BIR Ruling No. 062-82

March 5, 1982 BIR RULING NO. 062-82 267-00 000-00 062-82 Bangko Sentral ng Pilipinas M a n i l a Attention: Mrs . Elena C . Zambales Chief Accountant Gentlemen : This refers to your letter dated July 5, 1979 requesting for opinion on which rate of franchise tax should be applied on PLDT billings for telephone services rendered by it to government offices, for purposes of the withholding provisions of Republic Act No. 1051 as implemented by Revenue Regulations No. 21-67. According to your said letter, you have been withholding 5% franchise tax on PLDT's telephone service bills beginning November 29, 1978, in accordance with Republic Act No. 6146, promulgated November 20, 1970 extending the life of the franchise for 25 years upon the expiration of the original franchise (Act No. 3436) on November 28, 1978, and pursuant to the 3rd Indorsement of this Office dated February 16, 1977 to the Chairman Commission on Audit. In reply, I have the honor to inform you that under Section 1 of Presidential Decree No. 1528 dated June 11, 1978, the provisions of existing laws to the contrary notwithstanding, PLDT, its successors and assigns, shall pay a franchise tax of 2% on its gross receipts from telephone or other electrical transmission business transacted under its franchise, effective immediately upon issuance of said decree, and up to the end of the twenty five (25) years extended term of its franchise under Republic Act No. 6146. Moreover, it is so specifically provided in the said decree that except for the change in the rate of franchise tax (2%) prescribed therein, or shall be subject to the same terms and conditions as already provided for under existing laws. Such being the case, and as the term and condition in the original grant of franchise to PLDT under Act No. 3436, is that payment of franchise tax shall be in lieu of all taxes on earnings under the franchise, beginning June 11, 1978, (date of effectivity of P.D. No. 1528) money payments to PLDT for telephone services rendered to government offices and government owned or controlled corporations are subject to the franchise tax of 2%, to be withheld and paid in accordance with the provisions of Republic Act No. 1051, as implemented by Revenue Regulations No. 16-77. Please be guided accordingly. cdt Very truly yours, RUBEN B. ANCHETA Acting Commissioner