3. RULE OF UNIFORMITY AND EQUITY IN TAXATION

The rule of taxation shall be uniform and equitable (Sec.28 (1), Art.III, 1987 Constitution).

The tax is uniform when it operates with the same force and effect in every place where the subject of it is found. "Uniformity" means all property belonging to the same class shall be taxed alike. It does not signify an intrinsic, but simply a geographic, uniformity (Churchill & Tait vs. Conception, 34 Phil. 969). Uniformity does not require the same treatment; it simply requires reasonable basis for classification.

Application

In the following cases, the uniformity requirement is not violated:

(a) Where a statute imposes a tax of P2.50 a square meter or fraction thereof on every billboard or sign anywhere in the country (Churchill vs. Concepcion, 10 Phil.381 1908.)

(b) Where a license tax is imposed upon hotels and the amount required to be paid is graduated by the number of rooms which may be devoted to the accommodation of the public (St. Louis vs. Bircher,7 Mo. App.169; US vs. Sumulong, 30 Phil.381 1915.)

(c) Where those with different incomes are made to pay different rates of tax because in this case the incomes are considered as belonging to different classes;

(d) Where residential houses, regardless of their assessed value, are considered for purposes of taxation as belonging to one class (i.e., residential property and made subject to the same rate (e.g., 2% of assessed value) but different amounts of tax depending on their value;

The law, however, may validly further classify such property according to their assessed value and levy different rates, and consequently, different amounts of tax on the basis of such value;

Section 28 (c), Article VI of the Constitution provides that “the rule of taxation shall be uniform and equitable.”

The concept of uniformity in taxation implies that all taxable articles or properties of the same class shall be taxed at the same rate. It requires the uniform application and operation, without discrimination, of the tax in every place where the subject of the tax is found. It does not, however, require absolute identity or equality under all circumstances, but subject to reasonable classification.

The concept of equity in taxation requires that the apportionment of the tax burden be, more or less, just in the light of the taxpayer’s ability to shoulder the tax burden and, if warranted, on the basis of the benefits received from the government. Its cornerstone is the taxpayer’s ability to pay.