Republic of the Philippines
G.R. No. L-78780 July 23, 1987
DAVID G. NITAFAN, WENCESLAO M. POLO, and MAXIMO A. SAVELLANO, JR., petitioners,
COMMISSIONER OF INTERNAL REVENUE and THE FINANCIAL OFFICER, SUPREME COURT OF THE PHILIPPINES, respondents., ,
R E S O L U T I O N
Petitioners, the duly appointed and qualified Judges presiding over Branches 52, 19 and 53, respectively, of the Regional Trial Court, National Capital Judicial Region, all with stations in Manila, seek to prohibit and/or perpetually enjoin respondents, the Commissioner of Internal Revenue and the Financial Officer of the Supreme Court, from making any deduction of withholding taxes from their salaries.
In a nutshell, they submit that “any tax withheld from their emoluments or compensation as judicial officers constitutes a decrease or diminution of their salaries, contrary to the provision of Section 10, Article VIII of the 1987 Constitution mandating that ‘(d)uring their continuance in office, their salary shall not be decreased,’ even as it is anathema to the ideal of an independent judiciary envisioned in and by said Constitution.”
It may be pointed out that, early on, the Court had dealt with the matter administratively in response to representations that the Court direct its Finance Officer to discontinue the withholding of taxes from salaries of members of the Bench. Thus, on June 4, 1987, the Court en banc had reaffirmed the Chief Justice’s directive as follows:
“RE: Question of exemption from income taxation. The Court REAFFIRMED the Chief Justice’s previous and standing directive to the Fiscal Management and Budget Office of this Court to continue with the deduction of the withholding taxes from the salaries of the Justices of the Supreme Court as well as from the salaries of all other members of the judiciary.”
That should have resolved the question. However, with the filing of this petition, the Court has deemed it best to settle the legal issue raised through this judicial pronouncement. As will be shown hereinafter, the clear intent of the Constitutional Commission was to delete the proposed express grant of exemption from payment of income tax to members of the Judiciary, so as to “give substance to equality among the three branches of Government” in the words of Commissioner Rigos. In the course of the deliberations, it was further expressly made clear, specially with regard to Commissioner Joaquin F. Bernas’ accepted amendment to the amendment of Commissioner Rigos, that the salaries of members of the Judiciary would be subject to the general income tax applied to all taxpayers.
This intent was somehow and inadvertently not clearly set forth in the final text of the Constitution as approved and ratified in February, 1987 (infra, pp. 7-8). Although the intent may have been obscured by the failure to include in the General Provisions a proscription against exemption of any public officer or employee, including constitutional officers, from payment of income tax, the Court since then has authorized the continuation of the deduction of the withholding tax from the salaries of the members of the Supreme Court, as well as from the salaries of all other members of the Judiciary. The Court hereby makes of record that it had then discarded the ruling in Perfecto vs. Meer and Endencia vs. David, infra, that declared the salaries of members of the Judiciary exempt from payment of the income tax and considered such payment as a diminution of their salaries during their continuance in office. The Court hereby reiterates that the salaries of Justices and Judges are properly subject to a general income tax law applicable to all income earners and that payment of such income tax by Justices and Judges does not fall within the constitutional protection against decrease of their salaries during their continuance in office.
A comparison of the Constitutional provisions involved is called for. The 1935 Constitution provided:
“. . . (The members of the Supreme Court and all judges of inferior courts) shall receive such compensation as may be fixed by law, which shall not be diminished during their continuance in office . . .” 1
Under the 1973 Constitution, the same provision read:
“The salary of the Chief Justice and of the Associate Justices of the Supreme Court, and of judges of inferior courts shall be fixed by law, which shall not be decreased during their continuance in office . . .” 2
And in respect of income tax exemption, another provision in the same 1973 Constitution specifically stipulated:
“No salary or any form of emolument of any public officer or employee, including constitutional officers, shall be exempt from payment of income tax.” 3
The provision in the 1987 Constitution, which petitioners rely on, reads:
“The salary of the Chief Justice and of the Associate Justices of the Supreme Court, and of judges of lower courts shall be fixed by law. During their continuance in office, their salary shall not be decreased.”.4