CTA orders Pagcor to pay PHP375M in taxes for 2005-2006

The Court of Tax Appeals (CTA) has ordered the Philippine Amusement and Gaming Corporation (Pagcor) to pay PHP375.31 million in deficiency income tax for the years 2005 and 2006, inclusive of surcharge and penalty rates.

In a ruling dated December 22, 2023, Associate Justice Lanee S. Cui-David of the CTA en banc determined that Pagcor is liable to pay PHP8.36 million for 2005 and PHP366.95 million for 2006.

The SC’s decision in November 2017 clarified that Pagcor is only responsible for deficiency income tax on non-gaming activities, while maintaining its exemption from corporate income tax on gaming operations under the Pagcor Franchise Law of 1983.

Initially, the Bureau of Internal Revenue (BIR) had issued assessments totaling PHP5.927 billion in 2008, which included deficiency income tax, value-added tax, and fringe benefit tax (FBT).

The SC’s ruling also determined that FBT is not exempted under these laws.

RA 9337 did not repeal the tax exemption granted to Pagcor but withdrew its corporate income tax exemption on income derived from other related services previously covered by RA 8424.