Three Inherent Powers of the

Government

Eminent Domain. The power of the state or

whom the power has been delegated to take
private property for public use upon paying to
the owner a just compensation.
Police Power. The power of the state to enact
of promoting the public welfare by restraining
and regulating the use of liberty and property.
Taxation. The power by which the sovereign,
thru its legislature, raises revenue to support
expenditures of the government.

Taking
Imports a physical dispossession of the owner
thus deprived of all beneficial use and
enjoyment of his property
Includes:
-trespass without actual eviction of the owner
-material impairment of the value of the property
-prevention of the ordinary uses for which the
property was intended

Punzalan v. Manila Board, 95 Phil. 46.

Double taxation.

Facts:
Municipal board of the City of Manila imposes a
municipal occupation tax on persons exercising
various professions in the city and penalizes nonpayment of the tax

Enacted pursuant to paragraph (1) of section 18 of

the Revised Charter of the City of Manila, which
empowers the Municipal Board of said city to impose
a municipal occupation tax, not to exceed P50per
annum, on persons engaged in the various
professions above referred to.

Plaintiff in behalf of other professionals practicing in

the City of Manila filed a suit for the annulment of

As to plaintiffs' appeal, the ordinance and the law authorizing

it constitute class legislation, unjust and oppressive, and
authorize what amounts to double taxation.

Plaintiffs brand the ordinance unjust and oppressive because

they say that it creates discrimination within a class in that
while professionals with offices in Manila have to pay the tax,
outsiders who have no offices in the city but practice their
profession therein are not subject to the tax.

Having already paid their occupation tax under section 201 of

the National Internal Revenue Code, plaintiffs, upon being
required to pay the additional tax prescribed in the ordinance,
are being subject to double taxation

Issue: Whether professionals in Manila are being subjected to

double taxation, in light of the municipal occupation tax
imposed against them by the City of Manila.

Held: The Legislature may, in its discretion, select what

occupations shall be taxed, and in the exercise of that
discretion it may tax all, or it may select for taxation certain
classes and leave the others untaxed.

The ordinance imposes the tax upon every person "exercising"

or "pursuing" any one of the occupations named, but does not
say that such person must have his office in Manila.

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, it being widely recognized that there is
nothing inherently obnoxious in the requirement that license

Planters Products v. Fertiphil, GR No. 166006,

March 14, 2008.
Tax levy on sale of fertilizers.

Facts:
Petitioner PPI and private respondent Fertiphil are private
corporations incorporated under Philippine laws.They are
both engaged in the importation and distribution of
fertilizers, pesticides and agricultural chemicals.

OnJune 3, 1985, then President Ferdinand Marcos,

exercising his legislative powers, issued LOI No. 1465
which provided for the imposition of a capital recovery
component (CRC) on the domestic sale of all grades of
fertilizers in thePhilippines.

The LOI provides:

This capital contribution shall be collected until adequate
capital is raised to make PPI viable.

Pursuant to the LOI, Fertiphil paidP10 for every bag of

fertilizer it sold in the domestic market to the Fertilizer and
Pesticide Authority (FPA) which is remitted to the depositary
bank of PPI.

After the 1986 Edsa Revolution, FPA voluntarily stopped the

imposition of theP10 levy.Fertiphil demanded from PPI a
refund of the amounts it paid under LOI No. 1465, but PPI
refused to accede to the demand.

Fertiphilfiled a complaint for collection and damagesagainst

FPA and PPI with the RTC questioning the constitutionality of
LOI No. 1465 alleging that the LOI solely favored PPI, a
privately owned corporation, which used the proceeds to
maintain its monopoly of the fertilizer industry.

Issue: Whether or not LOI 1465 CONSTITUTES A VALID

LEGISLATION
PURSUANT
TO
THE
EXERCISE
OF
TAXATIONANDPOLICE POWER FOR PUBLIC PURPOSES.

Held: While it is true that the power of taxation can be used

as an implement of police power,the primary purpose of the
levy is revenue generation.If the purpose is primarily
revenue, or if revenue is, at least, one of the real and
substantial purposes, then the exaction is properly called a
tax.

An inherent limitation on the power of taxation is public

purpose.They cannot be used for purely private purposes or
for the exclusive benefit of private persons. The power to tax
exists for the general welfare; hence, implicit in its power is
the limitation that it should be used only for a public
purpose.

When a tax law is only a mask to exact funds from the public