January 24, 2017

G.R. No. 184450

JAIME N. SORIANO, MICHAEL VERNON M. GUERRERO, MARY ANN L. REYES,
MARAH SHARYN M. DE CASTRO and CRIS P. TENORIO, Petitioners,
vs.
SECRETARY OF FINANCE and the COMMISSIONER OF INTERNAL REVENUE,
Respondents.
FACTS:
Petitioners Jaime N. Soriano et al. primarily assail Section 3 of RR 10-2008 providing
for the pro-rated application of the personal and additional exemptions for taxable year
2008 to begin only effective 6 July 2008 for being contrary to Section 4 of Republic Act
No. 9504.
Petitioners argue that the pro-rated application of the personal and additional
exemptions under RR 10-2008 is not "the legislative intendment in this jurisdiction."
They stress that Congress has always maintained a policy of "full taxable year
treatment" as regards the application of tax exemption laws. They allege further that
R.A. 9504 did not provide for a prorated application of the new set of personal and
additional exemptions.
ISSUE
Whether Sections 1 and 3 of RR 10-2008 are consistent with the law in providing that
an MWE who receives other benefits in excess of the statutory limit of ₱30,000 is no
longer entitled to the exemption provided by R.A. 9504.
HELD:
NO.
Sections 1 and 3 of RR 10-2008 add a requirement not found in the law by effectively
declaring that an MWE who receives other benefits in excess of the statutory limit of
₱30,000 is no longer entitled to the exemption provided by R.A. 9504.
Nowhere in the above provisions of R.A. 9504 would one find the qualifications
prescribed by the assailed provisions of RR 10-2008. The provisions of the law are clear
and precise; they leave no room for interpretation - they do not provide or require any
other qualification as to who are MWEs.

To be exempt, one must be an MWE, a term that is clearly defined. Section 22(HH) says
he/she must be one who is paid the statutory minimum wage if he/she works in the
private sector, or not more than the statutory minimum wage in the non-agricultural
sector where he/she is assigned, if he/she is a government employee. Thus, one is
either an MWE or he/she is not. Simply put, MWE is the status acquired upon passing
the litmus test - whether one receives wages not exceeding the prescribed minimum
wage.
As stated before, nothing to this effect can be read from R.A. 9504. The amendment is
silent on whether compensation-related benefits exceeding the ₱30,000 threshold
would make an MWE lose exemption. R.A. 9504 has given definite criteria for what
constitutes an MWE, and R.R. 10-2008 cannot change this.