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ITL - Perfecto Vs Meer

The case discusses whether or not the salaries of members of the judiciary are taxable. It held that imposing an income tax on judicial salaries is a diminution and violates the Constitution, as the undiminishable character of judicial salaries is a basic limitation imposed in the public interest. Tax assessments may be levied on other income sources for judges.

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Pam Ramos
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28 views1 page

ITL - Perfecto Vs Meer

The case discusses whether or not the salaries of members of the judiciary are taxable. It held that imposing an income tax on judicial salaries is a diminution and violates the Constitution, as the undiminishable character of judicial salaries is a basic limitation imposed in the public interest. Tax assessments may be levied on other income sources for judges.

Uploaded by

Pam Ramos
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Gregorio Perfecto vs Bibiano L.

Meer, Collector of Internal Revenue


[G.R. No. L-2348. February 27, 1950]

Facts:
 In April, 1947 the Collector of Internal Revenue required Mr. Justice Gregorio Perfecto
to pay income tax upon his salary as member of this Court during the year 1946. After
paying the amount (P802), he instituted this action in the Manila Court of First Instance
contending that the assessment was illegal, his salary not being taxable for the reason
that imposition of taxes thereon would reduce it in violation of the Constitution.

Issue:
Whether or not the salary of the members of the Judiciary are taxable?

Held:
YES. The Imposition of income tax upon the salary of judges is a diminution and violates the
Constitution. The undiminishable character of judicial salaries is not a mere privilege of judges –
personal and therefore waivable – but a basic limitation upon legislative or executive action
imposed in the public interest. On income other than judicial salary, tax assessments may be
levied for men on the Bench. It is only when the tax is charged directly on their salary and the
effect of the tax is to diminish their official stipend when taxation becomes an infringement of
the fundamental charter.

“Wherefore, unless and until our Legislature approves an amendment to the Income Tax Law
expressly taxing "the salaries of judges thereafter appointed", the O'Malley case is not relevant.
As in the United States during the second period, we must hold that salaries of judges are not
included in the word "income" taxed by the Income Tax Law. Two paramount circumstances
may additionally be indicated, to wit: First, when the Income Tax Law was first applied to the
Philippines 1913, taxable "income" did not include salaries of judicial officers when these are
protected from diminution. That was the prevailing official belief in the United States, which
must be deemed to have been transplanted here; and second, when the Philippine
Constitutional Convention approved (in 1935) the prohibition against diminution of the judges'
compensation, the Federal principle was known that income tax on judicial salaries really impairs
them. Evans vs. Gore and Miles vs. Graham were then outstanding doctrines; and the inference
is not illogical that in restraining the impairment of judicial compensation the Fathers of the
Constitution intended to preclude taxation of the same.”

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