Taxation Taxation Case Digest: PLDT vs City of Davao, et.al. PHILIPPINE LONG DISTANCE TELEPHONE COMPAN, INC. !PLDT" vs. CIT O# DA$AO an% ADELAIDA &. &A'CELONA, in (e) *a+a*ity as City T)eas)e) of Davao
G'. No. -/012
Ma)*( 34, 355/ 6666666666666666666666666 6666666666666666666666666666 666 TA7 TA7 E7EMPTIONS vs. TA7 TA7 E7CL8SION9 E7CL8SION9 IN IN LIE8 O# ALL TA7ES; TA7ES; P'O$ISION 6666666666666666666666666 6666666666666666666666666666 666
#a*ts:
PLDT +ai% a f)an*(ise tax e<al to t()ee +e)*ent !/=" of its g)oss )e*ei+ts. T(e f)an*(ise tax >as +ai% in lie of all taxes on t(is f)an*(ise o) ea)nings t(e)eof; +)sant to 'A 2503. T(e exe?+tion f)o? all taxes taxes on t(is f)an*(ise o) ea)nings t(e)eof; >as s@se<ently >it(%)a>n @y 'A 2-15 !LGC", >(i*( at t(e sa?e ti?e gave lo*al gove)n?ent nits t(e +o>e) to tax @sinesses enoying a f)an*(ise on t(e @asis of in*o?e )e*eive% o) ea)ne% @y t(e? >it(in t(ei) t( ei) te))ito)ial )is%i*tion. T(e LGC tooB ee*t on ana)y ana)y -, -3. T(e City of Davao ena*te% ena*te% O)%inan*e No. No. 4-, Se)ies of -3, -3, >(i*( in +e)tinent +a)t +)ovi%es: Not>it(stan%ing any exe?+tion g)ante% @y la> o) ot(e) s+e*ial la>s, t(e)e is (e)e@y i?+ose% a tax on @sinesses enoying a f)an*(ise, a )ate of seventyF ve +e)*ent !24=" of one +e)*ent !-=" of t(e g)oss annal )e*ei+ts fo) t(e +)e*e%ing *alen%a) yea) @ase% on t(e in*o?e )e*ei+ts )ealie% >it(in t(e te))ito)ial )is%i*tion of Davao Davao City. City. S@se<ently, Cong)ess g)ante% in favo) of Glo@e Ma*Bay Ca@le an% 'a%io Co)+o)ation !Glo@e" an% S?a)t Info)?ation Te*(nologies, Te*(nologies, In*. !S?a)t" f)an*(ises >(i*( *ontaine% in lei of all taxes; +)ovisos.
In -4, it ena*te% 'A 234, o) t(e P@li* Tele*o??ni*ation Poli*y of t(e P(ili++ines, Se*. 3/ of >(i*( +)ovi%es t(at any a%vantage, favo), +)ivilege, exe?+tion, o) i??nity g)ante% n%e) existing f)an*(ises, o) ?ay (e)eafte) @e g)ante%, s(all i+so fa*to @e*o?e +a)t of +)eviosly g)ante% tele*o??ni*ations f)an*(ises an% s(all @e a**o)%e% i??e%iately an% n*on%itionally to t(e g)antees of s*( f)an*(ises. T(e la> tooB ee*t on Ma)*( -1, -4. In ana)y -, >(en PLDT a++lie% fo) a ?ayo)s +e)?it to o+e)ate its Davao Met)o ex*(ange, it >as )e<i)e% to +ay t(e lo*al f)an*(ise tax >(i*( t(en (a% a?onte% to P/,10-,04.23. PLDT *(allenge% t(e +o>e) of t(e *ity gove)n?ent to *olle*t t(e lo*al f)an*(ise tax an% %e?an%e% a )efn% of >(at (a% @een +ai% as a lo*al f)an*(ise tax fo) t(e yea) -2 an% fo) t(e )st to t(e t(i)% <a)te)s of -0.
Isse:
J(et(e) o) not @y vi)te of 'A 234, Se*. 3/, PLDT is again entitle% to t(e exe?+tion f)o? +ay?ent of t(e lo*al f)an*(ise tax in vie> of t(e g)ant of tax exe?+tion to Glo@e an% S?a)t.
Hel%:
Petitione) *onten%s t(at @e*ase t(ei) existing f)an*(ises *ontain in lie of all taxes; *lases, t(e sa?e g)ant of tax exe?+tion ?st @e %ee?e% to ( ave @e*o?e i+so fa*to +a)t of its +)eviosly g)ante% tele*o??ni*ations f)an*(ise. &t t(e )le is t(at tax exe?+tions s(ol% @e g)ante% only @y a *lea) an% ne<ivo*al +)ovision of la> ex+)esse% in a langage too +lain to @e ?istaBen; an% ass?ing fo) t(e non*e t(at t(e *(a)te)s of Glo@e an% of S?a)t g)ant tax exe?+tions, t(en t(is )na@ot >ay of g)anting tax exe?+tion to PLDT is not a %i)e*t, *lea) an% ne<ivo*al; >ay of *o??ni*ating t(e legislative intent. No) %oes t(e te)? exe?+tion; in Se*. 3/ of 'A 234 ?ean tax exe?+tion. T(e te)? )efe)s to exe?+tion f)o? )eglations an% )e<i)e?ents i?+ose% @y t(e National Tele*o??ni*ations Co??ission !NTC". #o) instan*e, 'A 234, Se*. -2 +)ovi%es: T(e Co??ission s(all exe?+t any s+e*i* tele*o??ni*ations se)vi*e f)o? its )ate o) ta)i )eglations if t(e se)vi*e (as sK*ient *o?+etition to ens)e fai) an% )easona@le )ates of ta)is. Anot(e) exe?+tion g)ante% @y t(e la> in line >it( its +oli*y of %e)eglation is t(e exe?+tion f)o? t(e )e<i)e?ent of se*)ing +e)?its f)o? t(e NTC eve)y ti?e a tele*o??ni*ations *o?+any i?+o)ts e<i+?ent.
Tax exe?+tions s(ol% @e g)ante% only @y *lea) an% ne<ivo*al +)ovision of la> on t(e @asis of langage too +lain to @e ?istaBen.
Poste% @y Little Miss #t)e La>ye) at -5:41 PM E?ail T(is &logT(is S(a)e to T>itte) S(a)e to #a*e@ooB S(a)e to Pinte)est
La@els: f)an*(ise tax, in lie of all taxes +)ovision, national tele*o??ni*ations *o??ission, tax ex*lsion, tax exe?+tion, Taxation Case Digest
