TIO VS VIDEOGRAM

FACTS:
Tio is a videogram operator who assailed the constitutionality of PD 1987 entitled An
Act Creating the ideogram !egulatory "oard# with $road powers to regulate and supervise the
videogram industry% The PD was also reinforced $y PD 199& which amended the 'ational
(nternal !evenue Code% The amendment provides that there shall $e collected on each
processed video)tape cassette* ready for play$ac+* regardless of length* an annual ta, of five
pesos- Provided* that locally manufactured or imported $lan+ video tapes shall $e su$.ect to sales
ta,%# The said law was $rought a$out $y the need to regulate the sale of videograms as it has
adverse effects to the movie industry% The proliferation of videograms has significantly lessened
the revenue $eing ac/uired from the movie industry* and that such loss may $e recovered if
videograms are to $e ta,ed%
Petitioner su$mits that the thirty percent 01234 ta, imposed is harsh and oppressive*
confiscatory* and in restraint of trade%
ISSUE:
5hether or not the the imposition of the ta, on sale and lease of video tapes6disc is valid
considering it regulates* discourages or even definitely deters the activities ta,ed%
HELD:
789% (t is $eyond serious /uestion that a ta, does not cease to $e valid merely $ecause it
regulates* discourages* or even definitely deters the activities ta,ed% The power to impose ta,es
is one so unlimited in force and so searching in e,tent* that the courts scarcely venture to declare
that it is su$.ect to any restrictions whatever* e,cept such as rest in the discretion of the authority
which e,ercises it% (n imposing a ta,* the legislature acts upon its constituents% This is* in
general* a sufficient security against erroneous and oppressive ta,ation%
The ta, imposed $y the D8C!88 is not only a regulatory $ut also a revenue measure
prompted $y the reali:ation that earnings of videogram esta$lishments of around P;22 million
per annum have not $een su$.ected to ta,* there$y depriving the <overnment of an additional
source of revenue% (t is an end)user ta,* imposed on retailers for every videogram they ma+e
availa$le for pu$lic viewing% (t is similar to the 123 amusement ta, imposed or $orne $y the
movie industry which the theater)owners pay to the government* $ut which is passed on to the
entire cost of the admission tic+et* thus shifting the ta, $urden on the $uying or the viewing
pu$lic% (t is a ta, that is imposed uniformly on all videogram operators%
At $ottom* the rate of ta, is a matter $etter addressed to the ta,ing legislature%