Extent of Liability of Globe Telecommunications, Inc. for Payment of Real Property Taxes

DOJ OPINION NO. 065, s. 2008 September 18, 2008 Secretary Margarito B. Teves Department of Finance Roxas Boulevard corner Pablo Ocampo, Sr. Street Manila 1004 Sir : This refers to your request for clarification (which we consider as a request for reconsideration) of this Department's Opinion dated May 18, 2007 (Op. No. 24, s. 2007) wherein we rendered opinion on the extent of the liability of Globe Telecommunications, Inc. ("Globe") vis--vis the payment of real property taxes in the light of the Supreme Court ruling in "City Government of Quezon City, et al. vs. Bayan Telecommunications, Inc.", G.R. No. 162015, March 6, 2006, 484 SCRA 169. The request, it appears, is raised in view of what you claim as a "contrary opinion" earlier rendered by the Department of Finance, through the Bureau of Local Government Finance (BLGF), stating that "Globe is liable to pay real property tax on its land, buildings and other improvements including its machinery shed and radio relay station tower except on its radio equipment accessories and spare parts needed in its business". You state that the aforesaid opinion was founded upon the ruling of the Supreme Court in "Radio Communications of the Philippines, Inc. vs. Provincial Assessor of South Cotabato, et al.", G.R. No. 144486, April 13, 2005, which "declared that the radio station relay tower, radio station building and machinery shed are real properties and are thus subject to real property tax". With regret, we have to decline your request. It bears stress, at the outset, that pursuant to established policy and precedents, this Department has consistently refrained from entertaining requests for clarification/reconsideration of the opinion of the Secretary of Justice, unless requested by the government functionary for whom the opinion was rendered (Sec. of Justice Op. No. 27, s. 2006; No. 78, s. 2003; No. 49, s. 1984). In the instant case, the opinion sought to be clarified/reconsidered was rendered for and upon the request of the Department of the Interior and Local Government (DILG), thru DILG. Accordingly, we are constrained to decline your instant request. HEScID Besides, and with due respect to the opinion rendered by the BLGF, apart from the clear statement of the Supreme Court in the above-mentioned 2006 case of "City Government of Quezon City vs. Bayan Telecommunications, Inc.", we find no iota of reason to depart from our views expressed in the subject Opinion and, consequently, maintain that the tax exemption privilege of Globe as explicitly provided in its franchise (R.A. No. 7229) is beyond doubt. In fact, our assailed opinion was impliedly sustained by the Supreme Court in the most recent case of "Smart Communications, Inc. vs. City of Davao", G.R. No. 155491, September 16, 2008, thus: Furthermore, in the franchise of Globe (R.A. 7229), the legislature incontrovertibly stated that it will be liable for one and one-half per centum of all gross receipts from business transacted under the franchise, in lieu of any and all taxes of any kind, nature or description levied, established, or collected by any authority whatsoever, municipal, provincial, or national, from which the grantee is hereby expressly exempted. The grant of exemption from municipal, provincial, or national is clear and categorical that aside from the franchise tax collected by virtue of R.A. No. 7229, no other franchise tax may be collected from Globe regardless of who the taxing power is. . . . . (pp. 15-16, Decision) (stress ours) AICHaS This affirms with finality our Opinion No. 24, s. 2007. Very truly yours, (SGD.) RAUL M. GONZALEZ Secretary