Sunday, December 04, 2011

Chevron Philippines, Inc. vs. Bases conversion Development Authority and Clark Development Corporation. G.R. No. 173863, September 15, 2010.

Police power; taxation versus regulation. In distinguishing tax and regulation as a form of police power, the determining factor is the purpose of the implemented measure. If the purpose is primarily to raise revenue, then it will be deemed a tax even though the measure results in some form of regulation. On the other hand, if the purpose is primarily to regulate, then it is deemed a regulation and an exercise of the police power of the state, even though incidentally, revenue is generated. In this case, the royalty fees were imposed by the Clark Development Corporation (CDC) primarily for regulatory purposes, and not for the generation of income or profits as petitioner claims. These fees form part of the regulatory mandate of CDC to ensure “free flow or movement” of petroleum fuel to and from the Clark Special Economic Zone (CSEZ). Being the administrator of CSEZ, CDC is responsible for ensuring the safe, efficient and orderly distribution of fuel products within the CSEZ. Addressing specific concerns demanded by the nature of goods or products involved is encompassed in the range of services which respondent CDC is expected to provide under the law, pursuant to its general power of supervision and control over the movement of all supplies and equipment into the CSEZ. Chevron Philippines, Inc. vs. Bases conversion Development Authority and Clark Development Corporation. G.R. No. 173863, September 15, 2010.

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