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    Tiu Vs CA Case

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    Executive Order No. 97-A limited the tax and duty incentives granted by Republic Act No. 7227 to businesses and residents within the fenced area of the Subic Special Economic Zone. Petitioners challenged this as violating equal protection. The Court upheld the Executive Order, finding it was not discriminatory but a reasonable classification based on substantial distinctions between circumstances inside and outside the base, in furtherance of developing the zone as a self-sustaining industrial center. The classification applied equally to all residents and businesses within the secured area.

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    Tiu Vs CA Case

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    marwantahsin
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    Executive Order No. 97-A limited the tax and duty incentives granted by Republic Act No. 7227 to businesses and residents within the fenced area of the Subic Special Economic Zone. Petitioners challenged this as violating equal protection. The Court upheld the Executive Order, finding it was not discriminatory but a reasonable classification based on substantial distinctions between circumstances inside and outside the base, in furtherance of developing the zone as a self-sustaining industrial center. The classification applied equally to all residents and businesses within the secured area.

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    Executive Order No. 97-A limited the tax and duty incentives granted by Republic Act No. 7227 to businesses and residents within the fenced area of the Subic Special Economic Zone. Petitioners challenged this as violating equal protection. The Court upheld the Executive Order, finding it was not discriminatory but a reasonable classification based on substantial distinctions between circumstances inside and outside the base, in furtherance of developing the zone as a self-sustaining industrial center. The classification applied equally to all residents and businesses within the secured area.

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    142 views1 page

    Tiu Vs CA Case

    Uploaded by

    marwantahsin
    Executive Order No. 97-A limited the tax and duty incentives granted by Republic Act No. 7227 to businesses and residents within the fenced area of the Subic Special Economic Zone. Petitioners challenged this as violating equal protection. The Court upheld the Executive Order, finding it was not discriminatory but a reasonable classification based on substantial distinctions between circumstances inside and outside the base, in furtherance of developing the zone as a self-sustaining industrial center. The classification applied equally to all residents and businesses within the secured area.

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    G.R. No. 127410 January 20, 1999 CONRADO L. TIU vs.

    COURT OF APPEALS Facts:Before us is a petition for review under Rule 45 of the Rules of Court, seeking the reversal of the Court of Appeals' Decisionpromulgated on August 29, 1996, and Resolutiondated November 13, 1996, in CA-GR SP No. 37788.The challenged Decision upheld the constitutionality and validity of Executive Order No. 97-A (EO 97-A), according to which the grant and enjoyment of the tax and duty incentives authorized under Republic Act No. 7227 (RA 7227) were limited to the business enterprises and residents within the fenced-in area of the Subic Special Economic Zone (SSEZ). On March 13, 1992, Congress, with the approval of the President, passed into law RA 7227 entitled "An Act Accelerating the Conversion of Military Reservations Into Other Productive Uses, Creating the Bases Conversion and Development Authority for this Purpose, Providing Funds Therefor and for Other Purposes." Section 12 thereof created the Subic Special Economic Zone and granted there to special privileges. Then the President issued Executive Order No. 97-A (EO 97-A), specifying the area within which the tax-and-duty-free privilege was operative. The petitioners challenged before this Court the constitutionality of EO 97-A for allegedly being violative of their right to equal protection of the laws. Issue:Whether or not Executive Order No. 97-A which grants the enjoyment of the tax and duty incentives were limited to the business enterprises and residents within the fenced-in are of the Subic Special Economic Zone (SSEZ) is valid. Held:We rule in favor of the constitutionality and validity of the assailed EO. Said Order is not violative of the equal protection clause; neither is it discriminatory. Rather, than we find real and substantive distinctions between the circumstances obtaining inside and those outside the Subic Naval Base, thereby justifying a valid and reasonable classification. The fundamental right of equal protection of the laws is not absolute, but is subject to reasonable classification. If the groupings are characterized by substantial distinctions that make real differences, one class may be treated and regulated differently from another. The classification must also be germane to the purpose of the law and must apply to all those belonging to the same class. Further, in creating the SSEZ, the law declared it a policy to develop the zone into a "self-sustaining, industrial, commercial, financial and investment center."From the above provisions of the law, it can easily be deduced that the real concern of RA 7227 is to convert the lands formerly occupied by the US military bases into economic or industrial areas. In furtherance of such objective, Congress deemed it necessary to extend economic incentives to attract and encourage investors, both local and foreign. Among such enticements are: (1) a separate customs territory within the zone, (2) tax-and-duty-free importation's, (3) restructured income tax rates on business enterprises within the zone, (4) no foreign exchange control, (5) liberalized regulations on banking and finance, and (6) the grant of resident status to certain investors and of working visas to certain foreign executives and workers . Lastly, the classification applies equally to all the resident individuals and businesses within the "secured area." The residents, being in like circumstances or contributing directly to the achievement of the end purpose of the law, are not categorized further. Instead, they are all similarly treated, both in privileges granted and in obligations required. All told, the Court holds that no undue favor or privilege was extended. The classification occasioned by EO 97-A was not unreasonable, capricious or unfounded. To repeat, it was based, rather, on fair and substantive considerations that were germane to the legislative purpose.

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