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  • PAGCOR Vs CIR

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    This case discusses whether PAGCOR should be subjected to income taxation and VAT. The Supreme Court held that Section 1 of R.A. 9337 is constitutional in subjecting PAGCOR to income taxation, as Congress expressly intended to exclude PAGCOR from exempt GOCCs. However, PAGCOR should not be subjected to VAT, as neither R.A. 9337 nor PAGCOR's charter subjects it to VAT, with Section 109 of R.A. 9337 expressly exempting PAGCOR. Therefore, PAGCOR is subject to income taxation but not VAT.

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    This case discusses whether PAGCOR should be subjected to income taxation and VAT. The Supreme Court held that Section 1 of R.A. 9337 is constitutional in subjecting PAGCOR to income taxation, as Congress expressly intended to exclude PAGCOR from exempt GOCCs. However, PAGCOR should not be subjected to VAT, as neither R.A. 9337 nor PAGCOR's charter subjects it to VAT, with Section 109 of R.A. 9337 expressly exempting PAGCOR. Therefore, PAGCOR is subject to income taxation but not VAT.

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    31 views2 pages

    PAGCOR Vs CIR

    Uploaded by

    Mystic Yuèliànger
    This case discusses whether PAGCOR should be subjected to income taxation and VAT. The Supreme Court held that Section 1 of R.A. 9337 is constitutional in subjecting PAGCOR to income taxation, as Congress expressly intended to exclude PAGCOR from exempt GOCCs. However, PAGCOR should not be subjected to VAT, as neither R.A. 9337 nor PAGCOR's charter subjects it to VAT, with Section 109 of R.A. 9337 expressly exempting PAGCOR. Therefore, PAGCOR is subject to income taxation but not VAT.

    Copyright:

    © All Rights Reserved
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    of 2

    ALMUEDA, KARL ANGELO CHING

    3.) PAGCOR vs. CIR, G.R. No. 172087, March 15, 2011

    FACTS:

     R.A. 9337, a law amending certain provisions of R.A. 8424, was passed.

     Excluded PAGCOR from the exempt GOCCs hence PAGCOR was subjected to pay
    income taxation.

     BIR issued the implementing rules and regulations (IRR) for R.A. 9337; it identified
    PAGCOR as subject to a 10% value added tax (VAT)

     PAGCOR questions the constitutionality of R.A. 9337 as well as the IRR.

     PAGCOR avers that the said provision violates the equal protection clause.

    ISSUE: 

     Whether or not PAGCOR should be subjected to income taxation. (NO)

     Whether or not PAGCOR should be subjected to VAT (YES)

    HELD: 

    Yes. Section 1 of R.A. 9337 is constitutional. It was the express intent of


    Congress to exclude PAGCOR from the exempt GOCCs hence PAGCOR is now subject
    to income taxation.

    The equal protection clause provides that all persons or things similarly situated
    should be treated alike, both as to rights conferred and responsibilities imposed.

    The general rule is, ALL GOCC’s are subject to income taxation. However, certain
    classes of GOCC’s may be exempt from income taxation based on the following
    requisites for a valid classification under the principle of equal protection:

    1) It must be based on substantial distinctions.

    2) It must be germane to the purposes of the law.

    3) It must not be limited to existing conditions only.

    4) It must apply equally to all members of the class.

    The record shows that.

     PAGCOR’s exemption was not really based on substantial distinctions.

     The lawmakers merely exempted PAGCOR from income taxation upon the
    request of PAGCOR itself. 
     This was changed however when R.A. 9337 was passed and now PAGCOR is
    already subject to income taxation.

    On the issue of the imposition of the 10% VAT against PAGCOR,

     Nowhere in R.A. 9337 does it state that PAGCOR is subject to VAT.

     Therefore, that portion of the IRR issued by the BIR is void.

     In fact, Section 109 of R.A. 9337 expressly exempts PAGCOR from VAT. Further,
    PAGCOR’s charter exempts it from VAT.

     To recapitulate, PAGCOR is subject to income taxation but not to VAT.

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