This came as a big relief to Solaire Resort and Casinos where the Philippine Supreme Court has upheld its decision declaring that Bloomberry Resorts and Hotels Inc.’s is exempted from paying corporate Income tax as a franchise of the Philippine Amusement and Gaming Corporation. As per the report of The Manila Times, the high tribunal has enjoined country’s Bureau of Internal Revenue from implementing a memorandum of the circular that imposed corporate income taxes on Pagcor’s and its franchise earnings.
Solaire Resort and Casinos is operated by Bloomberry and as pointed out under Presidential Decree No.1869 or the Pagcor Charter the state regulator should only pay five percent franchise tax on its gross revenues “in lieu of all taxes of any kind or form, as well as fees, charges or levies of whatever nature, which necessarily include corporate income tax.”
It is also added that “There was no need for Congress to grant tax exemption to [Pagcor] with respect to its income from gaming operations as the same is already exempted from all taxes of any kind or form, income or otherwise, whether national or local, under its Charter, save only for the five percent franchise tax.”
As per the Supreme Court even Bloomberry’s parent company, Sureste Properties, Inc is exempted since it is extended to Pagcor’s licensees.
SC said “Bloomberry and its parent company, Sureste Properties, Inc., own and operate Solaire Resort & Casino. Thus, being one of its licensees, petitioner only pays Pagcor license fees, in lieu of all taxes, as contained in its provisional license and consistent with the PAGCOR Charter or Presidential Decree (PD) No. 1869, which provides the exemption from taxes of persons or entities contracting with PAGCOR in casino operations.”
As per a senior court official who clarified that this decision cannot be interpreted as applying to the entire industry and he explained this through a phone text message “It’s a division decision involving only one party.” “It binds that party — but is not doctrine — so, it does not bind others.”
Bloomberry pointed out in its petition that the tax bureau, in issuing the circular, overstepped its authority by ruling contrary to a law’s intent.
BRHI also said “Indeed, administrative issuances must not override, supplant or modify the law, but must remain consistent with the law they intend to carry out. Only Congress can repeal or amend the law.”
