BY JUN RAMIREZ
The Court of Tax Appeals (CTA) has ordered the Bureau of Internal Revenue (BIR) to return or issue a tax credit certificate to a gaming company of some P115 million in “erroneously paid income tax” for 2015.
The court’s First Division said that as a licensee of the Philippine Amusement and Gaming Corporation (PAGCOR), Premium Leisure and Amusement, Inc.
(PLAI) is not required to pay income tax.
It noted that PLAI has been remitting to PAGCOR five percent of its annual gross income as license fee.
The 20-page decision written by Associate Justice Catherine Manahan stated that license fee to PAGCOR was already “inclusive of the five percent franchise tax in lieu of all other taxes.”
BIR lawyers argued that PLAI failed to prove that its income came solely from gaming operations, but also from related services.
They also said the corporate income tax exemption was granted to a consortium to which the PLAI belongs.
But the court said “petitioner’s claim was duly substantiated by documents and testimonial evidence.”
It also cited a Supreme Court decision on a similar case that PAGCOR licensees and contractors remain exempted from the payment of corporate and other taxes “since the law is clear that said exemption inures to their benefit.”
PLAI is an investment gaming company that partly owns gaming businesses in the country like the hotel/casino City of Dreams. (Jun Ramirez)
