Abakada Guro Party List, et al vs Exec. Sec.

Ermita
Facts: On May 24, 2005, the President signed into law Republic
Act 933 or the !A" Re#or$ Act% &e#ore the law too' e##ect on
(uly ), 2005, the *ourt issued a "RO en+oining go,ern$ent #ro$
i$ple$enting the law in response to a slew o# petitions #or
certiorari and prohibition -uestioning the constitutionality o# the
new law%
"he challenged section o# R%A% .o% 933 is the co$$on pro,iso in
/ections 4, 5 and 01 2"hat the President, upon the reco$$endation
o# the /ecretary o# 3inance, shall, e##ecti,e (anuary ), 2000, raise
the rate o# ,alue4added ta5 to )26, a#ter any o# the #ollowing
conditions has been satis#ied1
7i8 !alue4added ta5 collection as a percentage o# 9ross :o$estic
Product 79:P8 o# the pre,ious year e5ceeds two and #our4#i#th
percent 72 4;568<
or 7ii8 .ational go,ern$ent de#icit as a percentage o# 9:P o# the
pre,ious year e5ceeds one and one4hal# percent 7)=68>
Petitioners allege that the grant o# stand4by authority to the
President to increase the !A" rate is an abdication by *ongress o#
its e5clusi,e power to ta5 because such delegation is not co,ered
by /ection 2? 728, Article !@ *onsti% "hey argue that !A" is a ta5
le,ied on the sale or e5change o# goods and ser,ices which canAt
be included within the pur,iew o# tari##s under the e5e$ption
delegation since this re#ers to custo$s duties, tolls or tribute
payable upon $erchandise to the go,ern$ent and usually i$posed
on i$ported;e5ported goods% "hey also said that the President has
powers to cause, in#luence or create the conditions pro,ided by law
to bring about the conditions precedent% Moreo,er, they allege that
no guiding standards are $ade by law as to how the /ecretary o#
3inance will $a'e the reco$$endation%
Issue: Bhether or not the RA 933Cs stand4by authority to the
D5ecuti,e to increase the !A" rate, especially on account o# the
reco$$endatory power granted to the /ecretary o# 3inance,
constitutes undue delegation o# legislati,e powerE .O
Held: "he powers which *ongress is prohibited #ro$ delegating
are those which are strictly, or inherently and e5clusi,ely,
legislati,e% Purely legislati,e power which can ne,er be delegated
is the authority to $a'e a co$plete law4 co$plete as to the ti$e
when it shall ta'e e##ect and as to who$ it shall be applicable, and
to deter$ine the e5pediency o# its enact$ent% @t is the nature o# the
power and not the liability o# its use or the $anner o# its e5ercise
which deter$ines the ,alidity o# its delegation%
"he e5ceptions are1
7a8 delegation o# tari## powers to President under *onstitution
7b8 delegation o# e$ergency powers to President under
*onstitution
7c8 delegation to the people at large
7d8 delegation to local go,ern$ents
7e8 delegation to ad$inistrati,e bodies
3or the delegation to be ,alid, it $ust be co$plete and it $ust #i5 a
standard% A su##icient standard is one which de#ines legislati,e
policy, $ar's its li$its, $aps out its boundaries and speci#ies the
public agency to apply it%
@n this case, it is not a delegation o# legislati,e power &F" a
delegation o# ascertain$ent o# #acts upon which en#orce$ent and
ad$inistration o# the increased rate under the law is contingent%
"he legislature has $ade the operation o# the )26 rate e##ecti,e
(anuary ), 2000, contingent upon a speci#ied #act or condition% @t
lea,es the entire operation or non4operation o# the )26 rate upon
#actual $atters outside o# the control o# the e5ecuti,e% .o
discretion would be e5ercised by the President% Gighlighting the
absence o# discretion is the #act that the word /GAHH is used in
the co$$on pro,iso% "he use o# the word /GAHH connotes a
$andatory order% @ts use in a statute denotes an i$perati,e
obligation and is inconsistent with the idea o# discretion%
"hus, it is the $inisterial duty o# the President to i$$ediately
i$pose the )26 rate upon the e5istence o# any o# the conditions
speci#ied by *ongress% "his is a duty, which cannot be e,aded by
the President% @t is a clear directi,e to i$pose the )26 !A" rate
when the speci#ied conditions are present%
*ongress +ust granted the /ecretary o# 3inance the authority to
ascertain the e5istence o# a #act444 whether by :ece$ber 3), 2005,
the !A" collection as a percentage o# 9:P o# the pre,ious year
e5ceeds 2 4;5 6 or the national go,ern$ent de#icit as a percentage
o# 9:P o# the pre,ious year e5ceeds one and )=6% @# either o#
these two instances has occurred, the /ecretary o# 3inance, by
legislati,e $andate, $ust sub$it such in#or$ation to the
President%
@n $a'ing his reco$$endation to the President on the e5istence o#
either o# the two conditions, the /ecretary o# 3inance is not acting
as the alter ego o# the President or e,en her subordinate% Ge is
acting as the agent o# the legislati,e depart$ent, to deter$ine and
declare the e,ent upon which its e5pressed will is to ta'e e##ect%
"he /ecretary o# 3inance beco$es the $eans or tool by which
legislati,e policy is deter$ined and i$ple$ented, considering that
he possesses all the #acilities to gather data and in#or$ation and
has a $uch broader perspecti,e to properly e,aluate the$% Gis
#unction is to gather and collate statistical data and other pertinent
in#or$ation and ,eri#y i# any o# the two conditions laid out by
*ongress is present%
*ongress does not abdicate its #unctions or unduly delegate power
when it describes what +ob $ust be done, who $ust do it, and what
is the scope o# his authority< in our co$ple5 econo$y that is
#re-uently the only way in which the legislati,e process can go
#orward%
"here is no undue delegation o# legislati,e power but only o# the
discretion as to the e5ecution o# a law% "his is constitutionally
per$issible% *ongress did not delegate the power to ta5 but the
$ere i$ple$entation o# the law%