DOJ Opinion No. 179, s. 1990

DOJ OPINION NO. 179 , s. 1990 October 10, 1990 Dr. Tomas P. Maramba, Jr. Vice-Chairman Dangerous Drugs Board 5th Floor, Domestic Insurance Building Bonifacio Drive, Port Area Manila Sir : This refers to your request for opinion on the following queries: "1. On the basis of Section 36(a)(i) and (l) of R.A. 6425, as amended, may the Board legally issue a [r]egulation amending Revenue Regulations 16-67 which were promulgated by the Bureau of Internal Revenue pursuant to the provisions of Section 338 in relation to Section 4 of Commonwealth Act No. 466, as amended, otherwise known as the National Internal Revenue Code, as amended? "2. When the functions of the Bureau of Internal Revenue, Narcotics Section were transferred to the Dangerous Drugs Board pursuant to Section 36(l) of R.A. 6425, as amended, did the Board acquire the power to charge fees similar to those formerly charged by the BIR, specifically under Chapter II Section IV of the Revenue Regulations 16-67? Which of those charges are considered "fees" and which are "taxes"? "3. If those "fees" charged are in fact "taxes", does the Board still need a special law to be able to charge them? With respect to the first query, it appears that Revenue Regulations No. 16-67 dated May 2, 1967 was issued by the Bureau of Internal Revenue ("BIR") to implement R.A. No. 953, otherwise known as the Narcotics Drug Law, and to make the governmental requirements with respect to the importation, exportation and local traffic in narcotic drugs conform to the system of import certificates and export authorizations prescribed by the Single Convention on Narcotic Drugs (1961) to which the Philippines is a party. The aforesaid statute provides for the registration with the Collector (now Commissioner) of Internal Revenue of, and the imposition of fixed and special taxes upon, all persons who import, manufacture, produce, compound, sell, deal in, dispense, or give away opium, marijuana, opium poppies, coca leaves, or any synthetic drugs which may be declared habit forming by the President of the Philippines. R.A. No. 6425, on the other hand, empowers the Dangerous Drugs Board (the "Board"), inter alia to: "(a) Promulgate such rules and regulations as may be necessary to carry out the purposes of this Act ; including the manner of safekeeping, disposition, burning or condemnation of dangerous drugs under its charge and custody, and prescribe administrative remedies or sanctions for the violation of such rules and regulations xxx xxx xxx "(i) Receive, gather, collect and evaluate all information on the importation, exportation, production, manufacture, sale, stocks, seizures of and the estimated need for dangerous drugs, for which purpose the Board may require from any official, instrumentality or agency of the Government or any private persons or enterprises dealing in, or engaged in activities having to do with, dangerous drugs such data or information as it may need to implement this Act; xxx xxx xxx "(1) Authorize, pursuant to the provisions of this Act, the importation, distribution, manufacture, production, compounding, prescription, dispensing and sale of, and other lawful acts in connection with, dangerous drugs of such kind and quantity as it may deem necessary according to the medical and research needs of the country; and to determine the quantity/quantities to be imported, manufactured and held in stock at any given time by an authorized importer, manufacturer, distributor of dangerous drugs." " Every person or drug establishment authorized to import, distribute, manufacture, produce, compound, prescribe, dispense, and sell dangerous drugs shall register annually with the Board and pay such fees as the Board may by rules and regulations impose in respect to the registration and control of the importation, distribution, manufacture, production, compounding, prescription, dispensing, and sale of dangerous drugs ." (Sec. 36; Emphasis supplied) It is abundantly clear from the foregoing provisions of R.A. No. 6425 that the regulation and control of narcotic drugs are now vested upon the Board and to effectively carry out is functions, the Board is expressly empowered to issue rules and regulations. Since, as previously adverted to, Revenue Regulations No. 16-67 deal on the regulation of the production, importation, manufacture, sale and distribution of narcotics drugs, it is quite obvious that the subject of said administrative regulations falls within the authority of the Board; hence, it is within the Board's prerogatives to amend the said regulations or even repeal it entirely. prcd The first query is, therefore, answered affirmatively. As regards the second query, the authority of the Board to charge fees in connection with the exercise of its regulatory functions over narcotic drugs is clearly deducible from the second paragraph of Section 36(1) of R.A. No. 6425, abovequoted. Thus, whether or not the transfer of the BIR's regulatory jurisdiction over narcotic drugs to the Board carried with it the BIR's authority to charge fees is immaterial since under the Board's charter, the Board is empowered to collect fees in connection with the exercise of such jurisdiction. Besides, under Section 54, Chap. 12, Book IV of the Administrative Code of 1987 which insofar as pertinent reads: "For services required by law to be rendered for a fee, for supplies furnished, or articles of any kind sold to other divisions of the Government, or to any person, the head of bureau, office or agency may, upon the approval of the secretary, charge and collect the cost of the services, supplies or articles or other rate in excess of cost prescribed by law or approved by the same authority . . ." The Board is entitled to collect fees in connection with the issuance of an authorization to any person to perform lawful acts relative to narcotic drugs. This Department has previously ruled that whenever an agency renders service, it is empowered to charge fees, when the law does not expressly forbid it (Secretary of Justice Opn. dated May 23, 1969). It is believed, however, that the Board cannot collect the taxes impose by the BIR under Revenue Regulations 16-67. The reason is that fees are not taxes for raising revenues but are collected to defray the costs of the services rendered (Id, Opn. No. 30, s. 1984). Fees are exactions for purposes of regulation and inspection, whereas taxes are collected for revenue purposes (Calalang vs. Lorenzo, 97 Phil. 212). Stated otherwise, taxes are levied in the exercise of taxation power, while fees are imposed in the discharge of police power (Republic vs. Phil. Rabbit Lines, 32 SCRA 211). Thus, for the Board to be able to collect the taxes imposed in Revenue Regulations No. 16-67, it has first to be so empowered by law. Accordingly, in reply to the second and third queries, it is our opinion that the Board possesses authority to continue collecting the fees imposed by the BIR in the exercise of its regulatory functions over narcotic drugs, but that it cannot do so with respect to the taxes levied by the BIR for taxation purposes and that for the Board to collect such taxes, there is need for prior legislation authorizing it to do so. llcd Very truly yours, (SGD.) FRANKLIN M. DRILON Secretary