Nitafan vs. CIR, G.R. No.

78780, July 23, 1987

SEPTEMBER 16, 2018

FACTS:

Petitioners are qualified judges of the Regional Trial Court. They sought to prohibit the Commissioner of
Internal Revenue and the Financial Officer of the Supreme Court from making deductions of withholding
taxes from their salaries.

According to the petitioners, the tax withheld from their compensation as judicial officers is a violation of
Section 10, Article VIII of the 1987 Constitution which states that:

“The salary of the Chief Justice and of the Associate Justices of the Supreme Court, and of judges of
lower courts shall be fixed by law. During their continuance in office, their salary shall not be decreased”.

In other words, by deducting withholding taxes, the judges asserted that their salaries are being decreased,
citing Perfecto vs. Meer and Dencia vs. David as their legal basis.

In particular, since the 1987 Constitution does not contain a provision similar to Section 6, Article XV of
the 1973 Constitution, petitioners claimed that the intent of the framers was to revert to the original
concept of “non-diminution” of salaries.

The Chief Justice had actually dealt with this matter previously in response to representations that the
Court direct its Finance Officer to discontinue the withholding of taxes from salaries of members of the
Bench. While the question has been resolved, the Court decided to settle the legal issues through a
judicial pronouncement.

ISSUE/HELD:

Whether members of the judiciary are subject to payment of income tax – YES

RATIO:

Members of the judiciary are subject to payment of income tax

This payment of income tax does not fall within the constitutional protection against decrease of their
salaries during their continuance in office. Further, the deletion of the grant of exemption from payment
of income tax to members of the Judiciary was a way of ensuring the equality of the three branches of
government.

Based on jurisprudence, it was concluded that the true intent of the framers was to make the salaries of
members of the Judiciary taxable, as is applicable to all income earners.
The course of deliberations, debates, and amendments on the draft proposal of Section 10, Article VIII
further clarified the issue:

Commissioner Cirilo Rigos’s proposal, that the term “diminished” be changed to “decreased” and that the
word “nor subjected to income tax” be deleted, was accepted.

Commissioner Joaquin G. Bernas announced that by putting a period after “decreased”, it is with the
understanding that the salaries of justices are subject to tax. He cited that this is based on the
understanding that there will be a provision in the Constitution similar to Section 6 of Article XV, the
General Provisions of the 1973 Constitution, which states that no salary of any public officer shall be
exempt from payment of income tax.

Due to these issues, Fr. Bernas stated that the ruling in Perfecto vs Meer and Dencia vs David were not
applicable anymore.