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PERALTA, J.:
FACTS
PAGCOR sought for the annulment of RA 9337 for being unconstitutional by excluding them from
exemption from corporate income tax and BIR Revenue Regulations No. 16-2005 which imposes
them VAT for being contrary to law.
PAGCOR contends that pursuant to its charter, PD 1869, it is exempt from any kind of taxes except
francise tax.
ISSUE
Are the assailed RA 9337 and RR 16-2005 invalid for imposing taxes to PAGCOR?
RULING
Under Section 11, Article XII of the Constitution, PAGCOR’s franchise is subject to amendment,
alteration or repeal by Congress such as the amendment under Section 1 of R.A. No. 9377. Hence,
the provision in Section 1 of R.A. No. 9337, amending Section 27 (c) of R.A. No. 8424 by
withdrawing the exemption of PAGCOR from corporate income tax, which may affect any benefits to
PAGCOR’s transactions with private parties, is not violative of the non-impairment clause of the
Constitution.
Anent the validity of RR No. 16-2005, the Court holds that the provision subjecting PAGCOR to 10%
VAT is invalid for being contrary to R.A. No. 9337. Nowhere in R.A. No. 9337 is it provided that
petitioner can be subjected to VAT. R.A. No. 9337 is clear only as to the removal of petitioner's
exemption from the payment of corporate income tax, which was already addressed above by this
Court