b.

Prohibition against delegation of taxing power

exception
i. Delegation to LGUs
Section 5. Article X. 1987 Constitution.
Each local government unit shall have the power to create its own sources of revenues and
to levy taxes, fees and charges subject to such guidelines and limitations as the Congress
may provide, consistent with the basic policy of local autonomy. Such taxes, fees, and
charges shall accrue exclusively to the local governments.

ii. Delegation to the President
Section 28 (2). Article VI. 1987 Constitution
The Congress may, by law, authorize the President to fix within specified limits, and subject
to such limitations and restrictions as it may impose, tariff rates, import and export quotas,
tonnage and wharfage dues, and other duties or imposts within the framework of the
national development program of the Government.

Section 401, Tariff and Custom Code
Sec. 401. Flexible Clause.
a. In the interest of national economy, general welfare and/or national security, and subject
to the limitations herein prescribed, the President, upon recommendation of the National
Economic and Development Authority (hereinafter referred to as NEDA), is hereby
empowered: (1) to increase, reduce or remove existing protective rates of import duty
(including any necessary change in classification). The existing rates may be increased or
decreased to any level, in one or several stages but in no case shall the increased rate of
import duty be higher than a maximum of one hundred (100) per cent ad valorem; (2) to
establish import quota or to ban imports of any commodity, as may be necessary; and (3) to
impose an additional duty on all imports not exceeding ten (10%) per cent ad valorem
whenever necessary; Provided, That upon periodic investigations by the Tariff Commission
and recommendation of the NEDA, the President may cause a gradual reduction of
protection levels granted in Section One Hundred and Four of this Code, including those
subsequently granted pursuant to this section.

b. Before any recommendation is submitted to the President by the NEDA pursuant to the
provisions of this section, except in the imposition of an additional duty not exceeding ten
(10) per cent ad valorem, the Commission shall conduct an investigation in the course of
which they shall hold public hearings wherein interested parties shall be afforded reasonable
opportunity to be present, produce evidence and to be heard. The Commission shall also
hear the views and recommendations of any government office, agency or instrumentality
concerned. The Commission shall submit their findings and recommendations to the NEDA
within thirty (30) days after the termination of the public hearings.
c. The power of the President to increase or decrease rates of import duty within the limits
fixed in subsection "a" shall include the authority to modify the form of duty. In modifying
the form of duty, the corresponding ad valorem or specific equivalents of the duty with
respect to imports from the principal competing foreign country for the most recent
representative period shall be used as bases.
d. The Commissioner of Customs shall regularly furnish the Commission a copy of all customs
import entries as filed in the Bureau of Customs. The Commission or its duly authorized
representatives shall have access to, and the right to copy all liquidated customs import
entries and other documents appended thereto as finally filed in the Commission on Audit.
e. The NEDA shall promulgate rules and regulations necessary to carry out the provisions of
this section.
f. Any Order issued by the President pursuant to the provisions of this section shall take
effect thirty (3) days after promulgation, except in the imposition of additional duty not
exceeding ten (10) per cent ad valorem which shall take effect at the discretion of the
President.

iii. Delegation of administrative agencies

c. Exemption of government entities, agencies and instrumentalities
EXECUTIVE ORDER NO. 93 December 17, 1986
WITHDRAWING ALL TAX AND DUTY INCENTIVES, SUBJECT TO CERTAIN EXCEPTIONS,
EXPANDING THE POWERS OF THE FISCAL INCENTIVES REVIEW BOARD AND FOR OTHER
PURPOSES
WHEREAS, Presidential Decree Nos. 1931 and 1955 issued on June 11, 1984 and October 14,
1984, respectively, withdrew the tax and duty exemption privileges, including the
preferential tax treatment of government and private entities with certain exceptions, in
order that the requirements of national economic development, in terms of fiscal and other
resources, may be met more adequately;
WHEREAS, both issuances provided for a review by the Fiscal Incentives Review Board (FIRB)
of petitions initiated by affected entities for restoration of withdrawn tax and duty
exemption privileges either on a total or partial basis;
WHEREAS, a number of affected entities, government and private were able to get back
their tax and duty exemption privileges through the review mechanism implemented by the
Fiscal Incentives Review Board (FIRB);
WHEREAS, in addition to those whose tax and duty exemption privileges were restored by
the Fiscal Incentives Review Board (FIRB), a number of affected entities, government and
private, had their tax and duty exemption privileges restored granted by Presidential action
without benefit of review by the Fiscal Incentives Review Board (FIRB);
WHEREAS, the continued enjoyment of these tax and duty exemption privileges has resulted
in serious tax base erosion and considerable distortions in the tax treatment of similarly
situated entities;
WHEREAS, these privileges have become convenient opportunities for tax manipulation or
avoidance, especially in case of interrelated entities;
WHEREAS, the availability of such privileges makes more difficult the attainment of the
overall program for national economic development, considering government's fiscal
exigencies;
WHEREAS, private entities whose tax and duty exemption privileges are to be withdrawn
may still remain competitive by improving on their operational specialty and competence,
rather than by relying on fiscal incentives which create distortions in the overall pricing and
market systems;
WHEREAS, assistance to government and private entities may be better provided where
necessary by explicit subsidy and budgetary support rather than tax and duty exemption
privileges if only to improve the fiscal monitoring aspects of government operations;
NOW, THEREFORE, I, CORAZON C. AQUINO, President of the Philippines, do hereby order:
Sec. 1. The provisions of any general or special law to the contrary notwithstanding, all tax
and duty incentives granted to government and private entities are hereby withdrawn,
except:
a) those covered by the non-impairment clause of the Constitution;
b) those conferred by effective international agreements to which the Government of the
Republic of the Philippines is a signatory;
c) those enjoyed by enterprises registered with:
(i) the Board of Investments pursuant to Presidential Decree No. 1789, as amended;
(ii) the Export Processing Zone Authority, pursuant to Presidential Decree No. 66, as
amended;
(iii) the Philippine Veterans Investment Development Corporation Industrial Authority
pursuant to Presidential Decree No. 538, as amended;
d) those enjoyed by the copper mining industry pursuant to the provisions of Letter of
Instruction No. 1416;
e) those conferred under the four basic codes namely:
(i) the Tariff and Customs Code, as amended;
(ii) the National Internal Revenue Code, as amended;
(iii) the Local Tax Code, as amended;
(iv) the Real Property Tax Code, as amended;
f) those approved by the President upon the recommendation of the Fiscal Incentives
Review Board.
Sec. 2. The Fiscal Incentives Review Board created under Presidential Decree No. 776, as
amended, is hereby authorized to:
a) restore tax and/or duty exemptions withdrawn hereunder in whole or in part;
b) revise the scope and average of tax and/or duty exemption that may be restored;
c) impose conditions for the restoration of tax and/or duty exemption;
d) prescribe the date or period of effectivity of the restoration of tax and/or duty exemption;
e) formulate and submit to the President for approval, a complete system for the grant of
subsidies to deserving beneficiaries, in lieu of or in combination with the restoration of tax
and duty exemptions or preferential treatment in taxation, indicating the source of
therefore, eligible beneficiaries and the terms and conditions for the grant thereof taking
into consideration the international commitments of the Philippines and the necessary
precautions such that the grant of subsidies does not become the basis for countervailing
action.
Sec. 3. In the discharge of its authority hereunder the Fiscal Incentives Review Board shall
take into account any or all of the following considerations:
a) the effect on relative price levels;
b) relative contribution of the beneficiary to the revenue generation effort;
c) nature of the activity the beneficiary is engaged; and
d) in general, the greater national interest to be served.
Sec. 4. The Ministry of Finance shall promulgate the necessary rules and regulations and
shall establish and maintain a Secretariat for the Fiscal Incentives Review Board to
effectively implement the provisions of this Executive Order.
Sec. 5. All laws, orders, issuances, rules and regulations or parts thereof inconsistent with
this Executive Order are hereby repealed or modified accordingly.
Sec. 6. This Executive Order shall take effect upon the promulgation of the rules and
regulations stated in Section 4.
Done in the City of Manila, this 17th day of December in the year of Our Lord, nineteen
hundred and eighty-six.

PRESIDENTIAL DECREE NO. 1931
DIRECTING THE RATIONALIZATION OF DUTY AND TAX EXEMPTION PRIVILEGES GRANTED
TO GOVERNMENT-OWNED OR-CONTROLLED CORPORATIONS AND ALL OTHER UNITS OF
GOVERNMENT
WHEREAS, government-owned or controlled corporations as well as entities performing
quasi-governmental functions are still enjoying exemptions from duties, taxes, fees, imposts
and other charges despite the fact that they are able to earn profits or pass on these duties
and taxes to other parties with whom they transact business;
WHEREAS, these duty and tax exemption privileges have resulted in serious tax base erosion
and distortions in the tax treatment of similarly situated enterprises;
WHEREAS, such privileges make more difficult the accomplishment of the overall program
for economic development in general and compete with private industries to a great extent,
thus disturbing the equity feature of the tax system;
WHEREAS, Presidential Decree No. 1177 has already expressly repealed the grant of tax
privileges to any government-owned or controlled corporation and all other units of
government; and
WHEREAS, there is need for government-owned or controlled corporations and all other
units of government enjoying tax privileges to share in the requirements of development,
fiscal or otherwise, by paying the duties, taxes and other charges due from them;
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Republic of the Philippines,
by virtue of the powers vested in me by the Constitution, do hereby order and decree:
SECTION 1. The provisions of special or general law to the contrary notwithstanding, all
exemptions from the payment of duties, taxes, fees, imposts and other charges heretofore
granted in favor of government-owned or controlled corporations including their
subsidiaries, are hereby withdrawn.
SEC 2. The President of the Philippines and/or the Minister of Finance, upon the
recommendation of the Fiscal Incentives Review Board created under Presidential Decree
No. 776, is hereby empowered to restore, partially or totally, the exemptions withdrawn by
Section 1 above, or otherwise revise the scope and coverage of any applicable tax and duty,
taking into account, among others, any or all of the following:
1) The effect on the relative price levels;
2) The relative contribution of the corporation to the revenue generation effort;
3) The nature of the activity in which the corporation is engaged in; or
4) In general, the greater national interest to be served.
SEC 3. The Ministry of Finance shall promulgate the necessary rules and regulations to
effectively implement the provisions of this Decree.
SEC 4. The provisions of this Decree are hereby declared to be separable, and in the event
one or more of such provisions are declared unconstitutional, the validity of the other
provisions shall not be affected.
SEC 5. The provisions of Presidential Decree No. 1177 as well as all other laws, decrees,
executive orders, administrative orders, rules, regulations or parts thereof which are
inconsistent with this Decree are hereby repealed, amended or modified accordingly.
SEC 6. This Decree shall take effect immediately after promulgation.
Done in the City of Manila, this 11th day of June in the Year of Our Lord, Nineteen Hundred
and Eighty-Four.
(Sgd.) FERDINAND E. MARCOS
By the President:
(Sgd.) JUAN C. TUVERA
Presidential Executive Assistant
d. International comity
Article II. 1987 Constitution
DECLARATION OF PRINCIPLES AND STATE POLICIES
Section 2.
The Philippines renounces war as an instrument of national policy, adopts the generally accepted
principles of international law as part of the law of the land and adheres to the policy of peace,
equality, justice, freedom, cooperation, and amity with all nations.