Radio Communications of the Phils v CTA (1985)

Radio Communications of the Phils. V CTA GR No 60547, July 11, 1985

FACTS:
Under its original franchise, RA 2036 (1957), petitioner RCPI was subject to both the franchise tax and income tax. In
1964, petitioner’s franchise was amended by RA 4054 to the effect that its franchise tax of 1 and 1⁄2% of all gross receipts was provided as in lieu of any and all taxes of any kind and nature. In 1968, RA 4054 was repealed by RA 5431, which withdrew the exemption and subjected RCPI to taxes upon their taxable net income as imposed upon associations or corporations engaged in a similar business or industry.

ISSUE:
Whether the exemption under RA 4054 was repealed by RA 5431

RULING:
Yes. An examination of Section 24 of the Tax Code as amended shows clearly that the law intended all corporate
taxpayers to pay income tax as provided by the statute. There can be no doubt as to the power of Congress to repeal the earlier exemption it granted.

Article XIV, Section 5 of the 1973 Constitution expressly provide that no franchise shall be granted to any individual, firm or corporation except under the condition that it shall be subject to amendment, alteration, or repeal by the legislature when the public interest so requires.

There is no question as to the public interest involved. The country needs increased revenues. The repealing clause is clear and unambiguous. There is a listing of entities entitled to tax exemption. The petitioner is not covered by the provision.