SECTION 199.

Franchise Tax - any provision of general or special law to the contrary

notwithstanding, there shall be levied, assessed and collected in respect to all franchises on
radio and/or television broadcasting companies whose annual gross receipts of the
preceding year does not exceed Ten million pesos (P10,000.00), subject to Section 236 of
this Code, a tax of three percent (3%) and on electric, gas and water utilities, a tax of two
percent (2%) on the gross receipts derived from the business covered by the law granting
the franchise:
1. Provided, however, that radio and television broadcasting companies referred to in
this Section shall have an option to be registered as a value-added taxpayer and pay
the tax due thereon:
2. Provided, further, That once the option is exercised, it shall not be revoked.

The grantee shall file the return with, and pay the tax due thereon to the Commissioner or
his duly authorized representative, in accordance with the provisions of Section 128 of this
Code, and the return shall be subject to audit by the Bureau of Internal Revenue, any
provision of any existing law to the contrary notwithstanding.

This refers to all franchises on radio, television, electric, gas and water for radio and
television franchise, there’s a threshold amount of 10M. If you do not exceed to 10M, you are
subject to 3% percentage tax. But if you exceed 10M, you may opt to register in VAT, but
once you choose to be VAT-registered, it shall not be revoked. It’s perpetual. While, for
ellectric, gas and water utilities, there is no threshold amount.