Kapatiran ng mga Naglilingkod sa Pamahalaan v Tan (CIR Commissioner)

FACTS:
1. EO 372 was issued by the President of the Philippines which amended the Revenue Code, adopting
the value-added tax (VAT) effective January 1, 1988.

2. Four petitions assailed the validity of the VAT Law from being beyond the President to enact; (The
power to tax is vested in Congress) for being oppressive, discriminatory, regressive and violative of the
due process and equal protection clauses, among others, of the Constitution.

ISSUE:
Whether or not the other branches of government have kept themselves within the limits of the Constitution
and the laws and that they have not abused the discretion given to them,

RULING: The court ruled in favor of Tan.

It should be noted that, under both the Provisional and the 1987 Constitutions, the President is vested with
legislative powers until a legislature under a new Constitution is convened.

The first Congress, created and elected under the 1987 Constitution, was convened on 27 July 1987. Hence,
the enactment of EO 273 on 25 July 1987, two (2) days before Congress convened on 27 July 1987, was
within the President's constitutional power and authority to legislate.

LTO vs. City of Butuan

Facts:
Relying on the fiscal autonomy granted to LGU's by the Constitution and the provisions of the Local
Government Code, the Sangguniang Panglunsod of the City of Butuan enacted an ordinance that
provided for the payment of franchise fees for the grant of the franchise of tricycles-for-hire, fees for the
registration of the vehicle, and fees for the issuance of a permit for the driving thereof.

Petitioner LTO explains that one of the functions of the national government that, indeed, has been
transferred to local government units is the franchising authority over tricycles-for-hire of the Land
Transportation Franchising and Regulatory Board ("LTFRB") but not, it asseverates, the authority of LTO to
register all motor vehicles and to issue to qualified persons of licenses to drive such vehicles.

Issue:
Whether under the present set up the power of the Land Registration Office ("LTO") to register, tricycles in
particular, as well as to issue licenses for the driving thereof, has likewise devolved to local government units.
Nope. LTO pa rin.
Ruling: The court ruled in favor of LTO
Clearly unaffected by the Local Government Code are the powers of LTO under R.A. No. 4136 requiring the
registration of all kinds of motor vehicles "used or operated on or upon any public highway" in the country.

The reliance made by respondents on the broad taxing power of local government units, specifically
under Section 133 of the Local Government Code, is tangential.

All these inherent powers are for a public purpose and legislative in nature but the similarities just
about end there. The basic aim of police power is public good and welfare. Taxation, in its case, focuses on the
power of government to raise revenue in order to support its existence and carry out its legitimate objectives.
Although correlative to each other in many respects, the grant of one does not necessarily carry with it the
grant of the other. The two powers are, by tradition and jurisprudence, separate and distinct powers, varying
in their respective concepts, character, scopes and limitations.To construe the tax provisions of Section 133(1)
indistinctively would result in the repeal to that extent of LTO's regulatory power which evidently has not been
intended.

Basco v PAGCOR

FACTS: PAGCOR was created by PD 1067-A and granted a franchise under PD 1067-B. Subsequently, under
PD 1869, the Government enabled it to regulate and centralize all games of chance authorized by existing
franchise or permitted by law, under declared policy.

But the petitioners think otherwise, that is why, they filed the instant petition seeking to annul the
PAGCOR Charter — PD 1869, because it is allegedly contrary to morals, public policy and order, AND it
waived the City of Manila’s gov’t right to impose taxes and license fees AND it intruded into the LGU’s
right to impose local taxes and license fees

ISSUES:

(1) WON it waived the Manila City gov't's right to impose taxes and license fees, which is recognized by
law. NOPE

(2) WON it has intruded into the LGUs' right to impose local taxes and license fees, and thus contrary to
the principle of local autonomy enshrined in the Constitution. HINDI

HELD: The court ruled in favor of PAGCOR.

(1) The fact that PAGCOR, under its charter, is exempt from paying tax of any kind is not violative of the
principle of local autonomy. LGUs' have no inherent right to impose taxes. LGUs' power to tax must always
yield to a legislative act which is superior having been passed by the state itself which has the inherent
power to tax. The charter of LGUs is subject to control by Congress as they are mere creatures of Congress.
Congress, therefore, has the power of control over LGUs. And if Congress can grant the City of Manila the
power to tax certain matters, it can also provide for exemptions or even take back the power.

(2) LGUs' right to impose license fees on "gambling", has long been revoked. As early as 1975, the power
of local governments to regulate gambling thru the grant of "franchise, licenses or permits" was
withdrawn by P.D. No. 771 and was vested exclusively on the National Government. Furthermore, LGUs'
have no power to tax instrumentalities of the gov't such as PAGCOR which exercises governmental
functions of regulating gambling activities.

Garcia v Executive Secretary

FACTS:

The Tariff and Customs Code (TCC) states that in the interest of national economy, general welfare
and/or national security, the President, subject to limitations therein provided, may increase xxx existing
protective rates of import duty xxx when necessary. Pursuant to the TCC, the President issued EO 475 and
478 imposing an additional duty of 9% ad valorem to imported crude oil and other oil products, and a
special duty of P0.95 per liter of imported crude oil and P1.00 per liter of imported oil products.

Rep. Garcia contests the validity of the foregoing EOs averring that they are violative of Sec 24,
Art VI of the Constitution which provides: All xxx revenue or tariff bills shall originate in the House of
Representatives xxx. He also argues that said EOs contravene the TCC because the latter authorizes the
President to, according to him, impose additional duties only when necessary to protect local industries.

ISSUE:

Are said EOs constitutional? YES. OKs lang.

RULING:

There is explicit Constitutional permission to Congress to authorize the President to, “subject to such
limitations and restrictions as [Congress] may impose”, fix “within specific limits tariff rates xxx and other
duties or imposts xxx.”¹ Moreover, Garcia’s argument that the “protection of local industries” is the only
permissible objective that can be secured by the exercise of the delegated authority—that which was
provided in the TCC to be exercised by the President in “the interest of national economy, general welfare
and/or national security”—is a stiflingly narrow one. We believe, for instance, that the protection of
consumers is at the very least as important a dimension of the “the interest of national economy, general
welfare and national security” as the protection of local industries.

ABAKADA v Ermita

Facts:
Petitioners then filed a petition contending that sections 4,5, and 6 of RA 9337 giving the President the
stand-by authority to raise VAT rate from 10% to 12% when certain conditions are met constitutes under
delegation of legislative power to tax.

In the present case, the challenged section of R.A. No. 9337 is the common proviso in Sections 4, 5
and 6 which reads as follows:
“That the President, upon the recommendation of the Secretary of Finance, shall, effective January 1,
2006, raise the rate of value-added tax to twelve percent (12%), after any of the following conditions
has been satisfied:
(i) Value-added tax 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 ½%).”
Petitioners argue that the law is unconstitutional, as it constitutes abandonment by Congress of its
exclusive authority to fix the rate of taxes under Article VI, Section 28(2) of the 1987 Philippine
Constitution.
Issue
Is the standby authority given to the President an undue delegation of legislative power? NO.

Ruling
The case before the Court is not a delegation of legislative power.

The power to ascertain facts is such a power which may be delegated. There is nothing
essentially legislative in ascertaining the existence of facts or conditions as the basis of the
taking into effect of a law. That is a mental process common to all branches of the
government.
It is a simple delegation of ascertainment of facts upon which enforcement and administration of the
increase rate under the law are contingent. It leaves the entire operation or non-operation of the increase
to a 12% rate upon factual matters outside of the control of the executive. No discretion would be
exercised by the President.

Thus, it is the ministerial duty of the President to immediately impose the 12% rate upon the
existence of any of the conditions specified by Congress. This is a duty which cannot be evaded by
the President. Inasmuch as the law specifically uses the word shall, the exercise of discretion by the
President does not come into play.