Case Digest (G.R. No. 199802) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In Mandanas v. Ochoa (G.R. Nos. 199802 & 208488, April 10, 2019), petitioners—Congressman Hermilando I. Mandanas, various local chief executives and barangay officials, Atty. Jose Malvar Villegas, and Representative Enrique T. Garcia Jr.—challenged the constitutionality of the phrase “internal revenue” in Sections 284, 285, 287, and 290 of Republic Act No. 7160 (the Local Government Code), insofar as it limited the base for the Internal Revenue Allotment (IRA) to national internal revenue taxes. They asked the Court to delete the phrase and require the inclusion of all national taxes as the basis for computing local government units’ (LGUs’) just share. On July 3, 2018, the Court en banc partially granted the petitions: it declared the phrase unconstitutional, modified the affected provisions of the Code and its Implementing Rules and Regulations, ordered the Department of Finance, Department of Budget and Management, Bureau of Internal Revenue, Bureau of Customs, and the Nati Case Digest (G.R. No. 199802) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- Parties
- Petitioners
- Congressman Hermilando I. Mandanas; Mayor Efren B. Diona; Mayor Antonino Aurelio; Kagawad Mario Ilagan; Barangay Chairpersons Perlito Manalo, Medel Medrano; Barangay Kagawads Cris Ramos, Elisa D. Balbago; Atty. Jose Malvar Villegas.
- Congressman Enrique T. Garcia, Jr., in his personal and official capacity.
- Respondents
- Executive Secretary Paquito Ochoa; Secretary Cesar Purisima (Department of Finance); Secretary Florencio H. Abad (Department of Budget and Management); Commissioner Kim Jacinto-Henares (Bureau of Internal Revenue); Commissioner Rozzano Rufino B. Biazon (Bureau of Customs); National Treasurer Roberto Tan.
- Procedural History
- July 3, 2018 Decision (SC En Banc)
- Declared the phrase “internal revenue” in Section 284 of R.A. 7160 (Local Government Code) unconstitutional and deleted it.
- Modified Sections 284, 285, 287, 290 and related IRR provisions to provide that LGUs’ share be based on all national taxes (30%, 35%, 40%), specified mechanics for deficit adjustments, cost of devolved services, and automatic quarterly releases.
- Excluded certain special‐purpose taxes (franchise fees shares, ARMM allocations, mineral excise, tobacco excise, COA fees, former military base proceeds) per constitutional provisions.
- Dismissed LGUs’ claims for arrears, applied decision prospectively, and directed implementation guidelines.
- Motions for Reconsideration
- Filed by the Office of the Solicitor General (OSG), raising four errors: constitutional requirement of all national taxes; deletion of “internal revenue”; inclusion/exclusion of specific taxes; timing of prospective application (propose start in 2022).
- Filed by petitioner Garcia, seeking restoration of arrears from 1992.
Issues:
- Constitutional Interpretation
- Does Article X, Section 6 of the 1987 Constitution require that “national taxes” (all) be the base for computing LGUs’ just share?
- Can Congress, by statute, limit the base to national internal revenue taxes only?
- Legislative Power and Tax Scope
- Did the deletion of “internal revenue” from LGC Sections 284, 285, 287, 290 and IRR provisions unlawfully encroach on Congress’s power to determine LGUs’ just share?
- Should specific taxes or charges—tariffs and customs duties; VAT and other taxes in ARMM; excise taxes on mining and tobacco; franchise taxes shares; COA auditing fee; proceeds of former military bases—be included or excluded in the computation of LGUs’ share?
- Remedy and Application
- Is prospective application of the decision appropriate?
- If so, when should the revised computation of the Internal Revenue Allotment (IRA) for LGUs commence, and are past arrears recoverable?
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)