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PROMULGATED: August 14, 2008
PETITIONER: ABAKADA Guro Party List officers/members
RESPONDENTS: Hon. Cesar Purisima (as Secretary of Finance), Parayno (as
BIR Commissioner), and Lina (as BOC Commissioner)

Related provisions:
Art. 6, Sec. 1 of the Philippine Constitution:
“The legislative power shall be vested in the Congress of the Philippines which
shall consist of a Senate and a House of Representatives, except to the extent
reserved to the people by the provision on initiative and referendum.” – fixes a
standard, undue delegation
Kind of case/petition: petition for prohibition seeking to prevent respondents
from implementing and enforcing RA 9335 (Attrition
Act of 2005)
Facts of the case:
1. RA 9335 was enacted, which intends to encourage BIR and BOC officials
and employees to exceed their revenue targets by providing a system of
rewards and sanctions through Rewards and Incentives Fund and Revenue
Performance Evaluation Board if they exceed their revenue targets; covers
BIR and BOC employees with at least 6 months of service regardless of
employment status
a. Each board has duty to prescribe rules and guidelines in
allocation, distribution, and release of fund, set criteria and
procedure for removing service officials/employees who falls
short of target, terminate personnel, prescribe system of
performance evaluation, perform other functions such as issuance
of rules and regulations, and submit annual report to Congress
2. DOF, DBM, NEDA, BOC, BIR and CSC: tasked to promulgate and issue
IRR (Implementing Rules and Reg) of RA 9335 to be approved by Joint
Congressional Oversight Committee
3. Petitioners filed petition assailing the constitutionality of RA 9335, a tax
reform legislation (on grounds that system of rewards violates
constitutional guarantee equal protection and that there is undue
delegation of power)

1. W/N system of rewards and incentives only to officials and employees of
BIR and BOC violates the constitutional guarantee of equal protection
2. W/N RA 9335 unduly delegates power to fix revenue targets to the

1. NO. Equality that is guaranteed under Constitution is equality under the
same conditions and among persons similarly situated – Cited Victoriano
v Elizalde Rope Workers’ Union: it allows classification, does not pertain
to all citizens as a whole but rather, pertains to the equality of people in a
class (“equality of equals”); what is required of a valid classification is
that it should be reasonable (classification should be based on substantial
distinctions so that there are real differences, that it must be germane to
the purpose of law, that it must not be limited to certain conditions only,
and that it must apply equally to every member of class)
-Since the subject of RA 9335 is only the BIR and BOC, then the
incentives/sanctions must only pertain to them. Both agencies are under
the DOF and share the same function of taxation. This substantial
distinction is germane to purpose of law, thus, the classification and
treatment to these agencies are valid
2. NO. Two tests to determine validity of delegation of legislative power:
a. Completeness test: law is complete when it sets forth a the policy
to be implemented by the delegate
b. Sufficient standard test: law lays down a sufficient standard when
it provides guidelines or limitations in law to map out boundaries
of delegate’s authority; to be sufficient, standard must specify
limits of delegate’s authority, announce legislative policy, and
identify conditions under which it is to be implemented

-RA 9335 adequately sets policy and standards to guide the President in
fixing revenue targets. The policy of law is spelled out in Sec. 2.
(Declaration of Policy).
-Sec. 4 (Rewards and Initiatives fund) channeled to banks the delegated
power of President; revenue targets are not only to be determined by the
President alone but also by the DBCC or Dev’t Budget and Coordinating
-Sec. 7 (Powers and Functions of the Board) specifies limits of Board’s
authority and identifies conditions under which officials and employees
whose revenue collection falls short of target by at least 7.5% may be
terminated – does not violate security of tenure, law lays down standard
for approval with due consideration, moreover, this is subject to civil
service laws, rules and regulations in compliance with the due process

Ruling: Petition is partially granted. (Sec. 12 creating Joint Congressional
Oversight Committee to approve IRR is unconstitutional and null and void.
Constitutionality of remaining provisions is upheld.)

Tags: legislative power, undue delegation of power, equal protection, tax reform,
system of rewards and incentives