SIXTEENTH CONGRESS OF THE) j aVED
REPUBLIC OF THE PHILIPPINES) OVSEP 2014
Second Regular Session ) 00 PY

HOUSE of REPRESENTATIVES
House Bill No. 4934

Introduced by: MA. THERESA B. BONOAN
4th District, City of Manila

EXPLANATORY

In National Power Corporation v. City of Cabanatuan', the Court declared that “a
franchise tax is a tax on the privilege of transacting business in the state and
exercising corporate franchises granted by the state.” It is not levied on the
corporation simply for existing as a corporation, upon its property or its income, but
on its exercise of the rights or privileges granted to it by the government?

The attached bill seeks to expressly exclude all the franchise holder, licensee
and/or operators of Philippine Amusement and Gaming Corporation (PAGCOR)
from all kinds of imposable taxes and in lieu of the same, to only pay a certain
percentage for franchise tax. Imposition of different taxes would compel these
franchisees to “ pass-on’” the charge to its patrons or clienteles.

Through this bill, the imposition of a franchise tax which is directly absorbed
by the franchisee will free the patrons/clienteles of the franchisees of PAGCOR from
shouldering additional pass on charges.

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

MA. THERESA BONOAN

4th District, City of Manila

* GR. No. 149110, April 9, 2003, 401 SCRA 259, 260.
2 Ibid,


SIXTEENTH CONGRESS OF THE)
REPUBLIC OF THE PHILIPPINES)
Second Regular Session )

HOUSE of REPRESENTATIVES
House Bill No.__ 4934

Introduced by: MA. THERESA B. BONOAN,
4" District, City of Manila

AN ACT AMENDING SECTION 1 (C) OF REPUBLIC ACT NO. 9337

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

SECTION 1. Section 1 (C) of Republic Act No. 9337, is hereby amended to read
as follows:

"(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 Government, except
the Government Service and Insurance System (GSIS), the Social
Security System (SSS), the Philippine Health Insurance Corporation
(PHIC), and the Philippine Charity Sweepstakes Office (PCSO), shall
pay such rate of tax upon their taxable income as are imposed by
this Section upon corporations or associations engaged in a similar
business, industry, or activity.

Provided, that the Philippine Amusement and Gaming Corporation
(PAGCOR) shall not be exempted from the payment of taxable
income as are imposed by this Section.


Provided further, no tax of any kind or form, income or otherwise, as
well as fees, charges or levies of whatever nature, whether National
or Local, shall be assessed and collected to all the franchise holder,
licensee and/or operators of PAGCOR; nor shall any form of tax or
charge attach in any way to the earnings of the said franchise holder,
licensee and/or operators of PAGCOR, except a Franchise Tax of
five (5%) percent of the gross revenue or earnings derived by the
same from its operation under the Franchise. Such tax shal! be due
and payable quarterly to the National Government and shall be in
lieu of all kinds of taxes, levies, fees or assessments of any kind,
nature or description, levied, established or collected by any
municipal, provincial, or national government authority.”

SECTION 2, Repealing Clause. - All laws, decrees, orders, rules and regulations
or other issuances or parts thereof inconsistent with the provisions of this Act are
hereby repealed or modified accordingly.

SECTION 3. Separability Clause. - If any portion or provision of this Act is
declared unconstitutional, the remainder of this Act or any provision not affected
thereby shall remain in force and effect.

SECTION 4. Effectivity. - This Act shall take effect after fifteen (15) days
following the completion of its publication either in the Official Gazette or in a
newspaper of general circulation in the Philippines.

Approved.