SCOPE and LIMITATION of TAXATION (Inherently Legislative)

Abakada Guro Partylist Officer v. Exec Sec Ermita (GR 168056 plus 3 other cases, Sept 1 2005)
FACTS:
Consolidated petitions assailing the E-VAT Law (RA 9337 effective July 1 2005); the ff are the
assailed provisions of the law:
o (Sec 4, 5, 6) 10% VAT on goods, properties, importation of goods, sale of services and
use of leased properties will be increased by the President to 12% VAT by January 1 2006
if certain conditions are met (common proviso in all three sections)
o This provision gives the President stand-by-authority to increase VAT rates
According to petitioners, RA 9337;
o amounted to abandonment by Congress of its exclusive authority to fix tax rates (based
on Art VI, Sec 28 (2), Constitution);
o violative of due process; the rates are unfair and unreasonable
As for respondents, they mainly argue that RA 9337 enjoys presumption of constitutionality and
that the law was passed mainly to fulfill the governments fiscal reform agenda
ISSUE:
Whether there was an undue delegation of the Legislatives power to fix tax rates
RULING:
NO, While the power to tax cannot be delegated to executive agencies, details as to the
enforcement and administration of an exercise of such power may be left to them, including the
power to determine the existence of facts on which its operation depends
o The common proviso found in the three assailed sections is a mere ascertainment of facts
upon which the VAT increases is contingent
The powers which Congress is prohibited from delegating are those which are strictly, or
inherently and exclusively, legislative
o Purely legislative power, which can never be delegated, has been described as the
authority to make a complete law complete as to the time when it shall take effect and
as to whom it shall be applicable and to determine the expediency of its enactment