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    Abakada Vs Ermita

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    Lizzette Dela Pena
    The law gives the President stand-by authority to raise the VAT rate from 10% to 12% starting January 1, 2006 if certain economic conditions are met related to VAT collection or government deficit levels. Petitioners argued this was an unconstitutional delegation of taxing power. However, the court ruled that the law completely sets forth the policy and fixes standards for the President to follow without any discretion. The increase to 12% would automatically go into effect if objective economic conditions set by Congress are satisfied, making the President's role merely ministerial or administrative

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    Abakada Vs Ermita

    Uploaded by

    Lizzette Dela Pena
    2K views1 page
    The law gives the President stand-by authority to raise the VAT rate from 10% to 12% starting January 1, 2006 if certain economic conditions are met related to VAT collection or government deficit levels. Petitioners argued this was an unconstitutional delegation of taxing power. However, the court ruled that the law completely sets forth the policy and fixes standards for the President to follow without any discretion. The increase to 12% would automatically go into effect if objective economic conditions set by Congress are satisfied, making the President's role merely ministerial or administrative

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    taxation digest

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    Abakada vs Ermita

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    The law gives the President stand-by authority to raise the VAT rate from 10% to 12% starting January 1, 2006 if certain economic conditions are met related to VAT collection or government deficit levels. Petitioners argued this was an unconstitutional delegation of taxing power. However, the court ruled that the law completely sets forth the policy and fixes standards for the President to follow without any discretion. The increase to 12% would automatically go into effect if objective economic conditions set by Congress are satisfied, making the President's role merely ministerial or administrative

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    2K views1 page

    Abakada Vs Ermita

    Uploaded by

    Lizzette Dela Pena
    The law gives the President stand-by authority to raise the VAT rate from 10% to 12% starting January 1, 2006 if certain economic conditions are met related to VAT collection or government deficit levels. Petitioners argued this was an unconstitutional delegation of taxing power. However, the court ruled that the law completely sets forth the policy and fixes standards for the President to follow without any discretion. The increase to 12% would automatically go into effect if objective economic conditions set by Congress are satisfied, making the President's role merely ministerial or administrative

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    ABAKADA VS ERMITA

    FACTS: Before R.A. No. 9337 took effect (July 1, 2005, petitioners ABAKADA GURO Party List,
    et al., filed a petition for prohibition. 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. They further contend that
    Sections 4, 5 and 6 of R.A. No. 9337, amending Sections 106, 107 and 108, respectively, of
    the NIRC giving the President the stand-by authority to raise the VAT rate from 10% to 12%
    when a certain condition is met, constitutes undue delegation of the legislative power to tax.
    It states

    . . . 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 %).

    ISSUE: Do Sections 4, 5 and 6 of R.A. No. 9337, giving the President the stand-by
    authority to raise the VAT rate from 10% to 12% when a certain condition is met, constitutes
    undue delegation of the legislative power to tax?

    RULING: There is no undue delegation of legislative power but only of the discretion as to
    the execution of a law. 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. It is simply a delegation of ascertainment of facts upon which enforcement and
    administration of the increase rate under the law is contingent. A (permissible delegation) is
    valid only if the law (a) is complete in itself, setting forth therein the policy to be executed,
    carried out, or implemented by the delegate; and (b) fixes a standard the limits of which
    are sufficiently determinate and determinable to which the delegate must conform in the
    performance of his functions. In this case, the legislature has made the operation of the 12%
    rate effective January 1, 2006, contingent upon a specified fact or condition. It leaves the
    entire operation or non-operation of the 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.

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