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    Pepsi-Cola v. Tanauan

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    Ish
    The Supreme Court upheld the constitutionality of a Philippine law that delegates taxing powers to local governments and two municipal ordinances levying taxes on soft drinks. The court found: 1) Legislative powers, including taxation, can be delegated to local governments for matters of local concern like Ordinances Nos. 23 and 27. 2) The ordinances do not impose double taxation as one tax is imposed by the national government and the other by the municipality, which is allowed. 3) The taxes are not percentage taxes as the volume of production is only used to determine the tax rate, not set as a ratio to sales. The taxes are also not specific taxes on enumerated items.

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    Pepsi-Cola v. Tanauan

    Uploaded by

    Ish
    3K views2 pages
    The Supreme Court upheld the constitutionality of a Philippine law that delegates taxing powers to local governments and two municipal ordinances levying taxes on soft drinks. The court found: 1) Legislative powers, including taxation, can be delegated to local governments for matters of local concern like Ordinances Nos. 23 and 27. 2) The ordinances do not impose double taxation as one tax is imposed by the national government and the other by the municipality, which is allowed. 3) The taxes are not percentage taxes as the volume of production is only used to determine the tax rate, not set as a ratio to sales. The taxes are also not specific taxes on enumerated items.

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    The Supreme Court upheld the constitutionality of a Philippine law that delegates taxing powers to local governments and two municipal ordinances levying taxes on soft drinks. The court found: 1) Legislative powers, including taxation, can be delegated to local governments for matters of local concern like Ordinances Nos. 23 and 27. 2) The ordinances do not impose double taxation as one tax is imposed by the national government and the other by the municipality, which is allowed. 3) The taxes are not percentage taxes as the volume of production is only used to determine the tax rate, not set as a ratio to sales. The taxes are also not specific taxes on enumerated items.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    3K views2 pages

    Pepsi-Cola v. Tanauan

    Uploaded by

    Ish
    The Supreme Court upheld the constitutionality of a Philippine law that delegates taxing powers to local governments and two municipal ordinances levying taxes on soft drinks. The court found: 1) Legislative powers, including taxation, can be delegated to local governments for matters of local concern like Ordinances Nos. 23 and 27. 2) The ordinances do not impose double taxation as one tax is imposed by the national government and the other by the municipality, which is allowed. 3) The taxes are not percentage taxes as the volume of production is only used to determine the tax rate, not set as a ratio to sales. The taxes are also not specific taxes on enumerated items.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    of 2

    G.R. No.

    L-31156 : February 27, 1976

    PEPSI-COLA BOTTLING COMPANY OF THE PHILIPPINES,


    INC., Plaintiff-Appellant, v. MUNICIPALITY OF TANAUAN, LEYTE,
    THE MUNICIPAL MAYOR, ET AL., Defendant Appellees.

    MARTIN, J.:

    FACTS:

    The Municipal Ordinance No. 23, of Tanauan, Leyte levies and collects from soft drinks producers
    and manufacturers one-sixteenth (1/16) of a centavo for every bottle of soft drink corked.

    On the other hand, Municipal Ordinance No. 27 levies and collects on soft drinks produced or
    manufactured within the territorial jurisdiction of the Municipality of Tanauan, Leyte a tax of one
    centavo (P0.01) on each gallon (128 fluid ounces, U.S.) of volume capacity.

    Pepsi-Cola Bottling Company of the Philippines, Inc. (Pepsi-Cola) filed a complaint with the Court
    of First Instance (CFI) of Leyte to declare Section 2 of Republic Act No. 2264, otherwise known as
    the Local Autonomy Act, unconstitutional as an undue delegation of taxing authority as well as
    to declare Ordinances Nos. 23 and 27 of the Municipality of Tanauan, Leyte, null and void.

    The CFI of Leyte dismissed the complaint and upheld the constitutionality of Section 2 of Republic
    Act No. 2264. It also declared that Ordinance Nos. 23 and 27 are legal and constitutional.

    ISSUES: Whether or not Section 2 of Republic Act No. 2264 is an undue delegation of power.
    Whether or not Ordinances Nos. 23 and 27 constitute double taxation and impose percentage or
    specific taxes.

    HELD:

    The power of taxation is purely legislative and cannot be delegated either to the executive or
    judicial department of the government without infringing upon the theory of separation of
    powers. The exception, however, lies in the case of municipal corporations, to which, said theory
    does not apply. Legislative powers may be delegated to local governments in respect of matters
    of local concern. Section 5, Article XI provides that “each local government unit shall have the
    power to create its sources of revenue and to levy taxes, subject to such limitations as may be
    provided by law.” Thus, legislative powers may be delegated to local governments in respect of
    matters of local concern. 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.

    Ordinances Nos. 23 and 27 do not constitute double taxation. The delegating authority specifies
    the limitations and enumerates the taxes over which local taxation may not be exercised. Double
    taxation, in general, is not forbidden by our fundamental law. It becomes obnoxious only where
    the taxpayer is taxed twice for the benefit of the same governmental entity or by the same
    jurisdiction for the same purpose, but not in a case where one tax is imposed by the State and
    the other by the city or municipality. The tax is not a percentage tax as the volume capacity of
    the taxpayer’s production of softdrinks is considered solely for purposes of determining the tax
    rate on the products but there is no set ratio between volume of sales and amount of the tax.
    Nor can the tax levied be treated as a specific tax. Softdrink is not one of those specified articles.

    Ordinance Nos. 23 and 27 do not partake of the nature of a percentage tax on sales, or other
    taxes in any form based thereon. The tax is levied on the produce (whether sold or not) and not
    on the sales. The volume capacity of the taxpayer's production of soft drinks is considered solely
    for purposes of determining the tax rate on the products, but there is not set ratio between the
    volume of sales and the amount of the tax.

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