The Manila Times : The mystery of Batas Pambansa 135

24 February 2022

By Antonio Contreras | The Manila Times

HAD it not been for that news item in the GMA 7 online news, buried in its business pages, where Finance Secretary Carlos Dominguez 3rd was quoted as saying that the non-filing of income tax returns was exempted from penalties since 1982, and that such exemption was only lifted in 1992, I would not have made an inquiry on the matter.

As a trained qualitative researcher focusing on narratives and texts, I took an interest in researching the text of the law. That law is Batas Pambansa 135, passed by the Batasang Pambansa in December 1981 and which took effect in January 1982.

While non-payment of tax and non-filing of tax returns were punishable according to Presidential Decree 9158 or the "Tax Code of 1977," the second sentence of the first paragraph of Section 12 of BP 135 which amended Section 73 of PD 9158 clearly stated the following: "Provided, however, That an individual with compensation income taxable under Section 21 (a) of this Code and where the tax withheld from such compensation income is final shall be exempt from the penalty for failure to pay the tax on such compensation income and to file a return thereon at the designated period." This exemption existed until it was removed with the passage of Republic Act 7497 promulgated in 1992. Section 12 of RA 7497 amended Section 73 of the Tax Code, and it no longer contained the exemption in BP 135.

It is really mind-boggling how a law as critical as BP 135, which practically exempted from penalty anyone who fails to pay a tax or file a tax return as long as that person is on compensation income and taxes were already withheld, never figured in the tax cases filed against former senator Ferdinand Marcos Jr. As Dominguez pointed out, this is the law that prevailed in calendar years 1982, 1983, 1984 and 1985, the years for which Marcos was convicted by the Regional Trial Court (RTC) in Quezon City for failure to pay his tax and file the corresponding returns, and was penalized with imprisonment and fine. The RTC judge, a certain Judge Ulep, even ordered his arrest. Had the RTC applied this law, then Marcos should not have been convicted in the first place.

When the Court of Appeals reviewed the case, it acquitted Marcos Jr. for tax evasion, but upheld his conviction in failing to file his tax return, and amended the penalty to remove imprisonment and just imposed a fine. Again, had the CA applied BP 135, the decision of the RTC should have been junked for violating that law.

It is understandable why the Commission on Elections did not touch this issue. After all, it is not within its jurisdiction to disturb settled cases, particularly from the CA, and more so that such was not cited by Marcos Jr. in his reply to the petitions against him for disqualification and cancellation of his certificate of candidacy, considering that the decision has already been executed, and that it already became immutable. Besides, it is immaterial already since the two requirements for disqualification, as cited in the Omnibus Election Code, do not apply in his case. He was not meted out a penalty of imprisonment by the CA in his tax conviction, and that there is jurisprudence that failure to file an ITR is not a crime involving moral turpitude.

What is odd is why BP 135 was never raised by his lawyers when he was facing his tax cases.

Would BP 135 join the list of laws that were passed but were not implemented, strictly or otherwise, like the Seat Belt Law or the Clean Air Act? My hunch is that BP 135 was not fully circulated, and all the parties, including the judge and the CA justices, were not aware of it at the time. We should understand that during the late 1980s and the 1990s, laws were not yet digitized and available online for easy reference, and there was no Google yet. It would be understandable that this law simply did not enter the discursive imaginations that framed the disposition of the case. It is just too bad, considering that it could have saved us from all these divisive toxicity that is hurting and wounding our political landscape.

The impact of this is significant. And I am actually wondering why no major media outlet is furthering this issue, after Secretary Dominguez's revelation was reported by GMA News.

I am not sure if this issue can still be raised in the Supreme Court when the disqualification and cancellation of CoC cases reach the high court. I am not certain if it is procedurally allowed for Marcos Jr. to pray that these petitions against him be dismissed since they are based on a conviction that was wrongful in the first place, considering that he has already complied with the penalty.

An interesting side note here is that the petitioners are arguing that Marcos Jr. has not actually complied with the penalty because he has not paid the fine to the court. They are also questioning the veracity of the BIR receipts shown by Marcos Jr. If so, then perhaps Marcos Jr. can turn the argument around and raise BP 135 since he has technically not complied with the penalty, if we believe the petitioners.

In any case, because Marcos Jr. is now being hounded by the consequence of the failure to apply BP 135, and this jeopardizes his candidacy, it might be in order to raise the issue. The high court is known to have reversed decisions because new evidence or legal considerations have emerged.

A law that has not been applied, when it should be, which could have changed the outcome of the case could be one of those. And in this case, it could also help settle with finality whether Marcos is qualified to run for president of the Republic.