2. Issuance of revenue regulations by administrative agency

Sec. 244 of NIRC

- The Secretary of Finance, upon recommendation of the Commissioner, shall promulgate all needful rules and regulations for the effective enforcement of the provisions of this Code.

Director of Forestry vs. Muñoz ( 23 SCRA 1183)

- Administrative agencies are clothed with rule-making powers because the lawmaking body finds it impracticable, if not impossible, to anticipate and provide for the multifarious and complex situations that may be encountered in enforcing the law. All is required is that the regulation should be germane to the objects and purposes of law and that it should conform to the standards that the law subscribe.

Misamis Oriental Association of Coco Traders, Inc. vs. Department of Finance (238 SCRA 63)

Facts:

Petitioner Misamis Oriental Association of Coco Traders, Inc. is a domestic corporation engaged in the buying and selling of copra in Misamis Oriental. Copra was classified as agricultural food product under sec. 103(b) of the National Internal Revenue Code; copra is exempt from VAT at all stages of production or distribution. Revenue Memorandum Circular 47-91 on June 11, 1991, which implemented VAT Ruling 190-90, was issued classifying copra as agricultural non-food product and not exempt from VAT.

Commissioner of Internal Revenue issued the circular in question, classifying copra as an agricultural non-food product and declaring it "exempt from VAT only if the sale is made by the primary producer pursuant to Section 1 copra 03(a) of the Tax Code, as amended.

Misamis Oriental Association of Coco Traders, Inc. challenged RMC No. 47-91.On the other hand, the respondents argue that the opinion of the BIR, as the government agency charged with the implementation and interpretation of the tax laws, is entitled to great respect.

Issue: whether or not RMC No. 47-91 is valid.

Resolution:

Yes. The government agency charged with the enforcement of the law, the opinion of the Commissioner of Internal Revenue, in the absence of any showing that it is plainly wrong, is entitled to great weight. Indeed, the ruling was made by the Commissioner of Internal Revenue in the exercise of his power under sec.245 of the NIRC to "make rulings or opinions in connection with the implementation of the provisions of internal revenue laws, including rulings on the classification of articles for sales tax and similar purposes."

Commissioner vs. Bishop of the Missionary District of the Phil. Islands (14 SCRA 991)

- It is settled law that regulations promulgated by authority of law and not in conflict with the statute are binding upon everyone falling under any of their provisions.

Regulations have the force and effect of law, whenever they are found to be in consonance and in harmony with the general purposes and objects of the law, as if the regulations had been written in the original law itself. (Interprovincial Autobus Co. vs. Collector, 98 Phil 290)