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authority; in our complex economy that is frequently the only way in which the
legislative process can go forward. In this case, it is not a delegation of legislative
power but a delegation of ascertainment of facts upon which enforcement and
administration of the increased rate under the law is contingent.
The law did not nullify the President’s power of control over the Secretary of
Finance. In the present case, the Secretary of Finance is not acting as the alter
ego of the President or even her subordinate but as an agent of the Congress.
That the President has ample powers to cause, influence or create the conditions
to bring about either or both the conditions precedent is highly speculative.
On the alleged violation of equal protection and due process; regressivity
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.
The input tax is not a property or a property right within the constitutional purview
of the due process clause. A VAT-registered person’s entitlement to the creditable
input tax is a mere statutory privilege.
While the implementation of the law may yield varying end results depending on
one’s profit margin and value-added, the Court cannot go beyond what the
legislature has laid down and interfere with the affairs of business.
The equal protection clause does not require the universal application of the laws
on all persons or things without distinction. The rule of uniform taxation does not
deprive Congress of the power to classify subjects of taxation, and only demands
uniformity within a particular class.
R.A. No. 9337 is also equitable.
o The law is equipped with a threshold margin. The VAT does not apply to
sales of goods or services with gross annual sales or receipts not
exceeding P1,500,000.00.
o Basic marine and agricultural food products in their original state are still
not subject to the tax, thus ensuring that prices at the grassroots level will
remain accessible.
o While R.A. No. 9337 arguably puts a premium on businesses with low
profit margins, and unduly favors those with high profit margins, this is
equalized by the imposition of the 3% percentage tax on VAT-exempt
persons and the removal of the imposition of percentage taxes on certain
industries.
By its very nature, VAT is regressive. However, the Constitution does not really
prohibit the imposition of indirect taxes, like the VAT.
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DENIED.
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