(From San Beda Law Journal Case Update)
G.R. No. 168056
Before RA 9337 took effect, petitioners ABAKADA GURO Party List et al filed a petition for prohibition questioning the constitutionality of Section 4, 5, and 6 of RA 9337 amending Sections 106, 107, and 108 respectively of the NIRC. These questioned provisions contain a uniform proviso authorizing the President upon recommendation of the Secretary of Finance, to raise the VAT rate to 12% effective January 1, 2006 after certain conditions provided for in the law have been satisfied to wit:
i) VAT collection as a percentage of GDP of the previous year exceeds 2 4/5 % or ii) National government deficit as a percentage of GDP of the previous year exceeds 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 Constitution.
They content that delegating to the President the legislative power to tax is contrary to republicanism. They insist that accountability, responsibility, and transparency should dictate the actions of Congress and they should not pass so the President the decision to impose taxes. They also argue that the law also effectively nullified the President’s power of control, which includes the authority to set aside and nullify the acts of her subordinates like the Secretary of Finance by mandating the fixing of the tax rate by the President upon the recommendation of the Secretary of Finance.
G.R. No. 168207
Senator Aquino Pimentel Jr. et al filed a petition for certiorari contending that the increase in the VAT rate to 12% contingent on any of the two conditions provided for in the law being satisfied violates the due process clause embodied in Article III, Section I of the Constitution, as it imposes an unfair and additional tax burden on the people in that (1) the 12% increase is ambiguous because it does not state if the date would be returned to the original10% if the conditions are no longer satisfied; (2) the rate is unfair and unreasonable as the people are unsure of the applicable Vat rate from year to year; and (3) the increase in the VAT rate, which is supposed to be an incentive to the President to raise the VAT collection to at least 2 4/5% of the GDP of the previous year, should only be based on fiscal adequacy.
Petitioners further claim that the inclusion of the stand by authority granted to the President by the Bicameral Conference Committee is a violation of the no-amendment rule upon last reading if a bill laid down in Article VI, Section 26(2) of the Constitution.
G.R. No. 168461
Thereafter, a petition for prohibition was filed by the Association of Pilipinas Shell Dealers, Inc. et al assailing the following provisions of RA 9337:
1) Section 8, amending Section 110 (A)(2) if the NIRC, requiring that the input tax on depreciable goods shall be amortized over a 60-month period, if the acquisition, excluding the VAT components, exceeds 1M pesos 2) Section 8, amending Section 110(B) of the NIRC, imposing to 70% limit on the amount of input tax to be credited against the output tax; and 3) Section 12, amending Section 114(C.) of the NIRC, authorizing the Government or any of its political subdivisions, instrumentalities or agencies, including GOCCs to deduct a 5% final withholding tax on gross payments of goods and services, which are subject to 10% VAT under Sections 106 (sale of goods and properties) and 108 (sale of services and use or lease of properties) of the NIRC
Petitioners contend that these provisions are unconstitutional for being arbitrary, oppressive, excessive, and confiscatory.
According to petitioners, the contested sections impose limitations on the amount of input tax that may be claimed. Petitioners also argue that the input tax partakes the...