Scribd
Upload
88 views1 page

Taxation and Regulation of Videograms

The case involves a challenge to the constitutionality of PD No. 1987, which created the Videogram Regulatory Board and imposed a 30% tax on the sale, lease, or disposition of videograms. The Supreme Court upheld the tax, finding that it served both regulatory and revenue purposes by addressing issues in the video industry like piracy and helped generate additional tax revenue. While the tax impacts one industry, unequal treatment alone does not make a tax unconstitutional. Taxation can be a valid exercise of the state's police power when used for regulatory purposes.

Uploaded by

Jen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
88 views1 page

Taxation and Regulation of Videograms

The case involves a challenge to the constitutionality of PD No. 1987, which created the Videogram Regulatory Board and imposed a 30% tax on the sale, lease, or disposition of videograms. The Supreme Court upheld the tax, finding that it served both regulatory and revenue purposes by addressing issues in the video industry like piracy and helped generate additional tax revenue. While the tax impacts one industry, unequal treatment alone does not make a tax unconstitutional. Taxation can be a valid exercise of the state's police power when used for regulatory purposes.

Uploaded by

Jen
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

4.

TIO VS VIDEOGRAM REGULATORY BOARD, 1987:

Taxation has been made the implement of the state's police power. Hence, when tax is levied with a regulatory
purpose, the act is primarily an exercise of the police power.

In this case, the levy of the 30% tax was imposed primarily to answer the need for regulating the video industry,
particularly because of the rampant film piracy, the flagrant violation of intellectual property rights, and the
proliferation of pornographic video tapes.

FACTS: This petition was filed in1986 by petitioner on his own behalf and purportedly on behalf of other videogram
operators adversely affected. It assails the constitutionality of PD NO. 1987 entitled "An Act Creating the Videogram
Regulatory Board" with broad powers to regulate and supervise the videogram industry.

One of the grounds raised by petitioner in attacking the constitutionality of PD NO. 1987 is that the tax imposed under
Section 10 is harsh, confiscatory, oppressive and/or in unlawful restraint of trade.

Section 10. Tax on Sale, Lease or Disposition of Videograms. — Notwithstanding any provision of law to
the contrary, the province shall collect a tax of thirty percent (30%) of the purchase price or rental rate, as
the case may be, for every sale, lease or disposition of a videogram containing a reproduction of any motion
picture or audiovisual program. xxxxx

HELD: A tax does not cease to be valid merely because it regulates, discourages, or even definitely deters the
activities taxed. The power to impose taxes is one so unlimited in force and so searching in extent, that the courts
scarcely venture to declare that it is subject to any restrictions whatever, except such as rest in the discretion of the
authority which exercises it. In imposing a tax, the legislature acts upon its constituents. This is, in general, a
sufficient security against erroneous and oppressive taxation.

The tax imposed by the DECREE is not only a regulatory but also a revenue measure prompted by the realization
that earnings of videogram establishments of around P600 million per annum have not been subjected to tax, thereby
depriving the Government of an additional source of revenue. It is an end-user tax, imposed on retailers for every
videogram they make available for public viewing.

The levy of the 30% tax is for a public purpose. It was imposed primarily to answer the need for regulating the
video industry, particularly because of the rampant film piracy, the flagrant violation of intellectual property rights,
and the proliferation of pornographic video tapes.

The public purpose of a tax may legally exist even if the motive which impelled the legislature to impose the tax was
to favor one industry over another. It is inherent in the power to tax that a state be free to select the subjects of
taxation, and it has been repeatedly held that "inequities which result from a singling out of one particular class for
taxation or exemption infringe no constitutional limitation". Taxation has been made the implement of the state's
police power.

You might also like