Proposal to Customize the Community Tax Certificate as Alternative or Supplement to the Unified Multipurpose ID System

DOJ OPINION NO. 031 , s. 2007 June 8, 2007 Hon. Daniel F. Pabellon Assistant Director-General National Economic and Development Authority (NEDA) NEDA sa Pasig, Ortigas Center Pasig City Sir : This refers to your request for opinion on the legality of the proposal to customize the community tax certificate (CTC) as an alternative or a supplement to the Unified Multipurpose Identification (UM-ID) System. The request, it appears, was precipitated by the Memorandum from the Executive Secretary wherein the aforesaid proposal was referred to your Office "for study and recommendation." You state that the proposal provides for the conversion or customization of the CTC into an ID card type, which shall be UM-ID System compliant and renewable annually by the residents concerned; that the customization will be done by adopting the Common Reference Number (CRN) generated from the UM-ID System as the permanent CTC or cedula number for all Philippine residents required to pay the community tax; that the Executive Branch can act on the customization of the CTC since it is the Bureau of Internal Revenue (BIR) that prints the same; and that this strategy would strengthen and modernize the collection of the community tax and issuance of the CTC as provided for under Section 162 of the Local Government Code. Before we touch on the feasibility or non-feasibility of the proposal, it may be useful to examine the ruling of Supreme Court in the consolidated cases of Kilusang Mayo Uno, et al. vs. Director-General, National Economic Development Academy 1 wherein, sustaining the constitutionality of E.O. No. 420, 2 the Court, in part said, thus: A unified ID system for all these government entities 3 can be achieved in either of two ways. First, the heads of these existing government entities can enter into a memorandum of agreement making their systems uniform. If the government entities can individually adopt a format for their own ID pursuant to their regular functions under existing laws, they can also adopt by mutual agreement a uniform ID format , expectable if the uniform format will result in substantial savings, greater efficiency, and optimum compatibility. This is purely an administrative matter, and does not involve the exercise of legislative power. Second, the President may by executive or administrative order direct the government entities under the Executive department to adopt a uniform ID data collection and format . Section 17, Article VII of the 1987 Constitution provides that the "President shall have control of all executive departments, bureaus and offices." The same Section also mandates the President to "ensure that the laws be faithfully executed." . . . The President's constitutional power of control is self-executing and does not need any implementing legislation. xxx xxx xxx What require legislation are three aspects of a government maintained ID card system. First, when the implementation of an ID card system requires a special appropriation because there is no existing appropriation for such purpose. Second, when the ID card system is compulsory on all branches of government, including the independent constitutional commissions as well as compulsory on all citizens whether they have a use for the ID card or not. Third, when the ID card system requires the collection and recording of personal data beyond what is routinely or usually required for the purpose, such that the citizen's right is infringed. 4 The above-quoted pronouncement of the Highest Tribunal is clear and categorical. Government entities under the Executive department can adopt a unified ID system either through the execution of a memorandum of agreement among them making their systems or format uniform, or through the exercise by the President of his ordinance power 5 not only under his constitutionally ordained power of "control of all executive departments, bureaus and offices." 6 but also the mandate for him to ensure faithful execution of laws. 7 In both ways, prior legislative action is not necessary especially if the purpose of the adoption of a uniform ID data collection and ID format is to "reduce costs, increase efficiency, and in general, improve public service." The rationale is because there are presently a number of laws mandating the same, including the Budget Reform Decree of 1977, 8 the Administrative Code of 1987, 9 and the Code of Conduct and Ethical Standards for Public Officials and Employees. 10 This is, of course, apart from the express pronouncement of the Court that: "The act of issuing ID cards and collecting the necessary personal data for imprinting on the ID card does not require legislation." 11 Applied to the instant case, we have reservations on whether the CTC can be considered as a supplement or alternate to the uniform ID system mandated by E.O. No. 420, s. 2005 without the active participation of the local government units concerned and/or an implementing legislation. In the first place, it is not clear to us how the aforesaid proposal will supplement the UM-ID system mandated by E.O. No. 420. The said E.O. applies only to government entities that issue ID cards as part of their functions under existing laws. It is from the data in these IDs that a Common Reference Number (CRN) is generated. According to the proposal, this CRN will be adopted as permanent CTC number of a person who is required by law to have CTC. Note, however, that not all that secure CTC are government employees. This can lead to instances where a CTC does not have a CRN or the person without a CRN will not be issued a CTC. The former defeats the very idea of the instant proposal while the latter would spawn legal problems. Hence, on this issue alone, the proposal may not be workable. On the more substantive issue of whether the proposal can become an alternative to the UM-ID System, we are of the view that this cannot be done without the active participation of the local government units concerned. Under the Local Government Code, it is the local government units, specifically the cities and municipalities, that are empowered to levy community taxes and, consequently, to issue, through its treasurers, the certificates printed by the BIR. 12 It is worthy to stress that the community tax is a local tax which is well within the taxing power vested to the local sanggunians . Likewise, any agreement that may be entered into by the local governments relative to said proposal would necessitate a corresponding action from their local legislative bodies which, under the law, are the ones empowered "to impose a tax, fee or charge or generate revenue" for LGUs. 13 Absent authority from their respective legislative bodies, the local executives, to us, cannot enter into any agreement concerning the exercise of said power that will effectively bind the former. Nonetheless, assuming that an executive issuance can be used as a vehicle to implement the proposal, the implementation thereof should be guided by the earlier quoted Supreme Court ruling in order that it would not require legislation. A. The implementation of an ID card system should not require special appropriation It must be shown that the proposal can be implemented without the BIR or the LGUs incurring additional expenses. A quick look at the innovative features of the proposed CTC attached to the query would convince one that substantial amount of money is necessary not only to print but also to effectively implement the same. Since the costs of the printing and distribution thereof are chargeable to the LGUs, which are required to remit to the national government the reimbursement for said costs within a specified period, 14 LGUs must necessarily enact ordinance to cover the appropriation therefor. On the other hand, failure on the part of certain LGUs to provide appropriation for said purpose, or remit the required reimbursement, not to mention the absence of existing appropriation for the printing of the proposed CTC, would undeniably require in the passage of special appropriation by the national government to cover the printing cost, among others. B. The ID card system should not be compulsory on all branches of the government, including the independent constitutional commissions, as well as on all citizens whether they have a use for the ID card or not. Under the law, the existing CTC is required to be presented before: (a) a notary public, whenever one is a party to a document to be acknowledged before or notarized by the latter; (b) a public official before whom one takes an oath of office in government to which he is appointed or elected; (c) a public official who issues any public license, certificate or permit to him; (d) a public official who receives tax payments or fees from him; (e) a public official who pays money to him out of public funds; (f) a public official or employee with whom one transacts other official business; or (g) his personal or corporate employer from whom he receives any salary or wage. 15 Clearly, whether the proposed ID card shall be compulsory upon all citizens or not is secondary to the main issue which is its applicability especially because the purpose and use of the present CTC appear to apply compulsorily to all branches of the government. An ID card system implemented either as an alternative or supplement to the CTC could be construed as a wasteful expenditure of government funds unless of the same purpose and use as the present CTC which, as the Court said, requires the participation of Congress. C. The ID card system should not require the collection and recording of personal data beyond what is routinely or usually required for such purpose, such that the citizen's right to privacy is infringed. Under the Local Government code, it is the city or municipal treasurer who is authorized to collect the tax. 16 While the code allows the deputation of barangay treasurers for said purpose, 17 it is viewed that such action needs approval from the local legislative council considering the importance of a clear-cut guidelines in the data-gathering and recording to be undertaken by the barangay people if only to prevent what the Court said as possible infringement of the citizen's right to privacy. This is apart from the fact that under the law, 18 the barangay involved will be entitled to half or fifty percent (50%) of the proceeds from the community tax collected diminishing thereby the revenue intake of the city or municipality concerned. HaEcAC Indeed, we are of the view that without legislative action, local or national, implementation of the proposal to customize the present CTC either as an alternative or supplement to the UM-ID System, whether though executive issuance or MOA, can be assailed as contrary to both the law and the Constitution. Please be guided accordingly. Very truly yours, (SGD.) RAUL M. GONZALEZ Secretary Footnotes 1. G.R. Nos. 167798 & 167930, April 19, 2006, 487 SCRA 623. 2. Entitled, Requiring All Government Agencies and Government-Owned and Controlled Corporations to Streamline and Harmonize Their Identification (ID) Systems, and Authorizing for Such Purpose the Director-General, National Economic Development Authority to Implement the Same. 3. Under Section 2 of E.O. No. 420, they refer to "(a)ll government agencies and government-owned and controlled corporations issuing ID cards to their members or constituents", e.g., Government Service Insurance System, Social Security System, Philippine Health Insurance Corporation, the Mayor's Office under R.A. No. 7432 (Senior Citizens Act), as amended, Land Transportation Office, and Professional Regulation Commission. 4. Op. Cit., pp. 645, 649-650; stress supplied. 5. Chapter 2, Title I, Book III, 1987 Administrative Code (E.O. No. 292). 6. Section 17, Article VII, 1987 Constitution. 7. Ibid . 8. Presidential Decree No. 1177, Section 54. 9. Executive Order No. 292, Section 48, Chapter 5, Book VI.. 10. Republic Act No. 6713, Section 4 (A) (a). 11. Kilusang Mayo Uno vs. Director-General, National Economic Development Authority , op. cit., p. 649. 12. Section 156, in relation to Sections 162 and 164, Article Six, Title One, Book II, R.A. No. 7160. 13. See, Section 132, Chapter 1, Title One, Book II, R.A. No. 7160, in relation to Articles 223, Part One and Article 246, Part Eight, Rule XXX, IRR of R.A. No. 7160. 14. Pimentel, Jr., the Local Government Code of 1991: The Key to National Development, 1993 ed., p. 285. 15. Section 163 (a), R.A. No. 7160. 16. See also Section 164 (b), R.A. No. 7160. 17. Section 164 (c), supra . 18. Section 164 (c) (2), supra .