BIR Ruling

January 24, 1972 Delegate Adolfo A. Angala 1971 Constitutional Convention Suite 563, Manila Hotel Manila S i r : This refers to your Resolution No. 1972 introduced by you in the 1971 Constitutional Convention entitled: "RESOLUTION PROPOSING TO PROHIBIT THE ENACTMENT OF ANY LAW WHICH WILL IMPOSE THE PAYMENT BY THE CITIZENS OF ANY CEDULA OR RESIDENCE TAX." According to the explanatory note, the Residence Tax Law, (Commonwealth Act No. 465), aside from being a useless imposition on the citizens, has no good purpose for the government; that Residence Certificate class "A" cannot be used as a reliable document to identify the holder, since anybody who has the money to pay for its issue can secure one, and that with respect to the Residence Certificate Class "B", it is double taxation on income. While it may be true that Residence Certificate Class "A" can be easily secured without requiring the necessity of proof as to the identity or age of the person to whom issued, the defect in its implementation which can be cured. A Residence Certificate is essentially an evidence of tax payment and actually intended as such. Likewise, Residence Certificate "B" is not double taxation on income. To constitute double taxation, objectionable or prohibited, the two or more taxes must be (1) imposed on the same property, (2) by the same state or government, (3) during the same taxing period, and (4) for the same purpose. (Vol. I, Cooley 475-476; 500-501). Moreover, considering that a substantial amount is being realized from the issuance of the residence certificate every year which enables the National Government to finance the public elementary schools and meet the burden of their operations and for the general funds of the provinces, chartered cities, municipalities and municipal districts (Sec. 8, Commonwealth Act No. 586), the abolition of said taxes, will adversely affect the government. In view thereof, this Office recommends that said resolution be withdrawn. Very truly yours, MISAEL P. VERA Commissioner of Internal Revenue