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    Pagcor vs. BIR - Mel

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    PATRICK LLARENAS
    The Supreme Court ruled that PAGCOR is no longer exempt from corporate income tax based on amendments made by R.A. No. 9337 to the National Internal Revenue Code of 1997. Specifically, Section 1 of R.A. No. 9337 omitted PAGCOR from the list of government-owned and controlled corporations exempted from corporate income tax. As the claimant of an exemption, the burden was on PAGCOR to prove it was still exempted, but it failed to do so given the clear language of the amended law removing PAGCOR's exemption. The legislative intent in passing R.A. No. 9337 was also to require PAGCOR to pay corporate income tax.

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    Pagcor vs. BIR - Mel

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    PATRICK LLARENAS
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    The Supreme Court ruled that PAGCOR is no longer exempt from corporate income tax based on amendments made by R.A. No. 9337 to the National Internal Revenue Code of 1997. Specifically, Section 1 of R.A. No. 9337 omitted PAGCOR from the list of government-owned and controlled corporations exempted from corporate income tax. As the claimant of an exemption, the burden was on PAGCOR to prove it was still exempted, but it failed to do so given the clear language of the amended law removing PAGCOR's exemption. The legislative intent in passing R.A. No. 9337 was also to require PAGCOR to pay corporate income tax.

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    Case Digest of PAGCOR vs. BIR

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    Pagcor vs. BIR_Mel

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    The Supreme Court ruled that PAGCOR is no longer exempt from corporate income tax based on amendments made by R.A. No. 9337 to the National Internal Revenue Code of 1997. Specifically, Section 1 of R.A. No. 9337 omitted PAGCOR from the list of government-owned and controlled corporations exempted from corporate income tax. As the claimant of an exemption, the burden was on PAGCOR to prove it was still exempted, but it failed to do so given the clear language of the amended law removing PAGCOR's exemption. The legislative intent in passing R.A. No. 9337 was also to require PAGCOR to pay corporate income tax.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Download as docx, pdf, or txt
    32 views2 pages

    Pagcor vs. BIR - Mel

    Uploaded by

    PATRICK LLARENAS
    The Supreme Court ruled that PAGCOR is no longer exempt from corporate income tax based on amendments made by R.A. No. 9337 to the National Internal Revenue Code of 1997. Specifically, Section 1 of R.A. No. 9337 omitted PAGCOR from the list of government-owned and controlled corporations exempted from corporate income tax. As the claimant of an exemption, the burden was on PAGCOR to prove it was still exempted, but it failed to do so given the clear language of the amended law removing PAGCOR's exemption. The legislative intent in passing R.A. No. 9337 was also to require PAGCOR to pay corporate income tax.

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    of 2

    5.

    PAGCOR v BIR
    GR No. 172087, March 15, 2011

    FACTS:
     PAGCOR was created pursuant to Presidential Decree (P.D.) No. 1067-A2 on
    January 1, 1977. Simultaneous to its creation, P.D. No. 1067-B3 (supplementing P.D.
    No. 1067-A) was issued exempting PAGCOR from the payment of any type of tax,
    except a franchise tax of five percent (5%) of the gross revenue.
     June 2, 1978, P.D. No. 1399 was issued expanding the scope of PAGCOR's
    exemption.
     PAGCOR's tax exemption was removed in June 1984 through P.D. No. 1931, but it
    was later restored by Letter of Instruction No. 1430, which was issued in September
    1984.
     On January 1, 1998, R.A. No. 8424,8 otherwise known as the National Internal
    Revenue Code of 1997, took effect. Section 27 (c) of R.A. No. 8424 provides that
    government-owned and controlled corporations (GOCCs) shall pay corporate income
    tax, except petitioner PAGCOR, the Government Service and Insurance Corporation,
    the Social Security System, the Philippine Health Insurance Corporation, and the
    Philippine Charity Sweepstakes Office.
     With the enactment of R.A. No. 9337 10 on May 24, 2005, certain sections of the
    National Internal Revenue Code of 1997 were amended. The particular amendment
    that is at issue in this case is Section 1 of R.A. No. 9337, which amended Section 27
    (c) of the National Internal Revenue Code of 1997 by excluding PAGCOR from the
    enumeration of GOCCs that are exempt from payment of corporate income tax, thus:

    The provisions of existing special general laws to the contrary notwithstanding,


    all corporations, agencies, or instrumentalities owned and controlled by the
    Government, except the Government Service and Insurance Corporation (GSIS),
    the Social Security System (SSS), the Philippine Health Insurance Corporation
    (PHIC), and the Philippine Charity Sweepstakes Office (PCSO), shall pay such
    rate of tax upon their taxable income.

    Issue:
    Whether or not PAGCOR is still exempt from corporate income tax with the
    enactment of R.A. No. 9337?

    Ruling:
    No, Pagcor is not exempted. Under Section 1 of R.A. No. 9337, amending Section
    27 (c) of the National Internal Revenue Code of 1977, petitioner is no longer exempt from
    corporate income tax as it has been effectively omitted from the list of GOCCs that are
    exempt from it.

    Taxation is the rule and exemption is the exception. The burden of proof rests upon
    the party claiming exemption to prove that it is, in fact, covered by the exemption so
    claimed. As a rule, tax exemptions are construed strongly against the claimant.
    Exemptions must be shown to exist clearly and categorically, and supported by clear
    legal provision.

    In this case, PAGCOR failed to prove that it is still exempt from the payment of
    corporate income tax, considering that Section 1 of R.A. No. 9337 amended Section
    27 (c) of the National Internal Revenue Code of 1997 by omitting PAGCOR from the
    exemption.

    The legislative intent, as shown by the discussions in the Bicameral Conference


    Meeting, is to require PAGCOR to pay corporate income tax; hence, the omission or
    removal of PAGCOR from exemption from the payment of corporate income tax. It is
    a basic precept of statutory construction that the express mention of one person,
    thing, act, or consequence excludes all others as expressed in the familiar maxim
    expressio unius est exclusio alterius. Thus, the express mention of the GOCCs
    exempted from payment of corporate income tax excludes all others. Not being
    excepted, petitioner PAGCOR must be regarded as coming within the purview of the
    general rule that GOCCs shall pay corporate income tax

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