Upon seeing the global popularity of Korean culture, the President of the Philippines wanted to export Philippine culture as well. Thus, he met with both the Secretary of Tourism and the Chairperson of the National Commission for Culture and the Arts to come up with a plan to make Philippine culture the next big thing. After a series of meetings with industry stakeholders and with a resolution of support from Congress, the President issued a presidential proclamation granting tax exemptions to members of the Philippine entertainment and culinary industries who export 70% of their products and services. The proclamation also grants additional tax incentives (such as an income tax holiday) to artists, directors, chefs, studios (both TV and music), and authors who gain international acclaim. Is the proclamation constitutional? Explain your answer.
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No, the presidential proclamation is not constitutional. Under Article VI, Section 28(4) of the 1987 Constitution, no law granting any tax exemption shall be passed without the concurrence of a majority of all the members
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Quick check
Under Article VI, Section 28(4) of the 1987 Constitution, what vote is required in Congress to pass a law granting a tax exemption?
Article VI, Section 28(4) requires the concurrence of a majority of all the members of Congress to pass a tax exemption law.
Why is a presidential proclamation granting tax exemptions based on a congressional resolution unconstitutional?
A congressional resolution is not a statute and cannot satisfy the constitutional requirement of a law passed by Congress.
In whom is the power to grant tax exemptions inherently lodged under the 1987 Philippine Constitution?
The power to grant tax exemptions is inherently legislative and lodged exclusively in Congress.
What is the fundamental legal distinction between a statute and a congressional resolution regarding taxation?
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What constitutional principle is violated when the President grants tax exemptions by executive proclamation without a law?
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1. Tax Exemption Power
Under Article VI, Section 28(4) of the 1987 Constitution, the power to grant tax exemptions is inherently legislative and lodged exclusively in Congress. No law granting any tax exemption can be validly passed without the concurrence of a majority of all members of Congress. Because taxation is a high prerogative of sovereignty, any exemption from tax obligations must emanate strictly from an act of Congress. Executive proclamations, administrative orders, or executive issuances cannot grant tax exemptions without express statutory delegation.
2. Congressional Resolution Limits
A congressional resolution is a mere expression of the opinion, sentiment, or recommendation of one or both houses of Congress. Unlike a statute, a joint or concurrent resolution does not undergo the constitutional lawmaking process requiring three readings on separate days and presidential approval. Consequently, a congressional resolution cannot substitute for a law passed by Congress to authorize or grant tax exemptions. Executive proclamations issued pursuant to a mere resolution of support remain unconstitutional exercises of non-delegated legislative power.
3. Separation of Powers
The principle of separation of powers allocates legislative power to Congress, executive power to the President, and judicial power to the Judiciary. The President's constitutional duty under Article VII is to faithfully execute the laws enacted by the Legislature, not to enact or modify tax statutes. Granting tax exemptions or income tax holidays via executive proclamation encroaches upon the exclusive domain of Congress, violating the constitutional division of powers and rendering the executive issuance void and unconstitutional.