TIO vs. VIDEOGRAM REGULATORY BOARD

Citation: 151 SCRA 208; G.R. No. L-75697; June 18, 1987

Ponente: Melencio-Herrera, J.

DOCTRINES:

Validity of law; title of bill – The Constitutional requirement that "every bill shall embrace only one subject which shall be expressed in the title thereof" is sufficiently complied with if the title be comprehensive enough to include the general purpose which a statute seeks to achieve. It is not necessary that the title express each and every end that the statute wishes to accomplish. The requirement is satisfied if all the parts of the statute are related, and are germane to the subject matter expressed in the title, or as long as they are not inconsistent with or foreign to the general subject and title.

Taxation; security against oppressive taxation – The power to impose taxes is one so unlimited in force and so searching in extent, that the courts scarcely venture to declare that it is subject to any restrictions whatever, except such as rest in the discretion of the authority which exercises it. In imposing a tax, the legislature acts upon its constituents. This is, in general, a sufficient security against erroneous and oppressive taxation.

Taxation as a revenue and regulatory measure – The tax imposed by the DECREE is not only a regulatory but also a revenue measure prompted by the realization that earnings of videogram establishments of around P600 million per annum have not been subjected to tax, thereby depriving the Government of an additional source of revenue. . . . The levy of the 30% tax is for a public purpose. It was imposed primarily to answer the need for regulating the video industry, particularly because of the rampant film piracy, the flagrant violation of intellectual property rights, and the proliferation of pornographic video tapes. And while it was also an objective of the DECREE to protect the movie industry, the tax remains a valid imposition.

Undue delegation of legislative power – The grant in Section 11 of the DECREE of authority to the BOARD to "solicit the direct assistance of other agencies and units of the government and deputize, for a fixed and limited period, the heads or personnel of such agencies and units to perform enforcement functions for the Board" is not a delegation of the power to legislate but merely a conferment of authority or discretion as to its execution, enforcement, and implementation. "The true distinction is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring authority or discretion as to its execution to be exercised under and in pursuance of the law. The first cannot be done; to the latter, no valid objection can be made." Besides, in the very language of the decree, the authority of the BOARD to solicit such assistance is for a "fixed and limited period" with the deputized agencies concerned being "subject to the direction and control of the BOARD." That the grant of such authority might be the source of graft and corruption would not stigmatize the DECREE as unconstitutional. Should the eventuality occur, the aggrieved parties will not be without adequate remedy in law.

FACTS:

Valentin Tio is a videogram establishment operator adversely affected by Presidential Decree No. 1987 entitled "An Act Creating the Videogram Regulatory Board".

P.D. No. 1987 provides for the levy of a tax over each cassette sold (Sec. 134) and a 30% tax on the gross receipts of a videogram establishment, payable to the local government (Sec. 10). The rationale for this decree is set forth in its preambulatory/whereas clauses to wit:

1. WHEREAS, the proliferation and unregulated circulation of videograms including, among others, videotapes, discs, cassettes ... have greatly prejudiced the operations of moviehouses and theaters, and have caused a sharp decline in theatrical attendance by at least forty percent (40%) and a tremendous drop in the collection of [taxes] thereby resulting in substantial losses estimated at P450 Million annually in government revenues;

2. WHEREAS, videogram(s) establishments collectively earn around P600 Million per annum from rentals, sales and disposition of videograms, and such earnings have not been subjected to tax, thereby depriving the Government of approximately P180 Million in taxes each year;

3. WHEREAS, the unregulated activities of videogram establishments have also affected the viability of the movie industry, ...;

5. WHEREAS, proper taxation of the activities of videogram establishments will not only alleviate the dire financial condition of the movie industry ..., but also provide an additional source of revenue for the Government, and at the same time rationalize the heretofore uncontrolled distribution of videograms;

6. WHEREAS, the rampant and unregulated showing of obscene videogram features constitutes a clear and present danger to the moral and spiritual well-being of the youth [READ: PORN], and impairs the mandate of the Constitution for the State to support the rearing of the youth for civic efficiency and the development of moral character and promote their physical, intellectual, and social well-being;

8. WHEREAS, in the face of these grave emergencies corroding the moral values of the people [AGAIN, READ: PORN] and betraying the national economic recovery program, bold emergency measures must be adopted with dispatch; (emphasis supplied and certain passages omitted)

ISSUES:

The petioner, among others, raised the following issues:

1. Whether or not the imposition of the 30% tax is a rider and the same is not germane to the subject matter of the law.

2. Whether or not there is undue delegation of power and authority; and

HELD:

1. No, the tax is not a rider and is germane to the purpose and subject of the law.

The Constitutional requirement that "every bill shall embrace only one subject which shall be expressed in the title thereof" is sufficiently complied with if the title be comprehensive enough to include the general purpose which a statute seeks to achieve. It is not necessary that the title express each and every end that the statute wishes to accomplish. The requirement is satisfied if all the parts of the statute are related, and are germane to the subject matter expressed in the title, or as long as they are not inconsistent with or foreign to the general subject and title.

Reading section 10 of P.D. No. 1987 closely, one can see that the foregoing provision is allied and germane to, and is reasonably necessary for the accomplishment of, the general object of the law, which is the regulation of the video industry through the Videogram Regulatory Board as expressed in its title. The tax provision is not inconsistent with, nor foreign to that general subject and title. As a tool for regulation it is simply one of the regulatory and control mechanisms scattered throughout the decree.

Aside from revenue collection, tax laws may also be enacted for the purpose of regulating an activity. At the same time, the videogram industry is also an untapped source of revenue which the government may validly tax. All of this is evident from preambulatory clauses nos. 2, 5, 6 and 8, quoted in part above.

The levy of the 30% tax is also for a public purpose. It was imposed primarily to answer the need for regulating the video industry, particularly because of the rampant film piracy, the flagrant violation of intellectual property rights, and the proliferation of pornographic video tapes. And while it was also an objective of the law to protect the movie industry, the tax remains a valid imposition.

2. No. There was no undue delegation of law making authority.

Petitioner was concerned that Section 11 of P.D. No. 1987 stating that the videogram board (Board) has authority to "solicit the direct assistance of other agencies and units of the government and deputize, for a fixed and limited period, the heads or personnel of such agencies and units to perform enforcement functions for the Board" is an undue delegation of legislative power.

This is not a delegation of the power to legislate but merely a conferment of authority or discretion as to its execution, enforcement, and implementation. "The true distinction is between the delegation of power to make the law, which necessarily involves a discretion as to what it shall be, and conferring authority or discretion as to its execution to be exercised under and in pursuance of the law. The first cannot be done; to the latter, no valid objection can be made." Besides, in the very language of the decree, the authority of the Board to solicit such assistance is for a "fixed and limited period" with the deputized agencies concerned being "subject to the direction and control of the Board."

The petition was DISMISSED.