February 2009 Decisions on Tax and Labor Laws

Here are some decisions promulgated by the Supreme Court in February 2009 on tax and labor laws.

NIRC

Lending Investors.  Pawnshops are not lending investors that are subject to the 5% lending investors tax imposed under the National Internal Revenue Code.   Agencia Exquisite of Bohol, Inc. vs. Commissioner of Internal Revenue, G.R. No. 150141, February 10, 2009.

Local Government Code

Local taxes.  Under its franchise, SMART is not exempt from local business and franchise taxes. Moreover, Section 23 of the Public Telecommunications Act does not provide legal basis for Smart’s exemption from local business and franchises taxes. The term “exemption” in Section 23 of the Public Telecommunications Act does not mean tax exemption; rather, it refers to exemption from certain regulatory or reporting requirements imposed by government agencies such as the National Telecommunications Commission. The thrust of the Public Telecoms Act is to promote the gradual deregulation of entry, pricing, and operations of all public telecommunications entities, and thus to level the playing field in the telecommunications industry. The language of Section 23 and the proceedings of both Houses of Congress are bereft of anything that would signify the grant of tax exemptions to all telecommunications entities. Intent to grant tax exemption cannot therefore be discerned from the law; the term “exemption” is too general to include tax exemption and runs counter to the requirement that the grant of tax exemption should be stated in clear and unequivocal language too plain to be beyond doubt or mistake.  The City of Iloilo, Mr. Romeo V. Manikan etc. Vs. Smart Communications Inc., G.R. No. 167260, February 27, 2009.

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