Kapatiran ng mga Naglilingkod sa Pamahalaan v Tan
GR No 81311 June 30, 1988
FACTS:
EO 372 was issued by the President of the Philippines which amended the Revenue Code, adopting the value-added tax (VAT) effective January 1, 1988. Four petitions assailed the validity of the VAT Law from being beyond the President to enact; for being oppressive, discriminatory, regressive and violative of the due process and equal protection clauses, among others, of the Constitution. The Integrated Customs Brokers Association particularly contend that it unduly discriminate against customs brokers (Section 103r) as the amended provision of the Tax Code provides that “service performed in the exercise of profession or calling (except custom brokers) subject to occupational tax under the Local Tax Code and professional services performed by registered general professional partnerships are exempt from VAT.
ISSUE:
Whether the E-VAT law is void for being discriminatory against customs brokers
RULING:
No. The phrase “except custom brokers” is not meant to discriminate against custom brokers but to avert a potential conflict between Sections 102 and 103 of the Tax Code, as amended. The distinction of the customs brokers from the other professionals who are subject to occupation tax under the Local Tax Code is based on material differences, in that the activities of customs partake more of a business, rather than a profession and were thus subjected to the percentage tax under Section 174 of the Tax Code prior to its amendment by EO 273. EO 273 abolished the percentage tax and replaced it with the VAT. If the Association did not protest the classification of customs brokers then, there is no reason why it should protest now.
FACTS:
EO 372 was issued by the President of the Philippines which amended the Revenue Code, adopting the value-added tax (VAT) effective January 1, 1988. Four petitions assailed the validity of the VAT Law from being beyond the President to enact; for being oppressive, discriminatory, regressive and violative of the due process and equal protection clauses, among others, of the Constitution. The Integrated Customs Brokers Association particularly contend that it unduly discriminate against customs brokers (Section 103r) as the amended provision of the Tax Code provides that “service performed in the exercise of profession or calling (except custom brokers) subject to occupational tax under the Local Tax Code and professional services performed by registered general professional partnerships are exempt from VAT.
ISSUE:
Whether the E-VAT law is void for being discriminatory against customs brokers
RULING:
No. The phrase “except custom brokers” is not meant to discriminate against custom brokers but to avert a potential conflict between Sections 102 and 103 of the Tax Code, as amended. The distinction of the customs brokers from the other professionals who are subject to occupation tax under the Local Tax Code is based on material differences, in that the activities of customs partake more of a business, rather than a profession and were thus subjected to the percentage tax under Section 174 of the Tax Code prior to its amendment by EO 273. EO 273 abolished the percentage tax and replaced it with the VAT. If the Association did not protest the classification of customs brokers then, there is no reason why it should protest now.
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