Bureau of Local Government Finance Opinion

December 5, 2002 BUREAU OF LOCAL GOVERNMENT FINANCE OPINION Mr. Lamberto P. Pilatan The Municipal Assessor of San Enrique Municipality of San Enrique S i r : This refers to your letter asking whether the real properties (radio and telecommunications equipment) of PT & T which are directly used in the operation of its franchise located at Mount Caniapasan, Mapili, San Enrique, Iloilo are taxable or tax exempt. This Department through an Indorsement dated February 14, 1995 has already ruled on a similar matter. Attached hereto is a copy of the said Indorsement. In view of Section 14 of RA 4161 as amended, which states that ". . . however, in the event of any competing, individual, partnership or corporation, receiving from Congress of the Philippines, a similar permit or franchise with terms and/or provisions more favorable, than those herein granted or tending to place the herein grantee at any disadvantage, then such term or terms, and/or provisions hereof, and shall operate equally in favor of the grantee as in the case of said competing individual, partnership or corporation", this Department stated in the said Indorsement that "such real properties of the said company (PT & T) which are directly used in the operation of its franchise, should again, in view of the foregoing considerations, be assessed as exempt from the payment of real property taxes commencing January 1, 1993, the year after the franchise of SMART took effect . . . ". In another letter addressed to the City Assessor of Antipolo City, dated 14 August 2001, this Department has stated that, ". . . in consideration of the "ipso facto" provision of the "most favor treatment" clause in the franchise of telecommunications companies (such as LBNI) and the similar "equality of treatment" clause under Section 23 of R.A. No. 7925 which became effective on March 16, 1995, such withdrawn exemption by virtue of Section 234 of R.A. no. 7160 was, in effect, subsequently restored. We attach a copy of the said letter. Considering the foregoing, we believe that the real properties of PT & T which are directly used in operation of its franchise are exempt. cDHAaT Please be guided accordingly. Very truly yours, (SGD.) MA. PRESENTACION R. MONTESA Executive Director