FIRST DIVISION
G.R. No. 217898, January 15, 2020
COMMISSIONER OF INTERNAL REVENUE, PETITIONER, v. BASES CONVERSION AND DEVELOPMENT AUTHORITY, RESPONDENT.
D E C I S I O N
LAZARO-JAVIER, J.:
WHEREFORE, premises considered, the instant Petition for Review is hereby GRANTED. Accordingly, respondent Commissioner of Internal Revenue is ORDERED to REFUND in favor of petitioner BASES CONVERSION DEVELOPMENT AUTHORITY the amount of P101,637,466.40, representing creditable withholding tax paid on July 31, 2008 in connection with the sale/disposition of the 12,036 square-meter property, otherwise known as the "Expanded Big Delta Lots", located in Fort Bonifacio, Taguig City.Petitioner's subsequent motion for reconsideration was denied under Resolution dated January 30, 2014.
SO ORDERED.5
xxx xxx xxx
xxx petitioner's reliance in the cases of Philam Asset Management, Inc. v. Commissioner of Internal Revenue, United International Pictures AB v. Commissioner of Internal Revenue and Asiaworld Properties Phil. Corp v. Commissioner of Internal Revenue, is misplaced. It is noteworthy that the petitioner-taxpayers in these cases do not have a tax-exempt provision on its transaction that is akin to respondent's charter.9
SECTION 8. Funding Scheme. - The capital of the Conversion Authority shall come from the sales proceeds and/or transfers of certain Metro Manila military camps, including all lands covered by Proclamation No. 423, series of 1957, commonly known as Fort Bonifacio and Villamor (Nicholas) Air Base, namely:Section 8 is two (2) pronged. The first commands that the sale proceeds of certain properties in Fort Bonifacio and Villamor (Nicholas) Air Base are deemed appropriated by Congress to each of the aforenamed recipients and for the respective purposes specified therein. Consequently, the sale proceeds are not BCDA income but public funds subject to the distribution scheme and purposes provided in the law itself. Book VI, Chapter 5, Section 32 of the Administrative Code of 1987 directs that "[a]ll monies appropriated for functions, activities, projects and programs shall be available solely for the specific purposes for which these are appropriated." The second expressly enjoins that the proceeds of the sale shall not be diminished by any item or circumstance, including all forms of taxes and fees, to wit:
CampArea in has. (more or less) xxx xxx xxx
The President is hereby authorized to sell the above lands, in whole or in part, which are hereby declared alienable and disposable, pursuant to the provisions of existing laws and regulations governing sales of government properties: Provided, That no sale or disposition of such lands will be undertaken until a development plan embodying projects for conversion shall be approved by the President in accordance with paragraph (b), Section 4, of this Act. However, six (6) months after approval of this Act, the President shall authorize the Conversion Authority to dispose of certain areas in Fort Bonifacio and Villamor as the latter so determines. The Conversion Authority shall provide the President a report on any such disposition or plan for disposition within one (1) month from such disposition or preparation of such plan. The proceeds from any sale, after deducting all expenses related to the sale, of portions of Metro Manila military camps as authorized under this Act, shall be deemed appropriated for the purposes herein provided for the following purposes with their corresponding percent shares of proceeds:(1) Thirty-five percent (35%) - To primarily finance the self-reliance and modernization program of the AFP, the transfer of the AFP military camps and the construction of new camps and the rehabilitation and expansion of the AFP's medical facilities, and the modernization of the government arsenal;Approximately forty hectares (40 has.) of land in Fort Bonifacio, Phase I, shall be retained as a national government and local government centers, sports facilities and parks: Provided, That, in the case of Fort Bonifacio, two and five-tenths percent (2.5%) of the proceeds thereof in equal shares shall each go to the Municipalities of Makati, Taguig and Pateros: Provided, further, That in no case shall farmers affected be denied due compensation.
(2) Twenty-seven and a half percent (27.5%) - To finance the construction and upgrading of infrastructure such as highways, railways and other transport facilities to make Subic, Clark and other former bases accessible: Provided, That other public works, utilities and irrigation projects not specified herein shall be included: Provided, further, That the conversion into commercial uses of the former military baselands proper and their extensions shall be undertaken as much as practicable through the Build Operate-Transfer (BOT) scheme or financed by locator enterprises: Provided, finally, That this appropriation shall be retained by the Conversion Authority as part of its paid-up capital, pursuant to Section 6 of this Act;
(3) Twelve Percent (12%) - To finance the National Shelter Program: Provided, That fifty percent (50%) thereof, shall be used to finance mass social housing project for the underprivileged and homeless citizens of the country and the other fifty percent (50%) to concessional and long-term housing loan assistance for the homeless of Metro Manila, Olongapo City, Angeles City and other affected municipalities contiguous to the base areas;
(4) Three percent (3%) - To finance the National Health Insurance Program;
(5) Five percent (5%) - To finance critical infrastructure projects not covered by the Build-Operate-Transfer (BOT) program in areas surrounding the former base lands;
(6) Two percent (2%) - To finance the benefits/claims of Military War Veterans and their dependents under Republic Act No. 7696;
(7) One percent (1%) - As contribution for the Higher Education Development Fund under Section 10 of Republic Act No. 7722, otherwise known as the Higher Education Act of 1994, the amount of Five hundred million pesos (P500,000,000) or so much thereof, and the balance to finance [students'] scholarship, faculty development and the improvement of physical plants of colleges and universities under the Commission on Higher Education (CHED);
(8) Two percent (2%) - To finance the science and technology scholarships and training of thousands of young Filipino scientists and students in selected countries to be identified by the Department of Science and Technology; and the Study Now Pay Later Program for poor but deserving youths who shall enrol or are enrolled in science and technology (S&T) courses which will propel the country to achieve modernization and competitive excellence in the 21st century: Provided, That at least one (I) scholar/trainee shall be selected from each municipality/city of the country: Provided, further, That they shall render service to the Government for at least three (3) years or shall engage in S&T entrepreneurial activities within the country;
(9) One percent (1%) - To finance the multi-year program of the prosecution service;
(10) Two percent (2%), but in no case exceeding Two billion pesos (P2,000,000,000) - To finance a multi-year modernization program of the National Bureau of Investigation (NBI), the Philippine National Police (PNP) and improvement of prison facilities.
Provided, That seventy percent (70%) of this appropriations shall be used for capital outlay and thirty percent (30%) for training programs and early retirement schemes for their officers and personnel.
(11) One percent (1%), but in no case to exceed One billion pesos (P1,000,000,000) - To finance a multi-year judicial reform program;
(12) Two percent (2%) to finance the establishment of preschool and daycare centers nationwide;
(13) One-half percent (1/2%) but not to exceed Five hundred million pesos (P500,000,000) for the summer program for the education of students (SPES) in accordance with Republic Act No. 7323;
(14) One percent (1%) for the construction of Senior Citizens Centers as provided under Republic Act No. 7876;
(15) Three percent (3%) to the emergency and contingent needs of the areas devastated by the Mount Pinatubo eruptions;
(16) Two percent (2%) for infrastructure development of future special economic zones to be created;
The provisions of law to the contrary notwithstanding, the proceeds of the sale thereof shall not be diminished and, tlterefore, exempt from all forms oftaxes and fees. (Emphasis supplied)
The provisions of law to the contrary notwithstanding, the proceeds of the sale thereof shall not be diminished and, therefore, exempt from all forms of taxes and feesThe provision is self-explanatory.
SECTION 27. Rates of Income Tax on Domestic Corporations. -The argument does not persuade. We agree with the CTA-En Banc that Section 27 is a general law while Section 8 of RA 7227, as amended by RA 7917 is a special law. As a rule, a general law cannot impliedly repeal a special law. Commissioner of Internal Revenue v. Semirara Mining Corporation20 is apropos: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 Government, except the Government Service Insurance System (GSIS), the Social Security System (SSS), the Philippine Health Insurance Corporation (PHIC), the local water districts (LWDs), 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.
As regards the claim of petitioner that respondent SMC's VAT exemption has already been repealed, this Court affirms the CTA decision that respondent SMC's VAT exemption remains intact. R.A. No. 9337's amendment of the NIRC did not remove the VAT exemption of respondent SMC xxxAnother. Section 27 governs all corporations, agencies, or instrumentalities owned or controlled by the Government (GOCCs), with the exception of a few. It directs these GOCCs to "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." The directive presupposes that the funds are income, hence, taxable.xxx xxx xxx
xxx [T]his Court had the occasion to discuss in depth the reasons why PD No. 972 cannot be impliedly repealed by the repealing clause of R.A. No. 9337, a general law, to wit:It is a fundamental rule in statutory construction that a special law cannot be repealed or modified by a subsequently enacted general law in the absence of any express provision in the latter law to that effect. A special law must be interpreted to constitute an exception to the general law in the absence of special circumstances warranting a contrary conclusion. The repealing clause of RA No. 9337, a general law, did not provide for the express repeal of PD No. 972, a special law xxxxxx xxx xxx
xxx Had Congress intended to withdraw or revoke the tax exemptions under PD No. 972, it would have explicitly mentioned Section 16 of PD No. 972, in the same way that it specifically mentioned Section 13 of RA No. 6395 and Section 6, paragraph 5 of RA No. 9136, as among the laws repealed by RA No. 9337.xxx xxx xxx
There are two categories of repeal by implication. The first is where provisions in the two acts on the same subject matter are in an irreconcilable conflict. The later act to the extent of the conflict constitutes an implied repeal of the earlier one. The second is if the later act covers the whole subject of the earlier one and is clearly intended as a substitute, it will operate to repeal the earlier law.
Implied repeal by irreconcilable inconsistency takes place when the two statutes cover the same subject matter; they are so clearly inconsistent and incompatible with each other that they cannot be reconciled or harmonized; and both cannot be given effect, that is, that one law cannot [be] enforced without nullifying the other.
Endnotes:
1Rollo, pp. 67-106.
2Id. at 109-139.
3Id. at 140-144.
4 BIR Form No. 2307.
5Rollo, p. 29
6 CTA Case No. 8140.
7 Section 27.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 Insurance System (GSIS), the Social Security System (SSS), the Philippine Health Insurance Corporation (PHIC), the Philippine Charity Sweepstakes Office (PCSO) and the Philippine Amusement and Gaming Corporation (PAGCOR), 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.
8 Revenue Regulation No. 2-98, Section 2.57.5: Exemption from Withholding. - The withholding of creditable withholding tax prescribed in these Regulations shall not apply to income payments made to the following:
(A) National government and its instrumentalities, including provincial, city or municipal governments;xxx xxx xxx
9Rollo, p. 137
10 Section 10. Claims for credit or tax refund - Claims for tax credit or refund of income tax deducted and withheld on income payments shall be given due course only when it is shown on the return that the income payment received has been declared as part of the gross income and the fact of withholding is established by a copy of the withholding tax statement duly issued by the payor to the payee (BIR Form No. 1743.1) showing the amount paid and the amount of tax withheld therefrom.
11 629 Phil. 405, 412, 417-418 (2010), citing Banco Filipino Savings and Mortgage Bank v. Court of Appeals, 548 Phil. 32, 39-42 (2007).
12 Section 1. Paragraph (d), Section 8 of Republic Act No. 7227: xxx (d) A proposed 30.15 hectares as relocation site for families to be affected by circumferential road 5 and radial road 4 construction:
Provided further, That the boundaries and technical descriptions of these exempt areas shall be determined by an actual ground survey.
The President is hereby authorized to sell the above lands, in whole or in part, which are hereby declared alienable and disposable, pursuant to the provisions of existing laws and regulations governing sales of government properties: Provided, That no sale or disposition of such lands will be undertaken until a development plan embodying projects for conversion shall be approved by the President in accordance with paragraph (b), Section 4 of this Act. However, six (6) months after approval of this Act, the President shall authorize the Conversion Authority to dispose of certain areas in Fort Bonifacio and Villamor as the latter so determines. The Conversion Authority shall provide the President a report on any such disposition or plan for disposition within one (I) month from such disposition or preparation of such plan. The proceeds from any sale, after deducting all expenses related to the sale of portions of Metro Manila military camps as authorized under this Act, shall be deemed appropriated for the purposes herein provided for the following purposes with their corresponding percent shares of proceeds: xxx
The provisions of law to the contrary notwithstanding, the proceeds of the sale thereof shall not be diminished and, therefor, exempt from all forms of taxes and fees.
13 44 Phil. 138 (1922).
14 G.R. No. 89135, December 21, 1989, as cited by petitioner, see rollo, p. 173.
15 G.R. No. 87416, April 8, 1991, 195 SCRA 722, as cited by petitioner, see rollo, p. 174.
16 G.R. No. 44007, March 20, 1991, 195 SCRA 444.
17Bloomberry Resorts and Hotels, Inc., v. Bureau of Internal Revenue, 792 Phil. 751, 767 (2016).
18Id. at 767-768.
19 As amended by Republic Act No. 9487 also known as "An Act Further Amending Presidential Decree No. 1869, Otherwise Known as PAGCOR Charter," duly approved on 20 June 2007.
20 G.R. No. 202534, December 8, 2018.
21Mandanas v. Ochoa, G.R. Nos. 199802 & 208488, April 10, 2019.