By By Atty. Romulo P. Atencia
posted 31-Aug-2015  ·  
4,715 views  ·   0 comments  ·  

The police power of the state has been variously defined as the powers of government, inherent in every sovereignty; the power vested in the legislature to make such laws as they shall judge to be for the good of the state and its subjects; the powers to govern men and things, extending to the protection of the lives, limbs, health, comfort, and quiet of all persons and the protection of all property within the state; the authority to establish such rules and regulations for the conduct of all persons as may be conducive to the public interests. This question of what constitutes police power has been discussed for many years by the courts of last resort in various jurisdictions and by many eminent law writers. Blackstone, in his Commentaries upon the common law, defines police power as: "The defense, regulation, and domestic order of the country whereby the inhabitants of a state like members of a well-governed family, are bound to conform their general behavior to the rules of propriety, good neighborhood and good manners, and to be decent, industrious, and inoffensive in their respective stations." Chief Justice Shaw in a case decided in the U.S. said: "We think it is a settled principle, growing out of the nature of well-ordered civil society, that every holder of property, however absolute and unqualified may be his title, holds it under the implied liability that his use of it shall not be injurious to the equal enjoyment of others having equal rights to the enjoyment of their property, nor injurious to the rights of the community . . .Rights of property like all other social and conventional rights are subject to such reasonable limitations in their enjoyment as shall prevent them from being injurious, and to such reasonable restraints and regulations established by law as the legislature, under the governing and controlling power vested in them by the constitution, may think necessary and expedient." The state not only has authority under its police power to make such needful rules and regulations for the protection of the health of its citizens as it may deem necessary; it may also regulate private business in a way so that the business of one man shall in no way become a nuisance to the people of the state.


It would seem that nothing is of greater importance to the welfare of its citizens, in addition to the regulation of the morals and health of its people, than to have laws for the protection of its senior citizens. The priority given to senior citizens finds its basis in the Constitution, among which are: (a) it declares that it is the duty of the family to take care of its elderly members while the State may design programs of social security for them; (b) it provides that the State shall provide social justice in all phases of national development; (c) it mandates the State to adopt an integrated and comprehensive approach to health development which shall endeavor to make essential goods, health and other social services available to all the people at affordable cost; and (d) it directs that there shall be priority for the needs of the underprivileged sick, elderly, disabled, women and children.


Thus, Republic Act No. 7432 (as later amended by RA 9257) grants senior citizens privileges, including a) the grant of 20% discount from all establishments relative to the utilization of services in hotels and similar lodging establishments, restaurants and recreation centers, and purchase of medicines in all establishments for the exclusive use or enjoyment of senior citizens, including funeral and burial services for the death of senior citizens b) a minimum of 20% discount on admission fees charged by theaters, cinema houses and concert halls, circuses, carnivals and other similar places of culture, leisure, and amusement; c) exemption from the payment of individual income taxes if their annual taxable income does not exceed the property level as determined by the NEDA for that year; d) exemption from training fees for socioeconomic programs undertaken by the OSCA as part of its work; e) free medical and dental services in government establishment[s] anywhere in the country; f) if feasible, the continuance of the same benefits and privileges given by the GSIS, SSS and PAG-IBIG, as are enjoyed by those in actual service. On the side of the private sector, it provides that the establishment may claim the discounts granted under (a), (f), (g) and (h) as tax deduction based on the net cost of the goods sold or services rendered, from gross income for the same taxable year that the discount is granted, provided that the total amount of the claimed tax deduction net of value added tax if applicable, shall be included in their gross sales receipts for tax purposes.


Feeling aggrieved by the tax deduction scheme, some businessmen filed a case praying that RA 7432, as amended by RA 9257, and the implementing rules and regulations issued by the DSWD and the DOF be declared unconstitutional insofar as these allow business establishments to claim the 20% discount given to senior citizens as a tax deduction. According to them, under the tax deduction scheme, the private sector shoulders 65% of the discount because only 35% of it is actually returned by the government. Also, the 20% discount privilege constitutes taking of private property for public use which requires the payment of just compensation. Additionally, the law shifts the State’s constitutional mandate or duty of improving the welfare of the elderly to the private sector. 


Upholding the validity of the law, the Supreme Court held in its 2013 decision that it is a legitimate exercise of police power which, similar to the power of eminent domain, has general welfare for its object. Police power is not capable of an exact definition, but has been purposely veiled in general terms to underscore its comprehensiveness to meet all exigencies and provide enough room for an efficient and flexible response to conditions and circumstances, thus assuring the greatest benefits. Accordingly, it has been described as “the most essential, insistent and the least limitable of powers, extending as it does to all the great public needs.” It is “[t]he power vested in the legislature by the constitution to make, ordain, and establish all manner of wholesome and reasonable laws, statutes, and ordinances, either with penalties or without, not repugnant to the constitution, as they shall judge to be for the good and welfare of the commonwealth, and of the subjects of the same.” For this reason, when the conditions so demand as determined by the legislature, property rights must bow to the primacy of police power because property rights, though sheltered by due process, must yield to general welfare. Police power as an attribute to promote the common good would be diluted considerably if on the mere plea of those businessmen that they will suffer loss of earnings and capital, the questioned provision is invalidated. 

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