G.R. No. L-4817
May 26, 1954
Facts
Petitioners are professionals exercising their profession in the city of Manila. They are assailing the validity of Ordinance No. 3398 which imposes a municipal occupation tax on persons exercising various professions in the city and penalizes non-payment of the tax. The ordinance is enacted pursuant to paragraph (1) of section 18 of the Revised Charter of the City of Manila (as amended by Republic Act No. 409), which empowers the Municipal Board of said city to impose a municipal occupation tax. Hence, this petition.
Petitioners alleged that the ordinance and the law authorizing it constitute class legislation, are unjust and oppressive, and authorize what amounts to double taxation. It constitutes class legislation since the law has authorized only the City of Manila to impose the said tax, but has withheld that authority from other chartered cities, not to mention municipalities. Moreover, it is oppressive, unjust and amounts to double taxation considering that the plaintiffs is already paying their occupation tax required by the National Internal Revenue Code, and they are made to pay another tax.
The lower court upheld the validity of the provision of law authorizing the enactment of the ordinance but declared the ordinance itself illegal and void on the ground that the penalty therein provided for non-payment of the tax was not legally authorized. From this decision both parties appealed to this Court, and the only question they have presented for the Supreme Court’s determination.
Issue
Whether or not the ordinance constitutes double taxation?
Held
No. The argument against double taxation may not be invoked where one tax is imposed by the state and the other is imposed by the city (1 Cooley on Taxation, 4th ed., p. 492), it being widely recognized that there is nothing inherently obnoxious in the requirement that license fees or taxes be exacted with respect to the same occupation, calling or activity by both the state and the political subdivisions thereof.
In this case, the municipal occupation tax were required by the City of Manila by virtue of Ordinance No. 3398 while the other occupation tax was required by the State pursuant to the National Internal Revenue Code.
Hence, the ordinance does not constitute double taxation and is therefore valid.