Case Digest (G.R. No. 172087)
Facts:
In G.R. No. 172087 decided on March 15, 2011, the Philippine Amusement and Gaming Corporation (PAGCOR) filed a petition for certiorari and prohibition with prayer for a temporary restraining order and preliminary injunction against the Bureau of Internal Revenue (BIR), represented by Commissioner Jose Mario Buaag. PAGCOR was created by Presidential Decree No. 1067-A (January 1, 1977) and granted a franchise under P.D. 1067-B, P.D. 1399, and P.D. 1869 with broad exemptions from national and local taxes, save for a 5% franchise tax. Its exemption was briefly removed by P.D. 1931 (June 1984) but restored by Letter of Instruction No. 1430 (September 1984). Under the National Internal Revenue Code of 1997 (R.A. 8424), Section 27(c) maintained PAGCOR’s exemption from corporate income tax along with four other GOCCs. On May 24, 2005, R.A. 9337 amended Section 27(c) to omit PAGCOR from that list. Thereafter, on September 1, 2005, the Supreme Court upheld R.A. 9337 against several challeCase Digest (G.R. No. 172087)
Facts:
- Establishment and Tax-Exempt Status of PAGCOR
- PAGCOR was created by P.D. No. 1067-A (1977) and granted a franchise under P.D. No. 1067-B exempting it from all taxes except a 5% franchise tax on gross revenues.
- P.D. No. 1399 (1978) and P.D. No. 1869 (1979) expanded and consolidated these exemptions, granting customs-duty and income-tax exemptions to PAGCOR and its contractors/investors.
- Subsequent Legislative Changes
- P.D. No. 1931 (1984) removed PAGCOR’s tax exemption but LOI No. 1430 (1984) restored it.
- R.A. No. 8424 (NIRC of 1997) required most GOCCs to pay corporate income tax except PAGCOR, GSIS, SSS, PHIC, and PCSO (Sec. 27(c)).
- R.A. No. 9337 (2005) amended Sec. 27(c), removing PAGCOR from the list of income-tax-exempt GOCCs; BIR issued RR No. 16-2005 imposing 10% VAT on PAGCOR.
- Procedural History
- PAGCOR filed a Rule 65 petition (2006) seeking to declare Sec. 1(c) of R.A. 9337 void under the equal-protection and non-impairment clauses, and to enjoin RR No. 16-2005 for exceeding statutory authority.
- BIR and the OSG filed opposing comments; SC previously upheld R.A. 9337’s VAT provisions in Abakada Guro Party-list v. Ermita.
- The En Banc SC rendered its decision on March 15, 2011.
Issues:
- Whether Sec. 1(c) of R.A. 9337 violates the equal protection clause (Art. III, Sec. 1).
- Whether Sec. 1(c) of R.A. 9337 violates the non-impairment clause (Art. III, Sec. 10).
- Whether RR No. 16-2005, Sec. 4.108-3(h) is void for exceeding the scope of R.A. 8424, Sec. 108, by imposing VAT on PAGCOR and its licensees.
Ruling:
- (Subscriber-Only)
Ratio:
- (Subscriber-Only)
Doctrine:
- (Subscriber-Only)