Double Taxation

TAXATION QUESTION 1997

Is double taxation a valid defense against the legality of a tax measure?

SUGGESTED ANSWER:

No, double taxation standing alone and not being forbidden by our fundamental law is not a valid defense against the legality of a tax measure (Pepsi Cola v. Tanawan, 69 SCRA 460). However, if double taxation amounts to a direct duplicate taxation,

1          in that the same subject is taxed twice when it should be taxed but once, 

2          in a fashion that both taxes are imposed for the same purpose

3          by the same taxing authority, within the same jurisdiction or taxing district, 

4          for the same taxable period and  

5          for the same kind or character of a tax 

then it becomes legally objectionable for being oppressive and inequitable