July 29, 2005
Ponente: Azcuna, J.
FACTS
The Clark and Subic Economic Zones were created by virtue of RA 9227. Sec. 5 of EO 80, which declared that Clark shall have all the applicable incentives granted to the Subic Special Economic and Free Port Zone under RA 7227, and EO 97-A, which clarified the tax and duty free incentive within the SSEZ pursuant to RA 7277, as well as Sec. 4 of BCDA Board Resolution No. 93-05-034, which allowed the tax- and duty-free sale at retail of consumer goods imported via Clark for consumption outside of the CSEZ, were sought to be declared as unconstitutional and void.
Herein petitioners said the aforecited statues were violative of the Constitution as they (1) constitute executive lawmaking, (2) are contrary to RA 7227, and (3) violate the equal protection clause, the prohibition of unfair competition and practices in restraint of trade, and the preferential use of Filipino labor, domestic materials, and locally produced goods.
RULING
SC ruled partly for the petitioners and partly for the CSEZ.
The SC held that Sec. 5 of EO 80 and Sec. 4 of BCDA Board Resolution No. 93-05-034 are null and void because there is no express grant of tax and duty-free privileges to the CSEZ in RA 7227. EO 97-A is valid, except for the second sentences of paragraphs 1.2 and 1.3, which allowed tax- and duty-free removal of goods to certain individuals, even in a limited amount, from the Secured Area of the SSEZ.
On the subject of tax exemption, the Court reiterated that the claimed statutory exemption from taxation should be manifest and unmistakable from the language of the law on which it is based. In other words, it must be expressly granted in a statute stated in a language too clear to be mistaken. Tax exemption cannot be implied as it must be categorically and unmistakably expressed.
