TAX REVIEWER

PAGE 1TAX REVIEWER: LAW OF BASIC TAXATION IN THE PHILIPPINES BY: Benjamin B. Aban

JUICY NOTES (PROF. CABANEIRO) A2011

Chapter 1: GENERAL PRINCIPLESTAXATION DEFINED Taxation is the inherent power of the sovereign, exercised through the legislature, to impose burdens upon the subjects and objects within its jurisdiction, for the purpose of raising revenues to carry out the legitimate objects of the government. It is also defined as the act of levying a tax, i.e. the process or means by which the sovereign, through its law-making body, raises income to defray the necessary expenses of government. It is a method of apportioning the cost of government among those who, in some measure, are privileged to enjoy its benefits and must therefore bear its burdens. It is a mode of raising revenue for public purposes, (Cooley) Symbiotic relationship between the government and the citizens.RATIONALE OF TAXATION: DOCTRINE OF SYMBIOTIC RELATIONSHIP

This doctrine is enunciated in CIR v. Algue, Inc. [158 SCRA 9], which states that Taxes are what we pay for civilized society. Without taxes, the government would be paralyzed for lack of the motive power to activate and operate it. Hence, despite the natural reluctance to surrender part of ones hard-earned income to the taxing authorities, every person who is able must contribute his share in the burden of running the government. The government for its part, is expected to respond in the form of tangible and intangible benefits intended to improve the lives of the people and enhance their material and moral values.TAXES DEFINED Taxes are the enforced proportional contributions from persons and property levied by the law-making body of the State by virtue of its sovereignty for the support of the government and all public needs, [Cooley] They are not arbitrary exactions but contributions levied by authority of law, and by some rule of proportion which is intended to ensure uniformity of contribution and a just apportionment of the burdens of government.Thus:

a. Taxes are enforced contributions

It operates in invitum which means that it is in no way dependent on the will or contractual assent, express or implied, of the person taxed. They are positive acts of the government (Rochester vs Bloss).b. Taxes are proportional in character, since taxes are based on ones ability to pay.c. Taxes are levied by authority of law.

The power to impose taxes is a legislative power; it cannot be imposed by the executive department nor by the courts.

d. Taxes are for the support of the government and all its public needs.e. Taxes are pecuniary burden payable in money, such that a tax is not necessarily confined to those payable in money (e.g. a backpay cert may be used to pay real estate taxes).

f. Taxes are imposed by the State on persons, property or services within its jurisdiction.IMPORTANCE OF TAXES

Taxes are importants because they the lifeblood of the government and so should be calculated without unnecessary hindrance (CIR vs Algue).LIFEBLOOD DOCTRINE

The lifeblood theory constitutes the theory of taxation, which provides that the existence of government is a necessity; that government cannot continue without means to pay its expenses; and that for these means it has a right to compel its citizens and property within its limits to contribute. Without revenue raised from taxation, the government will not survive, resulting in detriment to society. Without taxes, the government would be paralyzed for lack of motive power to activate and operate it. (CIR vs. ALGUE) Taxes are the lifeblood of the government and there prompt and certain availability is an imperious need. (CIR vs Goodrich International Rubber Co.)ILLUSTRATION OF LIFEBLOOD THEORY1. Collection of taxes cannot be enjoined by injunction.

2. Taxes could not be the subject of compensation or set off.

3. A valid tax may result in the destruction of the taxpayers property.

4. Taxation is an unlimited and plenary power.TAXES,PERSONAL TO TAXPAYER

A corporations tax delinquency cannot be enforced against its stockholders except for unpaid taxes of a dissolved corporation if it appears that the corporate assets have passed into their hands (Tan Tiong Bio vs CIR). Estate taxes accruing upon transmission of the decedents estate to his heirs are not liabilities which can be enforced against heirs.NATURE OF THE TAXING POWER1) Inherent in sovereignty

2) Legislative in character

PURPOSES AND OBJECTIVES OF TAXATION

PRIMARY

1. To raise revenue in order to support the government (Revenue)SECONDARY

2. Used for regulatory purposes (Regulation)

3. Used to reduce social inequality (Reduction of Social Inequality)

4. Utilized to implement the police power of the State (Promotion of General Welfare)

5. Used to protect our local industries against unfair competition (Protectionism)

6. Utilized by the government to encourage the growth of local industries (Encourage Economic Growth)THEORY AND BASIS OF TAXATION1) NECESSITY THEORY

Taxation as stated in the case of Phil. Guaranty Co., Inc. v. Commissioner [13 SCRA 775], is a power predicated upon necessity. It is a necessary burden to preserve the States sovereignty and a means to give the citizenry an army to resist aggression, a navy to defend its shores from invasion, a corps of civil servants to serve, public improvements for the enjoyment of the citizenry, and those which come within the States territory and facilities and protection which a government is supposed to provide.2) BENEFITS PROTECTION THEORY This theory bases the power of the State to demand and receive taxes on the reciprocal duties of support and protection. The citizen supports the State by paying the portion from his property that is demanded in order that he may, by means thereof, be secured in the enjoyment of the benefits of an organized society. No one is allowed to object to or resist payment of taxes solely because no personal benefit to him can be pointed out as arising from the tax, [Lorenzo v. Posadas].SCOPE OF THE LEGISLATIVE TAXING POWER1) The persons, property and excises to be taxed, provided it is within its jurisdiction

2) Amount or rate of tax

3) Purposes for its levy, provided it be for a public purpose

4) Kind of tax to be collected

5) Apportionment of the tax

6) Situs of taxation

7) Method of collectionIS THE POWER TO TAX THE POWER TO DESTROY? /

CONSTITUTIONAL RESTRAINTS RE: TAXATION IS THE POWER TO DESTROY

The power to tax "is an attribute of sovereignty". In fact, it is the strongest of all the powers of government. But for all its plenitude, the power to tax is not unconfined as there are restrictions. Adversely effecting as it does property rights, both the due process and equal protection clauses of the Constitution may properly be invoked to invalidate in appropriate cases of a revenue measure. If it were otherwise, there would be truth to the 1903 dictum of Chief Justice Marshall that "the power to tax involves the power to destroy." The web or unreality spun from Marshall's famous dictum was brushed away by one stroke of Mr. Justice Holmes' pen, thus: "The power to tax is not the power to destroy while this Court sits." "So it is in the Philippines." It is because of the constitutional restraints placed on a taxing power that violates fundamental rights.

The power to tax includes the power to destroy if it is used as an implement of the police power (regulatory) of the State. However, it does not include the power to destroy if it is used solely for the purpose of raising revenue. (ROXAS vs. CTA)

If the purpose of taxation is regulatory in character, taxation is used to implement the police power of the state

If the power of taxation is used to destroy things, businesses, or enterprises and the purpose is to raise revenue, the court will come in because there will be violation of the inherent and constitutional limitations and it will be declared invalid.

POWER OF JUDICIAL REVIEW IN TAXATION

Courts cannot inquire into the wisdom of a taxing act. (CIR vs Lingayen Gulf Electric Power Co) Courts power in taxation is limited only to the application and interpretation of the law.

It is not within the province of the court to inquire into the wisdom of the law for indeed courts are bound by the words in the mouth of the lawmaker. A verbo legis non est recedendum (Commissioner of Customs vs Manila Star Ferry inc.)BASIC PRINCIPLE OF A SOUND TAX SYSTEM

1) FISCAL ADEQUACY

The sources of revenues must be adequate to meet govt expenditures. (Chavez v. Ongpin, 186 SCRA 331).

Even if a tax law violates the principle of Fiscal Adequacy and the proceeds may not be sufficient to satisfy the needs of the government, still the tax law is valid

2) THEORETICAL JUSTICE

The tax burden should be in proportion to the taxpayers ability to pay (ABILITY TO PAY PRINCIPLE)

Equitable taxation has been mandated by our constitution; as if taxes are unjust and unreasonable then they are not equitable, thus invalid.3) ADMINISTRATIVE FEASIBILITY

The tax law must be capable of effective or efficient enforcement.

There is no law that requires compliance with this principle, so even if the tax law violates this principle; such tax law is valid.TAXATION DISTINGUISHED FROM POLICE POWER AND EMINENT DOMAINTAXATIONPOLICE POWEREMINENT DOMAIN

AS TO PURPOSEFor the purpose raising revenueTo promote general welfare through regulationsFor public use

AS TO COMPENSATIONProtection and benefits received from the government.The maintenance of a healthy economic standard of society

(damnum absque injuria)Just compensation, not to exceed the market value by the owner or administrator or anyone having legal interest in the property, or as determined by the assessor, whichever is lower.

AS TO PERSONS AFFECTEDOperate upon community or a class of individualsOperates on the individual property owner

AS TO AUTHORITY WHICH EXERCISES THE POWERExercised only by the government or its political subdivisions.May be exercised by public services corp or public utilities if granted by law

AS TO AMOUNT OF IMPOSITIONGenerally no limit to the amount of tax that may be imposedLimited to the cost of regulationThere is no imposition; rather, it is the owner of the property taken who is paid just compensation.

AS TO THE RELATIONSHIP TO THE CONSTITUTIONSubject to certain constitutional limitations, including the prohibition against impairment of the obligation of contractsRelatively free from constitutional limitations and superior to the non-impairment provisionsSubject to certain constitutional limitations, NOT including the prohibition against impairment of the obligation of contracts

AS TO TRANSFER OF PROPERTY RIGHTSTaxes paid become part of the public fundsNo transfer, but only restraint on the exercise, of property right exists

ASPECTS OF TAXATION

1) LEVY or IMPOSITION

enactment of tax laws

legislative in character2) ASSESSMENT

collection

administrative in characterTAXES DISTINGUISHED FROM OTHER IMPOSITIONS

1) toll amount charged for the cost and maintenance of property used;

2) penalty punishment for the commission of a crime

3) compromise penalty amount collected in lieu of criminal prosecution in cases of tax violations;

4) special assessment levied only on land based wholly on the benefit accruing thereon as a result of improvements of public works undertaken by government within the vicinity.

5) license fee regulatory imposition in the exercise of the police power of the State;

6) margin fee exaction designed to stabilize the currency

7) debt a tax is not a debt but is an obligation imposed by law.

8) regulatory fees exaction designed to regulate industries

9) subsidy legislative grant of money in aid of a private enterprise deemed to promote the public welfare.

10) custom duties and fees duties charged upon commodities on their being imported into or exported from a country;

11) revenue broad term that includes not only taxes but income from other sources as well.12) Tribute synonymous with tax13) Impost signifies any tax, tribute or duty.Toll v. Tax

Toll is a sum of money for the use of something. It is the consideration which is paid for the use of a road, bridge, or the like, of a public nature. Taxes, on the other hand, are enforced proportional contributions from persons and property levied by the State by virtue of its sovereignty for the support of the government and all public needs.

Toll is a demand of proprietorship; tax is a demand of sovereignty.

Toll is paid for the used of anothers property; tax is paid for the support of government.

The amount paid as toll depends upon the cost of construction or maintenance of the public improvements used; while there is no limit on the amount collected as tax as long as it is not excessive, unreasonable, or confiscatory.

Toll may be imposed by the government or by private individuals or entities; tax may be imposed only by the government.

Penalty v. Tax

Penalty is any sanction imposed as a punishment for violation of law or for acts deemed injurious; taxes are enforced proportional contributions from persons and property levied by the State by virtue of its sovereignty for the support of the government and all public needs.

Penalty is designed to regulate conduct; taxes are generally intended to generate revenue.

Penalty may be imposed by the government or by private individuals or entities; taxes only by the government.Special assessment v. Tax

A special assessment tax is an enforced proportional contribution from owners of lands especially benefited by public improvements

A special assessment is levied only on land; tax is imposed on persons, property and excises.

A special assessment is not a personal liability of the person assessed; it is limited to the land.

A special assessment is based wholly on benefits, not necessity.

A special assessment is exceptional both as to time and place; a tax has general application.

Some rules:

An exemption from taxation does not include exemption from a special assessment. The power to tax carries with it the power to levy a special assessment.License fee v. Tax PURPOSE: Tax imposed for revenue WHILE license fee for regulation. Tax for general purposes WHILE license fee for regulatory purposes only.

BASIS: Tax imposed under power of taxation WHILE license fee under police power.

AMOUNT: In taxation, no limit as to amount WHILE license fee limited to cost of the license and expenses of police surveillance and regulation.

TIME OF PAYMENT: Taxes normally paid after commencement of business WHILE LF before.

EFFECT OF PAYMENT: Failure to pay a tax does not make the business illegal WHILE failure to pay license fee makes business illegal.

SURRENDER: Taxes, being lifeblood of the state, cannot be surrendered except for lawful consideration WHILE a license fee may be surrendered with or without consideration. IMPORTANCE OF DISTINCTION BETWEEN TAXES AND LICENSE FEES: It is necessary to determine whether a particular imposition is a tax or a license fee, because some limitations apply only to one and not to the other. Furthermore, exemption from taxes does not include exemption from license fees

Obligation to pay debt v. obligation to pay tax

A debt is generally based on contract, express or implied, while a tax is based on laws.

A debt is assignable, while a tax cannot generally be assigned.

A debt may be paid in kind, while a tax is generally paid in money.

A debt may be the subject of set off or compensation, a tax cannot.

A person cannot be imprisoned for non-payment of tax, except poll tax.

A debt is governed by the ordinary periods of prescription, while a tax is governed by the special prescriptive periods provided for in the NIRC.

A debt draws interest when it is so stipulated or where there is default, while a tax does not draw interest except only when delinquent.

TAXES CLASSIFIEDAS TO SUBJECT MATTER OR OBJECT

1. Personal, poll or capitation tax

Tax of a fixed amount imposed on persons residing within a specified territory, whether citizens or not, without regard to their property or the occupation or business in which they may be engaged, i.e. community tax.2. Property tax

Tax imposed on property, real or personal, in proportion to its value or in accordance with some other reasonable method of apportionment.3. Excise tax

A charge imposed upon the performance of an act, the enjoyment of privilege, or the engaging in an occupation.AS TO PURPOSE

4. General/fiscal revenue tax is that imposed for the purpose of raising public funds for the service of the government.

5. Special or regulatory tax is imposed primarily for the regulation of useful or non-useful occupation or enterprises and secondarily only for the purpose of raising public funds.AS TO WHO BEARS THE BURDEN

6. Direct tax

A direct tax is demanded from the person who also shoul,ders the burden of the tax. It is a tax which the taxpayer is directly or primarily liable and which he or she cannot shift to another.

7. Indirect tax

An indirect tax is demanded from a person in the expectation and intention that he or she shall indemnify himself or herself at the expense of another, falling finally upon the ultimate purchaser or consumer. A tax which the taxpayer can shift to another.

AS TO THE SCOPE OF THE TAX

8. National tax

A national tax is imposed by the national government.

9. Local tax

A local tax is imposed by the municipal corporations or local government units (LGUs).

AS TO THE DETERMINATION OF AMOUNT

10. Specific tax

A specific tax is a tax of a fixed amount imposed by the head or number or by some other standard of weight or measurement. It requires no assessment other than the listing or classification of the objects to be taxed.11. Ad valorem tax

An ad valorem tax is a fixed proportion of the value of the property with respect to which the tax is assessed. It requires the intervention of assessors or appraisers to estimate the value of such property before due from each taxpayer can be determined.12. Customs Duties

Duties charged upon the commodities on theor being imported into or exported from a country.

AS TO GRADUATION OR RATE

13. Proportional tax

Tax based on a fixed percentage of the amount of the property receipts or other basis to be taxed. Example: real estate tax.14. Progressive or graduated tax

Tax the rate of which increases as the tax base or bracket increases.

Digressive tax rate: progressive rate stops at a certain point. Progression halts at a particular stage.

15. Regressive tax

Tax the rate of which decreases as the tax base or bracket increases. There is no such tax in the Philippines.

TAXPAYERS SUIT

One where a taxpayer who feels aggrieved by the implication of a tax law goes now via judicial review to the SC and asks for a nullification of the law. In availing judicial review as a taxpayer, the only option one can look into are the inherent and constitutional limitations on taxation.

Taxpayers have sufficient interest of preventing the illegal expenditures of money raised by taxation (NOT DONATIONS AND CONTRIBUTIONS)

A taxpayer is not relieved from the obligation of paying a tax because of his belief that it is being misappropriated by certain officials

A taxpayer has no legal standing to question executive acts that do not involve the use of public funds. (GONZALES vs. MARCOS)

It is only when an act complained of which may include a legislative enactment of a statute, involves the illegal expenditure of public money that the so-called taxpayers suit may be allowed. LOZADA vs. COMELEC Taxpayers may be levied with a regulatory purpose to provide means for the rehabilitation and stabilization of a threatened industry which is affected with the public interest as to be within the police power of the State. CALTEX vs. COA The Supreme Court has discretion whether or not to entertain taxpayers suit and could brush aside lack of locus standi. KILOS BAYAN vs. GUINGONA

REQUISITES FOR A TAXPAYERS PETITION

1) That money is being extracted and spent in violation of specific constitutional protections against abuses of legislative power

2) That public money is being deflected to any improper purpose

3) That the petitioner seeks to restrain respondents from wasting public funds through the enforcement of an invalid or unconstitutional law.

CASES:

Commissioner vs. Algue

GRL-28890, 17 February 1988.First Division, Cruz (J); 4 concurFacts: The Philippine Sugar Estate Development Company (PSEDC) appointed Algue Inc. as its agent, authorizing it to sell its land, factories, and oil manufacturing process. The Vegetable Oil Investment Corporation (VOICP) purchased PSEDC properties. For the sale, Algue received a commission of P125,000 and it was from this commission that it paid Guevara, et. al. organizers of the VOICP, P75,000 in promotional fees. In 1965, Algue received an assessment from the Commissioner of Internal Revenue in the amount of P83,183.85 as delinquency income tax for years 1958 amd 1959. Algue filed a protest or request for reconsideration which was not acted upon by the Bureau of Internal Revenue (BIR). The counsel for Algue had to accept the warrant of distrant and levy. Algue, however, filed a petition for review with the Coourt of Tax Appeals.Issue: Whether the assessment was reasonable.

Held: Taxes are the lifeblood of the government and so should be collected without unnecessary hindrance. Every person who is able to pay must contribute his share in the running of the government. The Government, for his part, is expected to respond in the form of tangible and intangible benefits intended to improve the lives of the people and enhance their moral and material values. This symbiotic relationship is the rationale of taxation and should dispel the erroneous notion that is an arbitrary method of exaction by those in the seat of power. Tax collection, however, should be made in accordance with law as any arbitrariness will negate the very reason for government itself. For all the awesome power of the tax collector, he may still be stopped in his tracks if the taxpayer can demonstrate that the law has not been observed. Herein, the claimed deduction (pursuant to Section 30 [a] [1] of the Tax Code and Section 70 [1] of Revenue Regulation 2: as to compensation for personal services) had been legitimately by Algue Inc. It has further proven that the payment of fees was reasonable and necessary in light of the efforts exerted by the payees in inducing investors (in VOICP) to involve themselves in an experimental enterprise or a business requiring millions of pesos. The assessment was not reasonable.

Tolentino vs. Secetary of Finance

GR No. 115455. August 25, 1994

Facts:The value-added tax (VAT) is levied on the sale, barter or exchange of goods and properties as well as on the sale or exchange of services. RA 7716 seeks to widen the tax base of the existing VAT system and enhance its administration by amending theNationalInternal RevenueCode. There are various suits challenging the constitutionality of RA 7716 on various grounds.One contention is that RA 7716 did not originate exclusively in the House of Representatives as required byArt. VI, Sec. 24 of the Constitution, because it is in fact the result of theconsolidationof 2distinctbills, H. No. 11197 and S. No. 1630. There is also a contention that S. No. 1630 did not pass 3readingsas required by the Constitution.Issue:Whether or not RA 7716 violatesArt. VI, Secs. 24 and 26(2) of the ConstitutionHeld:The argument that RA 7716 did not originate exclusively in the House of Representatives as required byArt. VI, Sec. 24 of the Constitution will not bear analysis. To begin with, it is not the law but therevenuebill which is required by the Constitution to originate exclusively in the House of Representatives. To insist that arevenuestatute and not only the bill which initiated the legislative process culminating in the enactment of the law must substantially be the same as the House bill would be to deny the Senates power not only to concur with amendments but also to propose amendments. Indeed, what the Constitution simply means is that the initiative for filingrevenue, tariff or taxbills,billsauthorizing an increase of the public debt, privatebillsandbillsof local application must come from the House of Representatives on the theory that, elected as they are from thedistricts, the members of the House can be expected to be more sensitive to the local needs and problems. Nor does the Constitution prohibitthe filingin the Senate of a substitute bill in anticipation of its receipt of the bill from the House, so long as action by the Senate as a body is withheld pending receipt of the House bill.

The next argument of the petitioners was that S. No. 1630 did not pass 3readingson separate days as required by the Constitution because the second and thirdreadingswere done on the same day. But this was because the President had certified S. No. 1630 as urgent. The presidential certification dispensed with the requirement not only of printing but also that ofreadingthe bill on separate days. That upon the certification of a bill by the President the requirement of 3readingson separate days and of printing and distribution can be dispensed with is supported by the weight of legislative practice.

EXERCISES:Discuss the importance of taxesSUGGESTED ANSWER:Taxes are the lifeblood of the government, for without taxes, the government can neither exist nor endure. A principal attribute of sovereignty, the exercise of taxing power derives its source from the very existence of the state whose social contract with its citizens obliges it to promote public interest and common good. The theory behind the exercise of the power to tax emanates from necessity; without taxes, government cannot fulfill its mandate of promoting the general welfare and well-being of the people. (NAPOCOR v. City of Cabanatuan, G.R. No. 149110, April 9, 2003).Nature of the Power of Taxation (#1, 2000 Bar Exams)Justice Holmes once said: The power to tax is not the power to destroy while this Court (the SC) sits. Describe the power to tax and its limitations. SUGGESTED ANSWER:The power to tax is an inherent power of the sovereignty which is exercised through the legislature to impose burdens upon subjects and objects within its jurisdiction for the purpose of raising revenues to carry out the legitimate objects of govt. The underlying basis for its exercise is governmental necessity for without it, no govt can exist nor endure. Accordingly, it has the broadest scope of all the powers of government because in the absence of limitations, it is considered an unlimited, plenary, comprehensive and supreme. The two limitations on the power of taxation are the inherent and constitutional limitations which are intended to prevent abuse on the exercise of the otherwise plenary and unlimited power. It is the Courts role to see to it that the exercise of the power does not transgress these limitations.Power of Taxation: Legislative in Nature (Bar 1994)The Secretary of Finance, upon recommendation of the Commissioner of Internal Revenue, issued a Revenue Regulation using gross income as the tax base for corporations doing business in the Philippines. Is the Rev.Reg.valid?

SUGGESTED ANSWER:The regulation establishing gross income as the tax base forcorporations doing business in the Philippines (domestic as well as resident foreign) is not valid. This is no longer implementation of the law but actually it constitutes legislation because among the powers that are exclusively within the legislative authority to tax is the power to determine -the amount of the tax. (See 1 Cooley 176-184). Certainly, if the tax is limited to gross income without deductions of these corporations, this is changing the amount of the tax as said amount ultimately depends on the taxable base.

Power of Taxation; Inherent in a Sovereign State (2005)Describe the power of taxation. May a legislative body enact laws to raise revenues in the absence of a constitutional provision granting said body the power to tax? Explain.SUGGESTED ANSWER:Yes, the legislative body may enact laws even in the absenceof a constitutional provision because the power to tax is inherent in the government and not merely a constitutional grant. 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 granted by the people. (Pepsi-Cola Bottling Company of the Philippines, Inc. v. Municipality of Tanauan, Leyte, G.R. No. L-31156)Taxation is the inherent power of a State to collect enforced proportional contribution to support the expenses of government. Taxation is the power vested in the legislature to impose burdens or charges upon persons and property in order to raise revenue for public purposes.

The power to tax is so unlimited in force and so searching in extent that courts scarcely venture to declare it is subject to any restrictions whatever, except such as rest in the discretion of the authority which exercises it. (Tio v. Videogram Regulatory Board, G.R. No. L-75697, June 18, 1987) So potent is the power to tax that it was once opined that "the power to tax involves the power to destroy."(C.J. Marshall in McCulloch v. Maryland)

Revocation of Exempting Statutes (Bar 1997)"X" Corporation was the recipient in 1990 of two tax exemptions both from Congress, one law exempting the company's bond issues from taxes and the other exempting the company from taxes in the operation of its public utilities. The two laws extending the tax exemptions were revoked by Congress before their expiry dates. Were the revocations constitutional?

SUGGESTED ANSWER:Yes. The exempting statutes are both granted unilaterally byCongress in the exercise of taxing powers. Since taxation is the rule and tax exemption, the exception, any tax exemption unilaterally granted can be withdrawn at the pleasure of the taxing authority without violating the Constitution (Mactan Cebu International Airport Authority v, Marcos, G.R No. 120082, September 11, 1996).

Neither of these were issued by the taxing authority in a contract lawfully entered by it so that their revocation would not constitute an impairment of the obligations of contracts.

ALTERNATIVE ANSWER:No. The withdrawal of the tax exemption amounts to adeprivation of property without due process of law, hence unconstitutional.Chapter 1: GENERAL PRINCIPLES. Page 1 of 8