The provision of Article 19 of the Constitution that the people shall have the duty to pay tax in accordance with law means simply that the people shall have the duty to pay tax or the privileges to enjoy the benefits of tax exemption or reduction in pursuance of the prescriptions of law with respect to such matters as taxpaying bodies, tax denominations, tax rates, methods of tax payment, and tax incentives. Accordingly, no provision in administrative ordinances with respect to tax items may depart from the express prescription of law, or it will be in conflict with the principle of taxation by law. This has been held by this Yuan in our Interpretations Nos. 217 and 210.
Article 23 of the Constitution provides in express words that restraints on the freedoms and rights of the people may be imposed only by prescription of law and shall not go beyond the extent of necessity. As the law can not possibly deal with all details, the legislature may of course authorize administrative agencies to issue ordinances for the purpose of making supplementary provisions thereto. The Constitution also permits the authorization by law with respect to restraints to be imposed on the freedoms and rights of the people if such authorization is clear and specific in its purpose, scope and substance. This is the ratio decidenti based on which we have held in our Interpretation No. 345 that the Regulations Governing the Restriction on the Persons or Representatives of Profit-Making-Enterprise Defaulting on Tax Payments to Apply for Exit Permit, established by authority granted under the Tax Levy Act, Article 24, paragraph 3, and the Customs Act, Article 25-1, Paragraph 3, are not in conflict with the Constitution, and in our Interpretation No. 346 that the provisions in respect of the levying of educational dues as authorized by the National Education Act, Article 16, Paragraph 1, Subparagraph 3, and of the Act Governing the Allocation of Government Revenues and Expenditures, Article 18, Paragraph 1, are constitutional. In general, where the law authorizes the establishment by administrative agencies of enforcement rules, the competent agency may certainly set out in such rules details and technical matters in relation to the enforcement of the law to the extent that such rules are consistent with the legislative purposes of the law and are within the limits defined by the enabling statute, provided, however, that the substance of such rules shall neither conflict with the enabling statute nor add any restriction on the freedoms or rights of the people that does not exist in the law. This principle must especially be adhered to by ordinances issued ex officio by administrative agencies to give effect to the law other than the enforcement rules thereof. We have made this principle exceedingly clear in our previous Interpretations Nos. 268, 274, 313 and 360.
The Business Tax Act, as amended and promulgated on November 15, 1985, provides in Article 2, Subparagraphs 1 and 2, that all business operators who sell goods or services and all consignees or holders of imported goods are payers of business tax, with the duty to declare and pay business tax under Article 35 thereof. However, the Enforcement Rules of the Business Tax Act promulgated on January 29, 1986, provide in Article 47: “Goods forfeited and sold through auction sale by the Customs House shall be deemed to have been imported by the purchaser winning the bid and shall be dealt with in accordance with Article 41 of the Business Tax Act. Where the forfeited, confiscated or mortgaged goods sold through auction sale by the court and other agencies were owned by a business operator, the purchaser winning the bid shall, at the time of close of the sale, file with the competent taxing authority at the locality of the court or the agency holding such auction sale a declaration of business tax and pay the same or obtain therefrom a certificate of tax exemption, as the case may be, by presenting a list of the goods sold at auction. When delivering the goods sold by auction or issuing an instrument of transfer, the court or agency shall inspect the certificate of tax payment or exemption, as the case may require.” The provision clearly changes the taxpaying body specifically prescribed by law for the purpose of business tax declaration and payment from the business operator to the person winning the bid at the auction sale (i.e., purchaser). Furthermore, Clause 2(1) of the Guidelines on the Assessment of Business Tax on Goods Sold by Auction or Sale Held by the Customs House, Court or Other Agencies, announced by the Ministry of Finance directive Tai-Tsai-Shui-Tze No. 7522284 (April 1, 1986), which requires the purchaser winning the auction sale or the deal to pay business tax for the real property put up for auction sale or sale, is inconsistent with the Business Tax Act. Although the provisions of the enforcement rules and guidelines cited above do not increase any tax burden because the business tax is a type of value-added tax, the amount of which is added to the selling price and paid by the purchaser, they do impose on the purchaser the duty to declare and pay the tax, and are thus in conflict with the Business Tax Act and against the purpose of Articles 19 and 23 of the Constitution in the protection of the people’s right. From the date of this Interpretation, said Articles shall become void within one year. Incidentally, if the competent authority considers it necessary to regulate separately with respect to the person liable for the declaration and payment of the business tax to facilitate its operation on account of the distinct nature of the auction or sale of real property to be held by the court or other agencies from other sales made by ordinary business operators, it must be dealt with by prescription of law.
*Translated by Raymond T. Chu.