Tolentino v Secretary of Finance
GR No. 115455, August 25, 1994
FACTS:
The value-added tax (VAT) is levied on the sale, barter or exchange of goods and properties as well as on the sale or
exchange of services. RA 7716 seeks to widen the tax base of the existing VAT system and enhance its administration by amending the National Internal Revenue Code (NIRC).
Herein, various petitioners seek to declare RA 7166 as unconstitutional. One of the reasons is that it violates Article VI, Section 28 (1) which provides that “the rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of taxation.”
ISSUE:
Whether RA 7166 violates the principle of progressive system of taxation
RULING:
No. Lacking empirical data on which to base any conclusion regarding these arguments, any discussion whether the VAT is regressive in the sense that it will hit the poor and middle income group in society harder than it will the rich is largely an academic exercise.
Regressivity is not a negative standard for courts to enforce. “Evolve a progressive system of taxation” is a directive to Congress. These provisions are placed in the Constitution as moral incentives to legislation, not as judicially enforceable rights.
FACTS:
The value-added tax (VAT) is levied on the sale, barter or exchange of goods and properties as well as on the sale or
exchange of services. RA 7716 seeks to widen the tax base of the existing VAT system and enhance its administration by amending the National Internal Revenue Code (NIRC).
Herein, various petitioners seek to declare RA 7166 as unconstitutional. One of the reasons is that it violates Article VI, Section 28 (1) which provides that “the rule of taxation shall be uniform and equitable. The Congress shall evolve a progressive system of taxation.”
ISSUE:
Whether RA 7166 violates the principle of progressive system of taxation
RULING:
No. Lacking empirical data on which to base any conclusion regarding these arguments, any discussion whether the VAT is regressive in the sense that it will hit the poor and middle income group in society harder than it will the rich is largely an academic exercise.
Regressivity is not a negative standard for courts to enforce. “Evolve a progressive system of taxation” is a directive to Congress. These provisions are placed in the Constitution as moral incentives to legislation, not as judicially enforceable rights.
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