August 31, 2012

Globe Telecom, Inc. Globe Telecom Plaza, Pioneer corner Madison Streets, 1552 Mandaluyong City Attention: ATTY. NORINA AILEEN C. SANCHEZ Head, Local Tax and Special Projects Globe Telecom, Inc. 5th Floor, Globe Telecom Plaza Pioneer corner Madison Sts., Mandaluyong City

Sir/Madam: This has reference to the position letter of Globe Telecommunications, Inc. relative to its alleged exemption from Real Property Tax on its real properties. May I please invite your attention to BLGF Memorandum Circular 01-1010 dated January 13, 2010 stating therein “Clarification on the issue of real property/taxability of GLOBE Telecommunications, Inc. (GLOBE, for brevity) in the light of EN BANC Decision of the Supreme Court (SC) in the case entitled “DIGITAL Telecommunications Philippines, Inc., (Digitel) vs. City Government of Batangas, et. al.” (G.R. No. 156040) promulgated on December 11, 2008, reiterating the Supreme Court Decision in the case of “RCPI vs. Provincial Assessor of South Cotabato,” (G.R. No. 144486) dated April 13, 2005”. The abovementioned BLGF Memorandum Circular quoted the decision in the cited case, the pertinent portion thereof of which reads as follows: “xxx The BLGF, under its Memorandum Circular No. 04-2006 issued on May 2006, and subsequent opinions clarified that “GLOBE is liable to pay real property tax on its radio station buildings, machinery shed, and relay station tower, while radio equipment, accessories and spare parts needed in the business are exempt therefrom”. On the basis in the case entitled „RCPI Vs. Provincial Assessor of South Cotabato,‟ (G.R. No. 144486) promulgated on April 13, 2005. xxx” The BLGF Memorandum Circular is clear relative to the taxability of GLOBE that it leaves no room for any doubt; please take note also that the same argument was used as legal basis by the Executive Director of the BLGF in her reply to the query of the OIC-Provincial Assessor of the Province of Zamboanga de Sur requesting confirmation of the Opinion No. 24, Series of 2007 dated March 4, 2010. In your position paper, you argued that GLOBE is not liable to pay real property tax by virtue of Section (9b) of its franchise said section provides that the grantee shall further pay to the Treasurer of the Philippines each year after the audit and approval on the accounts as prescribed in this act, one and half percentum on all gross receipts from business transacted under this franchise by the said grantee in the Philippines, in lieu of any and all taxes of any kind, nature or description levied, established or collected by any authority whatsoever, municipal, provincial or national which grantee is hereby expressly exempted. Following the reasoning enunciated in the above-quoted BLGF Memorandum Circular, it

Any doubt whether a tax exemption exist is resolved against the taxpayer. GLOBE Telecommunications. Moreover. the Court cited that Globe is exempt from payment of local franchise tax and all other taxes of the same nature. RCPI vs. your interpretation of Section 9(b) of GLOBE Telecom. or charge. exemption from the common burden. the provision does not categorically provide that GLOBE is exempt from payment of Real Property Tax as assessed by the Local Government Unit wherein it is operating its business nor can it be implied therefrom that GLOBE is exempt. City of Davao. fees and charges within its territorial jurisdiction. In relation to Section 252 of the same code which provides that. franchise is too broad to the extent that you put in the provision of the franchise of GLOBE what is not written there thus changing its true meaning as enunciated by the Court in its ruling in the above-cited cases which in turn ties the hand of the Local Government Unit in assessing the proper Real Property Tax due to it and run counter to Article X. City of Batangas. Very truly yours.Page 2 of 2 Provides therein that it is submitted that even without the Supreme Court en Banc Decision in the case of Digitel vs. in case of a municipality within the Metropolitan Manila Area. Kalinga . There shall be annotated on the tax receipt the words “paid under protest”.Municipal Treasurer Both of Tinglayan. PLDT vs. xxxxxxxxx. he shall issue a notice of assessment stating the nature of the tax. Section 5 of the 1987 Constitution which grant local government units the power to create its own sources of revenues and to levy taxes. The position paper of the GLOBE can neither be considered as protest of assessment under Section 195 of the Local Government Code nor can be considered as protest in writing under Section 252 of the same Code for the reason that it is not in the required form rather the position paper can be considered as a mere scrap of paper without any probative value thus the assessment had become final and executory and that GLOBE has no more recourse than to pay correct taxes to the Municipal Treasurer of Tinglayan. Provincial Assessor of South Cotabato. Further. free or not liable for real property tax. In the case of Smart vs. As can be deduced from the above-quoted provisions of the Local Government Code of 1991. Within sixty (60) days from the receipt of the notice of assessment. did not follow proper procedure under the law in filing a protest of assessment or protest in writing but merely sent a position paper stating therein its (GLOBE) alleged real property tax exemption. fees. or charges have not been paid. Inc. interests and penalties. Protest of Assessment – When the local treasurer or his duly authorized representative finds that the correct taxes. in clear and plain terms. who shall decide the protest within sixty (60) days from receipt. the surcharges. With all due respect. Nowhere in the said decision did it categorically state that GLOBE is exempt from payment of real property taxes. Tax exemption must be clear and unequivocal. the amount of deficiency. otherwise the assessment shall become final and executor. city treasurer or municipal treasurer. Payment under protest – (a) No protest shall be entertained unless the taxpayer first pays the tax.e. ESTEFANIA T. The protest in writing must be filed within thirty (30) days from payment of the tax to the provincial. fee. DANNANG Provincial Treasurer Copy furnished: . the taxpayer may file a written protest with the local treasurer contesting the assessment. A taxpayer claiming a tax exemption must point to a specific provision of the law conferring on the taxpayer. Kalinga. under Section 195 of the Local Government Code it provides that. i. Inc. City of Davao and earlier cases. real properties of GLOBE will still be subject to real property tax pursuant to its legislative franchise and jurisprudence.Municipal Mayor . xxxxxx.

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