Rate of Informer's Reward Given to Persons Instrumental in the Delivery and Seizure of Smuggled Goods

DOJ OPINION NO. 040 , s. 2012 June 8, 2012 Secretary Cesar V. Purisima Department of Finance Roxas Boulevard cor. P. Ocampo St. Manila Dear Secretary Purisima : This refers to your request for confirmation of your opinion that informer's rewards given to persons instrumental in the delivery and seizure of smuggled goods shall be equivalent to ten percent (10%) of the fair market value of the smuggled and confiscated goods or One Million Pesos (P1,000,000) per case, whichever is lower, in accordance with Section 282 (B) of the National Internal Revenue Code (NIRC), 1 to wit: "SEC. 282. Informer's Reward to Persons Instrumental in the Discovery of Violations of the National Internal Revenue Code and in the Discovery and Seizure of Smuggled Goods. xxx xxx xxx (B) For Discovery and Seizure of Smuggled Goods. To encourage the public to extend full cooperation in eradicating smuggling, a cash reward equivalent to ten percent (10%) of the fair market value of the smuggled and confiscated goods or One Million Pesos (P1,000,000) per case, whichever is lower, shall be given to persons instrumental in the discovery and seizure of such smuggled goods. The cash rewards of informers shall be subject to income tax, collected as a final withholding tax, at a rate of ten percent (10%). The Provisions of the foregoing Subsections notwithstanding, all public officials, whether incumbent or retired, who acquired the information in the course of the performance of their duties during their incumbency, are prohibited from claiming informer's reward." In support of your position, you state that Section 282 (B) of the NIRC is applicable in determining the informer's rewards of persons instrumental in the discovery of seizure of smuggled goods, in connection with both customs and internal revenues recovered pursuant to such information; that Section 3513 of the Tariff and Customs Code of the Philippines (TCCP) which grants informers a cash reward equivalent to 20% of the fair market value of the smuggled and confiscated goods is deemed repealed and replaced by Section 282 (B) of the NIRC which was promulgated much later than the TCCP; that Section 282 (B) of the NIRC, to the exclusion of Section 3513 of the TCCP, governs the determination of informer's rewards of persons instrumental in the discovery of seizure of smuggled goods; that such provision applies regardless of whether the government income involved is internal revenue as administered by the Bureau of Internal Revenue, or customs revenue as administered by the Bureau of Customs; and that public officials are prohibited from claiming informer's rewards, regardless of whether the income recovered by the government was internal revenue or customs revenue. EACTSH After due consideration of the premises and a thorough study of your legal positions, we are in agreement with your view that Section 282 (b) of the NIRC is now the controlling provision with respect to informer's reward for discovery and seizure of smuggled goods; that such reward is limited to 10% of the fair market value of the smuggled and confiscated goods or the amount of One million pesos (P1,000,000) per case, whichever is lower; and that public officials so long as they acquired the information in the course of the performance of their duties are prohibited from claiming informer's reward, subject to the following discussions. The issue arose from the apparent conflicting provisions of Section 3513 of the TCCP and Section 282 (B) of the NIRC (which we had the occasion to interpret in Opinion No. 18, s. 2005). Quoted hereunder are the pertinent provisions of the TCCP and NIRC, to wit: PD 1464 (TCCP) "SEC. 3513. Reward to Persons Instrumental in the Discovery and Seizure of Smuggled Goods. The provisions of general and special laws to the contrary notwithstanding, a cash reward equivalent to twenty (20%) per centum of the fair market value of the smuggled and confiscated goods shall be given to the officers and men and informers who are instrumental in the discovery and seizure of such goods in accordance with the rules and regulations to be issued by the Secretary of Finance. The provisions of this section, and not those of Republic Act Numbered Twenty-three Hundred and Thirty-eight shall govern the giving of reward in cases covered by the former." (Emphasis supplied) R.A. No. 8424 (NIRC) "SEC. 282. Informer's Reward to Persons Instrumental in the Discovery of Violations of the National Internal Revenue Code and in the Discovery and Seizure of Smuggled Goods . (A) For Violations of the National Internal Revenue Code. Any person, except an internal revenue official or employee, or other public official or employee, or his relative within the sixth degree of consanguinity, who voluntarily gives definite and sworn information, not yet in the possession of the Bureau of Internal Revenue, leading to the discovery of frauds upon the internal revenue laws or violations of any of the provisions thereof, thereby resulting in the recovery of revenues, surcharges and fees and/or the conviction of the guilty party and/or the imposition of any fine or penalty, shall be rewarded in a sum equivalent to ten percent (10%) of the revenues, surcharges or fees recovered and/or fine or penalty imposed and collected or One million pesos (P1,000,000) per case, whichever is lower. The same amount of reward shall also be given to an informer where the offender has offered to compromise the violation of law committed by him and his offer has been accepted by the Commissioner and collected from the offender: Provided, That should no revenue, surcharges or fees be actually recovered or collected, such person shall not be entitled to a reward: Provided, further, That the information mentioned herein shall not refer to a case already pending or previously investigated or examined by the Commissioner or any of his deputies, agents or examiners, or the Secretary of Finance or any of his deputies or agents: Provided, finally, That the reward provided herein shall be paid under rules and regulations issued by the Secretary of Finance, upon recommendation of the Commissioner. (B) For Discovery and Seizure of Smuggled Goods. To encourage the public to extend full cooperation in eradicating smuggling, a cash reward equivalent to ten percent (10%) of the fair market value of the smuggled and confiscated goods or One million pesos (P1,000,000) per case ,whichever is lower, shall be given to persons instrumental in the discovery and seizure of such smuggled goods . The cash rewards of informers shall be subject to income tax, collected as a final withholding tax, at the rate of ten percent (10%). DTcACa The provisions of the foregoing Subsections notwithstanding, all public officials, whether incumbent or retired, who acquired the information in the course of the performance of their duties during their incumbency, are prohibited from claiming informer's reward. " (Emphasis supplied) It is quite clear that Section 3513 of the TCCP and Section 282 (B) of the NIRC speak of the same subject matter, i.e. , "informer's reward in the discovery and seizure of smuggled goods" although included in Section 282 (A) thereof is a provision that talks about violations of the National Internal Revenue Code, which is an entirely different matter. Section 3513 of the TCCP has been impliedly repealed, or at the very least, amended or modified by Section 282 (B) of the NIRC since they both refer to the same subject matter which contain inconsistent provisions. The provisions of Section 282 (B) of the NIRC must prevail over Section 3513 of the TCCP, it being a latter enactment by the Legislature with dual applicability. There cannot be two conflicting laws on the same subject. Either they are reconciled or, if they cannot, the later law repeals the prior law. Leges posteriores priores contrarias abrogant a later statute which is repugnant to an earlier statute is deemed to have abrogated the earlier one on the same subject matter. This maxim embodies the principle of implied repeal. 2 The later law repeals an earlier law because it is the later legislative will. It is to be presumed that the lawmakers knew the older law and intended to change it. In enacting the older law, the legislators could not have known the newer one and, hence, could not have intended to change what they did not know. We likewise concur with your view that Section 282 (B) clearly shows that the informer's reward for the discovery and seizure of smuggled goods is ten percent (10%) of the fair market value of the smuggled and confiscated goods or One million pesos (P1,000,000), whichever is lower. The law is very clear and, hence, the 20% fair market value of the discovered and confiscated goods as informer's reward under Section 3513 of the TCCP is no longer operative for the same reasons as stated above. Finally, we note that Section 3513 of the TCCP rewards not only the informers but also the officers and men instrumental in the discovery and seizure of the smuggled goods while Section 282 (B) of the NIRC clearly states in its third paragraph that all public officials, whether incumbent or retired, who acquired the information in the course of the performance of their duties during their incumbency are prohibited from claiming the informer's reward. In this regard, Section 282 of the NIRC is very emphatic that all public officials, which will include the officers and men referred to in Section 3513 of the TCCP, are disqualified from claiming the informer's reward if they acquired the information in the course of the performance of their duties during their incumbency. Section 282 of the NIRC is the controlling provision over Section 3513 of the TCCP. Basic is the rule that when the law is plain, simple, and clear, there is no room for interpretation, only application. The elementary rule in statutory construction is that when the words and phrases of a statute are clear and unequivocal, their meaning must be determined from the language employed and the statute must be taken to mean exactly what it says. 3 The foregoing considered, Opinion No. 18, s. 2005, which deals with the same subject matter, is hereby superseded. Please be guided accordingly. DcSTaC Very truly yours, (SGD.) LEILA M. DE LIMA Secretary Footnotes 1. R.A. No. 8424. 2. Erna v. Vergel de Dios , 85 Phil. 17. 3. Baranda v. Gustilo , 165 SCRA 757; Dayrit v. Cruz , 165 SCRA 571.