WHEREAS,
under Act No. 3436, the Philippine Long Distance Telephone Company was
granted a franchise for 50 years from November 28, 1928, to install,
operate and maintain a telephone system throughout the Philippines, and
the government imposed on it a franchise tax of 1% of all its gross
receipts, but it shall still pay the same taxes on its real estate,
buildings and personal property; chanroblesvirtualawlibrary
WHEREAS, on November 9, 1970, Republic Act No. 6146 was enacted
extending the term of the franchise of the PLDT for 25 years from the
date of its expiration;chanroblesvirtualawlibrary
WHEREAS, the average franchise tax for telephone corporations and power
companies is 2%; chanroblesvirtualawlibrary
WHEREAS, it is the policy of the government to rationalize the taxes on
private corporations;chanroblesvirtualawlibrary
WHEREAS, the Philippine Long Distance Telephone Company has committed
itself to a massive service improvement and expansion program involving
P4.6 billion through 1982 which is designed to:cralaw:red
a. Install an additional 225,000 telephones.
b. Introduce a total of 200,000 lines of electronic
switching equipment. This is part of a modernization program which will
also require the retirement of outmoded equipment.
c. Introduce new system into the present older type
of equipment in order to ensure constant analysis of operations and
ensure speedier corrective maintenance of faults.
d. Introduce new subscriber services, electronic
PABXs, and new types of subscriber equipment.
e. Establish telephone service in 47 rural areas
integrated into the PLDT nationwide system. chanroblesvirtualawlibrary
f. Upgrade party line services and provide only main
line services in electronic switching offices.
g. Introduce subscriber metering service in
electronic switching offices. chanroblesvirtualawlibrary
h. Introduce Direct Distance Dialing for electronic
switching subscribers and selected subscribers of step-by-step offices.
i. Increase the capacity of the present Microwave
backbone facility from 600 channels to 1200 channels and add to
geographical coverage of the backbone to cover new areas.
j. Expand the International and Domestic toll
switching systems to meet demand forecasts.
k. Provide the terrestrial link for all Domstat earth
station.
l. Provide interconnection with 15 telephone
companies and 100 toll stations. chanroblesvirtualawlibrary
m. Provide automatic mobile telephone service.
n. Replace outmoded toll facilities.
o. Rehabilitate existing outside plant facilities to
upgrade quality of service and provide adequate spare facilities for
speedier restoration of service.
WHEREAS, the Philippine Long Distance Telephone Company should now pay
double its original 1% franchise tax; chanroblesvirtualawlibrary
NOW, THEREFORE, I, FERDINAND E. MARCOS, President of the Philippines,
by virtue of the powers vested in me by the Constitutions, do hereby
decree and order:cralaw:red
Section 1. The provisions of existing law to the
contrary notwithstanding, the Philippine Long Distance Telephone
Company, its successors and assigns, shall pay a franchise tax at the
rate of two per centum of all gross receipts of the telephone or other
electrical transmission business transacted under its franchise,
effective immediately upon the issuance of this Decree and up to the
end of the twenty-five years extended term of its franchise under
Republic Act No. 6146; Provided, That, except for the change in the
rate of franchise tax herein prescribed, it shall be subject to the
same terms and conditions as already provided for under existing
laws. chanroblesvirtualawlibrary
Section 2. Any provisions of laws, decrees, orders,
rules and regulations inconsistent herewith are hereby repealed or
modified accordingly.
Section 3. This Decree shall take effect immediately.
Done in the City of Manila,
this 11th day of June, in the year of Our Lord, nineteen hundred and
seventy-eight.
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