Case Digest (G.R. No. 203754) Core Legal Reasoning Model
Core Legal Reasoning Model
Facts:
In 1993, the City of Cebu enacted City Ordinance No. LXIX, Chapter XI, imposing an amusement tax of thirty percent (later reduced to ten percent) on gross receipts of cinemas and other places of amusement, with all proceeds accruing to the local government pursuant to Section 140 and Section 151 of the Local Government Code (LGC). On June 7, 2002, Congress passed Republic Act No. 9167, creating the Film Development Council of the Philippines (FDCP) and providing in Sections 13 and 14 that all amusement taxes on *graded films* (A or B rating) collected in Metro Manila and other highly urbanized and independent component cities—including Cebu City—be withheld by theater operators and remitted to FDCP as an incentive reward for film producers. In January 2009, FDCP demanded unpaid amusement tax rewards (plus surcharges) from eight cinema operators in Cebu, including Colon Heritage Realty Corp. and SM Prime Holdings, Inc. When the operators refused payment, the City of Cebu filed fo Case Digest (G.R. No. 203754) Expanded Legal Reasoning Model
Expanded Legal Reasoning Model
Facts:
- 1993 City Ordinance
- City of Cebu enacted Ordinance No. LXIX (Revised Omnibus Tax Ordinance), Chapter XI, Sections 42–43, imposing a 30% amusement tax on gross receipts of theatres, cinemas, and other places of amusement, to be withheld by proprietors and remitted to the City Treasurer.
- The tax was periodically collected and shared per ordinance and Local Government Code (LGC) provisions.
- Republic Act No. 9167 (2002)
- Created the Film Development Council of the Philippines (FDCP) and abolished prior film boards.
- Section 13 granted graded films (AAA or ABA) an “amusement tax reward” of 100% or 65% of the tax collected by covered LGUs, respectively; the remaining 35% in the ABA case accrues to FDCP.
- Section 14 required theatre operators in Metro Manila and highly urbanized/independent component cities to withhold and remit all amusement taxes on graded films to FDCP within 30 days, with a 5% monthly surcharge for late payment.
- Dispute and Trial Court Proceedings
- FDCP demanded unpaid amusement‐tax rewards (plus surcharges) from cinema operators in Cebu. All LGUs complied except Cebu City.
- Cebu City (Civil Case No. CEB-35529) and Colon Heritage Realty Corp. (Civil Case No. CEB-35601) filed declaratory relief before RTC, seeking to declare Sections 13 and 14 of RA 9167 unconstitutional and enjoin FDCP.
- RTC, Branch 14 and Branch 5 issued decisions (September–October 2012) declaring Sections 13 and 14 invalid as violative of Article X, Section 5 of the 1987 Constitution (LGU taxes accrue exclusively to LGUs).
Issues:
- Whether Sections 13 and 14 of RA 9167 are unconstitutional for violating the constitutionally delegated taxing power and the basic policy on local autonomy.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)