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G.R. L-31156 Pepsi Cola v. Municipality of TanauanTaxation; Delegation of Powers; Power of taxation may be delegated to local governments on matters of local concern.—The power of taxation x x x may be delegated to local governments in respect of matters of local concern. This is sanctioned by immoral practice. By necessary implication, the legislative power to create political corporations for purposes of local self-government carries with it the power to confer on such local governmental agencies the power to tax. x x x The plenary nature of the taxing power thus delegated, contrary to plaintiff-appellant’s pretense, would not suffice to invalidate the said law as confiscatory and oppressive. In delegating the authority, the State is not limited to the exact meassure of that which is exercised by itself. When it is said that the taxing power may be delegated to municipalities and the like, it is meant taxes there may be delegated such measure of power to impose and collect taxes as the legislature may deem expedient. Thus, municipalities may be permitted to tax subjects which for reasons of public policy the State has not deemed wise to tax for more general purposes.Same; Due process; Taking of property without due process of law may not be passed over under the guise of taxing power, except when the latter is exercised lawfully.—This is not to say though that the constitutional injunction against deprivation of property without due process of law may be passed over under the guise of the taxing power, except when the taking of the property is in the lawful exercise of the taxing power, as when (1) the tax is for a public purpose; (2) the rule on uniformity of taxation is observed; (3) either the person or property taxed is within the jurisdiction of the government levying the tax; and (4) in the assessment and collection of certain kinds of taxes notice and opportunity for hearing are provided. [Pepsi-Cola Bottling Co. of the Philippines, Inc. vs. Municipality of Tanauan, Leyte, 69 SCRA 460(1976)]
Citation preview
Pepsi-Cola Bottling Co.
v.
Municipality of Tanauan
G.R. L-31156
PARTIES
Pepsi Cola is a domestic
corporation with offices and
principal place in the Quezon
City,
Municipality of Tanauan Leyte
is a municipal corporation
headed by the City Mayordefendant in this case.
FACTS
Levies and collects from
softdrinks manufactures and
producers a tax of
1/16 of a centavo for every
bottle of soft drinks
ISSUES &
RULING
Ordinance 23 Ordinance 27
Levies and collects from
softdrinks manufactures and
producers a tax of
P0.01 or once centavo on each
gallon of volume capacity.
These taxes are denominated as Municipal Production Tax
In this case, petitioners allege
that RA 2264 (2) is
unconstitutional because the
municipalitys power to tax is an undue delegation of the
taxing authority.
They also consider both
ordinances as illegal since they
constitute double taxation
Is the Municipality of
Tanauan not
empowered to tax?
The general rule is that taxation is vested to the
legislative authority.
However, because of doctrine of necessary
implication, municipal corporations are
empowered to tax since it as granted by the
Constitution, the local government has the
autonomous authority to create their own sources
of revenue and to levy taxes.
Does Ordinance 23 &
27 constitute double
taxation?
NOthe intention of the Municipality of Tanauan is to repeal Ordinance 23, even without express
words to that effect. The municipality is clear that
they only sought to enforce Ordinance 27
In this case, the Court noted that a sales tax is
void since it is beyond the municipalitys powers to exercise; but in this case Ordinance 27 taxes
the number of production and not on the saleswhich is allowable within the municipalitys powers.
G.R. L-31156 Pepsi Cola v. Municipality of Tanauan.vsdPage-1