When Some Sins are More Equal Than Others: A Critique of British American Tobacco v. Camacho and the Rational Basis Test*
Roentgen F. Bronce**
April Carmela B. Lacson***
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The problem of crafting an equitable excise tax system while maximizing revenue has plagued Congress for years. The current system utilizes a multi-tiered, price-based classification with a freezing provision allegedly designed to simplify collection. Not surprisingly, the system has been assailed by calls for reform from different sectors. The freezing provision, in particular, has long been challenged as allegedly being violative of the equal protection clause of the Constitution.
This paper proceeds by briefly giving a general background on the nature of excise taxes, then continues with a more specific discussion on the characteristics of the excise tax system on cigarettes in the Philippines. A discussion of the decision in British American Tobacco v. Camacho follows. This paper submits that while the rational basis test may be sufficient to review tax laws, the Supreme Court’s exposition in its decision is inadequate and unsatisfactory.
In particular, while the Court spent considerable time discussing the purposes of the excise tax law, it failed to expound on why or how it found the freezing provision to be reasonably related to its alleged purposes. Its failure is symptomatic of the shallow nature of judicial review in cases involving the application of the rational basis test, particularly in tax cases. To prove this, the paper discusses landmark cases involving equal protection challenges with respect to tax laws and finds that through the years, the Supreme Court has virtually rubber-stamped its approval of tax legislation upon a mere showing of a facially valid purpose.
This paper then evaluates this approach to judicial review by critiquing BAT v. Camacho using the traditional method of judicial review, albeit with a slightly tighter analysis based on US jurisprudence. It then introduces a stricter approach to the rational basis test using a two-step review involving a scrutiny of the purposes of the excise tax and its relation to the classification chosen for its implementation. The purposes are tested against an economic interpretation of constitutional principles applicable to taxation, particularly the concepts of horizontal and vertical equity, in order to ascertain adherence to the equal protection clause of the Constitution. The fit between the classification in the law and its alleged purpose is then tested against a minimum rationality constraint. Such an approach entails triadic criteria on which the subjects of the law are assessed based on the strength or weakness of their interest against their being burdened or benefited by the law, as well as the administrative cost of identifying them in contrast to other subjects who are not covered by the legal classification. This paper concludes that, whether tested against the traditional method of judicial review or by the two-step rational basis approach introduced herein, the freezing provision should have been invalidated for being violative of the equal protection clause. (Read full article in pdf)
* Cite as Roentgen Bronce & April Carmela Lacson, When Some Sins Are More Equal Than Others: A Critique of British American Tobacco v. Camacho and the Rational Basis Test, 87 Phil. L.J. 183, (page cited) (2012). This paper won the Vicente V. Mendoza Prize for Best Review of Supreme Court Decisions in 2012.
** Currently employed as Deputy Executive Director of the Office of the Speaker, House of Representatives. J.D., University of the Philippines College of Law (2012). B.A. Public Administration, cum laude, University of the Philippines (1998).
This author would like to dedicate this paper to Speaker Feliciano Belmonte, Jr., under whose term reforms to excise taxation were passed.
*** Currently employed at SyCip Salazar Hernandez & Gatmaitan. J.D., University of the Philippines College of Law (2012). M.A. Political Economy, University of Asia and the Pacific (2006). B.A. Humanities, University of Asia and the Pacific (2005).
 The case is hereafter referred to as BAT v. Camacho, G.R. No. 163583 (2008).
 While the US Supreme Court has been more elaborative of the grounds of its decisions, it has been subjected to roughly the same criticism that the authors level against the Philippine courts, i.e. the use of a very low, almost non-existent, standard in the rational basis test.
 This standard is based on US jurisprudence and on an exposition of the concept by the Michigan Law Review, note 90 infra.