Commissioner of Internal

Revenue v. San Miguel

Corporation

G.R. 184428

PARTIES

CIRis the head of Bureau of Internal Revenue

San Miguel Corporation is a

domestic corporation engaged

in the manufacture and sale of

fermented liquors such as

Red Horse beer.

FACTS

ISSUES &

RULING

Does the Revenue

Regulations conform

to the tax reform act?

Under the Tax Reform Act

(RA 8284) Sec. 143

The main issue in this

case is whether Sec. 1 of

BIR Revenue Regulations

No. 17-99 complies with

the Tax Reform Act.

A certain tax is imposed,

depending on the net retail price

per liter of beer.

P14.50 (6.15)

P14.50-P22.00 (9.15)

P22.00 up (12.15)

(excluding excise tax and value-

added tax)

Further, within the next 3 tears

(before the transitory period), taxes

shall not be lower than the tax

which is due from each brand on

Oct. 1996.

But on January 2000, rates of

excise tax shall be increased by

12%. (regardless whether the tax

is lower or higher)

Under the Revenue

Regulation 17-99 by

Secretary of Finance

The tax due after the 12% increase

shall not be lower than the tax

actually paid prior to January

2000.

Because of the said RR, Pepsi was

compelled to pay additional taxes.

They filed a complaint before the

CTA after the BIR denied their claim

for refund.

The court ruled that the Tax Reform Act of 1997 is

clear and unambiguous and therefore an invalid

exercise of the power of Secretary of Finance to

interpret the tax law.

Tax burdens are not to be imposed nor presumed

to be imposed beyond what the statute clearly

imports, as tax statutes must be construed

strictissimi juris against the government.

Between the basic law and a regulation, the basic

law prevails because the regulation cannot go

beyond the provisions of the basic law.

Despite the good faith, the law must be remained

as it is since it is clear and leaves no room for

interpretation.

G.R. 184428 Commissioner of Internal Revenue v. San Miguel Corporation.vsdPage-1