Ramon D. Villanueva Jr.

JD-2B

American Bible Society v City of Manila (1957)

American Bible Society v City of Manila GR No. L-9637, April 30, 1957

FACTS:
In the course of its ministry, the Philippine agency of American Bible Society (a foreign, non-stock,
non-profit, religious,
missionary corporation) has been distributing and selling bibles and/or gospel portions thereof
throughout the Philippines. The acting City Treasurer of Manila informed plaintiff that it was
conducting the business of general merchandise since November 1945, without providing itself with
the necessary Mayor’s permit and municipal license, in violation of Ordinance No. 3000, as amended,
and Ordinances Nos. 2529, 3028 and 3364. The society paid such under protest and filed suit
questioning the legality of the ordinances under which the fees are being collected.

ISSUES:

1. Whether or not the ordinances of the City of Manila are constitutional and valid
2. Whether the provisions of said ordinances are applicable or not to the case at bar

RULING:
1. Yes, they are constitutional. The ordinances do not deprive defendant of his constitutional right of
the free exercise and enjoyment of religious profession and worship, even though it prohibits him from
introducing and carrying out a scheme or purpose which he sees fit to claim as part of his religious
system. It seems clear, therefore, that Ordinance No. 3000 cannot be considered unconstitutional,
even if applied to plaintiff society.

2. The ordinance is inapplicable to said business, trade or occupation of the plaintiff. Even if religious
groups and the press are not altogether free from the burdens of the government, the act of
distributing and selling bibles is purely religious and does not fall under Section 27e of the Tax Code
(CA 466). The fact that the price of bibles, etc. are a little higher than actual cost of the same does not
necessarily mean it is already engaged in business for profit. Thus, the Ordinances are not applicable
to the Society.
 Tolentino vs. Secretary of Finance G.R. No. 115455 October 30, 1995 Freedom of the Press

FACTS:

These are motions seeking reconsideration of our decision dismissing the petitions filed in these
cases for the declaration of unconstitutionality of R.A. No. 7716, otherwise known as the Expanded
Value-Added Tax Law. Now it is contended by the Philippine Press Institute (PPI) that by removing
the exemption of the press from the VAT while maintaining those granted to others, the law
discriminates against the press. At any rate, it is averred, “even nondiscriminatory taxation of
constitutionally guaranteed freedom is unconstitutional.”

ISSUE:

Does sales tax on bible sales violative of religious and press freedom?

RULING:

No. The Court was speaking in that case of a license tax, which, unlike an ordinary tax, is mainly for
regulation. Its imposition on the press is unconstitutional because it lays a prior restraint on the
exercise of its right. Hence, although its application to others, such those selling goods, is valid, its
application to the press or to religious groups, such as the Jehovah’s Witnesses, in connection with
the latter’s sale of religious books and pamphlets, is unconstitutional. As the U.S. Supreme Court put
it, “it is one thing to impose a tax on income or property of a preacher. It is quite another thing to exact
a tax on him for delivering a sermon.”

The VAT is, however, different. It is not a license tax. It is not a tax on the exercise of a privilege,
much less a constitutional right. It is imposed on the sale, barter, lease or exchange of goods or
properties or the sale or exchange of services and the lease of properties purely for revenue
purposes. To subject the press to its payment is not to burden the exercise of its right any more than
to make the press pay income tax or subject it to general regulation is not to violate its freedom under
the Constitution.

CASSANOVAS VS. HORD [8 Phil 125; No. 3473; 22 Mar 1907]

Facts: The Spanish Govt. by virtue of a royal decree granted the plaintiff certain mines. The plaintiff is
now the owner of those mines. The Collector of Internal Revenue imposed tax on the properties,
contending that they were valid perfected mine concessions and it fallswithin the provisions of sec.134 of
Act No. 1189 known as Internal Revenue Act. The plaintiff paid under protest. He brought an action
against the defendant Collector of Internal Revenue to recover the sum of Php. 9, 600 paid by him as
taxes. Judgment was rendered in favor of the defendant, so the plaintiff appealed.

Issue: Whether or Not Sec. 164 is void or valid.

Held: The deed constituted a contract between the Spanish Government and the plaintiff. The obligation
of which contract was impaired by the enactment of sec. 134 of the Internal Revenue Law infringing sec.
5 of the Act of Congress which provides that “no law impairing the obligation of contracts shall be
enacted”. Sec. 134 of the Internal Revenue Law of 1904 is void because it impairs the obligation of
contracts contained in the concessions of mine made by the Spanish Government. Judgment reversed.

PHILIPPINE AMUSEMENT AND GAMING CORPORATION VS. BUREAU OF INTERNAL

REVENUE

Facts:
Petitioner further seeks to prohibit the implementation of Bureau of Internal Revenue (BIR) Revenue
Regulations No. 16-2005 for being contrary to law.
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.
Different groups came to this Court via petitions for certiorari and prohibition[11] assailing the validity
and constitutionality of R.A. No. 9337
10% Value Added Tax (VAT) on sale of goods and properties
10% VAT on importation of goods
10% VAT on sale of services and use or lease of properties... the Court dismissed all the petitions
and upheld the constitutionality of R.A. No. 9337.
On the same date, respondent BIR issued Revenue Regulations (RR) No. 16-2005,[13] specifically
identifying PAGCOR as one of the franchisees subject to 10% VAT imposed under Section 108 of the
National Internal Revenue Code of 1997, as amended by R.A.
No. 9337.
Furthermore, according to the OSG,... public respondent BIR exceeded its statutory authority when it
enacted RR No. 16-2005, because the latter's provisions are contrary to the mandates of P.D. No.
1869 in relation to R.A. No. 9337.

ISSUE:

Is Republic Act 9337 constitutional insofar as it excluded PAGCOR from the enumeration of GOCCs
exempt from the payment of corporate income tax?

HELD:

YES. The original exemption of PAGCOR from corporate income tax was not made pursuant to a
valid classification based on substantial distinctions so that the law may operate only on some and
not on all. Instead, the same was merely granted due to the acquiescence of the House Committee
on Ways and Means to the request of PAGCOR.

The argument that the withdrawal of the exemption also violates the non-impairment clause will not
hold since any franchise is subject to amendment, alteration or repeal by Congress.
However, the Court made it clear that PAGCOR remains exempt from payment of indirect taxes and
as such its purchases remain not subject to VAT, reiterating the rule laid down in the Acesite case.