Stamp Tax Return (BIR Form 2000) shall be filed and the amount due thereon shall be paid thru the eFPS/eFTIS for tax- payers/Authorized Agent Banks (AABs) on their own tax liabilities, respec- tively. However, pay- ments of DST arising from transfer of shares of stocks classified as capital asset or real property classified as capital or ordinary assets, shall not be covered by these Reg- ulations.
Taxpayers that are man- dated to use and/or vol- untarily availing of the eDST System shall enroll in the said system, in ac- cordance with the provi- sions of the applicable regulations, circulars and orders. For juridical enti- ties or persons, the en- rollment shall be made by authorized natural per- sons specified in the com- panys board resolution.
For taxpayers under the jurisdiction of the Large Taxpayers Service (LTS) and taxpayers adopting
REVENUE REGULA- TIONS NO. 7 - 2009
These Regulations are promulgated to imple- ment the Electronic Docu- mentary Stamp Tax (eDST) System as re- placement of Documen- tary Stamp Tax Electronic Imprinting Machine (DSEIM) thereby amend- ing certain provisions of Revenue Regulations No. 9-2000, as amended.
Any taxpayer belonging to the following industries is mandated to use the web-based eDST System in the payment/ remittance of its/his/her DST liabilities and the affixture of the prescribed documentary stamp on taxable documents, ex- cept those expressly ex- empted by the Commis- sioner of Internal Reve- nue, on meritorious grounds:
1. Bank, quasi-bank or non-bank financial intermediary, finance company, or insur- ance, surety, fidelity, or annuity company; 2. Shipping and airline companies; 3. Pre-need company on sale of pre-need plans, as provided under Section 186 of the Tax Code; 4. Educational institution in respect to the issu- ance of taxable certif- icates such as Diplo- ma, Transcript of Rec- ords, and other docu- ments taxable as cer- tificates under Section 188 of the Tax Code; and 5. Such other industries as may be required by the Commissioner to use the web- based eDST System upon written notifica- tion therefore.
These Regulations shall also apply to taxpayers who, at their option, choose to pay their DST liabilities thru the eDST System.
Prior to the enrollment in the eDST System, tax- payers availing thereof, whether on the mandato- ry or optional basis, shall be duly enrolled under the BIR eFPS. In paying BIR ISSUANCES FOR THE MONTH OF SEPTEMBER SEPTEMBER 2009 VOLUME II ISSUE No. 9 LCA LCA LCA LINES LINES LINES Inside this issue: Continuation of BIR issuances for the month of September 2 Jurisprudence 7 JLs Corner 14
centralized DST payment scheme, enrollment shall be made by their respective Head Offices as the lone Ac- count Owner. On the other hand, taxpayers with decen- tralized DST payment scheme may, at their option, designate one or more de- partments/branches as au- thorized Account Owner.
Once registered under the eDST System, the Account Owner may authorize as many users he/she deems necessary in the companys business operations without the need for prior approval by the BIR.
REVENUE MEMORANDUM ORDER NO. 28-2009
RMO No. 28-2009 issued on September 18, 2009 adjusts the reimbursable transporta- tion allowance of Revenue Officers, Collection Officers/ Agents, Seizure Agents, Le- gal Officers/Trial Attorney and Messengers/Liaison Of- ficers.
REVENUE MEMORANDUM ORDER NO. 29-2009
This Order issued on Sep- tember 30, 2009 prescribes the guidelines and proce- dures in the administration of the mandatory Written Competency Examination (WCE) for all Revenue Offic- ers of the Assessment Group in order to enhance their capabilities and competen- cies through appropriate training programs, and to eventually determine their respective places of assign- ment.
ternet Banking Facility (iAccess) where customers can view, monitor and print their transaction his- tory or enroll in their Phone Banking
Facility (Phone Access) to inquire their deposit bal- ances, transactions and request their bank state- ment. Moreover, account holders may request their depositary branch for a copy of their bank state- ment but with a fee of P 20.00/page and holding Fee of P100.00, to be deb- ited from their account, if not claimed or picked-up within a month.
REVENUE MEMORANDUM CIRCULAR NO. 50-2009
RMC NO. 50-2009 issued on September 16, 2009 reiter- ates the implementation of RMC No. 19-2009 re: Tran- sition Procedures Relative to the Issuance and Cancella- tion of Permit to Use Cash Register Machine (CRM), Point-of-Sale (POS) Ma- chine, Special Purpose Ma- chine (SPM) and other simi- lar machines.
The said Circular directs all Regional Directors, Revenue District Officers (RDOs), Chiefs of Large Taxpayer Assistance Division (LTAD) I and II, Head of Large Tax- payer District Offices (LTDOs) and others con- cerned to implement strictly the workaround procedures on the issuance of permits provided under RMC No. 19- 2009 and to comply with the three (3) working day processing time from the receipt of the complete re- quirements accompanying the application.
The receipt of the applica- Page 2 LCA LINES
REVENUE MEMORANDUM CIRCULAR NO. 49-2009
RMC No. 49-2009 issued on September 16, 2009 publish- es the full text of letter from the Land Bank of the Philip- pines (LBP) regarding the features and charges in de- posit accounts which will be implemented effective Octo- ber 1, 2009.
The following are the fea- tures and charges in the de- posit accounts of LBP effec- tive October 1, 2009: A. New Deposit Require- ments of Regular Pass- book (Peso) Savings Ac- count: INDIVIDUAL ACCOUNT Accounts affected by the new deposit requirements have an option to increase their ADB to avoid service charges. Existing Regular Peso Savings Passbook Ac- counts can also be convert- ed to an ATM account on or before October 1, 2009.
B. LBP Fees and Charges: Peso Savings Account, Current Account, Easy Savings Plus (ESP) US Dollar Savings Ac- count C. Issuance of Bank State- ment: Effective October 2009, LBP shall no longer issue bank statements for ATM savings accounts. Account holders are advised to enroll their ATM accounts in LBPs In- tion via electronic mail must be acknowledged upon verification of the correctness, completeness and validity of all infor- mation provided by the applicant; otherwise, con- cerned revenue personnel must specify the infor- mation needed to complete the application for the issu- ance of the Permit to Use.
On the part of the accredit- ed suppliers/taxpayer- users, no document is re- quired for their application for registration of CRM/ POS/SPM and other sales machines and for subse- quent issuance of the Permit to Use. Only a Sworn Statement (Annex A of Revenue memorandum Order No. 10-2005) is re- quired for submission by taxpayer-users for the reg- istration of non-accredited machines.
Each permit must be signed or approved by the
Page 3 VOLUME II ISSUE No. 9 RDO/Chief of LTAD I & II and LTDO where the tax- payer-user is registered or where the machine/s will be used prior to the issuance of the said per- mit.
REVENUE MEMORAN- DUM CIRCULAR NO. 51 -2009
RMC No. 51-2009 issued on September 16, 2009 clarifies the requirement for the submission of Summary Lists of Sales (SLS)/Summary Lists of Purchases (SLP); the imposition of penalties for their non-submission; the issuance of Subpoe- na Duces Tecum (SDT); and the imposition of penalties for failure to obey summons, pursuant to Revenue Regulations (RR) No. 8-2002, as in- corporated in RR No. 16- 2005, and Revenue Memorandum Order (RMO) No. 12-2009.
All VAT-registered per- sons with total quarterly sales/ receipts (net of VAT) exceeding P 2,500,000.00 are re- quired to sub- mit SLSs while all VAT- registered persons with total quarterly purchases (net of VAT) exceeding P 1,000,000.00 are re- quired to submit SLPs.
The quarterly SLS/SLP, whichever is applicable, shall be submitted to the Revenue District Office (RDO)/Large Taxpayers District Office (LTDO)/ Large Taxpayers Audit and Investigation Division (LTAID) having jurisdiction over he concerned tax- payer, on or before 35 th day of the month following the close of the taxable quarter (VAT calendar quarter or VAT fiscal quarter). Any taxpayer who, under established revenue rules and regulations, fails to submit the required SLS/ SLP, shall be subject to an administrative penalty in the amount of P 1,000.00 for each such failure, in accordance with the provisions of RR No. 8-2002, as incorporated in RR No. 16-2005. For this pur- pose, failure to supply the required information for each buyer or seller of goods and services shall constitute a single punishable act or omission. How- ever, the aggregate amount of penalties to be im- CODE OFFICE A-1 Office of the Senior Deputy Commissioner
A-1-1 Office of the Deputy Com- missioner, Operations Group A-1-2 Office of the Deputy Com- missioner, Information Systems Group A-1-3 Office of the Deputy Com- missioner, Resource Management Group A-1-4 Office of the Deputy Com- missioner, Legal and In- spection Group Deposit Re- quirem ent Amount (P) Minimum Initial Deposit 10,000 Required Minimum Average Daily Balance 10,000 Required Daily Balance to Earn Interest 10,000 Features/ Fees Peso Ac- counts US$ Sav- ings Ac- count Fee For Falling Below the Required Average Daily Balance (ADB) P 200 $ 5 Closing Fee (within 30 days from opening of account) P 200 P 200 Dormancy Fee P 200 $5 Interbank ATM With- drawal Fee (including Cash Card) P 10 - Fee for Printing and Reprinting SOA/Bank Statement P 20/page P 20/page Holding fee for Re- quested Statement of Account (SOA)/Bank Statements Not Claimed/Picked-up within a month
P 100 P 100
Page 4 LCA LINES posed for such failures during a taxable year shall not exceed P 25,000.00, in observance of Section 250 of the Na- tional Internal Revenue Code (NIRC), as amend- ed. In addition to admin- istrative penalties, the act of non-submission of an SLS/SLP in the format prescribed by the Bureau shall be tantamount to willful failure to supply correct and accurate in- formation, and shall be criminally punishable un- der Section 255 of the NIRC (as amended). The submission of erroneous/ incomplete/falsified infor- mation in a particular SLS/SLP shall be consid- ered as an act of non- submission, and therefore subject to the aforesaid penalties. Every instance of failure on the part of the taxpay- er to comply with the re- quirement to submit the SLS/SLP after due notice shall be considered as sufficient grounds for the issuance of a Subpoena Duces Tecum mandating the immediate submission of the aforesaid SLS/SLP. The issuance of the SDT, however, shall not be ne- gated by mere payment of the administrative pen- alty. Moreover, upon sub- mission of the required SLS/SLP in compliance with the SDT, the con- cerned taxpayer must pay a compromise penalty in the amount of P 10,000.00 for each non- submission of the re- quired SLS/SLP, in ac- cordance with the provi- sions of RMO No. 12- 2009. If a taxpayer still fails to submit the required SLS/ SLP, in the format pre- scribed by the Bureau, despite the issuance of an SDT, the Revenue District Officer (RDO)/ LTDO Head/LTAID Chief concerned shall recom- mend the filing of crimi- nal action against the taxpayer, for violation of Sec.255 (Failure to File BIR Return, Supply Cor- rect and Accurate Infor- mation), as well as for violation of Sec. 266 (Failure to Obey Sum- mons). If the taxpayer concerned is a corpora- tion, an association or a general co-partnership, the sanctions mandated under Sec. 256 (Penal Liability of Corporations) of the NIRC shall likewise be imposed and invoked in the filing of a criminal case against the taxpay- er.
The RDO/LTDO/LTAID having jurisdiction over the taxpayer who fails to comply with the duly- issued SDT shall forward the necessary report to the Regional Director (Attn: The Chief, Legal Division) or to the Assis- tant Commissioner (ACIR), Legal Service (Attn: The Chief, Prose- cution Division), as the case may be, attesting to the taxpayers non- compliance with the SDT and recommending the filing of a criminal case against the taxpayer. Thereafter, the Legal Division of the concerned Region or the Prosecu- tion Division at the Na- tional Office, as the case may be, shall be respon- sible for the institution of criminal action against the taxpayer himself, or in cases where the tax- payer is a juridical entity, the responsible officer of the corporation/ association/general co- partnership. The late submission of an SLS/SLP on or before the deadlines mandated by the Bureau is consid- ered tantamount to non- submission of the said document. Therefore the late submission of an SLS/SLP is also subject to administrative penal- ties in the amount of P 1,000.00 for each late submission.
Compromise penalties may be imposed, and the Subpoena Duces Tecum issued, for violations per- taining to a period/ periods prior to the issu- ance of RMO No. 12- 2009. However, such actions cannot be con- strued as a retroactive implementation of the RMO inasmuch as the submission of the re- quired SLS/SLP has yet to be complied with by the concerned taxpayer. Therefore, regardless of the period(s) involved, the taxpayer continues to be in violation of existing rules and regulations rela- tive to the submission of SLSs/SLPs. Moreover, RR No. 8-2002, as incorpo- rated in RR No. 16-2005, specifically states that: Finally, the admin- istrative penalty shall be imposed at all times, upon due notice and demand by the Commission- er of Internal Reve- nue. A Subpoena Duces Tecum for the submission of the required documents shall be issued on the second offense. A third offense shall set the motion for a criminal prosecution of the offend- er. (Sec. 5 [Penalty Provision], RR No. 8 -2002; Sec. 4. 114- 3. (i) [Penalty Clause], RR No. 16- 2005) The imposition of the ap- propriate penalties shall be applicable for every non-submission of a sum- mary List, whether it is an SLS or an SLP, in the for-
Page 5 VOLUME II ISSUE No. 9 mat prescribed by the Bureau. Likewise, each non-submission is consid- ered as grounds for the issuance of an SDT.
The signing of SDT may be delegated to the fol- lowing revenue officials: 1. For the BIR National Office The ACIR, Legal Ser- vice; The HREA, Legal Ser- vice, or the concerned HREA, Large Taxpay- ers Service; or, The concerned LTAID Chief/TDO Head, as may be specially au- thorized, in writing, by the Commissioner 2. For the Regional Offices The Regional Director, or in his/her absence, the Asst. Regional Director; The chief, Legal Divi- sion; or The concerned Reve- nue District Officer, as may be authorized by the Regional Director, through the appropri- ate Regional Delega- tion Order RR No. 8-2002 (as incor- porated in RR No. 16- 2005), mandates that 2 notices must be sent to the taxpayer. The first notice shall notify the tax- payer of his/her failure to submit the pertinent SLS/SLP, as well as of the imposition of the ad- ministrative penalty ranging from P 1,000.00 to P 25,000.00 and shall constitute the first of- fense of the taxpayer. The second notice shall be sent upon the first notice and shall contain a warning that non- compliance with the se- cond notice shall be con- sidered as the taxpayers second offense, and that the appropriate SDT shall be issued. Since there is no provision in RMO No. 12-2009 that repeals this requirement, it is there- fore considered as valid and applicable.
REVENUE MEMORAN- DUM CIRCULAR NO. 52-2009
RMC No. 52-2009 issued on September 22, 2009 circularizes the celebra- tion of the 20 th National Statistics Month (NSM) in October, 2009.
REVENUE MEMORAN- DUM CIRCULAR NO. 47-2009
RMC 47-2009 publishes the full text of Circular No. 2009-002 Reinstituting Selective Pre-Audit on Government Transactions dated 18 May 2009.
Pre-audit shall be selec- tively reinstituted in na- tional government agen- cies (NGAs), local gov- ernment units (LGUs) and government-owned and controlled corpora- tions (GOCCs) with origi- nal charters, with any, some or all of the follow- ing transactions: 1. Cash advances; 2. Payments of salaries and terminal leave benefits; 3. Payments for infra- structure projects; 4. Payments for road right-of-way; 5. Payments for pro- curement of capital assets, goods and services; 6. Payments made thru automatic debit ad- vice (ADA); 7. Release of funds to NGOs/Pos; 8. Transfers of funds between government agencies subject to the exceptions pro- vided in the Circular; 9. Disbursements from trust funds of LGUs, as limited in the Cir- cular; 10. Disposal of real prop- erty and unservicea- ble property, subject to the limitations provided in the Cir- cular. Subsequent identification of the NGAs, LGUs and GOCCs and their respec- tive transactions that may be included or ex- cluded in pre-audit shall proceed from the results of an evaluation of the internal control system put in place and operat- ing in each agency. Na- tional high schools, GOCCs audited under the team approach and ba- rangays shall be initially exempt from pre-audit.
Except for cash advances for payroll, intelligence funds, petty cash funds and those granted for local travel expenses of officers and employees, all other cash advances including those for for- eign travels funded out of the local funds regard- less of amount shall pass through pre-audit.
The liquidation of cash advances shall first be audited and the corre- sponding Credit Notice issued before the same shall be taken up in the books.
Only the advance pay- ments granted to con- tractors as well as the first and last progress billings of contracts for infrastructure projects, the contract amount of which falls within the aforecited threshold shall be subject to pre-audit. First progress billing rep- resents claims made for the first collection on the work accomplished in a particular project. In the
Page 6 LCA LINES payment for said ser- vices shall be subject to pre-audit. First pay- ments involving exten- sion of contracts shall also be pre-audited.
First and last payments of contracts entered into through any of the vari- ous modes of procure- ment involving an amount of at least P2 Million for NGAs, GOCCs, cities within Metro Ma- nila, other highly urban- ized cities and first class provinces; P1 Million for provinces/cities below first class; and P500,000.00 for munici- palities, shall be subject to pre-audit. Procure- ment between govern- ment agencies or instru- mentalities shall be ex- empt from pre-audit. For foreign-funded or locally-funded infrastruc- ture projects that shall be paid through Auto- matic Debit Advice (ADA), pre-audit shall be performed on the docu- ments to be submitted as basis for payment, such as but not limited to the approved dis- bursement vouchers, if applicable, statement of expenditures, list of due and demandable ac- counts payable and their supporting documents. For procurement paid through ADA, pre-audit shall be performed on the approved disburse- ment voucher duly sup- ported by the regular documentary require- ments for the specific transaction.
All releases of funds to NGOs/Pos shall be sub- ject to pre-audit. The audit shall be carried out taking into consideration the requirements and guidelines provided in COA Circular No. 2007- 001 dated 25 October 2007 and subsequent amendments thereto. No subsequent releases shall be made unless previous release is liqui- dated, and the liquida- tion documents are post- audited and properly taken up in the books.
All transfers of funds ei- ther thru funding check or bank transfer between and among bank ac- counts of government agencies or between dif- ferent bank accounts of the same government agency regardless of amount shall be subject to pre-audit.
Fund transfers within and between govern- ment banks, transfers of funds to addresses an emergency or calamity, releases of NCAs by the Department of Budget and Management (DBM), and releases of NTAs from department/central offices to operating units shall be exempt from pre -audit.
The pre-audit of trust funds of LGUs shall only pre-audit of the last pro- gress billing, all previous payments shall be con- sidered.
All claims for road right- of-way shall be subject to pre-audit taking into consideration the provi- sions of Republic Act (RA) No. 8974 [An Act To Facilitate The Acquisi- tion Of Right-Of-Way For National Government Infrastructure Projects] and its implementing rules and regulations.
Procurement of capital assets shall include land and building. Procure- ment of goods and ser- vices includes acquisition of supplies, material, general support services, labor, equipment and motor vehicles by the government, regardless of the source of fund. For this purpose, pro- curement of construction materials for projects implemented by admin- istration shall be treated as procurement of goods and services and shall be subject to the same to the same rules provided in the Circular, taking the total project cost and not the individual trans- actions as basis of its coverage in or exclusion from pre-audit.
General support services shall include only those which are recurring and fixed in nature, such as but not limited to rent- als, janitorial and securi- ty services, and solid waste management re- gardless of the amount involved. Only the first cover disbursements of the trust funds received from the national gov- ernment or from GOCCs.
Pre-audit of disposal of real property shall cover only those undertaken through negotiated sales involving an amount of at least P1 Million. Ne- gotiated sale of acquired assets of government financial institutions amounting to at least P50 Million, except those disposed to previous owners in the exercise of their right of redemption, shall be subject to pre- audit. For unserviceable property and those no longer needed, only ne- gotiated sales involving an amount of at least P500,000.00, whether valued individually or by lot, shall be subject to pre-audit.
REVENUE ADMINIS- TRATIVE ORDER NO. 13-2009
RAO No. 13-2009 issued on September 18, 2009 amends the title of Reve- nue Region No. 5, Valen- zuela to Revenue Region No. 5, Caloocan. The amendment is in line with the Bureaus efforts of bringing revenue ser- vice closer to the taxpay- ing public by proper identification of the place of business of Revenue Region No. 5.
Page 7 VOLUME II ISSUE No. 9 JURISPRUDENCE JOAQUIN P. OBIETA vs. EDWARD CHEOK G.R. No. 170072, Sep- tember 3, 2009
FACTS: The present controversy sprung from an intra-corporate dispute filed by Edward Check (Check) against Republic Resources and Develop- ment Corporation (REDECO) and Joaquin P. Obit (Obieta) in his capac- ity as its corporate secre- tary seeking the issuance of certificate of stocks at the new par value in lieu of his four REDECO street certificates.
REDECO and Obieta, con- tended that Check did not present any proof that the street certificates had been endorsed or as- signed to him. Further- more, considering the issuance of those certifi- cates was not reflected in the corporation's stock and transfer book, they validly denied Check's request.
The Regional Trial Court (RTC) held that those cer- tificates were genuine. Thus, Obieta acted negli- gently in refusing Check's request.
The appeal of REDECO and Obieta was not per- fected, thus, the RTC de- cision became final and executor. RTC issued a writ of execution and or- dered Obieta to deliver his Valley Golf and Country Club (VGCC) stock certifi- cate to the branch sheriff so that it may be sold in public auction. Obieta refused; hence, he was cited for contempt of court.
Obieta assailed the orders of the RTC (citing him for contempt) via a petition for certiorari and prohibi- tion in the Court of Ap- peals (CA).
CA held that Obieta was solidarily liable with RE- DECO.
ISSUE: Whether or not the decision of the RTC already attained finality prior to the filing of the appeal.
RULING: The RTC deci- sion has already become final and executor prior to the filing of the appeal. The appeal of the decision of the RTC (holding Obieta solidarily liable with REDECO for the judgment obligation) was never perfected. Further- more, neither REDECO nor Obieta assailed the orders dismissing the no- tice of appeal. Thus, the said decision became final and executory.
Page 8 LCA LINES
PEOPLE OF THE PHIL- IPPINES vs. ANTONIO ORTIZ, CHARITO CHAVEZ, EDWIN DASILIO and JERRY DOE G.R. No. 179944, Sep- tember 4, 2009
FACTS: Antonio Ortiz (Ortiz), Charito Chavez (Chavez), Edwin Dasilio (Dasillo) and Jerry Doe (Jerry) while all armed with guns, by means of force and violence against the persons of spouses BBB and AAA at their resi- dence, carried away the spouses personal belong- ings and cash, but before leaving with the loots, Ortiz, Chavez, Dasillo, and Jerry, with violence, force and intimidation at gun point succeeded in having carnal knowledge with AAA, one after the other, in taking their turns in satisfying their carnal desires, against her will, to the damage and prejudice of the spouses. Ortiz, Chavez and Dasilio pleaded not guilty to the charge. The trial court rendered a decision convicting Ortiz, Chavez, Dasillo and Jerry for the crime charged. The Court of Appeals (CA) affirmed the ruling of the trial court with modifica- tions. ISSUE: Whether or not the trial court erred in finding Ortiz, Chavez, Dasillo and Jerry guilty beyond reasonable doubt for Robbery with Multiple Rape. RULING: The trial court did not err in finding Ortiz, Chavez, Dasillo and Jerry guilty beyond rea- sonable doubt for Robbery with Multiple Rape. Robbery with rape is com- mitted when the following elements concur: (1) the taking of personal proper- ty is committed with vio- lence against or intimida- tion of persons; (2) the property taken belongs to another; (3) the taking is characterized by intent to gain or animus lucrandi; (4) the robbery is accom- panied by rape. The first three elements were proven by the estab- lished facts in court. Absent any showing that the trial court overlooked or misappreciated certain JURISPRUDENCE JURISPRUDENCE Page 9 VOLUME II ISSUE No. 9 CIVIL SERVICE COM- MISSION vs. FATIMA A. MACUD G.R. No. 177531, Sep- tember 10, 2009
FACTS: As a require- ment for her appointment as Teacher I of the De- partment of Education, Marawi City, Fatima A. Macud (Macud) submitted her Personal Data Sheet (PDS). Her declaration in the said PDS is that she successfully passed the Professional Board Exami- nation for Teachers (PBET). Investigations were there- upon conducted to verify the eligibility of newly appointed teachers. In- vestigation showed that Macud deliberately al- lowed another person to take the examination for and in her behalf. There- after, Macud was formally charged with Dishonesty, Grave Misconduct and Conduct Prejudicial to the Best Interest of the Ser- vice before the regional office and was later on found guilty by the Civil Service Commission Re- gional Office XII (CSCRO XXII). The Civil Service eligibility of Macud was revoked and cancelled. Macuds motion for recon- sideration of the Decision was denied. Her appeal to the CSC Central Office was likewise denied.
The Court of Appeals (CA) granted Macuds petition and set aside the deci- sions of the CSC Central Office and CSCRO XII on the sole ground of lack of jurisdiction. CSCs subsequent motion for reconsideration was denied by the CA.
ISSUE: Whether or not the Court of Appeals erred in ruling that the Investi- gating Committee formed under R.A. 4670 has ex- clusive jurisdiction to try the administrative case against Macud.
RULING: The Court of Appeals erred in ruling that the Investigating Committee formed under R.A. 4670 has exclusive jurisdiction to try the ad- ministrative case against Macud.
CSC is the constitutional body charged with the establishment and admin- istration of a career civil service which embraces all branches and agencies of the government.
Article IX-B, Section 2(1) of the 1987 Constitution provides:
Section 2. (1) The civil service em- braces all branch- es, subdivisions, instrumentalities, and agencies of the Government, in- cluding government- owned or controlled corporations with original charters. x x x (emphasis ours)
Section 3 of the same Article further states:
Section 3. The Civil Service Commission, as the central per- sonnel agency of the Government, shall establish a career service and adopt measures to pro- mote morale, effi- ciency, integrity, responsiveness, progressiveness, and courtesy in the civil service. It shall strengthen the merit and rewards system, integrate all human resources development pro- grams for all levels and ranks, and insti- tutionalize a man- agement climate conducive to public accountability. It shall submit to the President and the Congress an annual report on its person- facts or circumstances of weight and influence which, if considered, would affect the result, there is no reason to overturn the trial courts finding of robbery which is fully supported by the evidence on record. As to the attendant rape, the testimony of AAA is worthy of full faith and credence. it is beyond cavil that Ortiz, Chavez, Dasillo and Jerry raped AAA as an afterthought after robbing valuable items in the house. Alt- hough the examination of AAAs genital area re- vealed no laceration in her hymen, it is a settled rule that laceration is not an element of the crime of rape. Simply put, the absence of lacerations does not negate rape.
JURISPRUDENCE Page 10 LCA LINES nel programs. (emphasis ours) Section 12. Powers and Functions. The Commission shall have the following powers and func- tions:
(1) Administer and enforce the constitu- tional and statutory provisions on the merit system for all levels and ranks in the Civil Service; (2) Prescribe, amend and enforce rules and regulations for carry- ing into effect the provisions of the Civil Service Law and oth- er pertinent laws; xxx xxx xxx (11) Hear and decide administrative cases instituted by or brought before it di- rectly or on appeal, including contested appointments, and review decisions and actions of agencies attached to it xxx xxx xxx (14) Take appropri- ate action on all ap- pointments and other personnel matters in the Civil Service in- cluding extension of service beyond re- tirement age; xxx xxx xxx
R.A. 4670 did not divest the CSC of its inherent power to supervise and discipline all members of the civil service, includ- ing public school teach- ers.
CSC has the authority to directly institute proceed- ings to discipline a gov- ernment employee in or- der to protect the integri- ty of the civil service.
Indeed, where an admin- istrative case involves the alleged fraudulent pro- curement of an eligibility or qualification for em- ployment in the civil ser- vice, it is but proper that the CSC would have juris- diction over the case for it is in the best position to determine if there has been a violation of civil service rules and regula- tions.
ILEANA DR. MACALINAO vs. BANK OF THE PHILIP- PINE ISLANDS
G.R. No. 175490, Sep- tember 17, 2009
FACTS: I l ea na Macalinao (Macalinao) was an approved card- holder of BPI Mastercard, one of the credit card facilities of Bank of the Philippine Islands (BPI). Macalinao made some purchases through the use of the said credit card and defaulted in paying for said purchas- es. She subsequently received a letter from respondent BPI demand- ing payment. Under the Terms and Conditions Governing the Issuance and Use of the BPI Credit and BPI Mas- tercard, the charges or balance thereof remain- ing unpaid after the pay- ment due date indicated on the monthly State- ment of Accounts shall bear interest at the rate of 3% per month and an additional penalty fee equivalent to another 3% per month. For failure of Macalinao to settle her obligations, BPI filed with Metropoli- tan Trial Court (MeTC) of a complaint for a sum of money against her and her husband, Danilo SJ. Macalinao (Danilo). BPI prayed for the pay- ment of the amount due plus 3.25% finance charges and late pay- ment charges equivalent to 6% of the amount due and an amount equiva- lent to 25% of the total amount due as attor- neys fees, and of the cost of suit. Macalinao and her hus- band failed to file their Answer. MeTC ruled in favor of BPI and or der ed Macalinao and her hus- band to pay the amount due plus interest and penalty charges of 2% per month. Macalinao and her hus- band appealed to the Regional Trial Court (RTC).
Page 11 LCA LINES JURISPRUDENCE Macalinao filed a petition for review with the Court of Appeals (CA), which affirmed with modification the Decision of the RTC. Macalinao filed a Motion for Reconsideration but the same was denied. ISSUE: Whether or not the reduction of interest rate from 9.25% to 2% should be upheld since the stipulated rate of in- terest was unconscionable and iniquitous, and thus illegal. RULING: The stipulated rate of interest is uncon- scionable and iniquitous, thus illegal. Since the stipulation on the interest rate of 36% per annum is void, it is as if there was no express contract thereon. Hence, courts may reduce the interest rate as reason and equity demand. The same is true with respect to the penalty charge. Art. 1229. The judge shall equitably reduce the penalty when the principal obligation has been partly or irregularly complied with by the debtor. Even if there has been no performance, the penalty may also be reduced by the courts if it is iniquitous or unconscionable.
In exercising this power to determine what is in- iquitous and unconscion- able, courts must consid- er the circumstances of each case since what may be iniquitous and unconscionable in one may be totally just and equitable in another.
Thus, under the circum- stances, the Court finds it equitable to reduce the interest rate pegged by the CA at 1.5% monthly to 1% monthly and pen- alty charge fixed by the CA at 1.5% monthly to 1% monthly or a total of 2% per month or 24% per annum in line with the prevailing jurispru- dence and in accordance with Art. 1229 of the Civil Code.
Page 12 VOLUME II ISSUE No. 9 JURISPRUDENCE
PHILIPPINE HEALTH CARE PROVIDERS, INC., vs. COMMISSIONER OF INTERNAL REVENUE, G.R. No. 167330, Sep- tember 18, 2009
FACTS: Philippine Health Care Providers, Inc. (PHCPI) is a domes- tic corporation whose primary purpose is to establish, maintain, con- duct and operate a pre- paid group practice health care delivery sys- tem or a health mainte- nance organization to take care of the sick and disabled persons enrolled in the health care plan and to provide for the administrative, legal, and financial responsibilities of the organization. In- dividuals enrolled in its health care programs pay an annual member- ship fee and are entitled to various preventive, diagnostic and curative medical services provid- ed by its duly licensed physicians, specialists and other professional technical staff participat- ing in the group practice health delivery system at a hospital or clinic owned, operated or ac- credited by it.
The Commissioner of Internal Revenue [CIR] sent a formal demand letter and the corre- sponding assessment notices to PHCPI de- manding the payment of deficiency taxes [value- added tax (VAT) and documentary stamp tax (DST)], including sur- charges and interest, for the taxable years 1996 and 1997.
PHCPI protested the as- sessment. As the CIR did not act on the pro- test, PHPCI filed a peti- tion for review in the Court of Tax Appeals (CTA) seeking the can- cellation of the deficiency VAT and DST assess- ments.
CTA rendered a decision, ordering PHCPI to pay the deficiency VAT taxes for taxable years 2006 and 2007. The deficien- cy DST assessment for taxable years 1996 and 1997 was cancelled and set aside.
CIR appealed the CTA decision to the Court of Appeals (CA) insofar as it cancelled the DST as- sessment. The petition for review was granted.
ISSUES: 1. Whether or not PHCPI, as an HMO is engaged in the busi- ness of insurance during taxable years 1996 and 1997.
2. Whether or not the PHCPI is liable to pay DST under Section 185 of the National Internal Revenue of 1997.
RULING: As to the first issue, PHCPI is not en- gaged in the business of insurance during taxable years 1996 and 1997.
HMOs are not in the in- surance business. One test that they have ap- plied is whether the as- sumption of risk and in- demnification of loss (which are elements of an insurance business) are the principal object and purpose of the or- ganization or whether they are merely inci- dental to its business. If these are the principal objectives, the business is that of insurance. But if they are merely inci- dental and service is the principal purpose, then the business is not insur- ance. The main difference be- tween an HMO and an insurance company is
that HMOs undertake to provide or arrange for the provision of medical ser- vices through participat- ing physicians while insur- ance companies simply undertake to indemnify the insured for medical expenses incurred up to a pre-agreed limit.
Even if PHCPI assumes the risk of paying the cost of these services even if significantly more than what the member has prepaid, it nevertheless cannot be considered as being engaged in the in- surance business. A substantial portion of PHCPIs services covers preventive and diagnostic medical services intended to keep members from developing medical condi- tions or diseases. As an HMO, it is its obligation to maintain the good health of its members. Accord- ingly, its health care programs are designed to prevent or to mini- mize the possibility of any assumption of risk on its part. Thus, its un- dertaking under its agree- ments is not to indemnify its members against any loss or damage arising from a medical condition but, on the contrary, to provide the health and medical services needed JURISPRUDENCE to prevent such loss or damage. Therefore, since it substantially provides health care services ra- ther than insurance ser- vices, it cannot be consid- ered as being in the insur- ance business.
With regard to the second issue, PHCPI is not liable to pay DST under Section 185 of the National Inter- nal Revenue of 1997.
When the law imposing the DST was first passed, HMOs were yet unknown in the Philippines. How- ever, when the various amendments to the DST law were enacted, they were already in existence in the Philippines and the term had in fact already been defined by RA 7875. If it had been the intent of the legislature to impose DST on health care agree- ments, it could have done so in clear and categorical terms. It had many op- portunities to do so. But it did not. The fact that the NIRC contained no specific provision on the DST liability of health care agreements of HMOs at a time they were already known as such, belies any legislative intent to im- pose it on them. As a matter of fact, PHCPI was assessed its DST liability only on Janu- ary 27, 2000, after more than a decade in the business as an HMO. Considering that Section 185 did not change since 1904 (except for the rate of tax), it would be safe to say that health care agreements were never, at any time, recognized as insurance contracts or deemed engaged in the business of insurance within the context of the provision.
Taking into account that health care agreements are clearly not within the ambit of Section 185 of the NIRC and there was never any legislative in- tent to impose the same on HMOs like PHCPI, the same should not be arbi- trarily and unjustly in- cluded in its coverage.
Page 14 LCA LINES Www.lagundi-caronan-assoc.com SERV IN G Y O U R N EED S REA LIZIN G Y O U R D REA M S SERVIN G YO U R N EED S REALIZIN G YO U R D REAM S LAGUNDI-CARONAN AND ASSOCIATES
For weeks six-year old JL kept telling his first grade teacher about the baby brother or sister was expected at his house.
One day, his mother allowed JL to feel the movements of the unborn child. JL was obviously impressed, but made no comment. Furthermore, he stopped telling his teacher about the impending event.
The teacher finally sat the boy on her lap and said; JL, whatever has become of that baby brother or sister you were expecting at home?
JL burst into tears and confessed, I think mommy ate it!
LAGUNDI-CARONAN AND ASSOC. Rhen Square Bldg Carig Sur Tuguegarao City