January 2007 - Philippine Supreme Court Resolutions
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[G.R. No. 149857 : January 24, 2007] PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INC. V. CITY OF ILOILO AND ROMEO V. MANIKAN, IN HIS CAPACITY AS THE CITY TREASURER OF ILOILO :
[G.R. No. 149857 : January 24, 2007]
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INC. V. CITY OF ILOILO AND ROMEO V. MANIKAN, IN HIS CAPACITY AS THE CITY TREASURER OF ILOILO
Sirs/Mesdames:
Quoted hereunder, for your information, is a resolution of this Court dated 24 January 2007:
G.R. No. 149857 - (PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INC. v. CITY OF ILOILO and ROMEO V. MANIKAN, in his capacity as the City Treasurer of Iloilo)
Before us is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court, assailing the August 31, 2001 Final Order[2] of the Iloilo City Regional Trial Court (RTC), Branch 24 in Civil Case No. 00-26101, an action for refund and to declare petitioner exempted from the payment of local franchise and business taxes. It raises the sole issue on whether Section 23 of R.A. No. 7925[3] ipso facto exempts petitioner from payment of local franchise tax.
The facts are undisputed. Petitioner was paying quarterly local franchise taxes from 1997 to the third quarter of 1998, for an aggregate franchise tax payment of PhP 3,217,217.60.[4] On June 2, 1998, petitioner obtained a ruling[5] from the Bureau of Local Government Finance (BLGF) of the Department of Finance (DOF), exempting petitioner from local franchise and business taxes imposable by Local Government Units (LGU), under Sections 137 and 143 of the Local Government Code (LGC), upon the effectivity of R.A. No. 7925 on March 16, 1995. The BLGF construed Section 23 of R.A. No. 7925 - which provides for the equality of treatment in the telecommunications industry - as granting petitioner automatic tax exemption. Thereafter, petitioner informed respondent city about its supposed exemption from the local franchise tax, together with a claim for refund of the PhP 3,217,217.60 it had paid.[6] However, respondent city did not act on petitioner's claim for refund.
On January 13, 2000, petitioner instituted the present action for refund before the trial court,[7] but only for the amount of PhP 1,494,243.13, representing franchise taxes it paid in the first three quarters of 1998. Since only questions of law were raised in the pleadings, the parties agreed, during the pre-trial hearing, to settle the issue on the basis of memoranda. Consequently, on August 31, 2001, the trial court rendered the assailed Final Order denying the claim for refund and dismissing the case.
Hence, we have this instant petition for review on pure questions of law.
The petition raises the sole issue of the applicability of Section 23 of R.A. No. 7925 to petitioner. Petitioner contends that said proviso grants "equality of treatment in the telecommunications industry" and ipso facto granted to it the exemption. It maintains that by virtue of this provision, the "in lieu of all taxes" provision in the franchises of Globe and Smart is "deemed incorporated and written into, and to have amended, its franchise."
The petition is devoid of merit.
The issue raised in the petition and the arguments in support of it have already been passed over extensively, resolved, and laid to rest with finality in the 2001 case of Philippine Long Distance Telephone Company, Inc. (PLDT) v. City of Davao[8] and our subsequent 2003 en banc denial[9] of petitioner's Motion for Reconsideration. Besides, petitioner has not raised any new convincing argument. Moreover, in 2005, we reiterated this ruling in resolving the very same legal issue in PLDT v. City of Bacolod[10] and PLDT v. Province of Laguna.[11] And most recently, in PLDT v. Province of Cebu,[12] we consistently held that the Congress did not intend Section 23 of R.A. No. 7925 to grant a "blanket tax exemption" to all telecommunication entities.
Thus we held in PLDT v. City of Davao that any tax exemption must be interpreted in strictissimi juris against the taxpayer and liberally in favor of the taxing authority:
WHEREFORE, the petition is DENIED for lack of merit and the Final Order of the Iloilo City RTC, Branch 24 is AFFIRMED.
SO ORDERED.
G.R. No. 149857 - (PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, INC. v. CITY OF ILOILO and ROMEO V. MANIKAN, in his capacity as the City Treasurer of Iloilo)
Before us is a Petition for Review on Certiorari[1] under Rule 45 of the Rules of Court, assailing the August 31, 2001 Final Order[2] of the Iloilo City Regional Trial Court (RTC), Branch 24 in Civil Case No. 00-26101, an action for refund and to declare petitioner exempted from the payment of local franchise and business taxes. It raises the sole issue on whether Section 23 of R.A. No. 7925[3] ipso facto exempts petitioner from payment of local franchise tax.
The facts are undisputed. Petitioner was paying quarterly local franchise taxes from 1997 to the third quarter of 1998, for an aggregate franchise tax payment of PhP 3,217,217.60.[4] On June 2, 1998, petitioner obtained a ruling[5] from the Bureau of Local Government Finance (BLGF) of the Department of Finance (DOF), exempting petitioner from local franchise and business taxes imposable by Local Government Units (LGU), under Sections 137 and 143 of the Local Government Code (LGC), upon the effectivity of R.A. No. 7925 on March 16, 1995. The BLGF construed Section 23 of R.A. No. 7925 - which provides for the equality of treatment in the telecommunications industry - as granting petitioner automatic tax exemption. Thereafter, petitioner informed respondent city about its supposed exemption from the local franchise tax, together with a claim for refund of the PhP 3,217,217.60 it had paid.[6] However, respondent city did not act on petitioner's claim for refund.
On January 13, 2000, petitioner instituted the present action for refund before the trial court,[7] but only for the amount of PhP 1,494,243.13, representing franchise taxes it paid in the first three quarters of 1998. Since only questions of law were raised in the pleadings, the parties agreed, during the pre-trial hearing, to settle the issue on the basis of memoranda. Consequently, on August 31, 2001, the trial court rendered the assailed Final Order denying the claim for refund and dismissing the case.
Hence, we have this instant petition for review on pure questions of law.
The petition raises the sole issue of the applicability of Section 23 of R.A. No. 7925 to petitioner. Petitioner contends that said proviso grants "equality of treatment in the telecommunications industry" and ipso facto granted to it the exemption. It maintains that by virtue of this provision, the "in lieu of all taxes" provision in the franchises of Globe and Smart is "deemed incorporated and written into, and to have amended, its franchise."
The petition is devoid of merit.
The issue raised in the petition and the arguments in support of it have already been passed over extensively, resolved, and laid to rest with finality in the 2001 case of Philippine Long Distance Telephone Company, Inc. (PLDT) v. City of Davao[8] and our subsequent 2003 en banc denial[9] of petitioner's Motion for Reconsideration. Besides, petitioner has not raised any new convincing argument. Moreover, in 2005, we reiterated this ruling in resolving the very same legal issue in PLDT v. City of Bacolod[10] and PLDT v. Province of Laguna.[11] And most recently, in PLDT v. Province of Cebu,[12] we consistently held that the Congress did not intend Section 23 of R.A. No. 7925 to grant a "blanket tax exemption" to all telecommunication entities.
Thus we held in PLDT v. City of Davao that any tax exemption must be interpreted in strictissimi juris against the taxpayer and liberally in favor of the taxing authority:
In sum, it does not appear that, in approving �23 of R.A. No. 7925, Congress intended it to operate as a blanket tax exemption to all telecommunications entities. Applying the rule of strict construction of laws granting tax exemptions and the rule that doubts should be resolved in favor of municipal corporations in interpreting statutory provisions on municipal taxing powers, we hold that �23 of R.A. No. 7925 cannot be considered as having amended petitioner's franchise so as to entitle it to exemption from the imposition of local franchise taxes. x x x[13]
WHEREFORE, the petition is DENIED for lack of merit and the Final Order of the Iloilo City RTC, Branch 24 is AFFIRMED.
SO ORDERED.
Very truly yours,
(Sgd.) LUDICHI YASAY-NUNAG
Clerk of Court
(Sgd.) LUDICHI YASAY-NUNAG
Clerk of Court
Endnotes:
[1] Dated October 24, 2001, rollo, pp. 10-72.
[2] Id. at 99-106.
[3] An Act to Promote and Govern the Development of Philippine Telecommunications and the Delivery of Public Telecommunications Service.
[4] Id. at 85.
[5] Id. at 86-91.
[6] Id. at 84-85.
[7] Id. at 73-80.
[8] G.R. No. 143867, August 22, 2001, 363 SCRA 522.
[9] PLDT v. City of Davao, G.R. No. 143867, March 25, 2003, 399 SCRA 442 (Resolution).
[10] G.R. No. 149179, July 15, 2005, 463 SCRA 528.
[11] G.R. No. 151899, August 16, 2005, 467 SCRA 93.
[12] G.R. No. 151208, October 16, 2006 (Resolution).
[13] Supra note 8, 534.
