G.R. No. 252965 /G.R. No. 254102, December 7, 2021
SAINT WEALTH LTD., AS REPRESENTED BY DAVID BUENAVENTURA & ANG LAW OFFICES, PETITIONER, VS. BUREAU OF INTERNAL REVENUE, HEREIN REPRESENTED BY HON. CAESAR R. DULAY, IN HIS CAPACITY AS COMMISSIONER OF THE BUREAU OF INTERNAL REVENUE, AND JOHN DOES AND JANE DOES, AS PERSONS ACTING FOR, IN BEHALF, OR UNDER THE AUTHORITY OF RESPONDENTS, RESPONDENTS. [G.R. No. 254102] MARCO POLO ENTERPRISES LIMITED, MG UNIVERSAL LINK LIMITED, OG GLOBAL ACCESS LIMITED, PRIDE FORTUNE LIMITED, VIP GLOBAL SOLUTIONS LIMITED, AG INTERPACIFIC RESOURCES LIMITED, WANFANG TECHNOLOGY MANAGEMENT LTD., IMPERIAL CHOICE LIMITED, BESTBETINNET LIMITED, RIESLING CAPITAL LIMITED, GOLDEN DRAGON EMPIRE LTD., ORIENTAL GAME LIMITED, MOST SUCCESS INTERNATIONAL GROUP LIMITED, AND HIGH ZONE CAPITAL INVESTMENT GROUP LIMITED, PETITIONERS, VS. THE SECRETARY OF FINANCE, IN THE PERSON OF CARLOS G. DOMINGUEZ III AND THE COMMISSIONER OF INTERNAL REVENUE IN THE PERSON OF CAESAR R. DULAY, RESPONDENTS.

FACTS

This case involves consolidated petitions challenging the constitutionality of Sections 11(f) and (g) of Republic Act No. 11494 (Bayanihan 2 Law) and the validity of Revenue Regulation No. 30-2020, Revenue Memorandum Circular No. 64-2020, and parts of RMC 102-2017 and RMC 78-2018 (collectively, the Assailed Tax Issuances). The Bayanihan 2 Law is a COVID-19 response and recovery measure. Sections 11(f) and (g) identified as sources of funding a 5% franchise tax on gross bets/turnovers of offshore gaming licensees and income tax, VAT, and other applicable taxes on their non-gaming operations. The Court issued a Temporary Restraining Order (TRO) on January 5, 2021, preventing the Bureau of Internal Revenue (BIR) from enforcing these provisions and the Assailed Tax Issuances. Subsequently, Republic Act No. 11590 , a law specifically taxing Philippine Offshore Gaming Operations (POGOs), was enacted. The main decision (ponencia) declared Sections 11(f) and (g) unconstitutional and the Assailed Tax Issuances invalid but also opined that the case had been rendered moot and academic by the enactment of RA 11590.

ISSUE

1. Whether the enactment of Republic Act No. 11590 rendered the petitions moot and academic.
2. Whether Sections 11(f) and (g) of the Bayanihan 2 Law are constitutional.
3. Whether the Assailed Tax Issuances are valid.

RULING

Concurring and Dissenting Opinion of Justice Perlas-Bernabe:
1. On Mootness: The Justice dissents from the ponencia’s view that the case is moot. The general rule is that laws, including amendatory ones like RA 11590, have prospective application unless the contrary is provided. RA 11590 contains no provision for retroactive application. The TRO only prevented the BIR from demanding payment; it did not extinguish the State’s right to receive taxes that may have accrued under the challenged provisions prior to RA 11590’s effectivity. The core issue is whether petitioners were liable for taxes from the issuance of RMC 102-2017 until RA 11590 took effect. This issue remains ripe for judicial review.
2. On Constitutionality of Sections 11(f) and (g): The Justice concurs that these sections are unconstitutional for being “riders” prohibited under Sections 25(2) and 26(1), Article VI of the 1987 Constitution . A rider is a provision alien to the subject or purpose of the bill. The Bayanihan 2 Law is a temporary relief statute for COVID-19 response and recovery, not a tax measure. Sections 11(f) and (g) introduced new tax impositions not derived from pre-existing laws and were designed to outlive the law’s expiration date, directing collections to the General Fund after the pandemic. They lack a reasonable relation to the law’s subject matter as a relief measure and are therefore unconstitutional riders.
3. On Validity of the Assailed Tax Issuances: The Justice concurs in striking down the Assailed Tax Issuances for being issued contrary to relevant tax laws and the PAGCOR Charter (RA 9487). The opinion delves into specific grounds for invalidating these issuances, arguing they improperly expanded tax liability and contravened statutory definitions and international tax treaties.