EN BANC
[G.R. NO. 168056 : September 01, 2005]
ABAKADA GURO PARTY LIST (FORMERLY AASJAS) OFFICERS SAMSON S. ALCANTARA AND ED VINCENT S. ALBANO, Petitioners, v. THE HONORABLE EXECUTIVE SECRETARY EDUARDO ERMITA; HONORABLE SECRETARY OF THE DEPARTMENT OF FINANCE CESAR PURISIMA; AND HONORABLE COMMISSIONER OF INTERNAL REVENUE GUILLERMO PARAYNO, JR., Respondents.
[G.R. NO. 168207]
AQUILINO Q. PIMENTEL, JR., LUISA P. EJERCITO-ESTRADA, JINGGOY E. ESTRADA, PANFILO M. LACSON, ALFREDO S. LIM, JAMBY A.S. MADRIGAL, AND SERGIO R. OSMEÑA III, Petitioners, v. EXECUTIVE SECRETARY EDUARDO R. ERMITA, CESAR V. PURISIMA, SECRETARY OF FINANCE, GUILLERMO L. PARAYNO, JR., COMMISSIONER OF THE BUREAU OF INTERNAL REVENUE, Respondents.
[G.R. NO. 168461]
ASSOCIATION OF PILIPINAS SHELL DEALERS, INC. REPRESENTED BY ITS PRESIDENT, ROSARIO ANTONIO; PETRON DEALERS' ASSOCIATION REPRESENTED BY ITS PRESIDENT, RUTH E. BARBIBI; ASSOCIATION OF CALTEX DEALERS' OF THE PHILIPPINES REPRESENTED BY ITS PRESIDENT, MERCEDITAS A. GARCIA; ROSARIO ANTONIO DOING BUSINESS UNDER THE NAME AND STYLE OF "ANB NORTH SHELL SERVICE STATIONâ€; LOURDES MARTINEZ DOING BUSINESS UNDER THE NAME AND STYLE OF "SHELL GATE - N. DOMINGOâ€; BETHZAIDA TAN DOING BUSINESS UNDER THE NAME AND STYLE OF "ADVANCE SHELL STATIONâ€; REYNALDO P. MONTOYA DOING BUSINESS UNDER THE NAME AND STYLE OF "NEW LAMUAN SHELL SERVICE STATIONâ€; EFREN SOTTO DOING BUSINESS UNDER THE NAME AND STYLE OF "RED FIELD SHELL SERVICE STATIONâ€; DONICA CORPORATION REPRESENTED BY ITS PRESIDENT, DESI TOMACRUZ; RUTH E. MARBIBI DOING BUSINESS UNDER THE NAME AND STYLE OF "R&R PETRON STATIONâ€; PETER M. UNGSON DOING BUSINESS UNDER THE NAME AND STYLE OF "CLASSIC STAR GASOLINE SERVICE STATIONâ€; MARIAN SHEILA A. LEE DOING BUSINESS UNDER THE NAME AND STYLE OF "NTE GASOLINE & SERVICE STATIONâ€; JULIAN CESAR P. POSADAS DOING BUSINESS UNDER THE NAME AND STYLE OF "STARCARGA ENTERPRISESâ€; ADORACION MAÑEBO DOING BUSINESS UNDER THE NAME AND STYLE OF "CMA MOTORISTS CENTERâ€; SUSAN M. ENTRATA DOING BUSINESS UNDER THE NAME AND STYLE OF "LEONA'S GASOLINE STATION AND SERVICE CENTERâ€; CARMELITA BALDONADO DOING BUSINESS UNDER THE NAME AND STYLE OF "FIRST CHOICE SERVICE CENTERâ€; MERCEDITAS A. GARCIA DOING BUSINESS UNDER THE NAME AND STYLE OF "LORPED SERVICE CENTERâ€; RHEAMAR A. RAMOS DOING BUSINESS UNDER THE NAME AND STYLE OF "RJRAM PTT GAS STATIONâ€; MA. ISABEL VIOLAGO DOING BUSINESS UNDER THE NAME AND STYLE OF "VIOLAGO-PTT SERVICE CENTERâ€; MOTORISTS' HEART CORPORATION REPRESENTED BY ITS VICE-PRESIDENT FOR OPERATIONS, JOSELITO F. FLORDELIZA; MOTORISTS' HARVARD CORPORATION REPRESENTED BY ITS VICE-PRESIDENT FOR OPERATIONS, JOSELITO F. FLORDELIZA; MOTORISTS' HERITAGE CORPORATION REPRESENTED BY ITS VICE-PRESIDENT FOR OPERATIONS, JOSELITO F. FLORDELIZA; PHILIPPINE STANDARD OIL CORPORATION REPRESENTED BY ITS VICE-PRESIDENT FOR OPERATIONS, JOSELITO F. FLORDELIZA; ROMEO MANUEL DOING BUSINESS UNDER THE NAME AND STYLE OF "ROMMAN GASOLINE STATIONâ€; ANTHONY ALBERT CRUZ III DOING BUSINESS UNDER THE NAME AND STYLE OF "TRUE SERVICE STATIONâ€, Petitioners, v. CESAR V. PURISIMA, IN HIS CAPACITY AS SECRETARY OF THE DEPARTMENT OF FINANCE AND GUILLERMO L. PARAYNO, JR., IN HIS CAPACITY AS COMMISSIONER OF INTERNAL REVENUE, Respondents.
[G.R. NO. 168463]
FRANCIS JOSEPH G. ESCUDERO, VINCENT CRISOLOGO, EMMANUEL JOEL J. VILLANUEVA, RODOLFO G. PLAZA, DARLENE ANTONINO-CUSTODIO, OSCAR G. MALAPITAN, BENJAMIN C. AGARAO, JR. JUAN EDGARDO M. ANGARA, JUSTIN MARC SB. CHIPECO, FLORENCIO G. NOEL, MUJIV S. HATAMAN, RENATO B. MAGTUBO, JOSEPH A. SANTIAGO, TEOFISTO DL. GUINGONA III, RUY ELIAS C. LOPEZ, RODOLFO Q. AGBAYANI AND TEODORO A. CASIÑO, Petitioners, v. CESAR V. PURISIMA, IN HIS CAPACITY AS SECRETARY OF FINANCE, GUILLERMO L. PARAYNO, JR., IN HIS CAPACITY AS COMMISSIONER OF INTERNAL REVENUE, AND EDUARDO R. ERMITA, IN HIS CAPACITY AS EXECUTIVE SECRETARY, Respondents.
[G.R. NO. 168730]
BATAAN GOVERNOR ENRIQUE T. GARCIA, JR., Petitioner, v. HON. EDUARDO R. ERMITA, IN HIS CAPACITY AS THE EXECUTIVE SECRETARY; HON. MARGARITO TEVES, IN HIS CAPACITY AS SECRETARY OF FINANCE; HON. JOSE MARIO BUNAG, IN HIS CAPACITY AS THE OIC COMMISSIONER OF THE BUREAU OF INTERNAL REVENUE; AND HON. ALEXANDER AREVALO, IN HIS CAPACITY AS THE OIC COMMISSIONER OF THE BUREAU OF CUSTOMS, Respondents.
PANGANIBAN, J.:
In the computation of the percentage requirements in the alternative conditions under the law, the amounts of the VAT collection, National Deficit,33 and GDP34 -- as well as the interrelationship among them -- can easily be derived by the finance secretary from the proper government bodies charged with their determination. The law is complete and standards have been fixed.35 Only the fact-finding mathematical computation for its implementation on January 1, 2006, is necessary.
"(i) [VAT] collection as a percentage of Gross Domestic Product (GDP) of the previous year exceeds two and four-fifth percent (2 4/5%) or(ii) National Government Deficit as a percentage of GDP of the previous year exceeds one and one-half percent (1 1/2%).â€32
Amendments on Other Taxes and Administrative Matters. Finally, the BCC's amendments regarding other taxes90 are both germane in a legal sense and reasonably necessary in an economic sense. This fact is evident, considering that the proposed changes in the VAT law will have inevitable implications and repercussions on such taxes, as well as on the procedural requirements and the disposition of incremental revenues, in the Tax Code. Either mitigating measures91 have to be put in place or increased rates imposed, in order to achieve the purpose of the law, cushion the impact of increased taxation, and still maintain the equitability desired of any other revenue law.92 Directly related to the proposed VAT changes, these amendments are expected also to have a salutary effect on the national economy.
"Atty. Baniqued: But if your profit margin is low as i[n] the case of the petroleum dealers, x x x then we would have a serious problem, Your Honor."Justice Panganiban: Isn't the solution to increase the price then?"Atty. Baniqued: If you increase the price which you can very well do, Your Honor, then that [will] be deflationary and it [will] have a cascading effect on all other basic commodities[, especially] because what is involved here is petroleum, Your Honor."Justice Panganiban: That may be true[,] but it's not unconstitutional?"Atty. Baniqued: That may be true, Your Honor, but the very limitation of the [seventy percent] input [VAT], when applied to the case of the petroleum dealers[,] is oppressive[.] [I]t's unjust and it's unreasonable, Your Honor."Justice Panganiban: But it can be passed as a part of sales, sales costs rather."Atty. Baniqued: But the petroleum dealers here themselves…… interrupted"Justice Panganiban: In your [b]alance [s]heet, it could be reflected as Cost of Sales and therefore the price will go up?"Atty. Baniqued: Even if it were to be reflected as part of the Cost of Sales, Your Honor, the [input VAT] that you cannot claim, the benefit to you is only to the extent of the corporate tax rate which is 32 now 35 [percent]."Justice Panganiban Yes."Atty. Baniqued: It's not 100 [percent] credi[ta]bility[,] unlike if it were applied against your [output VAT], you get to claim 100 [percent] of it, Your Honor."Justice Panganiban: That might be true, but we are talking about whether that particular provision would be unconstitutional. You say it's oppressive, but you have a remedy, you just pass it on to the customer. I am not sayin[g] it's good[.] [N]either am I saying it's wise[.] [A]ll I'm talking about is, whether it's constitutional or not."Atty. Baniqued: Yes, in fact we acknowledge, Your Honor, that that is a remedy available to the petroleum dealers, but considering the impact of that limitation[,] and were just talking of the 70 [percent cap] on [input VAT] in the level of the petroleum dealers. Were not even talking yet of the limitation on the [input VAT] available to the manufacturers, so, what if they pass that on as well?"Justice Panganiban: Yes."Atty. Baniqued: Then, it would complicate… interrupted"Justice Panganiban: What I am saying is, there is a remedy, which is business in character. The mere fact that the government is imposing that [seventy percent] cap does not make the law unconstitutional, isn't it?"Atty. Baniqued: It does, Your Honor, if it can be shown. And as we have shown, it is oppressive and unreasonable, it is excessive, Your Honor… interrupted"Justice Panganiban: If you have no way of recouping it. If you have no way of recouping that amount, then it will be oppressive, but you have a business way of recouping it[.] I am saying that, not advising that it's good. All I am saying is, is it constitutional or not[?] We're not here to determine the wisdom of the law, that's up for Congress. As pointed out earlier, if the law is not wise, the law makers will be changed by the people[.] [T]hat is their solution t[o] the lack of wisdom of a law. If the law is unconstitutional[,] then the Supreme Court will declare it unconstitutional and void it, but[,] in this case[,] there seems to be a business remedy in the same manner that Congress may just impose that tax straight without saying it's [VAT]. If Congress will just say all petroleum will pay 3 [percent] of their Gross Sales, but you don't bear that, you pass that on, isn't it?"Atty. Baniqued: We acknowledge your concern, Your Honor, but we should not forget that when the petroleum dealers pass these financial burden or this tax differential to the consumers, they themselves are consumers in their own right. As a matter of fact, they filed this case both as petroleum dealer[s] and as taxpayers. If they pass if on, they themselves would ultimately bear the burden[, especially] in increase[d] cost of electricity, land transport, food, everything, Your Honor."Justice Panganiban: Yes, but the issue here in this Court, is whether that act of Congress is unconstitutional."Atty. Baniqued: Yes, we believe it is unconstitutional, Your Honor."Justice Panganiban: You have a right to complain that it is oppressive, it is excessive, it burdens the people too much, but is it unconstitutional?"Atty. Baniqued: Besides, passing it on, Your Honor, may not be as simple as it may seem. As a matter of fact, at the strike of midnight on June 30, when petroleum prices were being changed upward, the [s]ecretary of [the] Department of Energy was going around[.] [H]e was seen on TV going around just to check that prices don't go up. And as a matter of fact, he had pronouncements that, the increase in petroleum price should only be limited to the effect of 10 [percent] E-VAT."Justice Panganiban: It's becaus[e] the implementing rules were not clear and were not extensive enough to cover how much really should be the increase for various oil products, refined oil products. It's up for the dealers to guess, and the dealers were guessing to their advantage by saying plus 10 [percent] anyway, right?"Atty. Baniqued: In fact, the petroleum dealers, Your Honors, are not only faced with constitutional issues before this Court. They are also faced with a possibility of the Department of Energy not allowing them to pass it on[,] because this would be an unreasonable price increase. And so, they are being hit from both sides…interrupted"Justice Panganiban: That's why I say, that there is need to refine the implementing rules so that everyone will know, the customers will know how much to pay for gasoline, not only gasoline, gasoline, and so on, diesel and all kinds of products, so there'll be no confusion and there'll be no undue taking advantage. There will be a smooth implementation[,] if the law were to be upheld by the Court. In your case, as I said, it may be unwise to pass that on to the customers, but definitely, the dealers will not bear that [--] to suffer the loss that you mentioned in your consolidated balance sheets. Certainly, the dealers will not bear that [cost], isn't it?"Atty. Baniqued: It will be a very hard decision to make, Your Honor."Justice Panganiban: Why, you will not pass it on?"Atty. Baniqued: I cannot speak for the dealers…. interrupted."Justice Panganiban: As a consumer, I will thank you if you don't pass it on[;] but you or your clients as businessm[e]n, I know, will pass it on."Atty. Baniqued: As I have said, Your Honor, there are many constraints on their ability to do that[,] and that is why the first step that we are seeking is to seek redress from this Honorable Court[,] because we feel that the imposition is excessive and oppressive….. interrupted"Justice Panganiban: You can find redress here, only if you can show that the law is unconstitutional."Atty. Baniqued: We realized that, Your Honor."Justice Panganiban: Alright. Let's talk about the 5 [percent] [d]epreciation rate, but that applies only to the capital equipment worth over a million?"Atty. Baniqued: Yes, Your Honor."Justice Panganiban: And that doesn't apply at all times, isn't it?"Atty. Baniqued: Well……"Justice Panganiban: That doesn't at all times?"Atty. Baniqued: For capital goods costing less than 1 million, Your Honor, then…."Justice Panganiban: That will not apply?"Atty. Baniqued: That will not apply, but you will have the 70 [percent] cap on input [VAT], Your Honor."Justice Panganiban: Yes, but we talked already about the 70 [percent]."Atty. Baniqued: Yes, Your Honor."Justice Panganiban: When you made your presentation on the balance sheet, it is as if every capital expenditure you made is subject to the 5 [percent,] rather the [five year] depreciation schedule[.] [T]hat's not so. So, the presentation you made is a little inaccurate and misleading."Atty. Baniqued: At the start of our presentation, Your Honor[,] we stated clearly that this applies only to capital goods costing more than one [million]."Justice Panganiban Yes, but you combined it later on with the 70 [percent] cap to show that the dealers are so disadvantaged. But you didn't tell us that that will apply only when capital equipment or goods is one million or more. And in your case, what kind of capital goods will be worth one million or more in your existing gas stations?"Atty. Baniqued: Well, you would have petroleum dealers, Your Honor, who would have[,] aside from sale of petroleum[,] they would have their service centers[,] like[…] to service cars and they would have those equipments, they are, Your Honor."Justice Panganiban: But that's a different profit center, that's not from the sale of…"Atty. Baniqued: No, they would form part of their [VATable] sale, Your Honor."Justice Panganiban: It's a different profit center[;] it's not in the sale of petroleum products. In fact the mode now is to put up super stores in huge gas stations. I do not begrudge the gas station[.] [A]ll I am saying is it should be presented to us in perspective. Neither am I siding with the government. All I am saying is, when I saw your complicated balance sheet and mathematics, I saw that you were to put in all the time the depreciation that should be spread over [five] years. But we have agreed that that applies only to capital equipment [--]not to any kind of goods [--] but to capital equipment costing over 1 million pesos."Atty. Baniqued: Yes, Your Honor, we apologize if it has caused a little confusion…."Justice Panganiban: Again the solution could b[e] to pass that on, because that's an added cost, isn't it?"Atty. Baniqued: Well, yes, you can pass it on…."Justice Panganiban: I am not teaching you, I am just saying that you have a remedy… I am not saying either that the remedy is wise or should be done, because[,] as a consumer[,] I wouldn't want that to be done to me."Atty. Baniqued: We realiz[e] that, Your Honor, but the fact remain[s] that whether it is in the hands of the petroleum dealers or in the hands of the consumers[,] if this imposition is unreasonable and oppressive, it will remain so, even after it is passed on, Your Honor."Justice Panganiban: Alright. Let's go to the third. The 5 [percent] withholding tax, [f]inal [w]ithholding [t]ax, but this applies to sales to government?"Atty. Baniqued: Yes, Your Honor."Justice Panganiban: So, you can pass on this 5 [percent] to the [g]overnment. After all, that 5 [percent] will still go back to the government."Atty. Baniqued: Then it will come back to haunt us, Your Honor….."Justice Panganiban: Why?"Atty. Baniqued: By way of, for example sales to NAPOCOR or NTC…. interrupted"Justice Panganiban: Sales of petroleum products…."Atty. Baniqued: ………… in the case of NTC, Your Honor, it would come back to us by way of increase[d] cost, Your Honor."Justice Panganiban: Okay, let's see. You sell, let's say[,] your petroleum products to the Supreme Court, as a gas station that sells gasoline to us here. Under this law, the 5 [percent] withholding tax will have to be charged, right?"Atty. Baniqued: Yes, Your Honor."Justice Panganiban: You will charge that[.] [T]herefore[,] the sales to the Supreme Court by that gas station will effectively be higher?"Atty. Baniqued: Yes, Your Honor."Justice Panganiban: So, the Supreme Court will pay more, you will not [be] going to [absorb] that 5 [percent], will you?"Atty. Baniqued: If it is passed on, Your Honor, that's of course we agree…. Interrupted."Justice Panganiban: Not if, you can pass it on…."Atty. Baniqued: Yes, we can…. interrupted"Justice Panganiban There is no prohibition to passing it on[.] [P]robably the gas station will simply pass it on to the Supreme Court and say[,] well[,] there is this 5 [percent] final VAT on you so[,] therefore, for every tank full you buy[,] we'll just have to [charge] you 5 [percent] more. Well, the Supreme Court will probably say, well, anyway, that 5 [percent] that we will pay the gas dealer, will be paid back to the government, isn't it[?] So, how [will] you be affected?"Atty. Baniqued: I hope the passing on of the burden, Your Honor, doesn't come back to party litigants by way of increase in docket fees, Your Honor."Justice Panganiban: But that's quite another m[a]tter, though…(laughs) [W]hat I am saying, Mr. [C]ounsel is, you still have to show to us that your remedy is to declare the law unconstitutional[,] and it's not business in character."Atty. Baniqued: Yes, Your Honor, it is our submission that this limitation in the input [VAT] credit as well as the amortization……."Justice Panganiban: All you talk about is equal protection clause, about due process, depreciation of property without observance of due process[,] could really be a remedy than a business way."Atty. Baniqued: Business in the level of the petroleum dealers, Your Honor, or in the level of Congress, Your Honor."Justice Panganiban: Yes, you can pass them on to customers[,] in other words. It's the customers who should [complain]."Atty. Baniqued: Yes, Your Honor… interrupted"Justice Panganiban: And perhaps will not elect their representatives anymore[.]"Atty. Baniqued: Yes, Your Honor….."Justice Panganiban: For agreeing to it, because the wisdom of a law is not for the Supreme Court to pass upon."Atty. Baniqued: It just so happens, Your Honor, that what is [involved] here is a commodity that when it goes up, it affects everybody…."Justice Panganiban: Yes, inflationary and inflammatory…."Atty. Baniqued: …just like what Justice Puno says it shakes the entire economic foundation, Your Honor."Justice Panganiban: Yes, it's inflationary[,] brings up the prices of everything…"Atty. Baniqued: And it is our submission that[,] if the petroleum dealers cannot absorb it and they pass it on to the customers, a lot of consumers would neither be in a position to absorb it too and that['s] why we patronize, Your Honor."Justice Panganiban: There might be wisdom in what you're saying, but is that unconstitutional?"Atty. Baniqued: Yes, because as I said, Your Honor, there are even constraints in the petroleum dealers to pass it on, and we[‘]re not even sure whether….interrupted"Justice Panganiban Are these constraints [--] legal constraints?"Atty. Baniqued: Well, it would be a different story, Your Honor[.] [T]hat's something we probably have to take up with the Department of Energy, lest [we may] be accused of ….."Justice Panganiban: In other words, that's your remedy
[--] to take it up with the Department of Energy"Atty. Baniqued: …..unreasonable price increases, Your Honor."Justice Panganiban: Not for us to declare those provisions unconstitutional."Atty. Baniqued: We, again, wish to stress that the petroleum dealers went to this Court[,] both as businessmen and as consumers. And as consumers, [we're] also going to bear the burden of whatever they themselves pass on."Justice Panganiban: You know[,] as a consumer, I wish you can really show that the laws are unconstitutional, so I don't have to pay it. But as a magistrate of this Court, I will have to pass upon judgment on the basis of [--] whether the law is unconstitutional or not. And I hope you can in your memorandum show that."Atty. Baniqued: We recognized that, Your Honor." (boldface supplied, pp. 386-410).
"[T]he Court -- as a rule -- is deferential to the actions taken by the other branches of government that have primary responsibility for the economic development of our country.â€97 Thus, in upholding the Philippine ratification of the treaty establishing the World Trade Organization (WTO), Tañada v. Angara held that "this Court never forgets that the Senate, whose act is under review, is one of two sovereign houses of Congress and is thus entitled to great respect in its actions. It is itself a constitutional body, independent and coordinate, and thus its actions are presumed regular and done in good faith. Unless convincing proof and persuasive arguments are presented to overthrow such presumption, this Court will resolve every doubt in its favor.â€98 As pointed our in Cawaling Jr. v. Comelec, the grounds for nullity of the law "must be beyond reasonable doubt, for to doubt is to sustain.â€99 Indeed, "there must be clear and unequivocal showing that what the Constitutions prohibits, the statute permits.â€100WHEREFORE, I vote to GRANT the Petitions in part and to declare Sections 1, 2, and 3 of Republic Act No. 9337 unconstitutional, insofar as these sections (a) amend the rates of income tax on domestic, resident foreign, and nonresident foreign corporations; (b) amend the tax credit against taxes due from nonresident foreign corporations on intercorporate dividends; and (c) reduce the allowable deduction for interest expense. The other provisions are constitutional, and as to these I vote to DISMISS the Petitions.
Endnotes:
1 235 SCRA 630, August 25, 1994; and 249 SCRA 628, October 30, 1995. The second case is an en banc Resolution on the Motions for Reconsideration of the first case.
2 417 SCRA 503, December 10, 2003.
3 "[I]t is well settled that the enrolled bill doctrine is conclusive upon the courts as regards the tenor of the measure passed by Congress and approved by the President." Resins Inc. v. Auditor General, 134 Phil. 697, 700, October 29, 1968, per Fernando, J., later CJ.; (citing Casco Philippine Chemical Co., Inc. v. Gimenez, 117 Phil. 363, 366, February 28, 1963, per Concepción, J., later CJ.). It is a doctrine that flows as a corollary to the separation of powers, and by which due respect is given by one branch of government to the actions of the others. See Morales v. Subido, 136 Phil. 405, 412, February 27, 1969.
Following Field v. Clark (143 US 649, 12 S.Ct. 495, February 29, 1892), such conclusiveness refers not only to the provisions of the law, but also to its due enactment. Mabanag v. Lopez Vito, 78 Phil. 1, 13-18, March 5, 1947.
"[T]he signing of a bill by the Speaker of the House and the Senate President and the certification of the Secretaries of both [h]ouses of Congress that it was passed are conclusive of its due enactment." Fariñas v. Executive Secretary, supra, p. 529, per Callejo Sr., J.
4Mabanag v. Lopez Vito, supra, p. 12.
5 §1 of Rule 129 of the Rules of Court.
6 The United Kingdom has an uncodified Constitution, consisting of both written and unwritten sources, capable of evolving to be responsive to political and social change, and found partly in conventions and customs and partly in statute. Its Parliament has the power to change or abolish any written or unwritten element of the Constitution. There is neither separation of powers nor formal checks and balances. Every bill drafted has to be approved by both the House of Commons and the House of Lords, before it receives the Royal Assent and becomes an Act of Parliament. The House of Lords is the second chamber that complements the work of the Commons, whose members are elected to represent their constituents. The first is the House of Commons that alone may start bills to raise taxes or authorize expenditures. Each bill goes through several stages in each House. The first stage, called the first reading, is a mere formality. The second -- the second reading -- is when general principles of the bill are debated upon. At the second reading, the House may vote to reject the bill. Once the House considers the bill, the third reading follows. In the House of Commons, no further amendments may be made, and the passage of the motion amounts to passage of the whole bill. The House of Lords, however, may not amend a bill so as to insert a provision relating to taxation. http://en.wikipedia.org/wiki/Constitution_of_the_United_Kingdom; http:// www.oefre.unibe.ch/law/icl/uk00000_.html; www.parliament.uk; and http://encyclopedia.thefreedictionary.com/British+Parliament (Last visited August 4, 2005, 11:30am PST).
7See Dissenting Opinion of Puno, J. in Tolentino v. Secretary of Finance, supra, p. 818.
8 Cf. Francisco Jr. v. House of Representatives, 415 SCRA 44, November 10, 2003.
9Tolentino v. Secretary of Finance, supra.
10 2nd paragraph, §1 of Article VIII of the 1987 Constitution.
11Tolentino v. Secretary of Finance, supra.
12Arroyo v. De Venecia, 343 Phil. 42, 61-62, August 14, 1997, per Mendoza, J.
13 These refer to House Bill Nos. 3555 & 3705; and Senate Bill No. 1950.
14 §26(2) of Article VI of the 1987 Constitution.
15 "The purpose for which three readings on separate days is required is said to be two-fold: (1) to inform the members of Congress of what they must vote on and (2) to give them notice that a measure is progressing through the enacting process, thus enabling them and others interested in the measure to prepare their positions with reference to it." Tolentino v. Secretary of Finance, supra, p. 647, October 30, 1995, per Mendoza, J.
16 §24 of Article VI of the 1987 Constitution.
17 §24 of Article VI of the 1987 Constitution.
The power of the Senate to propose or concur with amendments is, apparently, without restriction. By virtue of this power, the Senate can practically rewrite a bill that is required to come from the House and leave only a trace of the original bill. See Flint v. Stone Tracy Co., 220 US 107, 31 S.Ct. 342, March 13, 1911.
18 §24 of Article VI of the 1987 Constitution.
19Tolentino v. Secretary of Finance, supra, p. 661, August 25, 1994.
20 Garner (ed. in chief), Black's Law Dictionary (8th ed., 2004), p. 708.
21 Statsky, West's Legal Thesaurus/Dictionary (1986), p. 348.
22 To argue that the raising of revenues makes the non-VAT provisions of a VAT bill automatically germane is to bring legal analysis within the penumbra of economic scrutiny. The burden or impact of any tax depends on the relative elasticities of supply and demand and is chiefly a matter of policy confined within the august halls of Congress. See Pindyck and Rubinfeld, Microeconomics (5th ed., 2003), pp. 314-317.
23Exxon Mobil Corp. v. Allapattah Services, Inc., 125 S.Ct. 2611, 2622, June 23, 2005, per Kennedy, J.
24Tolentino v. Secretary of Finance, supra, p. 663, August 25, 1994. See Cruz, Philippine Political Law (2002), p. 154.
25Tolentino v. Secretary of Finance, supra, August 25, 1994, per Mendoza, J.
26 Cruz, Philippine Political Law (2002), p. 155.
27Tolentino v. Secretary of Finance, supra, August 25, 1994.
28 Cruz, Philippine Political Law (2002), p. 111.
29Tolentino v. Secretary of Finance, supra, p. 668, August 25, 1994.
There is no allegation in any of the memoranda submitted to this Court that the consolidated bill was not approved. In fact, both houses of Congress voted separately and majority of each house approved it.
30 On the one hand, § §1-3 of House Bill (HB) No. 3555 seek to amend § §106, 107 & 108 the Tax Code by increasing the VAT rate to 12% on every sale, barter or exchange of goods or properties; importation of goods; and sale or exchange of services, including the use or lease of properties.
§ §1-3 of HB 3705, on the other, seek to amend § §106, 107 & 108 the Tax Code by also increasing the VAT rate to 12% on every sale, barter or exchange of goods or properties; importation of goods; and sale or exchange of services, including the use or lease of properties, but decreasing such rate to 8% on every importation of certain goods; 6% on the sale, barter or exchange of certain locally manufactured goods; and 4% on the sale, barter or exchange, as well as importation, of petroleum products subject to excise tax and raw materials to be used in their manufacture (subject to subsequent increases of such reduced rates), and on the gross receipts derived from services rendered on the sale of generated power.
The Tax Code referred to in this case is RA 8424, otherwise known as the "Tax Reform Act of 1997.â€
31 § §4-5 of Senate Bill (SB) No. 1950 seek to amend § §106 & 108 of the Tax Code by retaining the VAT rate of 10% on every sale, barter or exchange of goods or properties; and on the sale or exchange of services, including the use or lease of properties, and the sale of electricity by generation, transmission, and distribution companies.
32 § §4-6 of the consolidated bill amending § §106-108 of the Tax Code, respectively. Conference Committee Report on HBs 3555 & 3705, and SB 1950, pp. 4-7.
The predetermined factual scenario in the above-cited sections of the consolidated bill also appears in § §4-6 of Republic Act (RA) No. 9337, amending the same provisions of the Tax Code. Mathematically, it is expressed as follows:
VAT Collection > 2.8% GDP or National Government Deficit > 1.5% GDP
33 A negative budget surplus, or an excess of expenditure over revenues, is a budget deficit. Dornbusch, Fischer, and Startz, Macroeconomics (9th ed., 2005), p. 231.
34 GDP refers to the value of all goods and services produced domestically; the sum of gross value added of all resident institutional units engaged in production (plus any taxes, and minus any subsidies, on products not included in the values of their outputs). www.nscb.gov.ph/sna/default.asp (Last visited July 14, 2005 10am PST).
35 See Pelaez v. Auditor General, 122 Phil. 965, 974, December 24, 1965.
36 The acts of retroactively implementing the 12 percent VAT rate, should the finance secretary be able to make recommendation only weeks or months after the end of fiscal year 2005, or reverting to 10 percent if both conditions are not met, are best addressed to the political branches of government.
The following excerpts from the Transcript of the Oral Arguments in GR Nos. 168461, 168463, 168056, and 168207, held on July 14, 2005 at the Supreme Court Session Hall, are instructive on the position of petitioners:Culled from the same record, the following excerpts show the position of public respondents:
"Atty. Gorospe: [It's] supposed to be 2005, Your Honor, but apparently, it [will] be impossible to determine GDP the first day of 2006, Your Honor." (p. 57); x x x"Justice Panganiban: Now [let's see] when it is possible then to determine this formula. It cannot be on the first day of January 2006, because the year [2005] ended just the midnight before, isn't it?"Atty. Gorospe: Yes, Your Honor."Justice Panganiban: x x x if it's only determined on March 1[,] then how can the law become effective January 1[.] In other words, how will the [people be] able to pay the tax if ever that formula is exceeded x x x?" (pp. 59-60); x x x"Atty. Gana: Well, x x x it would take a grace period of 6 to 8 months[,] because obviously, determination could not be made on January 1, 2006. Yes, they were under the impression that at the earliest it would take 30 days."Justice Panganiban: Historically, when [will] these figures [be] available[:] the GDP, [VAT] collection?" (p. 192); x x x"Justice Panganiban: But certainly not on January 1. Therefore, by January 1, people would not know whether the rate would be increased or not, even if there is no discretion?"Atty. Gana: That's true, Your Honor, even if there is no discretion."Justice Panganiban: It will take weeks, or months to be able to determine that?"Atty. Gana: Well, they anticipated it, would take at most by March." (p. 193); and x x x"Justice Panganiban: March, I will ask the government later on when they argue."Atty. Gana: As early as January but not later than 60 to 90 days." (boldface supplied; p. 194).37 Using available statistics, it is approximated that the 2 4/5 percent has been reached. VAT collection (in million pesos) for the first quarter alone of 2004 is 83,542.83, or 83 percent of revenue collections amounting to 100,654.01. Divided into GDP of 13,053, the quotient is already 6.4 percent. http://www.nscb.gov.ph/sna/2005/1stQ2005/2005per1.asp; and the 2003 Bureau of Internal Revenue (BIR) Annual Report found on www.bir.gov.ph (Last visited July 14, 2005, 10:45am PST).
"Justice Panganiban: It will be based on actual figures?"Usec. Bonoan: It will be based on actual figures. "Justice Panganiban: That creates a problem[,] because where do you get the actual figures[?]"Usec. Bonoan: I understand that[,] traditionally[,] we can come in March, but there is no impediment to speeding up the gathering."Justice Panganiban: Speed it up. February 15?"Usec. Bonoan: Even within January, Your Honor, I think this can be…."Justice Panganiban: Alright at the end of January, it's just estimate to get the figures in January."Usec. Bonoan: Yes, Your Honor (pp. 661-662); and x x x"Justice Panganiban: My only point is, I raised this earlier and I promised counsel for the petitioner whom I was questionin[g] that I will raise it with you, whether the date January 1, 2006 would present an impossibility of a condition happening."Usec. Bonoan: It will not, Your Honor."Justice Panganiban: So, your position [is] it will not present an impossibility. Elaborate on it in your memorandum."Usec. Bonoan: Yes, Your Honor."Justice Panganiban: Because it is important. The administrative regulations are important[,] because they clarify the law and it will guide taxpayers. So[,] by January 1[,] [taxpayers] would not be wondering. Do we charge the end consumers 10 [percent] or 12 [percent]? The regulations should be able to spell that out [i]n the same manner that even now the various consumers of various products and services must be able to get from your regulations how much they [would] be charged, how much should gasoline stations charge in addition to their correct prices, how much carriers should charge[,] so there [would] be no confusion."Usec. Bonoan: Yes, Your Honor." (boldface supplied; pp. 665-666).
38 Besides, the use of the word "shall" in § §106(A), 107(A) & 108(A) of the Tax Code, as amended respectively by § §4, 5 & 6 of RA 9337, is mandatory, imperative and compulsory. See Agpalo, Statutory Construction (4th ed., 1998), p. 333.
39See Separate Opinion (Concurring and Dissenting) of Panganiban, J., in Southern Cross Cement Corp. v. Philippine Cement Manufacturers Corp., GR No. 158540, August 3, 2005, p. 31.
40 Escudero Memorandum, pp. 38-39.
GDP data are far from perfect measures of either economic output or welfare. There are three major problems: (1) some outputs are poorly measured because they are not traded in the market, and government services are not directly priced by such market; (2) some activities measured as additions to GDP in fact only represent the use of resources in order to avoid crime or risks to national security; and (3) it is difficult to account correctly for improvements in the quality of goods. Dornbusch, Fischer, and Startz, Macroeconomics (9th ed., 2005), pp. 35-36.
41Fariñas v. Executive Secretary, 417 SCRA, 503, 530, December 10, 2003.
42 "Any meaningful change in the method and procedures of Congress or its committees must x x x be sought in that body itself." Tolentino v. Secretary of Finance, supra, p. 650, October 30, 1995, per Mendoza, J.
43 The necessity, desirability or expediency of a law must be addressed to Congress as the body that is responsible to the electorate, for "legislators are the ultimate guardians of the liberties and welfare of the people in quite as great a degree [as the] courts." Tolentino v. Secretary of Finance, supra, p. 650, October 30, 1995, per Mendoza, J.; (citing Missouri, K. & T. Ry. Co. v. May, 194 US 267, 270, 24 S.Ct. 638, 639, May 2, 1904, per Holmes, J.)
44Fariñas v. Executive Secretary, 417 SCRA, 503, 524, December 10, 2003.
45Flint v. Stone Tracy Co., 220 US 107, 167, 31 S.Ct. 342, 355, March 13, 1911, per Day, J.
46 §16(3) of Article VI of the 1987 Constitution.
"Parliamentary rules are merely procedural, and with their observance, the courts have no concern. They may be waived or disregarded by the legislative body." Arroyo v. De Venecia, supra, p. 61, August 14, 1997, per Mendoza, J.; (citing Osmeña Jr. v. Pendatun, 109 Phil 863, 870-871, October 28, 1960, per Bengzon, J.).
47 HBs 3555 & 3705 do not contain any provision that seeks to revise non-VAT provisions of the Tax Code, but SB 1950 has § §1-3 that seek to amend the rates of income tax on domestic, resident foreign and nonresident foreign corporations at 35% (30% in 2009), with a tax credit on intercorporate dividends at 20% (15% in 2009); and to reduce the allowable deductions for interest expense by 42% (33% in 2009) of the interest income subject to final tax.
48 The amendments to income taxes also partake of the nature of taxation without representation. As I will discuss in the succeeding paragraphs of this Opinion, they did not emanate from the House of Representatives that, under §24 of Article VI of the 1987 Constitution, is the only body from which revenue bills should exclusively originate.
49 Mamalateo, Philippine Income Tax (2004), p. 1.
50Commissioner of Internal Revenue v. American Express International, Inc. (Philippine Branch), GR No. 152609, p. 20, June 29, 2005, per Panganiban, J. See Deoferio Jr. & Mamalateo, The Value Added Tax in the Philippines (2000), p. 36.
51 De Leon, The Fundamentals of Taxation (12th ed., 1998), pp. 92 & 132.
52 Mamalateo, Philippine Income Tax (2004), p. 379.
53 Vitug, Tax Law and Jurisprudence (2nd ed., 2000), p. 188.
54 Mamalateo, Philippine Income Tax (2004), p. 380.
55 De Leon, The Law on Transfer and Business Taxation with Illustrations, Problems, and Solutions (1998), pp. 195-196 & 222-224.
56 Mamalateo, Philippine Income Tax (2004), p. 173.
57See §78 of Revenue Regulations No. 2-1940, recommended by Bibiano L. Meer, then Collector of Internal Revenue, and promulgated by Manuel Roxas, then Secretary of Finance, later President of the Republic of the Philippines, on February 11, 1941, XXXIX OG 18, 325.
58 Mamalateo, Philippine Income Tax (2004), p. 196.
59 RA 8424 refers to the Tax Reform Act of 1997.
60 The 42 percent reduction rate under §3 of RA 9337, amending §34(B)(1) of the Tax Code, is derived by first subtracting the 20 percent tax on interest income from the increased tax rate of 35 percent imposed on domestic, resident foreign, and nonresident foreign corporations, and then dividing the difference obtained by the increased rate. Hence, it is computed as follows:35% - 20% = 15%
15% : 35% = 42%, the amount of reduction.
61 § §1-3 of HB 3705.
62 §5 of SB 1950. There seems to be a discrepancy between the Conference Committee Report and the various pleadings before this Court. While such report, attaching a copy of the bill as reconciled and approved by its conferees, as well as the report submitted by the Senate's Committee on Ways & Means to the Senate President on March 7, 2005, show that SB 1950 does not contain a no-pass on provision, the petitioners and respondents show that it does (Pimentel Memorandum, Annex A showing a "Matrix on the Disagreeing Provisions of the [VAT] Bills," pp. 9-11; Escudero Memorandum, p. 42; and Respondents' Memorandum, pp. 109-110). Notably, the qualified dissent of Senator Joker Arroyo to the Bicameral Conference Report states that the Senate version prohibits the power companies from passing on the VAT that they will pay.
63 §4 of HB 3555 seeks to amend §110(A) of the Tax Code by limiting to 5% and 11% of their respective total amounts the claim for input tax credit of capital goods, through equal distribution of the amount of such claim over their depreciable lives; and of goods and services other than capital goods, and goods purchased by persons engaged in retail trade.
64 §7 of SB 1950 seeks to amend §110 of the Tax Code by also limiting the claim for input tax credit of goods purchased or imported for use in trade or business, through an even depreciation or amortization over the month of acquisition and the 59 succeeding months, if the aggregate acquisition cost of such goods exceeds P 660,000.
The depreciation or amortization in the amendments is referred to as a "spread-out" in an unnumbered Revenue Memorandum Circular dated July 12, 2005, submitted to this Court by public respondents in their Compliance dated August 16, 2005. Such spread-out recognizes industries where capital assets are constructed or assembled.
65 No cap is found in HB 3705.
66 §5 of HB 3555 seeks to amend §114 of the Tax Code by requiring that the VAT be deducted and withheld by the government or by any of its political subdivisions, instrumentalities or agencies -- including government-owned-and-controlled corporations (GOCCs) -- before making any payment on account of each purchase of goods from sellers and services rendered by contractors. The VAT deducted and withheld shall be at the rates of 5% of the gross payment for the purchase of goods and 8% of the gross receipts for services rendered by contractors on every sale or installment payment. The VAT that is deducted and withheld shall be creditable against their respective VAT liabilities -- 10.5%, in case of government public works contractors; and 12% of the payments for the lease or use of properties or property rights to nonresident owners.
67 §11 of SB 1950 seeks to amend §114 of the Tax Code by requiring that the VAT be deducted and withheld by the government or by any of its political subdivisions, instrumentalities or agencies -- including government-owned or -controlled corporations (GOCCs) -- before making any payment on account of each purchase of goods from sellers and services rendered by contractors. The VAT deducted and withheld shall be at the rates of 5% of the gross payment for the purchase of goods and on the gross receipts for services rendered by contractors, including public works contractors. The VAT that is deducted and withheld shall be creditable against the VAT liability of the seller; and 10% of the gross payment for the lease or use of properties or property rights to nonresident owners.
68 Deoferio Jr. & Mamalateo, The Value Added Tax in the Philippines (2000), pp. 34-35 & 44.
69 http://explanation-guide.info/meaning/Maurice-Laurà ©.html (Last visited August 23, 2005, 3:25pm PST).
70 This refers to a "tax on value added" -- TVA in French and VAT in English.
71 http://en.wikipedia.org/wiki/ Maurice-Laurà © (Last visited August 23, 2005, 3:20pm PST).
72 The Transcript of the Oral Arguments in GR Nos. 168461, 168463, 168056, and 168207, held on July 14, 2005 at the Supreme Court Session Hall, show that the act of passing on to consumers is a mere cash flow problem, as agreed to by counsel for petitioners in GR No. 168461:73 The 5 percent final withholding tax may also be charged as part of a supplier's Cost of Sales.
"Justice Panganiban: So, the final consumer pays the tax? "Atty. Baniqued: Yes, Your Honor. "Justice Panganiban: The trade people in between the middlemen just take it as an input and then [collect] it as output, isn't it? Atty. Baniqued: Yes, Your Honor. "Justice Panganiban: It's just a cash flow problem for them, essentially? "Atty. Baniqued: Yes x x x." (p. 375).
74 This refers to RA 8424, as amended.
75 In fact, §112(B) of the Tax Code, prior to and after its amendment by §10 of RA 9337, does not at all prohibit the application of unused input taxes against other internal revenue taxes. The manner of application is determined though by the BIR through §4.112-1(b) of Revenue Regulations No. 14-2005, otherwise known as the "Consolidated VAT Regulations of 2005," dated June 22, 2005.
76 That the unutilized input VAT can be considered an ordinary and necessary expense for which a corresponding deduction will be allowed against gross income under §34(A)(1) of the Tax Code --instead of a deferred asset -- is another matter to be adjudicated upon in proper cases.
77 See United Paracale Mining Co. v. De la Rosa, 221 SCRA 108, 115, April 7, 1993.
78 The law referred to is not only the Tax Code, but also RA 9298, otherwise known as the "Philippine Accountancy Act of 2004.â€
79 These are based on pronouncements of recognized bodies involved in setting accounting principles. Greatest weight shall be given to their pronouncements in the order listed below:If there appears to be a conflict between any of the bodies listed above, the pronouncements of the first listed body shall be applied. SEC Securities Regulation Code Rule 68(1)(b)(iv) as amended, cited in Appendix C of Morales, The Philippine Securities Regulation Code (Annotated), [2005], p. 578.
- Securities and Exchange Commission (SEC);
- Accounting Standards Council;
- Standards issued by the International Accounting Standards Board (now Committee); and
- Accounting principles and practices for which there has been a long history of acceptance and usage.
Recommended by the World Bank and the Asian Development Bank, and increasingly recognized worldwide, international accounting standards (IAS) have been merely adopted by Philippine regulatory bodies and accredited professional organizations. The SEC, for instance, complies with the agreement among co-members of the International Organization of Securities Commissions to adopt IAS in order to ensure high-quality and transparent financial reporting, with full disclosure as a means to promote credibility and efficiency in the capital markets. In implementing the General Agreement on Trade in Services, the Professional Regulatory Board of Accountancy (PRBOA) of the Professional Regulatory Commission supports the adoption of IAS. The Philippine Institute of Certified Public Accountants, a member of the International Accounting Standards Committee (IASC), also has the commitment to support the work of the IASC and uses best endeavors to foster compliance with IAS. http://www.picpa.com.ph/adb/index.htm (Last visited August 23, 2005, 3:15pm PST).
80 Meigs & Meigs, Accounting: The Basis for Business Decisions (1981), pp. 28 & 515.
Under §9(b) & (g) of RA 9298, the PRBOA shall supervise the practice of accountancy in the Philippines and adopt measures -- such as the promulgation of accounting and auditing standards, rules and regulations, and best practices -- that may be deemed proper for the enhancement and maintenance of high professional, ethical, accounting, and auditing standards that include international accounting and auditing standards and generally accepted best practices.
81 The VAT is collected on each sale of goods or properties or upon the actual or constructive receipt of consideration for services, starting from the production stage, followed by the intermediate stages in the distribution process, and culminating with the sale to the final consumer. This is the essence of a VAT; it is a tax on the value added, that is, on the excess of sales over purchases. See Deoferio Jr. & Mamalateo, The Value Added Tax in the Philippines (2000), pp. 33-34. With the 70 percent cap on output tax that is allowable as an input tax credit, the remaining 30 percent becomes an outright expense that is, however, immediately payable and remitted by the business establishment to the government. This amount can never be recovered or passed on to the consumer, but it can be an allowable deduction from gross income under §34(A)(1) of the Tax Code. In effect, it is a tax computed by multiplying 30 percent to the 10 percent VAT that is imposed on gross sales, receipts or revenues. It is not a tax on tax and, mathematically, it is derived as follows:30% x 10% = 3% of gross sales, receipts or revenues.
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82 "Double taxation means taxing the same property [or subject matter] twice when it should be taxed only once; that is, ‘taxing the same person twice by the same jurisdiction for the same thing.'" Commissioner of Internal Revenue v. Solidbank Corp., 416 SCRA 436, November 25, 2003, per Panganiban, J.; (citing Afisco Insurance Corp. v. CA, 361 Phil. 671, 687, January 25, 1999, per Panganiban, J.). See Commissioner of Internal Revenue v. Bank of Commerce, GR No. 149636, pp. 17-18, June 8, 2005.
83 "The rule x x x is well settled that there is no constitutional prohibition against double taxation." China Banking Corp. v. CA, 403 SCRA 634, 664, June 10, 2003, per Carpio, J. Cruz, Constitutional Law (1998), p. 89.
84 §116 of the Tax Code as amended.
85 "[C]ourts accord the presumption of constitutionality to legislative enactments, not only because the legislature is presumed to abide by the Constitution[,] but also because the judiciary[,] in the determination of actual cases and controversies[,] must reflect the wisdom and justice of the people as expressed through their representatives in the executive and legislative departments of the government." Angara v. Electoral Commission, 63 Phil. 139, 158-159, July 15, 1936, per Laurel, J.; (cited in Francisco Jr. v. House of Representatives, supra, pp. 121-122.)
86Cawaling Jr. v. COMELEC, 420 Phil. 524, 530, October 26, 2001, per Sandoval-Gutierrez, J.
87Ichong v. Hernandez, 101 Phil. 1155, 1164, May 31, 1957, per Labrador, J.
88 De Leon, The Fundamentals of Taxation (12th ed., 1998), p. 1.
89 Except, as earlier discussed, for Sections 1, 2 and 3 of the law.
90 § §13-20 of SB 1950 seek to amend Tax Code provisions on percentage taxes on domestic carriers and keepers of garages in §117, and on international carriers in §118; franchise taxes in §119; amusement taxes in §125; excise taxes on manufactured oils and other fuels in §148; registration requirements in §236; issuance of receipts or sales or commercial invoices in §237; and disposition of incremental revenues in §288.
91 "[T]he removal of the excise tax on diesel x x x and other socially sensitive products such as kerosene and fuel oil substantially lessened the impact of VAT. The reduction in import duty x x x also eased the impact of VAT." Manila Bulletin, "Impact of VAT on prices of oil products should be less than 10%, says DoE," by James A. Loyola, Business Bulletin B-3, Friday, July 1, 2005, attached as Annex A to the Memorandum filed by the Association of Pilipinas Shell Dealers, Inc.
The Transcript of the Oral Arguments in GR Nos. 168461, 168463, 168056, and 168207 on July 14, 2005 also reveals the effect of mitigating measures upon petitioners in GR No. 168461:92 §28(1) of Article VI of the 1987 Constitution.
"Justice Panganiban: As a matter of fact[,] a part of the mitigating measures would be the elimination of the [e]xcise [t]ax and the import duties. That is [why] it is not correct to say that the [VAT] as to petroleum dealers increase to 10 [percent]."Atty. Baniqued: Yes, Your Honor."Justice Panganiban: And[,] therefore, there is no justification for increasing the retail price by 10 [percent] to cover the E-[VAT.] [I]f you consider the excise tax and the import duties, the [n]et [t]ax would probably be in the neighborhood of 7 [percent]? We are not going into exact figures[.] I am just trying to deliver a point that different industries, different products, different services are hit differently. So it's not correct to say that all prices must go up by 10 [percent]."Atty. Baniqued: You're right, Your Honor."Justice Panganiban: Now. For instance, [d]omestic [a]irline companies, Mr. Counsel, are at present imposed a [s]ales [t]ax of 3 [percent]. When this E-[VAT] law took effect[,] the [s]ales [t]ax was also removed as a mitigating measure. So, therefore, there is no justification to increase the fares by 10 [percent;] at best 7 [percent], correct?"Atty. Baniqued: I guess so, Your Honor, yes." (pp. 367-368).
93 §26(2) of Article VI of the 1987 Constitution.
94 These bills refer to HB 3705 and SB 1950.
95 §26(2), supra.
96 "Each house may not by its rules ignore constitutional restraints or violate fundamental rights, and there should be a reasonable relation between the mode or method of proceeding established by the rule and the result which is sought to be attained." US v. Ballin, 144 US 1, 5, 12 S.Ct. 507, 509, February 29, 1892, per Brewer, J.
97 Panganiban, Leveling the Playing Field (2004), PRINTTOWN Group of Companies, pp. 46-47.
98 338 Phil. 546, 604-605, May 2, 1997, per Panganiban, J.
99 420 Phil. 525, 531, October 26, 2001, per Sandoval-Gutierrez, J.; (citing The Philippine Judges Association v. Prado, 227 SCRA 703, 706, November 11, 1993, per Cruz, J.).
100Veterans Federation Party v. COMELEC, 396 Phil. 419, 452-453, October 6, 2000, per Panganiban, J.; (citing Garcia v. COMELEC, 227 SCRA 100, 107-108, October 5, 1993).