GR No.

172087
PAGCOR v. BIR (Peralta)
November 21 2014
This resolves a motion for clarification on the
Decision rendered in this case, which held that
PAGCORs exclusion from the list of exempt GOCCs in
the Tax Code is valid. The decision at this point is already
final and executory and there was already an entry of
judgment.
PAGCOR alleges that RMC No. 33-2013 was issued
by the BIR as a result of the decision. The RMC states
the tax treatment of PAGCORs income. It subjected
income of Philippine Amusement and Gaming
Corporation (Pagcor) from its operations and licensing of
gambling casinos, gaming clubs and other similar

recreation or amusement places, gaming pools and other

related operations to corporate tax.
Justice Peralta resolves the motion on the ground of
transcendental importance. On the merits, he states the
tax treatment as follows:
1. Income from gaming operations - subject only
to franchise tax under PD 1869 (PD 1869 has an
in-lieu-of provision: 5% franchise tax in lieu of all
other taxes; but the provision applies only to
income from gaming operations)
2. Income from other related services subject
to corporate income tax (this is taxable under the
PD and with the withdrawal of the exemption in
the Tax Code, this income is taxable again.) It is
not subject to franchise tax as this is expressly
provided by the PD.