[G.R. No. L-31156. February 27, 1976.

]
PEPSI-COLA BOTTLING COMPANY OF THE PHILIPPINES,
INC., plaintiff-appellant, vs. MUNICIPALITY
OF
TANAUAN,
LEYTE, THE MUNICIPAL MAYOR, ET AL., defendants-appellees.
Sabido, Sabido & Associates for plaintiff-appellant.
Assistant Solicitor General Conrado
M. Reyes for defendants-appellees.

T . Limcaoco and Solicitor

Enrique

SYNOPSIS
Pepsi-Cola Bottling Company of the Philippines, Inc., filed a complaint with
preliminary injunction before the Court of First Instance of Leyte to declare
Section 2 of R.A. No. 2264, (known as the Local Autonomy Act) unconstitutional
as an undue delegation of the taxing authority and declare null and void
Municipal Ordinance No. 23, which levies and collects from soft drinks producers
and manufactures a tax of 1/16 of a centavo for every bottle of soft drinks corked,
and Municipal Ordinance No. 27 which levies and collects on soft drinks
produced or manufactured within the territorial jurisdiction a tax of one centavo on
each gallon of volume capacity. The trial court dismissed the complaint and
upheld the constitutionality of Sec. 2 of R.A. No. 2264 and declared Municipal
Ordinances Nos. 27 valid and constitutional. Appealed to the Court of Appeals,
the case was certified to the Supreme Court as involving pure question of law.
The Supreme Court upheld the validity of the delegation to Municipal Corporation
or authority to tax and likewise the validity of Municipal Ordinance No. 27, which
repealed Municipal Ordinance No. 23.
SYLLABUS
1. TAXATION; NATURE; NON-DELEGATION OF POWER, EXCEPTION. 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 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. This is sanctioned by
immemorial. By necessary implication, the legislative power to create political
corporations for purpose of local self-government carries with it the power to
confer on such local government agencies the power to tax.
2. ID.; ID.; ID.; SCOPE OF LOCAL GOVERNMENT'S POWER TO TAX. The
taxing authority conferred on local governments under Section 2, Republic Act
No. 2264, is broad enough as to extend to almost "everything, excepting those
which are mentioned therein." As long as the tax levied under the authority of a
city or municipal ordinance is not within the exceptions and limitations in the law,
the same comes within the ambit of the general rule, pursuant to the rules
of expresio unius est exclusio alterius, and exceptio firmat regulum in casibus non
excepti. Municipalities are empowered to impose not only municipal license taxes
upon persons engaged in any business or occupation but also to levy for public
purposes, just and uniform taxes.
3. ID.; ID.; ID.; LIMITATION. Municipalities and municipal districts are
prohibited to impose "any percentage tax on sales or other in any form based
thereon nor impose taxes on articles subject to specific tax, except gasoline,
under the provisions of the National Internal Revenue Code." For purposes of this
particular limitation, a municipal ordinance which prescribes a set of radio
between the amount of the tax and the volume of sales of the taxpayer imposes a
sales tax and is null and void for being outside the power of the municipality to
enact.
4. ID.; ID.; ID.; DELEGATION
OF
POWER TO
TAX
UNDER
NEW CONSTITUTION. Under the New Constitution, local governments are
granted autonomous authority to create their own sources of revenue and to levy
taxes. Section 5, Article XI Provides: "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." Withal, it cannot be said that Section 2

of Republic Act No. 2264 emanated from beyond the sphere of the legislative
power to enact and vest in local governments the power of local taxation.
5. ID.; ID.; ID.; VALIDITY THEREOF. The plenary nature of the delegated
power of local governments under Section 2, of R.A. No. 2264 would not suffice
to invalidate the law as confiscatory and oppressive. In delegating the authority,
the State is not limited to the measure 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 that there may be delegated such measure of power to impose and collect
taxes 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.
6. ID.; REQUISITES FOR LAWFUL EXERCISE OF TAXING POWER.
Constitutional injunction against deprivation of property without due process of
law may not 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 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.
7. ID.; ID.; INSTANCES WHERE DUE PROCESS IS VIOLATED. Due process
is usually violated where the tax imposed is for a private as distinguished from
the public purposes; a tax a imposed on property outside the State, i.e., extraterritorial taxation; and arbitrary or oppressive methods are used in assessing
and collecting taxes. But, a tax does not violate the due process clause, as
applied to a particular taxpayer, although the purpose of the tax will result in an
injury rather than a benefit to such taxpayer. Due process does not require that
the property subject to the tax or the amount of tax to be raised should be
determined by judicial inquiry, and a notice and hearing as to the amount of tax
and the manner in which it shall be apportioned are generally not necessary to
due process of law.
8. ID.; DOUBLE TAXATION; GENERALLY NOT FORBIDDEN. The delegated
authority under Section 2 of the Local Autonomy Act cannot 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 local
taxation may not be exercised. The reason is that the State has exclusively
reversed the same for its own prerogative. Moreover, double taxation, in general,
is not forbidden by the fundamental law, since the injunction against double
taxation found in the Constitution of the United States and some states of the
Union has not been adopted as part thereof.
9. ID.; ID.; ID.; EXCEPTION. Double taxation 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.
10. ID.; ID.; ID.; INSTANT CASE. Where, as in the case at bar, the municipality
of Tanauan enacted Ordinance No. 27 imposing a tax of one centavo on each
gallon of volume capacity while in the previous Ordinance No. 23, it was 1/16 of a
centavo for every bottle corked, it is clear that the intention of the municipal
council was to substitute Ordinance No. 27 to that of Ordinance No. 23, repealing
the latter.
11. ID.; TAX LEVIED ON PRODUCE, NOT PERCENTAGE TAX. The
imposition of "a tax of one centavo (P0.01) on each gallon (128 fluid ounces,
U.S.) of volume capacity" on all soft drinks produced or manufactured under
Ordinance No. 27 does not partake of a 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 no set ratio between the volume of sales and
the amount of tax.
12. ID.; ID.; ID.; MUNICIPALITY ALLOWED TO INCREASE TAX AS LONG AS
AMOUNT IS REASONABLE. The tax of one centavo (P0.01) on each gallon
(128 fluid ounces, U.S.) of volume capacity of all soft drinks, produced or
manufactured or an equivalent of 1-1/2 centavos per case, cannot be considered
unjust and unfair. An increase in the tax alone would not support the claim that
the tax is oppressive, unjust and confiscatory. Municipal corporations are allowed
much discretion in determining the rates of impossible taxes. This is in line with
the constitutional policy of according the widest possible autonomy to local

government in matters of taxation, an aspect that is given expression in the Local

Tax Code (PD No. 231, July 1, 1973).
13. ID.; SPECIFIC TAXES; ARTICLES SUBJECT TO SPECIFIC TAX. Specific
taxes are those imposed on specified articles, such as distilled spirits, wines,
fermented liquors, products of tobacco other than cigars and cigarettes, matches,
firecrackers, manufactured oils and other fuels, coal bunker fuel oil
cinematographic films, playing cards, saccharine, opium and other habit forming
drugs.
FERNANDO, J., concurring:
1. CONSTITUTIONAL
LAW;
TAXATION;
POWER
OF
MUNICIPAL
CORPORATION TO TAX UNDER THE NEW CONSTITUTION. The
present Constitution is quite explicit as to the power of taxation vested in local
and municipal corporations. It is therein specifically provided: "Each local
government unit shall have the power to create its own sources to revenue and to
levy taxes, subject to such limitations as may be provided by law."
2. ID.;
ID.;
LIMITATION
ON
POWER
TO
TAX
UNDER
THE
1935 CONSTITUTION. The only limitation on the authority to tax under the
1935Constitution was that while the President of the Philippines was vested with
the power of control over all executive departments, bureaus, or offices, he could
only "exercise general supervision over all local governments as may be provided
by law." As far as legislative power over local government was concerned, no
restriction whatsoever was placed in the Congress of the Philippines. It would
appear therefore that the extent of the taxing power was solely for the legislative
body to decide.

3. ID.; ID.; MUNICIPAL CORPORATION'S POWER TO TAX MUST BE CLEARLY

SHOWN. Although the scope of municipal taxing power had been enlarged by
subsequent legislations, the Court, in Golden Ribbon Lumber Co. vs. City of
Butuan, L-18534, December 24, 1964, reaffirmed the traditional concept, thus:
"The rule is well-settled that municipal corporations, unlike sovereign states, are
clothed with no power of taxation; that its charter or a statute must clearly show
an intent to confer that power of the municipal corporation cannot assume and

exercise it, and that any such power granted must be construed strictly, any doubt
or ambiguity arising from the terms of the grant to be resolved against the
municipality."
4. ID.; ID.; DOUBLE TAXATION. The objection to the taxation as double may
be laid down on one side. The 14th Amendment (the due process clause) no
more forbids double taxation than it does doubling the amount of a tax, short of
confiscation or proceedings unconstitutional on other grounds.
DECISION
MARTIN, J :
p

This is an appeal from the decision of the Court of First Instance of Leyte in its
Civil Case No. 3294, which was certified to Us by the Court of Appeals on
October 6, 1969, as involving only pure questions of law, challenging the power
of taxation delegated to municipalities under the Local Autonomy Act(Republic
Act No. 2264, as amended, June 19, 1959).
On February 14, 1963, the plaintiff-appellant, Pepsi-Cola Bottling Company of the
Philippines, Inc., commenced a complaint with preliminary injunction before the
Court of First Instance of Leyte for that Court to declare Section 2 of Republic Act
No. 2264, 1 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, series of 1962, of the Municipality of Tanauan, Leyte, null and void.
aisa dc

On July 23, 1963, the parties entered into a Stipulation of Facts, the material
portions of which state that, first, both Ordinances Nos. 23 and 27 embrace or
cover the same subject matter and the production tax rates imposed therein are
practically the same, and second that on January 17, 1963, the acting Municipal
Treasurer of Tanauan, Leyte, as per his letter addressed to the Manager of the
Pepsi-Cola Bottling Plant in said municipality, sought to enforce compliance by
the latter of the provisions of said Ordinance No. 27, series of 1962.
LLpr

Municipal Ordinance No. 23, of Tanauan, Leyte, which was approved on

September 25, 1962, levies and collects "from soft drinks producers and

manufacturers a tax of one-sixteenth (1/16) of a centavo for every bottle of soft

drink corked." 2 For the purpose of computing the taxes due, the person, firm,
company or corporation producing soft drinks shall submit to the Municipal
Treasurer a monthly report of the total number of bottles produced and corked
during the month. 3
On the other hand, Municipal Ordinance No. 27, which was approved on October
28, 1962, levies and collects "on soft drinks produced or manufactured within the
territorial jurisdiction of this municipality a tax of ONE CENTAVO (P0.01) on each
gallon (128 fluid ounces, U.S.) of volume capacity." 4 For the purpose of
computing the taxes due, the person, firm, company, partnership, corporation or
plant producing soft drinks shall submit to the Municipal Treasurer a monthly
report of the total number of gallons produced or manufactured during the
month. 5
The tax imposed in both Ordinances Nos. 23 and 27 is denominated as
"municipal production tax."
On October 7, 1963, the Court of First Instance of Leyte rendered judgment
"dismissing the complaint and upholding the constitutionality of [Section
2,Republic Act No. 2264]; declaring Ordinances Nos. 23 and 27 valid, legal and
constitutional; ordering the plaintiff to pay the taxes due under the oft-said
Ordinances; and to pay the costs."
From this judgment, the plaintiff Pepsi-Cola Bottling Company appealed to the
Court of Appeals, which, in turn, elevated the case to Us pursuant to Section 31
of the Judiciary Act of 1948, as amended.
There are three capital questions raised in this appeal:
1. Is Section 2, Republic Act No. 2264 an undue delegation of
power, confiscatory and oppressive?
2. Do Ordinances Nos. 23 and 27 constitute double taxation and
impose percentage or specific taxes?
3. Are Ordinances Nos. 23 and 27 unjust and unfair?

1. 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. 6 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. 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. 7 This is
sanctioned by immemorial practice. 8 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. 9 Under the New Constitution, local governments are granted the
autonomous authority to create their own sources of revenue and to levy taxes.
Section 5, Article XI provides: "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." Withal, it cannot be said that Section 2 of Republic Act
No. 2264 emanated from beyond the sphere of the legislative power to enact and
vest in local governments the power of local taxation.
The plenary nature of the taxing power thus delegated, contrary to plaintiffappellant'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
measure 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 that 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. 10 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. 11 Due process is usually violated where the tax
imposed is for a private as distinguished from a public purpose; a tax is imposed
on property outside the State, i.e., extra-territorial taxation; and arbitrary or

oppressive methods are used in assessing and collecting taxes. But, a tax does
not violate the due process clause, as applied to a particular taxpayer, although
the purpose of the tax will result in an injury rather than a benefit to such
taxpayer. Due process does not require that the property subject to the tax or the
amount of tax to be raised should be determined by judicial inquiry, and a notice
and hearing as to the amount of the tax and the manner in which it shall be
apportioned are generally not necessary to due process of law. 12
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. 13 The reason is that the State has
exclusively reserved the same for its own prerogative. Moreover, double taxation,
in general, is not forbidden by our fundamental law, since We have not adopted
as part thereof the injunction against double taxation found in the Constitution of
the United States and some states of the Union.14 Double taxation becomes
obnoxious only where the taxpayer is taxed twice for the benefit of the same
governmental entity 15 or by the same jurisdiction for the same purpose, 16 but not
in a case where one tax is imposed by the State and the other by the city or
municipality. 17
2. The plaintiff-appellant submits that Ordinance Nos. 23 and 27 constitute
double taxation, because these two ordinances cover the same subject matter
and impose practically the same tax rate. The thesis proceeds from its
assumption that both ordinances are valid and legally enforceable. This is not so.
As earlier quoted, Ordinance No. 23, which was approved on September 25,
1962, levies or collects from soft drinks producers or manufacturers a tax of onesixteen (1/16) of a centavo for every bottle corked, irrespective of the volume
contents of the bottle used. When it was discovered that the producer or
manufacturer could increase the volume contents of the bottle and still pay the
same tax rate, the Municipality of Tanauan enacted Ordinance No. 27, approved
on October 28, 1962, imposing a tax of one centavo (P0.01) on each gallon (128
fluid ounces, U.S.) of volume capacity. The difference between the two
ordinances clearly lies in the tax rate of the soft drinks produced: in Ordinance
No. 23, it was 1/16 of a centavo for every bottle corked; in Ordinance No. 27, it is

one centavo (P0.01) on each gallon (128 fluid ounces, U.S.) of volume capacity.
The intention of the Municipal Council of Tanauan in enacting Ordinance No. 27
is thus clear: it was intended as a plain substitute for the prior Ordinance No. 23,
and operates as a repeal of the latter, even without words to that
effect. 18 Plaintiff-appellant in its brief admitted that defendants-appellees are only
seeking to enforce Ordinance No. 27, series of 1962. Even the stipulation of facts
confirms the fact that the Acting Municipal Treasurer of Tanauan, Leyte sought to
compel compliance by the plaintiff-appellant of the provisions of said Ordinance
No. 27, series of 1962. The aforementioned admission shows that only
Ordinance No. 27, series of 1962 is being enforced by defendants-appellees.
Even the Provincial Fiscal, counsel for defendants-appellees admits in his brief
"that Section 7 of Ordinance No. 27, series of 1962 clearly repeals Ordinance No.
23 as the provisions of the latter are inconsistent with the provisions of the
former."

That brings Us to the question of whether the remaining Ordinance No. 27

imposes a percentage or a specific tax. Undoubtedly, the taxing authority
conferred on local governments under Section 2, Republic Act No. 2264, is broad
enough as to extend to almost "everything, excepting those which are mentioned
therein." As long as the tax levied under the authority of a city or municipal
ordinance is not within the exceptions and limitations in the law, the same comes
within the ambit of the general rule, pursuant to the rules of expresio unius est
exclusio alterius, and exceptio firmat regulum in casibus non excepti. 19 The
limitation applies, particularly, to the prohibition against municipalities and
municipal districts to impose "any percentage tax on salesor other taxes in any
form based thereon nor impose taxes on articles subject to specific tax, except
gasoline, under the provisions of the National Internal Revenue Code." For
purposes of this particular limitation, a municipal ordinance which prescribes a
set ratio between the amount of the tax and the volume of sales of the taxpayer
imposes a sales tax and is null and void for being outside the power of the
municipality to enact. 20 But, the imposition of "a tax of one centavo (P0.01) on
each gallon (128 fluid ounces, U.S.) of volume capacity" on all soft drinks
produced or manufactured under Ordinance No. 27 does 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 taxpayers production of soft drinks is considered solely for
purposes of determining the tax rate on the products, but there is no set ratio
between the volume of sales and the amount of the tax. 21
Nor can the tax levied be treated as a specific tax. Specific taxes are those
imposed on specified articles, such as distilled spirits, wines, fermented liquors,
products of tobacco other than cigars and cigarettes, matches, firecrackers,
manufactured oils and other fuels, coal, bunker fuel oil, diesel fuel oil,
cinematographic films, playing cards, saccharine, opium and other habit-forming
drugs. 22 Soft drink is not one of those specified.
cdphil

3. The tax of one centavo (P0.01) on each gallon (128 fluid ounces, U.S.) of
volume capacity on all soft drinks, produced or manufactured, or an equivalent of
1-1/2 centavos per case, 23 cannot be considered unjust and unfair. 24 An
increase in the tax alone would not support the claim that the tax is oppressive,
unjust and confiscatory. Municipal corporations are allowed much discretion in
determining the rates of imposable taxes. 25 This is in line with the constitutional
policy of according the widest possible autonomy to local governments in matters
of local taxation, an aspect that is given expression in the Local Tax Code (PD
No. 231, July 1, 1973). 26 Unless the amount is so excessive as to be prohibitive,
courts will go slow in writing off an ordinance as unreasonable. 27 Reluctance
should not deter compliance with an ordinance such as Ordinance No. 27 if the
purpose of the law to further strengthen local autonomy were to be realized. 28
Finally, the municipal license tax of P1,000.00 per corking machine with five but
not more than ten crowners or P2,000.00 with ten but not more than twenty
crowners imposed on manufacturers, producers, importers and dealers of soft
drinks and/or mineral waters under Ordinance No. 54, series of 1964, as
amended by Ordinance No. 41, series of 1968, of defendant
Municipality, 29 appears not to affect the resolution of the validity of Ordinance
No. 27. Municipalities are empowered to impose, not only municipal license taxes
upon persons engaged in any business or occupation but also to levy for public
purposes, just and uniform taxes. The ordinance in question (Ordinance No. 27)
comes within the second power of a municipality.

ACCORDINGLY, the constitutionality of Section 2 of Republic Act No. 2264,

otherwise known as the Local Autonomy Act, as amended, is hereby upheld and
Municipal Ordinance No. 27 of the Municipality of Tanauan, Leyte, series of 1962,
repealing Municipal Ordinance No. 23, same series, is hereby declared of valid
and legal effect. Costs against petitioner-appellant.
cdta

SO ORDERED.
Castro, C .J ., Teehankee, Barredo, Makasiar, Antonio, Esguerra, Muoz Palma,
Aquino and Concepcion, Jr., JJ ., concur.

Separate Opinions
FERNANDO, J ., concurring:
The opinion of the Court penned by Justice Martin is impressed with a scholarly
and comprehensive character. Insofar as it shows adherence to tried and tested
concepts of the law of municipal taxation, I am certainly in agreement. If I limit
myself to concurrence in the result, it is primarily because with the article on
Local Autonomy found in the present Constitution, I feel a sense of reluctance in
restating doctrines that arose from a different basic premise as to the scope of
such power in accordance with the 1935 Charter. Nonetheless, it is well-nigh
unavoidable that I do so as I am unable to share fully what for me are the
nuances and implications that could arise from the approach taken by my
brethren. Likewise as to the constitutional aspect of the thorny question of double
taxation, I would limit myself to what has been set forth in City of Baguio v. De
Leon. 1
1. The present Constitution is quite explicit as to the power of taxation vested in
local and municipal corporations. It is therein specifically provided: "Each local
government unit shall have the power to create its own sources of revenue and to
levy taxes, subject to such limitations as may be provided by law." 2 That was not
the case under the 1935 Charter. The only limitation then on the authority,
plenary in character of the national government, was that while the President of
the Philippines was vested with the power of control over all executive
departments, bureaus, or offices, he could only "exercise general supervision

over all local governments as may be provided by law . . ." 3 As far as legislative
power over local government was concerned, no restriction whatsoever was
placed on the Congress of the Philippines. It would appear therefore that the
extent of the taxing power was solely for the legislative body to decide. It is true
that in 1939, there was a statute that enlarged the scope of the municipal taxing
power. 4 Thereafter, in 1959 such competence was further expanded in the Local
Autonomy Act. 5 Nevertheless, as late as December of 1964, five years after its
enactment of the Local Autonomy Act, this Court, through Justice Dizon, in
Golden Ribbon Lumber Co. v. City of Butuan, 6 reaffirmed the traditional concept
in these words: "The rule is well-settled that municipal corporations, unlike
sovereign states, are clothed with no power of taxation; that its charter or a
statute must clearly show an intent to confer that power or the municipal
corporation cannot assume and exercise it; and that any such power granted
must be construed strictly, any doubt or ambiguity arising from the terms of the
grant to be resolved against the municipality." 7 Taxation, according to Justice
Paredes in the earlier case of Tan v. Municipality of Pagbilao, 8 "is an attribute of
sovereignty which municipal corporations do not enjoy." 9 That case left no doubt
either as to weakness of a claim "based merely by inferences, implications and
deductions [as they] have no place in the interpretation of the power to tax of a
municipal corporation." 10 As the conclusion reached by the Court finds support in
such grant of the municipal taxing power, I concur in the result.
LLjur

2. As to any possible infirmity based on an alleged double taxation, I would prefer

to rely on the doctrine announced by this Court in City of Baguio v. De
Leon. 11 Thus "As to why double taxation is not violative of due process, Justice
Holmes made clear in this language: 'The objection to the taxation as double may
be laid down on one side. . . . The 14th Amendment [the due process clause] no
more forbids double taxation than it does doubling the amount of a tax, short of
confiscation or proceedings unconstitutional on other grounds.' With that decision
rendered at a time when American sovereignty in the Philippines was recognized,
it possesses more than just a persuasive effect. To some, it delivered the coup
de grace to the bogey of double taxation as a constitutional bar to the exercise of
the taxing power. It would seem though that in the United States, as with us, its
ghost, as noted by an eminent critic, still stalks the juridical stage. In a 1947
decision, however, we quoted with approval this excerpt from a leading American

decision: 'Where, as here, Congress has clearly expressed its intention, the
statute must be sustained even though double taxation results.'" 12
So I would view the issues in this suit and accordingly concur in the result.
Footnotes
1."Sec. 2.Taxation. Any provision of law to the contrary notwithstanding, all
chartered cities, municipalities and municipal districts shall have authority to
impose municipal license taxes or fees upon persons engaged in any
occupation

or

business,

or

exercising

privileges

in

chartered

cities,

municipalities and municipal districts by requiring them to secure licenses at

rates fixed by the municipal board or city council of the city, the municipal
council of the municipality, or the municipal district council of the municipal
district; to collect fees and charges for service rendered by the city, municipality
or municipal district; to regulate and impose reasonable fees for services
rendered in connection with any business, profession or occupation being
conducted within the city, municipality or municipal district and otherwise to levy
for public purposes, just and uniform taxes, licenses or fees: Provided, That
municipalities and municipal districts shall, in no case, impose any percentage
tax on sales or other taxes in any form based thereon nor impose taxes on
articles subject to specific tax, except gasoline, under the provisions of the
national Internal Revenue Code: Provided, however, That no city, municipality
or municipal district may levy or impose any of the following:

(a) Residence tax;

(b) Documentary stamp tax;
(c) Taxes on the business of any newspaper engaged in the printing and publication
of any newspaper, magazine, review or bulletin appearing at regular intervals
and having fixed prices for subscription and sale, and which is not published
primarily for the purpose of publishing advertisements;
(d) Taxes on persons operating waterworks, irrigation and other public utilities except
electric light, heat and power;
(e) Taxes on forest products and forest concessions;

(f) Taxes on estates, inheritance, gifts, legacies and other acquisition mortis causa;
(g) Taxes on income of any kind whatsoever;
(h) Taxes or fees for the registration of motor vehicles and for the issuance of all
kinds of licenses or permits for the driving thereof;
(i) Customs duties registration, wharfage on wharves owned by the national
government, tonnage and all other kinds of customs fees, charges and dues;
(j) Taxes of any kind on banks, insurance companies, and persons paying franchise
tax;
(k) Taxes on premiums paid by owners of property who obtain insurance directly with
foreign insurance companies; and
(l) Taxes, fees or levies, of any kind, which in effect impose a burden on exports of
Philippine finished, manufactured or processed products and products of
Philippine cottage industries.
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(Pepsi-Cola Bottling Co. of the Philippines, Inc. v. Municipality of Tanauan, G.R.

No. L-31156, [February 27, 1976], 161 PHIL 591-611)