Facts:
Congress enacted Republic Act 7167 amending the NIRC (adjusting the basic and additional exemptions allowable to individuals for income tax purposes to the poverty threshold level). The said Act was signed and approved by the President on 19 December 1991 and published on 14 January 1992 in "Malaya" a newspaper of general circulation. On 26 December 1991, the CIR promulgated Revenue Regulations No. 1-92 stating that the regulations shall take effect on compensation income from January 1, 1992. Petitioners filed a petition for mandamus to compel the CIR to implement RA 7167 in regard to income earned or received in 1991, and prohibition to enjoin the CIR from implementing the revenue regulation.
Issue:
Assuming that Rep. Act 7167 took effect on 30 January 1992 (15 days after its publication in “Malaya”), whether or not the said law nonetheless covers or applies to compensation income earned or received during calendar year 1991.
Ruling:
Yes. The Court is of the considered view that Rep. Act 7167 should cover or extend to compensation income earned or received during calendar year 1991. Sec. 29, par. [L], Item No. 4 of the National Internal Revenue Code, as amended, provides:
Upon the recommendation of the Secretary of Finance, the President shall automatically adjust not more often than once every three years, the personal and additional exemptions taking into account, among others, the movement in consumer price indices, levels of minimum wages, and bare subsistence levels.
The exemptions were last adjusted in 1986. The president could have adjusted it in 1989 but did not do so. The poverty threshold level refers to the level at the time Rep. Act 7167 was enacted by Congress. The Act is a social legislation intended to alleviate in part the present economic plight of the lower income taxpayers.
Rep. Act 7167 says that the increased personal exemptions shall be available after the law shall have become effective. These exemptions are available upon the filing of personal income tax returns, done not later than the 15th day of April after the end of a calendar year. Thus, under Rep. Act 7167, which became effective, on 30 January 1992, the increased exemptions are literally available on or before 15 April 1992 [though not before 30 January 1992]. But these increased exemptions can be available on 15 April 1992 only in respect of compensation income earned or received during the calendar year 1991. The personal exemptions as increased by Rep. Act 7167 are not available in respect of compensation income received during the 1990 calendar year; the tax due in respect of said income had already accrued, and been presumably paid (The law does not state retroactive application). The personal exemptions as increased by Rep. Act 7167 cannot be regarded as available as to compensation income received during 1992 because it would in effect postpone the availability of the increased exemptions to 1 January-15 April 1993. The implementing regulations collide with Section 3 of Rep. Act 7167 which states that the statute "shall take effect upon its approval”. The revenue regulation should take effect on compensation income earned or received from 1 January 1991. Since this decision is promulgated after 15 April 1992, those taxpayers who have already paid are entitled to refunds or credits.
Congress enacted Republic Act 7167 amending the NIRC (adjusting the basic and additional exemptions allowable to individuals for income tax purposes to the poverty threshold level). The said Act was signed and approved by the President on 19 December 1991 and published on 14 January 1992 in "Malaya" a newspaper of general circulation. On 26 December 1991, the CIR promulgated Revenue Regulations No. 1-92 stating that the regulations shall take effect on compensation income from January 1, 1992. Petitioners filed a petition for mandamus to compel the CIR to implement RA 7167 in regard to income earned or received in 1991, and prohibition to enjoin the CIR from implementing the revenue regulation.
Issue:
Assuming that Rep. Act 7167 took effect on 30 January 1992 (15 days after its publication in “Malaya”), whether or not the said law nonetheless covers or applies to compensation income earned or received during calendar year 1991.
Ruling:
Yes. The Court is of the considered view that Rep. Act 7167 should cover or extend to compensation income earned or received during calendar year 1991. Sec. 29, par. [L], Item No. 4 of the National Internal Revenue Code, as amended, provides:
Upon the recommendation of the Secretary of Finance, the President shall automatically adjust not more often than once every three years, the personal and additional exemptions taking into account, among others, the movement in consumer price indices, levels of minimum wages, and bare subsistence levels.
The exemptions were last adjusted in 1986. The president could have adjusted it in 1989 but did not do so. The poverty threshold level refers to the level at the time Rep. Act 7167 was enacted by Congress. The Act is a social legislation intended to alleviate in part the present economic plight of the lower income taxpayers.
Rep. Act 7167 says that the increased personal exemptions shall be available after the law shall have become effective. These exemptions are available upon the filing of personal income tax returns, done not later than the 15th day of April after the end of a calendar year. Thus, under Rep. Act 7167, which became effective, on 30 January 1992, the increased exemptions are literally available on or before 15 April 1992 [though not before 30 January 1992]. But these increased exemptions can be available on 15 April 1992 only in respect of compensation income earned or received during the calendar year 1991. The personal exemptions as increased by Rep. Act 7167 are not available in respect of compensation income received during the 1990 calendar year; the tax due in respect of said income had already accrued, and been presumably paid (The law does not state retroactive application). The personal exemptions as increased by Rep. Act 7167 cannot be regarded as available as to compensation income received during 1992 because it would in effect postpone the availability of the increased exemptions to 1 January-15 April 1993. The implementing regulations collide with Section 3 of Rep. Act 7167 which states that the statute "shall take effect upon its approval”. The revenue regulation should take effect on compensation income earned or received from 1 January 1991. Since this decision is promulgated after 15 April 1992, those taxpayers who have already paid are entitled to refunds or credits.
Posts
No comments:
Post a Comment