CIR vs.

Algue
(GRL-28890, 17 February 1988)
Facts: 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
InvestmentCorporation (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,
P75,000in promotional fees. In 1965, Algue received an assessment from the Commissioner of Internal
Revenuein the amount of P83,183.85 as delinquency income tax for years 1958 amd 1959. Algue filed a
protestor request for reconsideration which was not acted upon by the Bureau of Internal Revenue
(BIR). Thecounsel for Algue had to accept the warrant of distrant and levy. Algue, however, filed a
petition forreview with the Coourt of Tax Appeals.
Issue: Whether the assessment was reasonable.
Ruling: No. taxes are the lifeblood of the government and 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 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 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. On the other hand, such collection should be made in
accordance with law as any arbitrariness will negate the very reason for government itself.

TOLENTINO VS SECRETARY OF FINANCE ET AL.
(GR No. 115455,October 30, 1995)
Facts: The Philippine Airlines, Inc. (PAL) was granted its own franchise under P.D. No. 1590.Under its
franchise, PAL was exempted from payment of other taxesnow and in the nearfuture including the Value
Added Tax (VAT) which exemption was provided for under Section103 of the NIRC. Upon the enactment
of R.A. 7716 providing for the restructuring of the VATsystem, the aforementioned section was repealed
and in effect removed the exemptiongranted to PAL as far as its VAT is concerned.PAL attacked the
validity of the amendment on the ground that its franchise may onlybe made by a special law, in view of
Section 24 of P.D. 1590 and hence it cannot be amended byR.A. 7716. The VAT is levied on the sale,
barter, or exchanged of the goods and properties as well as on the sale of services. RA7116 seeks to
wider the tax base of the existing VAT system and enhance it administration on by amending the NIRC.
CRTBA asserts that R.A. 7116 is unconstitutional as it violate the rule that taxes should be uniform and
equitable.
Issue: Whether or not it is meritorious?
Ruling: No. Equity and uniformity in taxation means that all the taxable articles or kinds of properties of
the same class be taxed at the same rate. The taxing power has the authority to make reasonable and
natural classifications for purposes of taxation. To satisfy this requirement, it is enough that the statute
or ordinance applies equally to all persons, firms, and corporations placed in a similar situation.