1 digested
TRANSCRIPT
-
8/9/2019 1 Digested
1/5
G.R. No. 88291 June 8, 1993
ERNESTO M. MACEDA, petitioner,
vs.
HON. CATALINO MACARAIG, JR., in his c!ci"# s E$ecu"i%e Sec&e", O''ice o' "he(&esi)en", HON. *ICENTE JA+ME, ETC., ET AL., respondents.
Angara, Abello, Concepcion & Cruz for respondent Pilipinas Shell Petroleum Corporation.
Siguion Reyna, Montecillo & Ongsiao for Calte!.
FACTS:
Petitioner contends that P.D. No. 938 repealed the indirect tax exemption o NPC as the
phrase !all orms o taxes etc.,! in its section "#, amendin$ Section "3, %.A. No. &39', as amended() P.D. No. 38#, does not expressl) incl*de !indirect taxes.!
+is point is not ell-taen.
A chronolo$ical revie o the NPC las ill sho that it has (een the lamaer/s intention
that the NPC as to (e completel) tax exempt rom all orms o taxes 0 direct and indirect.
NPC/s tax exemptions at irst applied to the (onds it as a*thori1ed to loat to inance its operations
*pon its creation () virt*e o C.A. No. "2#. hen the NPC as a*thori1ed to contract ith the 45%D
or orei$n inancin$, an) loans o(tained ere to (e completel) tax exempt. Ater the NPC as
a*thori1ed to (orro rom other so*rces o *nds 0 aside iss*ance o (onds 0 it as a$ainspeciicall) exempted rom all t)pes o taxes !to acilitate pa)ment o its inde(tedness.! 6ven hen
the ceilin$s or domestic and orei$n (orroin$s ere periodicall) increased, the tax exemption
privile$es o the NPC ere maintained. NPC/s tax exemption rom real estate taxes as, hoever,
speciicall) ithdran () %ep. Act No. 987, as a(ove stated. The exemption as, hoever, restored
() %.A. No. &39'.
Section "3, %.A. No. &39', as ver) comprehensive in its en*meration o the tax exemptions
alloed NPC. 4ts section "3d is the startin$ point o this (one o contention amon$ the parties. For
eas) reerence, it is reprod*ced as ollos:
T;he Corporation is here() declared exempt:
d From all taxes, d*ties, ees, imposts and all other char$es imposed () the
%ep*(lic o the Philippines, its provinces, cities, m*nicipalities and other $overnment
a$encies and instr*mentalities, on all petrole*m prod*cts *sed () the Corporation in
the $eneration, transmission, *tili1ation, and sale o electric poer.
P.D. No. 38# added phrase !directl) or indirectl)! to said Section "3d, hich no reads as ollos:
-
8/9/2019 1 Digested
2/5
d From all taxes, d*ties, ees, imposts, and all other char$es imposed directly or
indirectly () the %ep*(lic o the Philippines, its provinces, cities, m*nicipalities and
other $overnment a$encies and instr*mentalities, on all petrole*m prod*cts *sed ()
the Corporation in the $eneration, transmission, *tili1ation and sale o electric poer.
6mphasis s*pplied
Then came P.D. No. 938 hich amended Sec. "3a, (, c and d into one ver) simple para$raph
as ollos:
The Corporation shall (e non-proit and shall devote all its ret*rns rom its capital
investment as ell as excess reven*es rom its operation, or expansion. To ena(le
the Corporation to pa) its inde(tedness and o(li$ations and in *rtherance and
eective implementation o the polic) en*nciated in Section one o this Act, the
Corporation, incl*din$ its s*(sidiaries, is here() declared exempt rom the pa)ment
oA"" #ORMS O#taxes, d*ties, ees, imposts as ell as costs and service ees
incl*din$ ilin$ ees, appeal (onds, s*persedeas (onds, in an) co*rt or administrative
proceedin$s. 6mphasis s*pplied
4t m*st (e (orne in mind that Presidential Decree Nos. 38#
and 938 ere iss*ed () one man, actin$ as s*ch the 6xec*tive and
"3( : income, ranchise, realt) taxes>
"3c : import o orei$n $oods re?*ired or its operations and pro@ects>
"3d : petrole*m prod*cts *sed in $eneration o electric poer.
P.D. No. 938 l*mped *p "3(, "3c, and "3d into the phrase !A
-
8/9/2019 1 Digested
3/5
the overnment in NPC/s a*thori1ed capital stoc. And si$niicantl) one o the so*rces o this ann*al
appropriation o P2## million is TAB =N6G accr*in$ to the eneral F*nd o the overnment. 4t
does not stand to reason then that ormer President =arcos o*ld order P2## =illion to (e taen
partiall) or totall) rom tax mone) to (e *sed to pa) the overnment s*(scription in the NPC, on one
hand, and then order the NPC to pa) all its indirect taxes, on the other.
The a(ove concl*sion that then President =arcos l*mped *p Sections "3 (, "3 c and d
into the phrase !All F%=S F! is s*pported () the act that he did not do the same or the tax
exemption provision or the orei$n loans to (e inc*rred.
The same as amended () P.D. No. 38# as ollos:
The loans, credits and inde(tedness contracted this s*(section and the pa)ment o
the principal, interest and other char$es thereon, as ell as the importation o
machiner), e?*ipment, materials, s*pplies and services, () the Corporation, paid
rom the proceeds o an) loan, credit or inde(tedness inc*rred *nder this Act, shall
also (e exempt rom all direct and indirect taxes, ees, imposts, other char$es andrestrictions, incl*din$ import restrictionspre$iously and presently imposed,and to be
imposed () the %ep*(lic o the Philippines, or an) o its a$encies and political
s*(divisions. -86mphasis s*pplied
P.D. No. 938 did not amend the same and so the tax exemption provision in Section 8 (, %.A. No.
&39', as amended () P.D. No. 38#, still stands. Since the s*(@ect matter o this partic*lar Section 8 (
had to do onl) ith loans and machiner) imported, paid or rom the proceeds o these orei$n
loans, %'R' (AS )O O%'R S*+'C% MA%%'R %O "*MP -% *P (-%, and so, the tax exemption
stood as is 0 ith the express mention o !direct
and indirect! tax exemptions. And this !direct and indirect! tax exemption privile$e extended to !taxes,
ees, imposts, other char$es . . . to (e imposed! in the future 0 s*rel), an indication that the lamaers
anted the NPC to (e exempt rom A
-
8/9/2019 1 Digested
4/5
all orms o taxes and impositions itho*t distin$*ishin$ (eteen those that are direct and those that
are not.
4n vie o all the ore$oin$, the Co*rt r*les and declares that the oil companies hich s*ppl)
(*ner *el oil to NPC have to pa) the taxes imposed *pon said (*ner *el oil sold to NPC. 5) the
ver) nat*re o indirect taxation, the economic (*rden o s*ch taxation is expected to (e passed onthro*$h the channels o commerce to the *ser or cons*mer o the $oods sold. 5eca*se, hoever,
the NPC has (een exempted rom (oth direct and indirect taxation, the NPC m*st (eheld exempted
rom a(sor(in$ the economic (*rden o indirect taxation. This means, on the one hand, that the oil
companies hich ish to sell to NPC a(sor( all or part o the economic (*rden o the taxes
previo*sl) paid to 54%, hich the) co*ld shit to NPC i NPC did not en@o) exemption rom indirect
taxes. This means also, on the other hand, that the NPC ma) re*se to pa) the part o the !normal!
p*rchase price o (*ner *el oil hich represents all or part o the taxes previo*sl) paid () the oil
companies to 54%. 4 NPC nonetheless p*rchases s*ch oil rom the oil companies 0 (eca*se to do
so ma) (e more convenient and *ltimatel) less costl) or NPC than NPC itsel importin$ and ha*lin$
and storin$ the oil rom overseas 0 NPC is entitled to (e reim(*rsed () the 54% or that part o the
(*)in$ price o NPC hich veriia(l) represents the tax alread) paid () the oil compan)-vendor tothe 54%.
4t sho*ld (e noted at this point in time that the hole iss*e o ho 4
-
8/9/2019 1 Digested
5/5