Mandanas vs Ochoa
G.R. No. 199802 / G.R. No. 208488
Facts:
Implementing the constitutional mandate for decentralization and local autonomy, Congress enacted Republic Act No. 7160, otherwise known as the Local Government Code (LGC), in order to guarantee the fiscal autonomy of the LGUs by specifically providing that:
SECTION 284. Allotment of Internal Revenue Taxes. - Local government units shall have a share in the national internal revenue taxes based on the collection of the third fiscal year preceding the current fiscal year as follows…:
Petitioners averred that the insertion by Congress of the words internal revenue in the phrase national taxes found in Section 284 of the LGC caused the diminution of the base for determining the just share of the LGUs, and should be declared unconstitutional
SC on July 3, 2018 declares that the phrase "internal revenue" appearing in Section 284 of Republic Act No. 7160 (Local Government Code) UNCONSTITUTIONAL, and DELETES the phrase from Section 284.
OSG contends that the affected provisions of the Local Government Code (LGC) are not contrary to Section 6, Article X of the Constitution, under which the plenary power of Congress extends nut only to the determination of they just share of local government units (LGUs) but also to the determination of which national taxes serve as base for the computation of such just share.
The OSG premises its contention on the fact that the article "the" immediately precedes the phrase "national taxes" in Section 6, thereby manifesting the intent to give Congress the discretion to determine which national taxes the just share will be based on considering that the qualifier "the" signals that the succeeding phrase "national taxes" is a specific class of taxes; that if it was the intention of the framers to include all national taxes, the Constitution should have so stated; that the phrase internal revenue should be restored in the affected provisions of the LGC considering that the deletion of the phrase constitutes an undue encroachment on the power of Congress to determine the LGUs' just share; that the effect of broadening the base for computing the just share is to modify Congress' internal revenue allocations (IRA) in favor of the LGUs, which the Court cannot do because imposing the new base was not intended by Congress.
Issue:
Whether SC should reverse its decision that the phrase "internal revenue" appearing in Section 284 of Republic Act No. 7160 (Local Government Code) UNCONSTITUTIONAL, and DELETES the phrase from Section 284.
Held:
NO. Constitution itself set national taxes as the base amount from which to reckon the just share of the LGUs; and Section 6, Article X the 1987 Constitution textually commands the allocation to the LGUs of a just share in the national taxes.
Section 6, when parsed, embodies three mandates, namely: (1) the LGUs shall have a just share in the national taxes; (2) the just share shall be determined by law; and (3) the just share shall be automatically released to the LGUs.
SC's agrees with Garcia contention that Congress has exceeded its constitutional boundary by limiting to the NIRTs the base from which to compute the just share of the LGUs.
Although the power of Congress to make laws is plenary in nature, congressional lawmaking remains subject to the limitations stated in the 1987 Constitution. The phrase national internal revenue taxes engrafted in Section 284 is undoubtedly more restrictive than the term national taxes written in Section 6. As such, Congress has actually departed from the letter of the 1987 Constitution stating that national taxes should be the base from which the just share of the LGU comes. Such departure is impermissible. Verba legis non est recedendum (from the words of a statute there should be no departure). Equally impermissible is that Congress has also thereby curtailed the guarantee of fiscal autonomy in favor of the LGUs under the 1987 Constitution.
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