Question: Can power to tax which is a purely legislative act be delegated?Answer: YES. Not to the Executive nor to the Judicial department (which violates the doctrine of Separation of Powers) but to Local Government.
Further Question: Can Double Taxation be allowed?
Further Answer: It's NOT forbidden by law, unless the taxpayer is taxed twice for the same benefit of the same governmental entity or by the same jurisdiction for the same purpose,
FACTS:
Pepsi, appellant in this case commenced a complaint with preliminary injunction assailing Sec.2 of R.A. 2264 otherwise known as the LOCAL AUTONOMY ACT stating the following:
1. That there is UNDUE DELEGATION OF THE TAXING AUTHORITY
2. To declare ORDINANCES Nos. 23 and 27 was unconstitutional which allows DOUBLE TAXATION
3. Subject ordinances are void for they impose PERCENTAGE TAX or SPECIFIC TAX
Ordinance No. 23 – Levies and collects from soft drink producers and manufacturers a tax of 1/16th of a centavo for every bottle of soft drink corked.
Ordinance No. 27 – Levies and collects on soft drinks produced or manufactured within the territorial jurisdiction of the Municipality of Tanauan a tax of 1 Centavo (P0.01) on each gallon of volume capacity.
ISSUE:
Are the contentions of the appellant tenable?
RULING:
1. On the issue of UNDUE DELEGATION of Taxing Power - It is settled that the power of taxation is an essential and inherent attribute of sovereignty, belonging as a matter of right to every independent government, without being expressly conferred by the people.
It is a power that is purely Legislative and which the central legislative body cannot delegate either to the Executive or Judicial department of the government without infringing upon the theory of separation of powers.
However there is an exception to this. In cases 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. 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.
2. On the issue on DOUBLE TAXATION - There is no validity to the assertion that the delegated authority can be declared unconstitutional on the theory of double taxation. It must be observed that the delegating authority specifies the limitations and enumerates the taxes over which local taxation may not be exercised. The reason is that the state has exclusively reserved the same for its own prerogative.
Double Taxation in general is NOT FORBIDDEN BY OUR FUNDAMENTAL LAW. Double Taxation becomes obnoxious only when the taxpayer is taxed twice for the same 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.
3. Last issue raised regarding the PERCENTAGE TAX issue - The ordinances do not partake of the nature of percentage tax . The tax is levied on the PRODUCE (whether sold or not) and not on the sales.
