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PLDT vs. CITY OF DAVAO
and ADELAIDA B.  

BARCELONA, in her
capacity as City Treasurer of  Search …

Davao GR. No. 143867, March

25, 2003
OCTOBER 6, 2017
CATEGORIES

Appeals

Bail
 
Banking
FACTS: 
Bar Q & A
PLDT paid a franchise tax Civil Law
equal to three percent (3%)
of its gross receipts. The Civil Law

franchise tax was paid “in

Constitutional Law
lieu of all taxes on this
franchise or earnings Corporation Law
thereof” pursuant to RA
7082. The exemption from Criminal Law

“all taxes on this franchise

Election Law
or earnings thereof” was
subsequently withdrawn by Homicide

RA 7160 (LGC), which at the

Insurance
same time gave local
government units the power Intellectual
to tax businesses enjoying a Property Law
franchise on the basis of
International Law
income received or earned by
them within their territorial Internet Crime
jurisdiction. The LGC took
e ect on January 1, 1992. Labor Law

Law School
The City of Davao enacted
Ordinance No. 519, Series of Legal Ethics
1992, which in pertinent part
provides: Notwithstanding Mercantile Law

any exemption granted by

Political Law
law or other special laws,
there is hereby imposed a Remedial Law
tax on businesses enjoying a
Special Proceedings
franchise, a rate of seventy-
ve percent (75%) of one Statutory
percent (1%) of the gross Construction
annual receipts for the
Taxation
preceding calendar year
based on the income receipts
realized within the
territorial jurisdiction of
RECENT
Davao City.
POSTS
Subsequently, Congress
granted in favor of Globe and
Smart franchises which
contained “in leiu of all
taxes” provisos.
In 1995, it enacted RA 7925,
Atty. Mane v. Judge
Belen A.M. No. RTJ-
08-2119 June 30,
2008 Legal and
Judicial Ethics
Sps. Solitarios and
Torda v. Sps. Jaque

or the Public G.R. No. 199852

Telecommunication Policy
of the Philippines, Sec. 23 of
which provides that any
advantage, favor, privilege,
exemption, or immunity
granted under existing
franchises, or may hereafter
be granted, shall ipso facto
November 12, 2014
Equitable Mortgage
People v. Fabro G.R.
No. 95089 August
11, 1997 Conspiracy,
Treachery, Evident
Premeditation,
Confession,
Constitutional

become part of previously RIghts of the

Accused
granted telecommunications
franchises and shall be Gamboa v. Cruz G.R.
accorded immediately and No. L-56291 June
unconditionally to the 27, 1988
Constitutional
grantees of such franchises.
Rights of the
The law took e ect on March Accused
16, 1995.
Domingo v.

In January 1999, when PLDT Domingo G.R. No. L-

30573 October 29,
applied for a mayor’s permit
1971 Contract of
to operate its Davao Metro Agency
exchange, it was required to
pay the local franchise tax
which then had amounted to
P3,681,985.72. PLDT
challenged the power of the
city government to collect
the local franchise tax and
demanded a refund of what
had been paid as a local
franchise tax for the year
1997 and for the rst to the
third quarters of 1998.

ISSUE:

Whether or not by virtue of

RA 7925, Sec. 23, PLDT is
again entitled to the
exemption from payment of
the local franchise tax in
view of the grant of tax
exemption to Globe and
Smart.

RULING:: 

Petitioner contends that

because their existing
franchises contain “in lieu of
all taxes” clauses, the same
grant of tax exemption must
be deemed to have become
ipso facto part of its
previously granted
telecommunications
franchise. But the rule is that
tax exemptions should be
granted only by a clear and
unequivocal provision of law
“expressed in a language too
plain to be mistaken” and
assuming for the nonce that
the charters of Globe and of
Smart grant tax exemptions,
then this runabout way of
granting tax exemption to
PLDT is not a direct, “clear
and unequivocal” way of
communicating the
legislative intent.

Nor does the term

“exemption” in Sec. 23 of RA
7925 mean tax exemption.
The term refers to
exemption from regulations
and requirements imposed
by the National
Telecommunications
Commission (NTC). For
instance, RA 7925, Sec. 17
provides: The Commission
shall exempt any speci c
telecommunications service
from its rate or tari
regulations if the service has
su cient competition to
ensure fair and reasonable
rates of tari s. Another
exemption granted by the
law in line with its policy of
deregulation is the
exemption from the
requirement of securing
permits from the NTC every
time a telecommunications
company imports
equipment.

Tax exemptions should be

granted only by clear and
unequivocal provision of law
on the basis of language too
plain to be mistaken.
  OCTOBER 6, 2017  PINAYJURIST
 TAXATION  RA 7925, TAX EXEMPTION

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