FACTS
Taganito Mining, a domestic company that was granted a permit to remove, ship, and sell Beneficiated Nickel Silicate ore and chromite oar from a mineral reservation area in Surigao del Norte, was required by law to pay 5 percent excise tax and 5 percent royalties to the Government.
But the company was arguing that because the analysis abroad (mainly, Japan) would often reveal a lower value for the metallic minerals from that indicated in the temporary or provisional invoices it submitted to the Philippine government, the actual market value should therefore be based on the final invoice made on account of the analysis by the Japanese surveyors.
RULING: For the Government.
Section 151(3) of the Tax Code provides that in case of excise tax on minerals and mineral products, the basis is the actual market value of these minerals “at the time of removal” and not after final assessment.
This is in keeping with the essence of an excise tax, which is a charge upon the privilege of severing or extracting minerals from the earth, and is due and payable upon removal of the mineral products from its bed or mines.
The SC also noted that tax refund cases partake of the nature of an exemption, and as such, tax exemption cannot be allowed unless granted in the most explicit and categorical language. Lastly, the SC emphasized that taxes are what we pay for civilized society. Without taxes, the government would be paralyzed for lack of the motive power to activate and operate it.
