Prospective Application of Executive Order No. 93

June 29, 1987 BIR RULING NO. 182-87 24 000-00 182-87 Gentlemen : This refers to your letter dated May 29, 1987 requesting confirmation of your opinion to the effect that Executive Order No. 93 applies prospectively; and that your client, Maranaw Hotels and Resort Corporation can still carry-over and deduct from its gross income the net operating losses which it has incurred prior to the effectivity of Executive Order No. 93. It is represented that your client, Maranaw Hotels and Resort Corporation (MHRC) owns and manages Century Park Sheraton Hotel; that it enjoys certain tax incentives extended to tourism related industries by Presidential Decree No. 535 more specifically Section 8(b) thereof on "net operating loss carry-over"; and that your client has incurred net losses for the years 1981 to 1985 in the amount of P158,920,855.00 which it has not availed of as a deduction in any year. I reply thereto, I have the honor to inform you that Section 8(b) of Presidential Decree No. 535 provides, viz: "SEC. 8. Incentives available to a Registered Tourism Enterprise . "(a) . . . "(b) A net operating loss incurred in any of the first ten years of operation shall be carried over as a deduction from taxable income for six years following such loss as provided for in Section 7(e) of Republic Act No. 5186". The aforesaid tax incentive which was withdrawn by Presidential Decree No. 1955 on October 15, 1984 has been restored by Fiscal Incentives Review Board Resolution No. 15-85 dated February 14, 1985 effective October 15, 1984. However, on December 17, 1986, Executive Order No. 93 was passed withdrawing the tax and duty exemption privileges granted to government and private entities. The Supreme Court in the case of Taada, et al. vs. Tuvera, et al ., G.R. No. 63915 dated December 29, 1986 held that all statutes , including those of local application and private laws, presidential decrees and executive orders promulgated by the President in the exercise of legislative powers whenever the same are validly delegated by the legislature or, at present, directly conferred by the Constitution, shall be published as a condition for their effectivity; that administrative rules and regulations must also be published if their purpose is to enforce or implement existing law pursuant also to a valid delegation ; and that while newspapers of general circulation could better perform the functions of communicating the laws to the people as such periodicals are more easily available, have a wider readership and come out regularly, that kind of publication is not the one required or authorized by existing law but publication in the Official Gazette despite its erratic releases and limited readership, as provided for in Article 2 of the New Civil Code , reading: "ART. 2. Laws shall take effect after fifteen days following the completion of their publication in the Official Gazette, unless it is otherwise provided. . . ." Executive Order No. 93 nevertheless provides for its own effectivity in Section 6 thereof stating that said Executive Order shall take effect upon the promulgation of its implementing rules and regulations. The said rules and regulations were promulgated on February 19, 1987 and published in the Official Gazette on February 23, 1987. Such being the case, Executive Order No. 93 took effect on March 10, 1987 which is after fifteen (15) days reckoned from February 23, 1987, the date its implementing rules and regulations were published in the Official Gazette. cdta Moreover, it is a rule of statutory construction that all statutes are to be construed as having only a prospective operation unless the purpose and intention of the Legislature to give them a retrospective effect is expressly declared or is necessarily implied from the language used. In every case of doubt, the doubt must be solved against the retrospective effect. (Montilla vs. Agustinian Corp., 24 Phil. 279). In view of the foregoing consideration, your aforesaid opinion is hereby confirmed. Executive Order No. 93 is of prospective application; and MHRC can still carry-over and deduct from gross income its unused net operating losses incurred prior to March 10, 1987, the date of effectivity of Executive Order No. 93, e.g., net operating losses incurred from 1981 up to 1985, provided that they are incurred within the first ten (10) years of operation and are deducted from taxable income within six (6) years following such loss. Very truly yours, (SGD.) BIENVENIDO A. TAN, JR. Commissioner