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[G.R. No. 168056, G.R. No. 168207, G.R. No. 168461, G.R. No. 168463, G.R. No.
168730.September 1, 2005] En banc AUSTRIA-MARTINEZ, J.:
The facts of the cases are as follows:
(1) RA 9337 is the VAT Reform Act enacted on May 24, 2005;
(2) Sec. 4 (sales of goods and properties), Sec. 5 (importation of goods) and Sec. 6
(services and lease of property) of RA 9337, in collective, granted the Secretary
of Finance the authority to ascertain:
a. Whether by 31 December 2005, the VAT collection as a percentage of the
2004 GDP exceeds 2.8%; or
b. The National Government deficit as a percentage of the 2004 GDP
exceeds 1.5%;
(3) If either condition is met, the Secretary of Finance must inform the President
who, in turn, must impose the 12% VAT rate (from 10%) effective January 1,
(4) ABAKADA maintained that Congress abandoned its exclusive authority to fix
taxes and that RA 9337 contained a uniform proviso authorizing the President
upon recommendation by the Department of Finance (DOF) Secretary to raise
VAT to 12%;
(5) Sen. Pimentel maintained that RA 9337 constituted undue delegation of
legislative powers and a violation of due process since the law was ambiguous
and arbitrary. Same with Rep. Escudero;
(6) Pilipinas Shell dealers argued that the VAT reform was arbitrary, oppressive and
(7) Respondents countered that the law was complete, that it left no discretion to
the President, and that it merely charged the President with carrying out the
rate increase once any of the two (2) conditions arise.

Issue:Is there an undue delegation of powers?

No. The Constitution allows as under exempted delegation the delegation of tariffs,
customs duties, and other tolls, levies on goods imported and exported. VAT is tax levied on
sales of goods and services which could not fall under this exemption. Hence, its delegation
if unqualified is unconstitutional. The Legislative power has the authority to make a
complete law. Thus, to be valid, a law must be complete in itself, setting forth therein the
policy and it must fix a standard, limits of which are sufficiently determinate and
No undue delegation when congress describes what job must be done who must do it
and the scope of the authority given. Secretary of Finance was merely tasked to ascertain
the existence of facts. All else was laid out.Mainly ministerial for the secretary to ascertain
the facts and for the president to carry out the implementation for the VAT. They were
agents of the legislative department thus, their acts were merely implementations of the