Friday January 3, 2014 : FOUR YEARS ON, PHILIPPINES COURT NIXES TAX ON INTERNET CAFES
Quezon City government loses case…and a lucrative source of revenues.
Operators of internet cafes in the Quezon region of the Philippines have again emerged victorious in their long running tax dispute with the local government.
The litigation has been ongoing for the past four years and is rooted in the government's questionable 2010 decision to impose a heavier tax on PAGCOR operators than had originally been agreed.
The government took an initial lower court decision against it on the issue to the Philippines’ Court of Tax Appeals, which has now confirmed the lower court ruling stopping the Quezon government from pushing ahead with its revised taxation plans.
The Court confirmed that PAGCOR's tax exemption extends to all taxes with the exception of corporate income tax, a boon granted by the Philippines Congress.
The Court's ruling is also a perhaps timely reminder to Quezon law-makers that on this occasion they over-reached their authority and need to re-familiarise themselves with the correct processes.