DOJ Opinion No. 071, s. 1993

DOJ OPINION NO. 071 , s. 1993 May 28, 1993 Secretary Cielito F. Habito Director-General National Economic and Development Authority NEDA sa Pasig, Amber Avenue Pasig, Metro Manila Sir : This refers to your request for "opinion as to whether or not NEDA Resolution No. 6 has been amended by Executive Order No. 93." You state that "NEDA Resolution No. 6 [series of 1974] recommends the exemption of domestic contractors from the payment of import duties pursuant to and under authority of Section 4-A of Republic Act No. 6142 as amended, to equalize Filipino and foreign contractors"' that Executive Order No. 93 withdraws "all tax and duty exemptions, subject to certain exceptions"; and that the present inquiry is prompted by "the request of the Philippine Constructor Association for tax and duty-free importation of machinery and equipment under" said resolution. LLphil This Department is unable to find from the instant query any issue of law which would necessitate an opinion of the Secretary of Justice. Section 4-A of R.A. No. 4860, as amended by R.A. No. 6142, reads: "In the contracting of any loan, credit or indebtedness under this Act, the President of the Philippines may, when necessary, agree to modify the application of any law granting preference or imposing restriction on international competitive bidding, including, among others, Act Numbered Four Thousand Two Hundred Thirty Nine, Commonwealth Act Numbered One Thousand Five Hundred Forty One, in so far as such provisions do not pertain to constructions primarily for national defense purposes, Republic Act Numbered Nine Hundred Twelve, and Republic Act Numbered Nine Hundred Eighty Three: Provided, however, That any privilege granted to any foreign bidder shall, likewise, be granted to the domestic bidder in order to put them on equal terms with foreign bidders: . . ." On the other hand, NEDA Resolution No. 6, provides: "NOW, THEREFORE, BE IT RESOLVED, as it is hereby resolved, to recommend, as it is hereby recommended, to His Excellency, the President, the exemption from the payment of import taxes but not from compensating tax, of the successful domestic bidder for ADB projects, pursuant to and under authority of Section 4-A of Republic Act No. 6142, as amended, provided that should said successful bidder sell his machinery and/or equipment tax-exempt by authority hereof after their use in the ADB or IBRD project, as the case may be, they shall be required to pay taxes thereon computed on the basis of the depreciated value thereof." It bears stress that the NEDA Resolution in question merely recommends to the President the exemption from payment of import duties of successful domestic bidders for ADB-and IBRD-assisted projects. However, there is no showing that the said resolution has ever been implemented by then President Marcos as there is no mention of any executive issuance or presidential directive authorizing such tax privilege. Moreover, contrary to what you believe, NEDA Resolution No. 6 could not have been promulgated "pursuant to and under authority of Section 4-A of Republic Act No. 6142" abovequoted. This is because the authority granted in said statutory provision is vested in the President, and not NEDA. Said resolution, in and by itself, did not attain the character of an administrative rule and regulation, which has the force and effect of law. Hence, Executive Order No. 93, which was, incidentally, issued as a legislative act, cannot have legal effects upon the subject resolution. Indeed, the proper subject of the query should not be NEDA Resolution No. 6, but the executive issuance implementing the same, if any. prcd In view of the foregoing, this Office is constrained to decline opinion herein. Very truly yours, (SGD.) FRANKLIN M. DRILON Secretary