G.R. No.

78780 July 23, 1987

DAVID G. NITAFAN, WENCESLAO M. POLO,
and MAXIMO A. SAVELLANO, JR.,
petitioners,
vs.
COMMISSIONER OF INTERNAL REVENUE and
THE FINANCIAL OFFICER, SUPREME COURT
OF THE PHILIPPINES, respondents.
FACTS: Judge David Nitafan and several other judges of the Manila Regional Trial Court seek to
prohibit the Commissioner of Internal Revenue (CIR) from making any deduction of withholding
taxes from their salaries or compensation for such would tantamount to a diminution of their
salary, which is unconstitutional. Earlier however, or on June 7, 1987, the Court en banc had
already reaffirmed the directive of the Chief Justice which directs the continued withholding of
taxes of the justices and the judges of the judiciary but the SC decided to rule on this case
nonetheless to settle the issue once and for all.

ISSUE: Whether or not the members of the judiciary are exempt from the payment of income tax.

HELD: No. The clear intent of the framers of the Constitution, based on their deliberations, was
NOT to exempt justices and judges from general taxation. Members of the judiciary, just like
members of the other branches of the government, are subject to income taxation. What is
provided for by the constitution is that salaries of judges may not be decreased during their
continuance in office. They have a fix salary which may not be subject to the whims and caprices
of congress. But the salaries of the judges shall be subject to the general income tax as well as
other members of the judiciary.
But may the salaries of the members of the judiciary be increased?
Yes. The Congress may pass a law increasing the salary of the members of
the judiciary and such increase will immediately take effect thus the incumbent members of the
judiciary (at the time of the passing of the law increasing their salary) shall benefit immediately.
Congress can also pass a law decreasing the salary of the members of the judiciary but such will
only be applicable to members of the judiciary which were appointed AFTER the effectivity of
such law.