ABAKADA Guro Party List vs Executive Secretary Issues:

1. Whether or not R.A. No. 9337 has violated the provisions in

Bills Must Originate EXCLUSIVELY from the House of Representatives;
Article VI, Section 24, and Article VI, Section 26 (2) of the

Undue Delegation of Legislative Power; Equal Protection Clause Constitution.

  2. Whether or not there was an undue delegation of legislative

power in violation of Article VI Sec 28 Par 1 and 2 of the

 
Constitution.
ABAKADA GURO PARTY LIST VS EXECUTIVE SECRETARY
3. Whether or not there was a violation of the due process and
G.R. No. 168056     September 1, 2005
equal protection under Article III Sec. 1 of the Constitution.
ABAKADA GURO PARTY LIST (Formerly AASJAS) OFFICERS
SAMSON S. ALCANTARA and ED VINCENT S. ALBANO, Petitioners,
vs.  
THE HONORABLE EXECUTIVE SECRETARY EDUARDO ERMITA;
HONORABLE SECRETARY OF THE DEPARTMENT OF FINANCE Discussions:
CESAR PURISIMA; and HONORABLE COMMISSIONER OF INTERNAL
REVENUE GUILLERMO PARAYNO, JR., Respondent.
1. Basing from the ruling of Tolentino case, it is not the law, but
 
  the revenue bill which is required by the Constitution to “originate

  exclusively” in the House of Representatives, but Senate has the

Facts: power not only to propose amendments, but also to propose its own

Petitioners ABAKADA GURO Party List challenged the constitutionality of version even with respect to bills which are required by the
R.A. No. 9337 particularly Sections 4, 5 and 6, amending Sections 106, Constitution to originate in the House. the Constitution simply
107 and 108, respectively, of the National Internal Revenue Code (NIRC).
These questioned provisions contain a uniform proviso authorizing the means is that the initiative for filing revenue, tariff or tax bills, bills
President, upon recommendation of the Secretary of Finance, to raise the
VAT rate to 12%, effective January 1, 2006, after any of the following authorizing an increase of the public debt, private bills and bills of
conditions have been satisfied, to wit:
local application must come from the House of Representatives on
. . . That the President, upon the recommendation of the Secretary of
Finance, shall, effective January 1, 2006, raise the rate of value-added tax the theory that, elected as they are from the districts, the members
to twelve percent (12%), after any of the following conditions has been
of the House can be expected to be more sensitive to the local
satisfied:
needs and problems. On the other hand, the senators, who are
(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 elected at large, are expected to approach the same problems from

(ii) National government deficit as a percentage of GDP of the previous the national perspective. Both views are thereby made to bear on
year exceeds one and one-half percent (1 ½%).
the enactment of such laws.
Petitioners argue that the law is unconstitutional, as it constitutes
abandonment by Congress of its exclusive authority to fix the rate of taxes 2. In testing whether a statute constitutes an undue delegation
under Article VI, Section 28(2) of the 1987 Philippine Constitution. They
of legislative power or not, it is usual to inquire whether the statute
further argue that VAT is a tax levied on the sale or exchange of goods
and services and cannot be included within the purview of tariffs under the was complete in all its terms and provisions when it left the hands
exemption delegation since this refers to customs duties, tolls or tribute
payable upon merchandise to the government and usually imposed on of the legislature so that nothing was left to the judgment of any
imported/exported goods. They also said that the President has powers to
cause, influence or create the conditions provided by law to bring about other appointee or delegate of the legislature.
the conditions precedent. Moreover, they allege that no guiding standards
are made by law as to how the Secretary of Finance will make the 3. The equal protection clause under the Constitution means
recommendation. They claim, nonetheless, that any recommendation of
that “no person or class of persons shall be deprived of the same
the Secretary of Finance can easily be brushed aside by the President
since the former is a mere alter ego of the latter, such that, ultimately, it is protection of laws which is enjoyed by other persons or other
the President who decides whether to impose the increased tax rate or
not. classes in the same place and in like circumstances.”
 
 

Rulings:

1. R.A. No. 9337 has not violated the provisions. The revenue

bill exclusively originated in the House of Representatives, the

Senate was acting within its constitutional power to introduce

amendments to the House bill when it included provisions in Senate

Bill No. 1950 amending corporate income taxes, percentage, excise

and franchise taxes. Verily, Article VI, Section 24 of the Constitution

does not contain any prohibition or limitation on the extent of the

amendments that may be introduced by the Senate to the House

revenue bill.

2. There is no undue delegation of legislative power but only of

the discretion as to the execution of a law. This is constitutionally

permissible. Congress does not abdicate its functions or unduly

delegate power when it describes what job must be done, who must

do it, and what is the scope of his authority; in our complex

economy that is frequently the only way in which the legislative

process can go forward.

3. Supreme Court held no decision on this matter. The power of

the State to make reasonable and natural classifications for the

purposes of taxation has long been established. Whether it relates

to the subject of taxation, the kind of property, the rates to be

levied, or the amounts to be raised, the methods of assessment,

valuation and collection, the State’s power is entitled to

presumption of validity. As a rule, the judiciary will not interfere with

such power absent a clear showing of unreasonableness,

discrimination, or arbitrariness.