TOLENTINO

-versus-

THE SECRETARY OF FINANCE (Roberto Ocampo) and THE COMMISSIONER OF INTERNAL

REVENUE (Liwayway Vinzons-Chato)
CONSOLIDATED CASES CONCERNING:

Expanded Value Added Tax Law (RA no. 7716)

AN ACT RESTRUCTING THE VALUE ADDED TAX (VAT) SYSTEM, WIDENING ITS TAX BASE
AND ENHANCING ITS ADMINISTRATION, AND FOR THESE PURPOSES AMENDING AND
REPEALING THE RELEVANT PROVISIONS OF THE NATIONAL INTERNAL REVENUE CODE,
AS AMENDED, AND FOR OTHER PURPOSES

WHY DID DEAN ASSIGNED THIS CASE?

Claims of Press Freedom and Religious Liberty

Philippine Press Institute Inc. claims that, as applied to newspaper, the law abridges press freedom. It contends
that by withdrawing the exemption previously granted to print media transactions involving printing, publication,
importation or sale of newspapers, Republic Act No. 7716 has singled out the press.
If the press is now required to pay a value-added tax on its transactions, it is not because it is being singled out,
much less targeted, for special treatment but only because of the removal of the exemption previously granted to
it by law. Other exemptions from VAT such as those previously granted to PAL, petroleum concessionaires,
enterprises registered with the Export Processing Zone Authority, and many more are likewise withdrawn.
There is only a risk of suppression of expression of the press if the differential treatment of the press is not
justified.
Grosjean vs American Press Co.
Tax was found to be discriminatory because it was laid on the gross advertising receipts of newspapers
whose weekly circulation was over 20,000 thus taxing only 13 out of 124 publishers
Background of the Case: It was well known that the thirteen newspapers had been critical of Senator
Huey Long, and the Long-dominated legislature of Louisiana respondent by taxing what Long described as
the "lying newspapers" by imposing on them "a tax on lying." The effect of the tax was to curtail both
their revenue and their circulation. As the U.S. Supreme Court noted, the tax was "a deliberate and
calculated device in the guise of a tax to limit the circulation of information to which the public is entitled
in virtue of the constitutional guaranties." (Censorial motive of the law is evident)

American Bible Society v. City of Manila

Here, this Court held that an ordinance of the City of Manila, which imposed a license fee on those
engaged in the business of general merchandise, could not be applied to the appellant's sale of bibles
and other religious literature. It is a restraint to its free exercise of the right to propagate.
This Court relied on Murdock v. Pennsylvania, in which it was held that, as a license fee is fixed in amount
and unrelated to the receipts of the taxpayer, the license fee, when applied to a religious sect, was
actually being imposed as a condition for the exercise of the sect's right under the Constitution. For that
reason, it was held, the license fee "restrains in advance those constitutional liberties of press and
religion and inevitably tends to suppress their exercise."

VAT is different from license tax. LICENSE TAX is the fee or tax charged by a government to issue the license
required for engaging in some regulated activity such as the sale of liquor or the practice of a profession. (imagine if a
newspaper company failed to pay license tax, they cannot anymore practice their profession thus it suppresses their right to freedom of
expression and of the press. Here it becomes a prior restraint to the exercise of their right).VALUE ADDED TAX is imposed on the

sale, barter, lease or exchange of goods or properties or the sale or exchange of services and the lease of
properties purely for revenue purposes.
VAT is not a burden in the exercise of its right. It is not intended to license or regulate the exercise of ones right
(in this case the freedom of the press). Hence, it does not violate freedom of press under the constitution.