F. Classification of Taxes 2. As to who shoulders the burden of the tax b. Indirect Taxes Case: Ernesto M. Maceda vs.

Macaraig, Jr. (196 SCRA 771; 223 SCRA 217) Maceda vs. Macaraig, Jr. 196 SCRA 771, 223 SCRA 217 Petition to reconsider decision of Court promulgated on May 31, 1991 Facts: This case is regarding a matter of indirect tax exemption of the private respondent National Power Corporation (NPC) which is brought to the Supreme Court (SC) a second time by petitioner Senator Ernesto Maceda. On November 3, 1936, Commonweath Act No. 120 (An Act Creating The National Power Corporation, And Prescribing Its Powers And Activities, Appropriating The Necessary Funds Therefor, And Reserving The Unappropriated Public Waters For Its Use) was enacted creating the NPC, which is a public corporation, mainly to develop hydraulic power and the production of power from other sources in the Philippines (Com. Act No. 120, secs 1 & 2(g)). The main source of funds for the NPC was the flotation of bonds in the capital markets and such bonds were exempt from payment of all taxes in order for the corporation to facilitate payment of its indebtedness. On September 10, 1971, Republic Act No. 6395 (An Act Revising The Charter Of The National Power Corporation) was enacted, which tasked NPC to carry out the policy of national electrification, and provided for the details of NPCs tax exemption. On January 22, 1974, Presidential Decree No. 380 was issued and specified that NPCs tax exemption includes all taxes imposed directly and indirectly on all petroleum products used by NPC in its operation. On May 27, 1976, Presidential Decree 938 amended R.A 6395 which integrated the tax exemption privilege of NPC in general terms Section 10 To enable the Corporation to pay its indebtedness and obligations and in furtherance and effective implementation of the policy enunciated in Section One of this Act, the Corporation, including its subsidiaries, is hereby declared exempt from the payment of all forms of taxes, duties, fees, imposts as well as costs and service fees including filing fees, appeal bonds, supersedeas bonds, in any court or administrative proceedings. After a series of withdrawal and restoration of NPCs tax exemption, the Fiscal Incentives Review Board, possessing the power restore tax exemptions, issued Resolution 10-85 (February 7, 1985) restoring NPCs exemption from June 11, 1984 to June 30, 1985. Since 1976, oil firms never paid excise or specific and ad valorem taxes for petroleum products sold and delivered to NPC. Such taxes were paid on their sales of oil products to NPC only in 1984. NPC claimed for a refund of P468.58 Million (1984-1986), and only a portion was approved and released by Caltex. The claim for the refund of taxes paid by PetroPhil, Shell and Caltex was denied. NPC moved for reconsideration, stating that all the deliveries of petroleum products to NPC are tax exempt.

Petitioner contends that Presidential Decree No. 938 (1976) repealed the indirect tax exemption of NPC as Sec 10 thereof does not expressly include indirect taxes. Issue: Whether the National Power Corporation still possessed indirect tax exemption after the repeal made in PD 938

Held: Yes, NPC still possess the exemption to indirect taxes. NPC laws show that it has been the lawmakers intention that the NPC was to be completely tax exempt from all forms of taxes direct and indirect. One common theme in all these laws is that the NPC must be able to pay its indebtedness which, as of P.D. No. 938, was P12 Billion in total domestic indebtedness, at any one time, and U$4 Billion in total foreign loans at any one time. The NPC must be and has to be exempt from all forms of taxes if this goal is to be achieved. In addition to this, the then President Marcos mandated that 200 Million pesos be appropriated annually to NPC, such amount should be taken from the general fund of the government. It does not stand to reason that the then President would order 200 million pesos to be taken partially or totally from the tax money to be used to pay the government subscription in the NPC on one hand and order NPC to pay its indirect tax. Furthermore, section 10 of PD 938 was intended to be in its general form, President Marcos must have considered all the NPC statutes from C.A 120 up to its latest amendments, PD 380, PD 395 and PD 758 and came up with a very simple Section 13, RA 6395, as amended by PD 938. When construing a series of statutes, they shall be taken and construed together, as in statutes in pari materia. And in addition, repeal by implication is not favoured unless it is manifest that the legislature so intended.