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    PAL v. Edu, GR No. L-41383, 15 August 1988

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    Christopher Jan Dotimas
    PAL challenged the collection of motor vehicle registration fees, claiming exemption as a non-profit organization. The court ruled that while fees may serve regulatory purposes, motor vehicle registration fees in this case were intended primarily for additional government revenue, making them a tax. The fees had evolved over time from simple regulatory exactions into a major source of income for the government through increased vehicular traffic. Therefore, PAL was not exempt from paying the fees.

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    PAL v. Edu, GR No. L-41383, 15 August 1988

    Uploaded by

    Christopher Jan Dotimas
    134 views1 page
    PAL challenged the collection of motor vehicle registration fees, claiming exemption as a non-profit organization. The court ruled that while fees may serve regulatory purposes, motor vehicle registration fees in this case were intended primarily for additional government revenue, making them a tax. The fees had evolved over time from simple regulatory exactions into a major source of income for the government through increased vehicular traffic. Therefore, PAL was not exempt from paying the fees.

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    PAL challenged the collection of motor vehicle registration fees, claiming exemption as a non-profit organization. The court ruled that while fees may serve regulatory purposes, motor vehicle registration fees in this case were intended primarily for additional government revenue, making them a tax. The fees had evolved over time from simple regulatory exactions into a major source of income for the government through increased vehicular traffic. Therefore, PAL was not exempt from paying the fees.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    134 views1 page

    PAL v. Edu, GR No. L-41383, 15 August 1988

    Uploaded by

    Christopher Jan Dotimas
    PAL challenged the collection of motor vehicle registration fees, claiming exemption as a non-profit organization. The court ruled that while fees may serve regulatory purposes, motor vehicle registration fees in this case were intended primarily for additional government revenue, making them a tax. The fees had evolved over time from simple regulatory exactions into a major source of income for the government through increased vehicular traffic. Therefore, PAL was not exempt from paying the fees.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    of 1

    PAL v. Edu, GR No.

    L-41383, 15 August 1988

    DOCTRINE: Fees may be properly regarded as taxes even though they also serve as an instrument of regulation. To
    identify, when the purpose is primarily revenue, or if revenue is, at least, one of the real and substantial purposes, then the
    exaction is properly called a tax. Such is the case of motor vehicle registration fees.

    FACTS: Since 1956, PAL has not been paying motor vehicle registration fees. By virtue of RA 4136, Commissioner
    Elevate issued a regulation requiring all tax exempt entities, among them PAL to pay motor vehicle registration fees.
    Despite PAL's protestations, the appellee refused to register the appellant's motor vehicles  unless the amounts imposed
    under Republic Act 4136 were paid. The appellant thus paid, under protest the registration fees of its motor vehicles. After
    paying under protest, PAL through counsel, wrote a letter to Commissioner Edu demanding a refund of the amounts paid
    stating that motor vehicle registration fees are in reality taxes from the payment of which PAL is exempt by virtue of its
    legislative franchise. Edu denied the request for refund. Hence, PAL filed the complaint against Land Transportation
    Commissioner Edu and National Treasurer Carbonell. Elevate in his capacity as LTC Commissioner, and LOI Carbonell
    in his capacity as National Treasurer, filed a motion to dismiss alleging that the complaint states no cause of action.

    ISSUE: Whether the nature of motor vehicle registration fees is a tax or regulatory fees.

    RULING: The motor vehicle registration fees as at present exacted pursuant to the Land Transportation and Traffic Code
    are actually taxes intended for additional revenues of government even if one fifth or less of the amount collected is set
    aside for the operating expenses of the agency administering the program. It was explained that when the purpose is
    primarily revenue, or if revenue is, at least, one of the real and substantial purposes, then the exaction is properly called a
    tax.

    In this case, it is quite apparent that vehicle registration fees were originally simple exactions intended only for regulatory
    purposes in the exercise of the State's police powers. Over the years, however, as vehicular traffic exploded in number and
    motor vehicles became absolute necessities without which modern life as we know it would stand still, Congress found
    the registration of vehicles a very convenient way of raising much needed revenues. Without changing the earlier
    denomination of registration payments as fees. Thus, their nature has become that of "taxes."

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