Permissible delegation of tax powers

The general rule is delegated power cannot be further delegated. Potestas delegata non delegari potest. Tax is a power inherently legislative in character; hence, it cannot be delegation.

By way of exception, there are three (3) instances of permissible delegation of tax powers. Note, however, that it is not altogether accurate to call them "delegation" because, for example, the Constitution directly gives local government units the power to tax. The Local Goverment Code (LGC) merely regulates this power.

[1] Delegation to local government units. The State shall ensure the autonomy of local governments. (Article II)

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. (Article X)

Local government units shall have a just share, as determined by law, in the national taxes which shall be automatically released to them. (Article X)

Local governments shall be entitled to an equitable share in the proceeds of the utilization and development of the national wealth within their respective areas, in the manner provided by law, including sharing the same with the inhabitants by way of direct benefits. (Article X)

[2] Authority of the President to fix rates. 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. (Article VI)

This is a real instance of delegation. Remember that Congress cannot delegate the fixing of the rate of taxes but, here, the Constitution expressly allows it to do so.

[3] Delegation to administrative agencies. Delegation to administrative agencies may be in the form of quasi-legislative or quasi-judicial powers. In either case, the rule on sufficient standards and completeness must be complied with.

Usually, in tax cases, the power delegated is the authority to promulgate implementing rules and regulations. These are called revenue regulations. For example:

[a] Authority of the Secretary of Finance to promulgate the necessary rules and regulations for the effective enforcement of the provisions of the law. (Sec. 244, R.A.8424)

[b] The Secretary of Finance may, upon the recommendation of the Commissioner, require the withholding of a tax on the items of income payable. (Sec. 57, R.A. 8424)