Saturday, March 10, 2012

Reagan vs. CIR (G.R. No. L-26379, December 27, 1969)

Facts: William Reagan imported a tax-free 1960 Cadillac car with accessories valued at US $ 6,443.83, including freight, insurance and other charges. After acquiring a permit to sell the car from the base commander of Clark Air Base, Reagan sold the car to a certain Willie Johnson Jr. of the US Marine Corps stationed in Sangley Point, Cavite for US$ 6,600. Johnson sold the same, on the same day to Fred Meneses, a Filipino. As a result of the transaction, the Commissioner rendered Reagan liable for income tax in the sum of P2,970. Reagan claimed that he was exempt as the transaction occurred in Clark Air Base, which as he contends is “a base outside the Philippines.” 

Issue: Whether or not petitioner Reagan was covered by the tax exemption. 

Held: The court ruled in the negative. The Philippines, as an independent and sovereign country, exercises its authority over its entire domain. Any state may, however, by its consent, express or implied, submit to a restriction of its sovereign rights. It may allow another power to participate in the exercise of jurisdictional right over certain portions of its territory. By doing so, it by no means follows that such areas become impressed with an alien character. The areas retain their status as native soil. Clark Air Base is within Philippine territorial jurisdiction to tax, and thus, Reagan was liable for the income tax arising from the sale of his automobile in Clark. The law does not look with favor on tax exemptions and that he who would seek to be thus privileged must justify it by words too plain to be mistaken and too categorical to be misinterpreted. Reagan has not done so, and cannot do so.

Digg Google Bookmarks reddit Mixx StumbleUpon Technorati Yahoo! Buzz DesignFloat Delicious BlinkList Furl

0 comments: on "Reagan vs. CIR (G.R. No. L-26379, December 27, 1969)"

Post a Comment