RMC 113-2020 and Effectivity of RA 11467

May 25, 2021 at 2:48 pm (Opinions) (Taxation)

The Bureau of Internal Revenue (BIR) issued Revenue Memorandum Circular (RMC) No. 113-2020 which publishes the full text of the letter issued by the Department of Finance (DOF) to amend the previous effectivity date of Republic Act (RA) No. 11467 circularized by RMC No. 65-2020 from 27 January to 23 January.

The BIR now maintains the position that RA No. 11467 became effective beginning 23 January 2020, the date it was uploaded in the Official Gazette website, since there is neither a law nor any doctrinal court decision expressly stating that online publication of a statute by the Official Gazette is invalid.

With all due respect, I disagree with the BIR.

RA No. 11467 took effect on 10 February 2020.

Last 22 January 2020, President Rodrigo Duterte signed into law RA No. 11467 which amends the National Internal Revenue Code (NIRC) of 1997 by raising the rates of excise tax on alcoholic beverages, electronic cigarettes and vape products.

By its express provision, RA No. 11467 shall take effect after its complete publication either in the Official Gazette or in a newspaper of general circulation.

RA No. 11467 was published on 10 February 2020 in pages 815-823 of Volume 116 No. 6 of the Official Gazette. There is no existing record of RA No. 11467 being published on 23 January 2020 in either the Official Gazette or any newspaper of general circulation.

Article 2 of the Civil Code does not recognize online publication.

Effectivity of laws is governed by the Civil Code which provides that laws are effective following the completion of their publication either in the Official Gazette or in a newspaper of general circulation in the Philippines.

The Civil Code does not recognize online publication, in whatever website, among the mediums for publication for the purpose of effectivity of statutes. When the Civil Code was crafted, the obvious intent then was publication in printed form as online publication was most likely beyond the contemplation of Congress at that time. To give it a contemporaneous interpretation similar to the DOF is equivalent to stretching the law to a limit it did not contemplate, to the detriment of affected taxpayers. The proper approach should have been to amend the Civil Code to expressly include the Official Gazette’s website as a recognized medium.

Noscitur a Sociis

Article 2 of the Civil Code, as amended, limits publication to two mediums: 1) Official Gazette; and 2) newspaper of general circulation. Said provision does not include the term “Internet” or referred to any website for that matter.

Following the basic doctrine of noscitur a sociis in statutory construction, where a particular word or phrase is ambiguous in itself or is equally susceptible of various meanings, its meaning may be made clear and specific by considering the company of the words in which it is found or with which it is associated. Stated differently, the obscurity or doubt on a particular word or phrase may be removed by reference to associated words.

Here, since the term “Official Gazette” is associated with the word “newspaper”, which is a printed material, and not “internet” or “website”, it logically follows that what is required for statutory effectivity is the complete publication in the printed version of the Official Gazette and not the mere upload of a copy in its website. This interpretation is also in consonance with the time-settled rule that tax laws should be interpreted liberally in favor of the taxpayer and strictly against the Government.

The internet is not a medium for publishing laws, rules and regulations.

While the DOF letter in RMC 113-2020 cited the case of Garcillano v. HRET, the DOF left out a very important detail which was expressly mentioned in the decision. The Supreme Court ruled therein that the Electronic Commerce Act of 2000 does not make the internet a medium for publishing laws, rules and regulations (emphasis mine):

“The invocation by the respondents of the provisions of R.A. No. 8792, otherwise known as the Electronic Commerce Act of 2000, to support their claim of valid publication through the internet is all the more incorrect. R.A. 8792 considers an electronic data message or an electronic document as the functional equivalent of a written document only for evidentiary purposes. In other words, the law merely recognizes the admissibility in evidence (for their being the original) of electronic data messages and/or electronic documents. It does not make the internet a medium for publishing laws, rules and regulations.”

Garcillano v. HRET did not qualify as to what website is excluded from the coverage of the prohibition. Said case categorically stated that the internet is not a medium for publishing laws, rules and regulations. It follows then that the mere uploading of a scanned version of a signed law in whatever website is insufficient compliance with the mandatory requirements for publication of statutes.

*******