Case Summary (G.R. No. 166715)
Petitioners and Respondents
Petitioners challenged the constitutionality of RA 9335 on equal‐protection, delegation, separation-of-powers, and public‐trust grounds. Respondents, through the Office of the Solicitor General, defended the law, contending that petitioners lack a personal stake, and that the law’s classifications, standards, and congressional oversight provisions are valid under the Constitution.
Key Dates
• RA 9335 enacted December 15, 2004 (effective 2005).
• Implementing Rules and Regulations (IRR) approved May 22, 2006, published May 30, 2006.
• Petition for prohibition filed under Rule 65, challenging enforcement of RA 9335.
• Decision rendered August 14, 2008, applying the 1987 Constitution.
Applicable Law
• 1987 Constitution: Article II, Section 1 (public office is a public trust); Article III, Section 1 (equal protection); Article VI (bicameralism and presentment; separation of powers).
• Republic Act No. 9335:
– Sec. 2 (declaration of policy on rewards and sanctions for BIR and BOC).
– Sec. 3–Sec. 8 (scope, Rewards and Incentives Fund, composition and powers of the Revenue Performance Evaluation Boards, liability provisions).
– Sec. 11–Sec. 12 (rule-making and joint congressional oversight committee).
– Sec. 13 (separability clause).
• Civil Service laws (security of tenure; Code of Conduct).
• Administrative Code of 1987 (BIR and BOC functions).
Actual Case and Ripeness
An actual case or controversy requires a concrete legal injury that is ripe for adjudication. Petitioners alleged only speculative harm from RA 9335’s enactment, failing to identify a personal stake or direct adverse effect. The petition was procedurally infirm as premature. Nonetheless, the Court exercised its discretion to resolve the substantial constitutional questions in the public interest and affirmed the duty to review legislative action on constitutional grounds.
Accountability of Public Officers
Under Article XI, Section 1, public office is a public trust; officials must serve with responsibility, integrity, loyalty, and efficiency. BIR and BOC personnel enjoy a presumption of regularity in duty performance, which RA 9335 reinforces through incentives and sanctions. Petitioners’ fear that rewards will produce “mercenary” conduct is speculative and insufficient to overcome the strong presumption of constitutionality that attaches to tax‐reform legislation.
Equal Protection
Equal protection requires that any classification rest on reasonable grounds and relate to the law’s objective. RA 9335 targets only BIR and BOC officials and employees because of their distinct and primary function—revenue and customs collection for the national government. This substantive distinction is germane to the statute’s purpose, thus satisfying the rational-basis test and preserving equal protection.
Undue Delegation
Legislative power may be delegated if the statute (1) sets forth a clear policy, (2) identifies the delegate, and (3) provides adequate standards.
• Policy and standards are declared in Section 2 (optimize revenue collection through rewards and sanctions).
• Section 4 channels the President’s power to fix revenue-collection targets within percentages specified and requires DBCC determination and publication.
• Section 7 prescribes criteria and due-process safeguards for removal of personnel falling short of targets by at least 7.5%.
These provisions satisfy both the completeness and sufficient-standards tests, and do not impair security of tenure under civil-service law.
Separation of Powers
Section 12 creates a Join
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Facts of the Case
- Republic Act No. 9335 (Attrition Act of 2005) was enacted to optimize revenue generation by BIR and BOC through a system of rewards and sanctions.
- The law creates:
• A Rewards and Incentives Fund sourced from collections exceeding targets (as determined by the DBCC).
• A Revenue Performance Evaluation Board in each bureau to allocate the Fund, prescribe criteria for rewards and removals, evaluate performance, issue rules, and report annually to Congress. - RA 9335 covers all BIR and BOC officials and employees with at least six months of service.
- Implementing rules and regulations (IRR) are to be promulgated by DOF, DBM, NEDA, BIR, BOC, and CSC, subject to approval by a Joint Congressional Oversight Committee.
- Petitioners (taxpayers) challenged RA 9335 on grounds of corruption, equal protection, undue delegation, and unconstitutional legislative oversight.
Issues
- Whether there is an actual case or controversy and whether the petition is ripe for adjudication.
- Whether RA 9335’s reward‐and‐sanctions scheme undermines the constitutional accountability of public officers.
- Whether the law’s exclusive application to BIR and BOC employees violates equal protection.
- Whether the delegation of power to fix revenue targets to the President lacks sufficient standards (undue delegation).
- Whether the creation of a Joint Congressional Oversight Committee violates separation of powers (legislative veto).
Ruling of the Court
- The petition is partially granted.
- Section 12 (Joint Congressional Oversight Committee) is declared unconstitutional, null and void.
- All other provisions of RA 9335 are upheld and remain in full force and effect under the law’s separability clause.
Actual Case and Ripeness
- An actual case or controversy requires a concrete conflict of legal rights and a personal stake or injury