Cebu City prods telcos to pay franchise taxes

CEBU CITY — The city government has found another way to force telecommunications firms to pay franchise taxes, that is, by not renewing their business permits unless they pay the fees.

City administrator Nigel Paul Villarete suspended the processing of business permit applications from firms which refuse to pay taxes.

Among the giant telecommunication firms referred to by the city are Globe Telecom, Smart Communications and the Philippine Long Distance Telephone Co.

"At present, the city is instituting measures to ensure that those doing business in the city pay their franchise and other business taxes as mandated by the law," Villarete said.

Globe spokesman Jonji Gonzales held his comment on the issue, saying he has referred the matter to their head office in Manila.

Officials of telecommunications firms had said that they would not pay local franchise taxes because they are already paying franchise taxes to the national government.

But the city government said the Supreme Court has resolved the issue in favor of local governments in its ruling in the case of PLDT vs City of Davao.

The High Tribunal ruled that telecommunications companies are not exempt from paying franchise taxes to the local government units where they are operating.

The telecommunications firms can be closed for their failure to secure the required business permit.

Two months ago, the city government removed the advertising materials of Globe Telecom and Smart which were installed at the reclamation area for their refusal to pay franchise taxes. — Freeman News Service