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CIR V Algue Inc. Digest
CIR V Algue Inc. Digest
digest
The issue in this case is whether the CIR correctly disallowed the deduction
claimed by Algue as part of its business expenses. The Supreme Court answered in the
negative. Such deduction for promotional fees from their gross income was valid and
considered part of the necessary expenses of Algue. The Supreme Court went on to
discuss that while it is true that taxes are the lifeblood of the government, the collection
of such taxes should still be made in accordance with law. Due process must still be
observed. This is because if there is an arbitrary exercise of such power, then it defeats
the real purpose of taxation, which is the promotion of the common good. Taxes are
what we pay for a civilized society. Hence, despite the natural reluctance to surrender
part of one’s hard earned income, every person who is able must still contribute his
share to the government. The government also is expected to respond in the form of
benefits, tangible or intangible, creating a symbiotic relationship as a rationale of
taxation.