Procesamiento estadístico de datos y análisis de resultados instrumento

TREASURER OF QUEZON CITY, and CITY ASSESSOR

OF QUEZON

CITY, Respondents (G.R. No. 210551, June 30, 2015)

FACTS:

 On October 17, 2011, respondent Quezon City Council enacted Ordinance No. SP-2095, S-2011,or the Socialized Housing Tax of Quezon City.

 Effective for five (5) years, the Socialized Housing Tax ( SHT ) shall be utilized by the Quezon City Government for the following projects: (a) land purchase/land banking; (b) improvement of current/existing socialized housing facilities; (c) land development; (d) construction of core houses, sanitary cores, medium-rise buildings and other similar structures; and (e) financing of public-private partnership agreement of the Quezon City Government and National Housing Authority ( NHA ) with the private sector.

 Under certain conditions, a tax credit shall be enjoyed by taxpayers regularly paying the special assessment:

“SECTION 7- TAX CREDIT. Taxpayers dutifully paying the special assessment tax as imposed by this ordinance shall enjoy a tax credit. The tax credit may be availed of only after five (5) years of continue[d] payment. Further, the taxpayer availing this tax credit must be a taxpayer in good standing as certified by the City Treasurer and City Assessor.”

 Petitioner alleges that he is a registered co-owner of a 371- square-meter residential property in Quezon City, and that, on January 7, 2014, he paid his realty tax which already included the garbage fee.  The instant petition was filed on

on February 5, 2014, which enjoined the enforcement of Ordinance Nos. SP-2095 and SP- 2235 and required respondents to comment on the petition without necessarily giving due course thereto.

 The imposition of the SHT and the garbage fee cannot be justified by the Quezon City Government as an exercise of its power to create sources of income under Section 5, Article X of the 1987 Constitution. According to petitioner, the constitutional provision is not a carte blanche for the LGU to tax everything under its territorial and political jurisdiction as the provision itself admits of guidelines and limitations.

ISSUES:

1. Whether or not Ordinance No. SP-2095, S-2011 or the Socialized Housing Tax is valid?

2. Whether or not Ordinance No. SP-2235, S-2013 on Garbage Fees is valid?

a. Whether or not Ordinance No. SP-2235, S-2013 on Garbage Fee violates the rule on double taxation?

RULING:

1. The constitutionality and legality of Ordinance No. SP-2095, S-2011, or the "Socialized Housing Tax of Quezon City," is sustained for being consistent with Section 43 of Republic Act No. 7279.

Ordinance No. SP-2095 imposes a Socialized Housing Tax equivalent to 0.5% on the assessed value of land in excess of Php100,000.00. This special assessment is

the same tax referred to in R.A. No. 7279 or the UDHA. The SHT is one of the sources of funds for urban development and housing program. Section 43 of the law provides:

“Sec. 43. Socialized Housing Tax – Consistent with the constitutional principle that the ownership and enjoyment of property bear a social function and to raise funds for the Program, all local government units are hereby authorized to impose an additional one-half percent (0.5%) tax on the assessed value of all lands in urban areas in excess of Fifty thousand pesos (P50,000.00).”

The SHT charged by the Quezon City Government is a tax which is within its power to impose. The tax is not a pure exercise of taxing power or merely to raise revenue; it is levied with a regulatory purpose. The levy is primarily in the exercise of the police power for the general welfare of the entire city. It is greatly imbued with public interest. Removing slum areas in Quezon City is not only beneficial to the underprivileged and homeless constituents but advantageous to the real property owners as well. The situation will improve the value of the their property investments, fully enjoying the same 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.

2. Ordinance No. SP-2235, S-2013, which collects an annual garbage fee on all domestic households in Quezon City, is hereby declared as unconstitutional and illegal.

Certainly, as opposed to petitioner’s opinion, the garbage fee is not a tax. In Smart Communications, Inc. v. Municipality of Malvar, Batangas ,the Court had the occasion to distinguish these two concepts:

“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 is also obtained does not make the imposition a tax.

In Victorias Milling Co., Inc. v. Municipality of Victorias, the Court reiterated that the purpose and effect of the imposition determine whether it is a tax or a fee, and that the lack of any standards for such imposition gives the presumption that the same is a tax.”

Although a special charge, tax, or assessment may be imposed by a municipal corporation, it must be reasonably commensurate to the cost of providing the garbage service. To pass judicial scrutiny, a regulatory fee must not produce revenue in excess of the cost of the regulation because such fee will be construed as an illegal tax when the revenue generated by the regulation exceeds the cost of the regulation.

Petitioner argues that the Quezon City Government already collects garbage fee under Section 47 of R.A. No. 9003, which authorizes LGUs to impose fees in amounts sufficient to pay the costs of preparing, adopting, and implementing a solid waste management plan, and that it has access to the SWM Fund under Section 46 of the same law. Moreover, Ordinance No. S-2235 is inconsistent with R.A. No. 9003, because the ordinance emphasizes the collection and payment of garbage fee with no concern for segregation, composting and recycling of wastes. It also skips the mandate of the law calling for the active involvement of the barangay in the collection, segregation, and recycling of garbage.

We accordingly say that the designation given by the municipal authorities does not decide whether the imposition is properly a license tax or a license fee.

In Georgia, U.S.A., assessments for garbage collection services have been consistently treated as a fee and not a tax.

In another U.S. case, the garbage fee was considered as a "service charge" rather than a tax as it was actually a fee for a service given by the city which had previously been provided at no cost to its citizens.

Hence, not being a tax, the contention that the garbage fee under Ordinance No. SP-2235 violates the rule on double taxationmust necessarily fail. QUESTIONS: a.) Do local governments

have the power to tax? Explain your answer.

b.) Does the direct grant of taxing power to the local governments mean that the legislature may no longer provide limitations and guidelines to such power? Explain your answer.

July 2015 1.) FORTUNE TOBACCO ORPORATION, Petitioner VS. COMMISSIONER OF INTERNAL REVENUE, Respondent (G.R. No. 192024, July 01, 2015) FACTS:  Petitioner is the manufacturer/producer of, among others, the following cigarette brands, with tax rate classification based on net retail price prescribed by Republic Act No. 4280:

Brand Tax Rate

Champion M 100 P1.00

Camel F King P1.00

Camel Lights Box 20's P1.00 Camel Filters Box 20's P1.00

Winston F King P5.00

Winston Lights P5.00

 Prior to January 1, 1997, the above- mentioned cigarette brands were

subject to ad valorem tax pursuant to then Section 142 of the Tax Code of 1977, as amended. However, on January 1, 1997, R.A. No. 8240 took effect causing a shift from the ad valorem tax (AVT) system to the specific tax system. As a result of such shift, the aforesaid cigarette brands were subjected to specific tax under Section 142 thereof now renumbered as Section 145 of the Tax Code of 1997.

 To implement the provisions for a twelve percent (12%) increase of excise tax on cigars and cigarettes packed by machines by January 1, 2000, the Secretary of Finance, upon recommendation of the respondent Commissioner of Internal Revenue, issued Revenue Regulations No. 17-99, dated December 16, 1999:

“RR No. 17-99 likewise provides in the last paragraph of Section 1 thereof, "that the new specific tax rate for any existing brand of cigars, cigarettes packed by machine, distilled spirits, wines and fermented liquor shall not be lower than the excise tax that is actually being paid prior to January 1, 2000."

 Petitioner filed a claim for tax credit or refund under Section 229 of the NIRC for erroneously or illegally collected specific taxes covering the period June to December 31, 2004 in the total amount of Php219,566,450.00.

 Petitioner filed a Petition for Review which was raffled to the Former First Division of this Court. After trial on the merits, the Former First Division of this Court rendered the assailed Decision, which consistently ruled that RR 17-99 is contrary to law and that there is insufficiency of evidence on the claim for refund. Petitioner elevated

its claim to the CTA En Banc, but was rebuffed after the tax tribunal found no cause to reverse the findings and conclusions of the CTA Division.

ISSUE:

Whether or not there is sufficient evidence to warrant the grant of petitioner's claim for tax refund?

RULING:

Petition of Petitioner is denied. Petitioner failed to provide sufficient evidence to prove its claim and the amount thereof.

Petitioner relied heavily on photocopied documents to prove its claim. The other documentary evidence submitted by petitioner was refused admission for being merely photocopies.

In this case, petitioner did not even attempt to provide a plausible reason as to why the original copies of the documents presented could not be produced before the CTA or any reason that the application of any of the foregoing exceptions could be justified. Although petitioner presented one (1) witness to prove its claim, it appears that this witness was not even a signatory to any of the disputed documentary evidence.

Petitioner's evidence, even if considered, fails to prove that it is entitled to its claim for refund. Clearly, it is petitioner's burden to prove the allegations made in its claim for refund. For a claim for refund to be granted, the manner in proving it must be in accordance with the prescribed rules of evidence. It would have been erroneous had the CTA En Banc relied on petitioner's own Excise Tax Refund Computation Summary or the unsatisfactory explanation of its lone witness to justify its claim for tax refund.

This Court is simply pointing to the rule that claims for refunds are the exception, rather than the rule, and that each claim for refund, in order to be granted, must be clearly set forth and established in accordance with the rules of evidence.

As it has been said, time and again, that claims for tax refunds are in the nature of tax exemptions which result in loss of revenue for the government. Upon the person claiming an exemption from tax payments rests the burden of justifying the exemption by words too plain to be mistaken and too categorical to be misinterpreted; it is never presumed nor be allowed solely on the ground of equity.

QUESTIONS: a.) What are the requirements needed in order that the application for VAT refund/tax credit may be approved? Cite your legal basis.

b.) Should an application for refund/credit be accompanied by copies of the taxpayer’s VAT return(s) for the taxable quarter(s) concerned? Explain your answer.

2.) CHINA BANKING CORPORATION, Petitioner VS. CITY TREASURER OF MANILA, Respondent (G.R. No. 204117, July 1, 2015) FACTS:

 On January 2007, on the basis of the reported income of respondent CBC's Sto. Cristo Branch, Binondo,

Manila, amounting

to P34,310,777.34 for the year ending December 31, 2006, respondent CBC was assessed the amount of P267,128.70 by petitioner City Treasurer of Manila, consisting of local business tax, business permits, and other fees for taxable year 2007.

 On January 15, 2007, CBC paid the amount of P267,128.70 and protested, thru a Letter dated January 12, 2007, the imposition of business tax under Section 21 of the Manila Revenue Code in the amount ofP154,398.50, on the ground that it is not liable of said additional business tax and the same constitutes double taxation.

 On March 27, 2007, respondent wrote a letter-reply to petitioner’s Letter dated February 8, 2007, reiterating that respondent already protested the additional assessment under Section 21 of the Manila Revenue Code in its Letter dated January 12, 2007. In the same Letter, respondent averred that pursuant to Section 195 of the Local Government Code ("LGC ''), petitioner had until March 16, 2007 within which to decide the protest, and considering that respondent received the Letter dated February 8, 2007, four days after the deadline to decide and petitioner did not even resolve the protest, respondent formally demanded the refund of the amount of P154,398.50, representing the business tax collected under Section 21 of the Manila Revenue Code.

 Respondent CBC filed a Petition for Review with the RTC. The RTC, rendered its decision granting the petition filed by CBC and ordered the City Treasurer to refund the amount of P154,398.50, representing the assessment paid by it under Section 21 of Manila Ordinance No. 7988,as amended by Tax Ordinance No. 8011.

 The RTC resolved to deny the motion for reconsideration filed by the City Treasurer.

 Decision of the CTA Division: CTA Divisionreversed the decision of the

RTC, effectively dismissing CBC’s protest against the disputed assessment. It found that the RTC did not have jurisdiction over the said petition for because it was filed out of time. The CTA Division noted that the petition for review was filed one (1) day beyond the reglementary period allowed by Section 195 of the Local Government Code (LGC) to taxpayers who wished to appeal a denial of a protest due to the inaction of the City Treasurer. Consequently, the CTA Division ruled that the City Treasurer’s assessment against CBC had attained finality.

 Decision of the CTA En Banc: The CTA En Banc affirmed the ruling of the CTA Division in toto, reiterating that the petition for review was filed out of time.

ISSUE:

Whether or not the Honorable Court of Tax Appeals gravely erred in disregarding the law and interest of substantial justice by reversing the ruling of the trial court solely because of its assumed pronouncement that the original petition was filed one (1) day beyond the reglementary period?

RULING:

The petition lacks merit. The Court, however, is of the view that the period within which the City Treasurer must act on the protest, and the consequent period to appeal a "denial due to inaction," should be reckoned from January 15, 2007, the date CBC filed its protest, and not March 27, 2007. Consequently, the Court finds that the CTA En Banc did not err in ruling that CBC had lost its right to challenge the City

Treasurer’s "denial due to inaction." On this matter, Section 195 of the LGC is clear:

SECTION 195. Protest of Assessment. - When the local treasurer or his duly authorized representative finds that correct taxes, fees, or charges have not been paid, he shall issue a notice of assessment stating the nature of the tax, fee or charge, the amount of deficiency, the surcharges, interests and penalties. Within sixty (60) days from the receipt of the notice of assessment, the taxpayer may file a written protest with the local treasurer contesting the assessment; otherwise, the assessment shall become final and executory. The local treasurer shall decide the protest within sixty (60) days from the time of its filing . If the local treasurer finds the protest to be wholly or partly meritorious, he shall issue a notice canceling wholly or partially the assessment. However, if the local treasurer finds the assessment to be wholly or partly correct, he shall deny the protest wholly or partly with notice to the taxpayer. The taxpayer shall have thirty (30) days from the receipt of the denial of the protest or from the lapse of the sixty (60)-day period prescribed herein within which to appeal with the court of competent jurisdiction otherwise the assessment becomes conclusive and unappealable.

Time and again, it has been held that the perfection of an appeal in the manner and within the period laid down by law is not only mandatory but also jurisdictional. The failure to perfect an appeal as required by the rules has the effect of defeating the right to appeal of a party and precluding the appellate court from acquiring jurisdiction over the case.

At the risk of being repetitious, the Court declares that the right to appeal is neither a natural right nor a part of due process. It is merely a statutory privilege, and may be exercised only in the manner and in accordance with the provisions of the law.

3.) CLARK INVESTORS AND