PHILIPPINE AMUSEMENT AND GAMING CORPORATION (PAGCOR)

vs.

THE BUREAU OF INTERNAL REVENUE(BIR), G.R. No. 172087 Ma!" 1#, 2011FACTS$

PAGCOR was created pursuant to Presidential Decree (P.D.) No. 1067 A

 on "anuar# 1$ 1%77. &i'ultaneous to itscreation$ P.D. No. 1067  

 (supple'entin* P.D. No. 1067 A) was issued e+e'ptin* PAGCOR ,ro' t-e pa#'ent o, an#t#pe o, ta+$ e+cept
a ,ranc-ise ta+ o, ,ive percent ( /) o, t-e *ross revenue.

  - erea,ter$ on "une !$ 1%72$ P.D. No. 1 %%was issued e+pandin* t-e scope o, PAGCOR3s e+e'ption.

 o consolidate t-e laws pertainin* to t-e ,ranc-ise and powers o, PAGCOR$ P.D. No. 126%

 was issued. PAGCOR3s ta+e+e'ption was re'oved in "une 1%2  t-rou*- P.D. No. 1% 1$ 4ut it was later
restored 4# 5etter o, nstruction No. 10$w-ic- was issued in &epte'4er 1%2 . On "anuar# 1$ 1%
%2$ R.A. No. 2!$

 ot-erwise nown as t-e

National Internal Revenue Code of 1997 

$ too e,,ect. &ection !7 (c) o, R.A. No. 2! provides t-at *overn'entowned and
controlledcorporations (GOCCs) s-all pa# corporate inco'e ta+$ e+cept petitioner PAGCOR$ t-
e Govern'ent &ervice andnsurance Corporation$ t-e &ocial &ecurit# &#ste'$ t-e P-ilippine 8ealt-
nsurance Corporation$ and t-e P-ilippineC-arit# &weepsta es O,,ice.9it- t-e enact'ent o, R.A. No.
%7

10

 on :a# !$ !00$ certain sections o, t-e National nternal Revenue Code o, 1%%7were a'ended. -e
particular a'end'ent t-at is at issue in t-is case is &ection 1 o, R.A. No. % 7$ w-ic- a'ended&ection !7
(c) o, t-e National nternal Revenue Code o, 1%%7 4# e+cludin* PAGCOR ,ro' t-e enu'eration o,
GOCCst-at are e+e'pt ,ro' pa#'ent o, corporate inco'e ta+.Di,,erent *roups ca'e to t-is Court via
petitions ,or

certiorari

and pro-i4ition
11

 assailin* t-e validit# and constitutionalit# o, R.A. No. %7$ in particular;

&ection $ &ection $ and &ection 6$ were alle*ed to 4e violative o, &ection !2 (!)$ Article <  o, t-e
Constitution$w-ic- section vests in Con*ress t-e e+clusive aut-orit# to ,i+ t-e rate o, ta+es$ and o,
&ection 1$ Article  o, t-eConstitution on due process$ as well as o, &ection !6 (!)$ Article <  o, t-
e Constitution$ w-ic- section provides ,or t-e =no a'end'ent rule= upon t-e last readin* o, a 4ill. &ections
2 and 1! were alle*ed to 4e violative o, &ection 1$ Article  o, t-e Constitution$ or t-e *uarantee o,
e>ual protection o, t-e laws$ and &ection !2 (1)$ Article < o, t-eConstitution?

On &epte'4er 1$ !00  t-e

$ Court dis'issed all t-e petitions and up-eld t-e constitutionalit# o, R.A. No.
%7.

1!

 On t-e sa'e date$ respondent R issued Revenue Re*ulations (RR) No. 16 !00 $

1

 speci,icall# identi,#in*PAGCOR as one o, t-e ,ranc-isees su4@ect to 10/ <A  i'posed under &ection 102
o, t-e National nternal RevenueCode o, 1%%7$ as a'ended 4# R.A. No. % 7.8ence$ t-e present
petition ,or certiorari.

ISSUE$

 - e 'ain issue is w-et-er or not PAGCOR is still e+e'pt ,ro' corporate inco'e ta+ and <A  wit- t-e
enact'ent o, R.A.No. %7.

RULE$

nder &ection 1 o, R.A. No. %7$ a'endin* &ection !7 (c) o, t-e National nternal Revenue Code o,
1%77$ petitioner isno lon*er e+e'pt ,ro' corporate inco'e ta+ as it -as 4een e,,ectivel# o'itted ,ro' t-e list
o, GOCCs t-at are e+e'pt,ro' it.  a+ation is t-e rule and e+e'ption is t-e e+ception.

!

  - e 4urden o, proo, rests upon t-e part# clai'in* e+e'ptionto prove t-at it is$ in ,act$ covered 4# t-e
e+e'ption so clai'ed.

!

 B+e'ptions 'ust 4e s-own to e+ist clearl# andcate*oricall#$ and supported 4# clear le*al provision.

!6

 n t-is case$ PAGCOR ,ailed to prove  t-at it is still e+e'pt ,ro' t-epa#'ent o, corporate inco'e ta+$
considerin* t-at &ection 1 o, R.A. No. %7 a'ended &ection !7 (c) o, t-e National nternal Revenue
Code o, 1%%7 4# o'ittin* PAGCOR ,ro' t-e e+e'ption. - e le*islative intent$ as s-own 4# t-e discussions in
t-e ica'eral Con,erence :eetin*$ is to re>uire PAGCOR to pa#corporate inco'e ta+? -ence$  t-e o'ission
or re'oval o, PAGCOR ,ro' e+e'ption ,ro' t-e pa#'ent o, corporate inco'eta+. t is a 4asic precept o,
statutor# construction t-at t-e e+press 'ention o, one person$ t-in*$ act$ or conse>uencee+cludes all ot-
ers as e+pressed in t-e ,a'iliar 'a+i' e+pressio unius est e+clusio alterius.

!7

 PAGCOR cannot ,indsupport in t-e e>ual protection clause o, t-e Constitution$ as t-e le*islative records
o, t-e ica'eral Con,erence :eetin*dated Octo4er !7$ 1%%7$ o, t-e Co''ittee on 9a#s and :eans$ s-ow t-
at PAGCORs e+e'ption ,ro' pa#'ent o, corporate inco'e ta+$ as provided in &ection !7 (c) o, R.A. No. 2!
$ or t-e National nternal Revenue Code o, 1%%7$ wasnot 'ade pursuant to a valid classi,ication
4ased on su4stantial distinctions and t-e ot-er re>uire'ents o, a reasona4leclassi,ication 4# le*islative
4odies$ so t-at t-e law 'a# operate onl# on so'e$ and not all$ wit-out violatin* t-e e>ualprotection
clause.  - e le*islative records s-ow t-at t-e 4asis o, t-e *rant o, e+e'ption to PAGCOR ,ro'
corporateinco'e ta+ was PAGCORs own re>uest to 4e e+e'pted.