ABAKADA v Purisima

GR No. 166715 August 14, 2008

En Banc

Facts: RA 9335 also known as the Attrition Act of 2005 was enacted to optimize the
revenue-generation capability and collection of the Bureau of Internal Revenue (BIR)
and the Bureau of Customs (BOC). This provided a Rewards and Incentives Fund
(Fund) and a Revenue Performance Evaluation Board (Board).
The scope of the system of rewards and incentives only to officials and employees of the
BIR and the BOC violates the constitutional guarantee of equal protection. There is no
valid basis for classification or distinction as to why such a system should not apply to
officials and employees of all other government agencies.
Q: Was there a violation of the equal protection clause?
A: None
Rational Basis Test
- The equal protection clause recognizes a valid classification, that is, a classification
that has a reasonable foundation or rational basis and not arbitrary. The substantial
distinction should be germane and intimately related to the purpose of the law
The subject of the law is the revenue- generation capability and collection of the BIR and
the BOC, the system of incentives and/or sanctions is logical to the functions of the said
agencies.
Note: the function of the Bureau of Internal Revenue is to Assess and collect all taxes,
fees and charges and account for all revenues collected. While the functions of the
Bureau of Customs are (1) Collect custom duties, taxes and the corresponding fees,
charges and penalties; (2) Account for all customs revenues collected;
The law concerns only the BIR and the BOC because they have the common distinct
primary function of generating revenues for the national government through the
collection of taxes, customs duties, fees and charges.
Both the BIR and the BOC are bureaus under the DOF. They principally perform the
special function of being the instrumentalities through which the State exercises one of
its great inherent functions taxation. .