8/17/2019 Meralco v Laguna- Lazatin
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Meralco v Laguna TOPIC: Grant of power to the local
governmentunits to create its own sources of revenue
DOCTRIN: !n"er the Constitution# localgovernment units are
"irectl$ grante" general an"%roa" ta& powers to safeguar" their
via%ilit$ an"self'su(cienc$) Nevertheless# the fun"amental law"i"
not inten" the "elegation to %e a%solute an"uncon"itional) The
legislature must still see to itthat the ta&pa$er will not %e
over'%ur"ene" orsa""le" with multiple an" unreasona%leimpositions#
that each local government unit willhave its fair share of
availa%le resources# that the
resources of the national government will not %eun"ul$
"istur%e"# an" that local ta&ation will %efair# uniform# an"
*ust)
+,CT-:
• MR,LCO was grante" franchise for thesuppl$ of electric light#
heat an" power %$certain municipalities of the Province
of Laguna)
• R, ./01 2LGC3 was enacte"# en*oining local
government units to create their ownsources of revenue an" to
lev$ ta&es# feesan" charges# su%*ect to the
limitationse&presse" therein# consistent with the %asicpolic$
of local autonom$)
• Pursuant to the provisions of the Co"e#respon"ent province
enacte" LagunaProvincial Or"inance provi"ing for franchise
ta& at a rate of 415 of /5 of the grossannual receipts)
• Provincial Treasurer# then sent a "eman"
letter to MR,LCO for the correspon"ing ta&
pa$ment)• Petitioner MR,LCO pai" the ta which then
amounte" to P/6#471#078)97# un"er protest), formal claim for
refun" was thereaftersent %$ MR,LCO to the Provincial Treasurerof
Laguna claiming that the franchise ta& itha" pai" an" continue"
to pa$ to theNational Government pursuant to P)D) 44/alrea"$
inclu"e" the franchise ta& impose"%$ the Provincial Ta&
Or"inance)
• MR,LCO conten"e" that the imposition of a franchise
ta& un"er -ection 7)16 of Laguna Provincial Or"inance No)
1/'67#insofar as it concerne" MR,LCO#contravene" the provisions of
-ection / of P)D) 44/ which provi"es that the franchiseta&
pa$a%le %$ all grantees of franchises togenerate# "istri%ute an"
sell electric currentfor light# heat an" power shall %e in lieu
of all ta&es an" assessment of whatever nature
impose" %$ an$ national or local authorit$on earnings# receipts#
income# an" privilegeof generation# "istri%ution# an" sale
of electric current)
• Claim for refun" was "enie" on the %asis of
the newer law# R, ./01) RTC a(rme")
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