Religious Freedom
American Bible Society v. Manila Tolentino v. Secretary of Finance and CIR
G.R. No. L-9637 April 30, 1957 G.R. No. 115455 October 30, 1995
Felix, J. Mendoza J.
Facts:
Facts: The value-added tax (VAT) is levied on the sale, barter or exchange of goods
and properties as well as on the sale or exchange of services. RA 7716 seeks to widen the
In the course of its ministry, the Philippine agency of the
tax base of the existing VAT system and enhance its administration by amending the
American Bible Society has been distributing and selling bibles National Internal Revenue Code. There are various suits challenging the constitutionality of
and/or gospel portions thereof throughout the Philippines and RA 7716 on various grounds.
One contention is that RA 7716 did not originate exclusively in the House of
translating the same into several Philippine dialets. The acting City
Representatives as required by Art. VI, Sec. 24 of the Constitution, because it is in fact the
Treasurer of Manila required the society to secure the corresponding result of the consolidation of 2 distinct bills, H. No. 11197 and S. No. 1630. There is also a
Mayor’s permit and municipal license fees, together with compromise contention that S. No. 1630 did not pass 3 readings as required by the Constitution.
Issue:
covering the period from the 4th quarter of 1945 to the 2nd quarter of
Whether or not RA 7716 violates Art. VI, Sections 24 and 26(2) of the
1953. The society paid such under protest, and filed suit questioning Constitution.
the legality of the ordinances under which the fees are being Held:
The argument that RA 7716 did not originate exclusively in the House of
collected. Representatives as required by Art. VI, Sec. 24 of the Constitution will not bear analysis. To
Issue: begin with, it is not the law but the revenue bill which is required by the Constitution to
originate exclusively in the House of Representatives. To insist that a revenue statute and
Whether the municipal ordinances violate the freedom of not only the bill which initiated the legislative process culminating in the enactment of the
religious profession and worship. law must substantially be the same as the House bill would be to deny the Senate’s power
not only to concur with amendments but also to propose amendments. Indeed, what the
Held: Constitution simply means is that the initiative for filing revenue, tariff or tax bills, bills
A tax on the income of one who engages in religious authorizing an increase of the public debt, private bills and bills of local application must
come from the House of Representatives on the theory that, elected as they are from the
activities is different from a tax on property used or employed in districts, the members of the House can be expected to be more sensitive to the local needs
connection with those activities. It is one thing to impose a tax on the and problems. Nor does the Constitution prohibit the filing in the Senate of a substitute bill in
income or property of a preacher, and another to exact a tax for him anticipation of its receipt of the bill from the House, so long as action by the Senate as a
body is withheld pending receipt of the House bill.
for the privilege of delivering a sermon. The power to tax the exercise The next argument of the petitioners was that S. No. 1630 did not pass 3
of a privilege is the power to control or suppress its enjoyment. Even readings on separate days as required by the Constitution because the second and third
if religious groups and the press are not altogether free from the readings were done on the same day. But this was because the President had certified S.
No. 1630 as urgent. The presidential certification dispensed with the requirement not only of
burdens of the government, the act of distributing and selling bibles printing but also that of reading the bill on separate days. That upon the certification of a bill
is purely religious and does not fall under Section 27 (e) of the Tax by the President the requirement of 3 readings on separate days and of printing and
Code (CA 466). The fact that the price of bibles, etc. are a little distribution can be dispensed with is supported by the weight of legislative practice.
higher than actual cost of the same does not necessarily mean it is
already engaged in business for profit. Ordinance 2529 and 3000 are
not applicable to the Society.
Non-Impairment of Obligations of Contracts
Casanovas v. Hord PAGCOR v. BIR
G.R. No. L-3473 March 22, 1907 GR No. 172087 March 15, 2011
Willard, J. Peralta, J.
Facts:
Facts:
In 1897, the Spanish Government, in accordance with the
provisions of the royal decree of 14 may 1867, granted J. Casanovas Petitioner further seeks to prohibit the implementation of
certain mines in the province of Ambos Camarines, of which mines Bureau of Internal Revenue (BIR) Revenue Regulations No. 16-2005
the latter is now the owner. That these were validly perfected mining for being contrary to law. With the enactment of R.A. No. 9337 on
concessions granted to prior to 11 April 1899 is conceded. They May 24, 2005, certain sections of the National Internal Revenue
were so considered by the Collector of Internal Revenue and were by Code of 1997 were amended. Different groups came to this Court via
him said to fall within the provisions of Section 134 of Act 1189 petitions for certiorari and prohibition assailing the validity and
(Internal Revenue Act). The Commissioner, JNO S. Hord, imposed constitutionality of R.A. No. 9337.
upon these properties the tax mentioned in Section 134, which 10% Value Added Tax (VAT) on sale of goods and
Casanovas paid under protest. properties; 10% VAT on importation of goods; 10% VAT on sale of
services and use or lease of properties the Court dismissed all the
Issue: petitions and upheld the constitutionality of R.A. No. 9337.
Whether Section 134 of Act 1189 is valid. On the same date, respondent BIR issued Revenue
Regulations (RR) No. 16--2005,[13] specifically identifying PAGCOR
as one of the franchisees subject to 10% VAT imposed under
Held:
Section 108 of the National Internal Revenue Code of 1997, as
The deed constituted a contract between the Spanish amended by R.A. No. 9337. Furthermore, according to the OSG,
Government and Casanovas. The obligation in the contract was public respondent BIR exceeded its statutory authority when it
impaired by the enactment of Section 134 ofthe Internal Revenue La, enacted RR No. 16-2005, because the latter's provisions are
thereby infringing the provisions of Section 5 of the Act of Congress contrary to the mandates of P.D. No. 1869 in relation to R.A. No.
of 1 July 1902. Furthermore, the section conflicts with Section 60 of 9337.
the Act of Congress of 1 July 1902, which indicate that concessions
can be cancelled only by reason of illegality in the procedure by
which they wer obtained, or for failure to comply with the conditions Issues:
prescribed as requisites for their retention in the laws under which
Whether or not PAGCOR is still exempt from VAT with the
they wer granted. The grounds were not shown or claimed in the
enactment of R.A. No. 9337.
case. As to the allegation that the section violates uniformity of
taxation, the Court found it unnecessary to consider the claim in view
of the result at which the Court has arrived.
Held:
Anent the validity of RR No. 16-2005, the Court holds that the
provision subjecting PAGCOR to 10% VAT is invalid for being
contrary to R.A. No. 9337. Nowhere in R.A. No. 9337 is it provided
that petitioner can be subjected to VAT. R.A. No. 9337 is clear only
as to... the removal of petitioner's exemption from the payment of
corporate income tax, which was already addressed above by this
Court. As pointed out by the OSG, R.A. No. 9337 itself exempts
petitioner from VAT pursuant to Section 7(k) thereof, the following
transactions shall be exempt from the value-added tax:
Transactions which are exempt under international
agreements to which the Philippines is a signatory or under
special laws.
Petitioner is exempt from the payment of VAT, because
PAGCOR's charter, P.D. No. 1869, is a special law that grants
petitioner exemption from taxes. Moreover, the exemption of
PAGCOR from VAT is supported by Section 6 of R.A. No. 9337. The
following services performed in the Philippines by VAT-registered
persons shall be subject to zero percent (0%) rate. Services
rendered to persons or entities whose exemption under special
laws... subjects the supply of such services to zero percent (0%)
rate... although R.A. No. 9337 introduced amendments to Section
108 of R.A. No. 8424 by imposing VAT on other services not
previously covered, it did not amend the portion of Section 108 (B)
(3) that subjects to zero percent rate services performed by VAT-
registered persons to persons or entities whose exemption under
special laws or international agreements to which the Philippines is a
signatory effectively subjects the supply of such services to 0% rate.
