly be invoked only when
there is a clear contravention of inherent or constitutional limitations in the exercise of the tax power.
CIR vs. Santos,277 SCRA 617 (1997)

Facts:

Guild of Phil. Jewellers questions the constitutionality of certain provisions of the NIRC and Tariff and
Customs Code of the Philippines. It is their contention that present Tariff and tax structure increases
manufacturing costs and render local jewelry manufacturers uncompetitive against other countries., in
support of their position, they submitted what they purported to be an exhaustive study of the tax rates
on jewelry prevailing in other Asian countries, in comparison to tax rates levied in the country. Judge
Santos of RTC Pasig, ruled that the laws in question are confiscatory and oppressive and declared them
INOPERATIVE and WITHOUR FORCE AND EFFECT insofar as petitioners are concerned. Petitioner CIR
assailed decision rendered by respondent judge contending that the latter has no authority to pass
judgment upon the taxation policy of the government. Petitioners also impugn the decision by asserting
that there was no showing that the tax laws on jewelry are confiscatory.

ISSUE:

Whether or not the Regional Trial Court has authority to pass judgment upon taxation policy of the
government.

RULING:

The policy of the courts is to avoid ruling on constitutional questions and top resume that the acts of the
political departments are valid in the absence of a clear and unmistakable showing to the contrary. This
is not to say that RTC has no power whatsoever to declare a law unconstitutional. But this authority
does not extend to deciding questions which pertain to legislative policy.RTC have the power to declare
the law unconstitutional but this authority does not extend to deciding questions which pertain to
legislative policy. RTC can only look into the validity of a provision, that is whether or not it has been
passed according to the provisions laid down by law, and thus cannot inquire as to the reasons for its
existence.

RULING ON THE EXTENT OF LEGISLATIVE POWER TO TAX

SC held that it is within the power f the legislature whether to tax jewelry or not. With the legislature
primarily lies the discretion to determine the nature (kind), object(purpose), extent (rate), coverage
(subject) and situs (place) of taxation.