Hest. UF REPRESENTATIVES:

RECEIVED
Republic of the Philippines
HOUSE OF REPRESENTATIVES pave: 14 JUL 2016
Quezon City, Metro Manila Tac: [Oop
ey:

SEVENTEENTH CONGRESS
First Regular Session

PEST TON UNIT
BRES NO NDEX SERVICE

HOUSE BILL No. _ 1589, ~

Introduced by: HON. ARNULFO “NOLI” P. FUENTEBELLA

EXPLANATORY NOTE

The Philippine Amusement and Gaming Corporation is a government-owned and
controlled corporations created by virtue of Presidential Decree No. 1869 to enable the
government “To centralize and integrate the right and authority to operate and conduct
games of chance not heretofore authorized by existing franchises or permitted by law in
order to attain xxx” certain objectives among others, “to fund infrastructure facilities and
socio-civie projects, such as flood control programs, beautification, sewerage and sewage
projects, xxx such other essential services and xxx create recreation facilities which will
expand and improve the country’s tourist attractions xxx”

Moreover, pursuant to existing legal mandates, PAGCOR likewise provides direct
funding to various government programs such as 1. Early Childhood Care and
Development Program; 2. Sports Benefits and Incentives Act; 3. Gasoline Station and
Training Loan Fund; 4. National Museum Act of 1998; 5. Comprehensive Dangerous Act
of 2002; 6 Children TV Act of 1997; 7. Barangay Micro Business Enterprises
Development Fund; 8. Philippine Seafarer’s One Stop Processing Center; 9. The
Philippine Sports Commission Act; 10. The Law Providing Compensation to Victims of
Unjust Imprisonment or Detention and Victims of Violent Crimes.

To tap it all, PAGCOR contributes billions of pesos to the President's Social Fund
(PSF) to enable the Office of the President to carry out its social responsibility and to
immediately respond in times of calamities

In view of these legal impositions and other essential social responsibilities laid
on the PAGCOR’s shoulders, it was exempted from income tax together with other
government-owned and controlled corporations performing socio-civic functions such as
the Government Service Insurance System (GSIS), the Social Security System (SSS), the
Philippine Health Insurance Corporation (PHIC) and the Philippine Charity Sweepstakes
Office (PCSO)

However, In a sudden twist of fate, the tax exemption privilege enjoyed by
PAGCOR under Republic Act No. $424 otherwise known as the “Tax Reform Act of
1997” was removed when it was amended by Republic Act No, 9337 in the year 2005


Consequently, while other GOCCs mentioned in the law continue to enjoy tax
exemption privilege, PAGCOR was single-handedly left out and was deprived of such
tax relief but the burden resulting from existing legal impositions remain on its shoulders

This bill therefore seeks to rectify this absurd situation by repealing Section 27
(C) of Republic Act No. 9337 in order to restore the effectivity of the old law, the Tax
Reform Act of 1997. The provision of the former is a verbatim reproduction of the later
law, except that PAGCOR was expressly deleted.

In view of the foregoing reasons, the approval of this bill is earnestly sought.

2


Republic of the Philippines
HOUSE OF REPRESENTATIVES
Quezon City

SEVENTEENTH CONGRESS
First Regular Session
1539

HOUSE BILL No.

Introduced by: HON. ARNULFO “NOLI” P. FUENTEBELLA

AN ACT
RESTORING THE TAX EXEMPTION PRIVILEGE GRANTED TO THE PHILIPPINE
AMUSEMENT AND GAMING CORPORATION (PAGCOR) UNDER REPUBLIC ACT.
No. 8424 OTHERWISE KNOWN AS THE TAX REFORM ACT OF 1997, AMENDING
FOR THE PURPOSE SECTION 27 (C) OF REPUBLIC ACT No. 9337

Be it enacted by the Senate and the House of Representatives
of the Philippines in Congress assembled:

SECTION 1. Section 27 (C) of the National Intemal Revenue Code of 1997, as
amended. is hereby further amended to read as follows

“SEC. 27. Rates of Income Tax on Domestic Corporations. ~
(A) In General. = xxx xxx xxx.

(C) Government-owned or — Controlled Corporations, Agencies or
Instrumentalities. ~ The provisions of existing special or general laws to the
contrary notwithstanding, all corporations, agencies, or instrumentalities owned
or controlled by the Govemment, except the Government Service Insurance
System (GSIS). the Social Security System (SSS), the Philippine Health
Insurance Corporation (PHIC), THE PHILIPPINE AMUSEMENT AND
GAMING CORPORATION (PAGCOR) and the Philippine Charity Sweepstakes
Office (PCSO). shall pay such rate of tax upon their taxable income as are
imposed by this Section upon corporation or associations engaged in a similar
business. industry. or activity

NNN XXX XXX

Section 27 (C) of Republic Act No. 9337 and all laws, decrees, executive orders,
rules and regulations which are inconsistent with this Act are hereby repealed. amended or
modified accordingly

SEC. 3. This Act shall take effect fifteen (15) days after its publication in the Official
Gazette or in a newspaper of general circulation

Approved.