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Unjustified Demand for Exactitude

(Article published in the Jul 20,2011 issue of Manila Standard Today) 

The rise to prominence of criminal action as a means of raising tax collections, under the RATE (“Run After Tax Evaders”) program that was started in 2005 and which is being revitalized, with great vigor, by Bureau of Internal Revenue Commissioner Kim Henares, sets on a collision course, now more than ever, two sets of fundamental principles of constitutional, statutory, and judge-made law. 

 On the one hand and usually invoked by the taxpayer is the Due Process clause, now enshrined in Article III, Section 1 of the present Constitution but actually operating in the country as early as the 1900s when the Americans took over the islands from Spain.  Taxation is the taking by the state of property from the taxpayer and therefore needs to respect the protective restrictions of “due process of law.”

On the other hand and usually invoked by the tax collector is the so-called “life blood theory” which has been judicially articulated in Philippine jurisprudence just as early, at about the same time that the American justices who were sitting as final interpreters of Philippine law were expounding on Due Process and its implications on taxing power.  That theory maintains that Taxation is necessary for the existence of government and therefore needs to be upheld by the courts unless blatantly wrong.

Just which one of these two principles holds the upper hand in any one particular era (or even in any one particular decided case) though interesting to observe, as interesting as watching two women mud wrestlers grapple for supremacy in such a slippery milieu, is not my concern at the moment; I leave that exercise to younger and more sanguine men.


What I would like to mull over for now is the practical impact of these two opposing principles on current tax pleading and practice in the instance when, under the RATE, a criminal action is filed by the Bureau of Internal Revenue.

More specifically, in cases where criminal action for tax evasion is brought ahead of both the administrative process and of the filing of the civil action---Section 205 of the Tax Code (the National Internal Revenue Code) provides that “either of…” (a) the administrative remedies, namely distraint of personal property and levy upon real property, and (b) civil or criminal action, “...or both simultaneously may be pursued in the discretion of the authorities charged with the collection of such taxes…”—just how precise must the amount of civil liability of the erring taxpayer be stated in the Information?

In other words, should the Information (which is the initiatory document that starts the criminal court process) state the exact amount due from the accused? Or is it sufficient to indicate in the Information just the ballpark figure of what is due to the Government by way of taxes with the understanding that the exact amount will be proven during the trial?

Some would argue that the exact amount of tax due ought to be stated in the Information, in pesos and centavos. They reason that it is by the mechanism of the Information that the accused is made aware, formally and in compliance with his prerogative under Section 14(2) of the Bill of Rights, of “the nature and cause of the accusation against him.”  That right is not served if the accused is not told exactly, at the time he pleads guilty or not guilty, how much is being demanded of him. 

The “exact statement” school of thought further point out that the Tax Code itself suggests a certain amount of finality in the amount that is to be demanded from the accused.  Section 205, third paragraph, provides that “the judgment in the criminal case shall not only impose the penalty but shall also order payment of the taxes subject of the criminal case as finally decided by the Commissioner.” 

En contra, others maintain (and I agree with them) that the final amount of taxes due need not be stated in the Information to the last centavo.  Several reasons support that view. 

For instance, a careful reading of Section 205, third paragraph, immediately reveals that finality of the amount due is not required in the Information, which begins trial, but in the Judgment, which ends it.  Section 205 is thus not authority for what ought to be stated in the Information; it is limited to what needs to be stated in the judgment.

We, the en contras, also argue that “the nature and cause of the accusation” of which the Constitution requires the accused to be informed does not, by itself, connote exactitude.  The phrase “nature and cause” is descriptive and not quantitative:  negatively it is means sufficient to prevent the accused from being taken by surprise; positively it means definite enough to enable the accused to prepare for his defense.  As stated in Section 9 of Rule 110 of the Rules of Court, it merely demands such “in terms sufficient to enable a person of common understanding to know what offense is being charged as well as its qualifying and aggravating circumstances and for the court to pronounce judgment.”

That interpretation is supported by established criminal law practice and procedure.  Article 100 of the Revised Penal Code states that “every person criminally liable for a felony shall also be civilly liable.”  For that reason, Section 1 of Rule 111 of the Rules of Court provides that “When a criminal action is instituted, the civil action for the recovery of civil liability arising from the offense charged shall be deemed instituted with the criminal action unless the offended party waives the civil action, reserves the right to institute it separately or institutes the civil action prior to the criminal action.

These provisions translate uniformly, in cases where the civil action is instituted with the criminal, into wording in the Information along the lines of “…resulting in damage to [offended party] in the amount of Php_____, more or less.”

This uniform use of the operative phrase “more or less,” long standing in criminal law and procedure which is in pari materia with the Tax Code on the point of joint institution of both criminal and civil action in one case, demonstrates the accepted validity of a mere statement of a ballpark figure in the Information, whether for a common crime or for a tax evasion case seeking penal sanction as well as civil collection from an erring taxpayer.  “More or less” or other words to the same effect are sufficient alerts to the accused that in the trial the exact amount is to be threshed out.  That is all that, even Due Process requires.

In subsequent pieces, this corner will deal with how the “exact statement” school of thought, when pushed to its logical implications, would leads to unwanted consequences.