Double Taxation


local Government Code; double taxation; definition; elements. Double taxation means taxing the same property twice when it should be taxed only once; that is, “taxing the same person twice by the same jurisdiction for the same thing.”

It is obnoxious when the taxpayer is taxed twice, when it should be but once. Otherwise described as “direct duplicate taxation,” the two taxes must be imposed on the same subject matter, for the same purpose, by the same taxing authority, within the same jurisdiction, during the same taxing period; and the taxes must be of the same kind or character. Petitioner is indeed liable to pay business taxes to the City of Manila; nevertheless, considering that the former has already paid these taxes under Section 14 of the Manila Revenue Code, it is exempt from the same payments under Section 21 of the same code.

As held in The City of Manila v. Coca-Cola Bottlers Philippines, Inc., when a municipality or city has already imposed a business tax on manufacturers, etc. of liquors, distilled spirits, wines, and any other article of commerce, pursuant to Section 143(a) of the Local Government Code (LGC), said municipality or city may no longer subject the same manufacturers, etc. to a business tax under Section 143(h) of the same code. Section 143(h) may be imposed only on businesses that are subject to excise tax, value-added tax, or percentage tax under the National Internal Revenue Code, and that are “not otherwise specified in preceding paragraphs.” Thus, business already subject to a local business tax under Section 14 [which is based on Section 143(a) of the LGC], can no longer be made liable for local business tax under Section 21 [which is based on Section 143(h) of the LGC]. Swedish Match Philippines Inc. v. The Treasurer of the City of Manila, G.R. No. 181277, July 3, 2013.