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Facts:

case involving the constitutionality of RA 7496 or the Simplified Net Income Taxation (SNIT)scheme.

Petitioners claim to be taxpayers adversely affected by the continued implementation of theSNIT.

they contend that the House Bill which eventually became RA 7496 is a misnomer or deficientbecause it was named as Simplified Net Income Taxation Scheme for the Self-Employed and

Professionals Engaged in the Practice of their Profession while the actual title contains the said

words with the additional phrase, Amending Section 21 and 29 of the National Internal

Revenue Code.

they argue that respondents have exceeded their rule-making authority in applying SNIT togeneral professional partnerships by issuing Revenue Regulation 2-93 to carry out the RA.

Issue: Whether or not general professional partnerships may be taxed under SNIT

Held: No.

A general professional partnership is not itself an income taxpayer.

Income tax is imposed not on the partnership (which is tax exempt), but on the partners themselves in

their individual capacity computed on their distributive shares of partnership profits.

There is no distinction in income tax liability between a person who practices his profession alone and

one who does it through partnership with others in the exercise of a common profession.

SNIT is not envisioned by the Congress to cover corporations or partnerships which are independently

subject to the payment of income tax.

*2 KINDS OF PARTNERSHIPS UNDER TAX CODE

1. Taxable Partnerships no matter how it was created or organized, they are subject to income tax by

law.

2. Exempt Partnerships the partners, not the partnership (although obligated to file an income tax

return for administration and data) are liable for income tax in their individual capacity.

No.

uniformity of taxation, like the hindered concept of equal protection, merely require that allsubjects or objects of taxation similarly situated are to be treated alike both privileges and

liabilities.

Uniformity, does not offend classification as long as it rest on substantial distinctions, it isgermane to the purpose of the law.

It is not limited to existing only and must apply equally to all members of the same class. The legislative intent is to increasingly shift the income tax system towards the scheduled

approach in taxation of individual taxpayers and maintain the present global treatment on taxable

corporations.

This classification is neither arbitrary nor inappropriate.