g. Taxpayer’s Suit

Locus Standi and Taxpayer Suits in Constitutional Challenges to Tax Measures

In actions challenging the validity of tax statutes, locus standi is a procedural requirement that may be relaxed when serious constitutional questions are raised and the matter is of transcendental importance, overarching significance to society, or paramount public interest¹. As held in Tayam v. Recto, G.R. No. 280898, 22 April 2026, procedural technicalities regarding legal standing must yield where the constitutionality of a tax measure directly impacts the State's taxing power, the public coffers, and the consuming public at large¹.

Addressing the substantive challenge, Tayam ruled that Republic Act No. 12079 is not unconstitutional because its VAT refund mechanism aligns with the destination principle governing value-added tax as a tax on consumption¹. Under this destination principle, goods and services are taxed only in the country where they are consumed, meaning that consumption outside the Philippines is not subject to Philippine VAT on that basis¹.