Manila, Davao foiled anew from wringing taxes out of Smart, coco levy firms

The Manila city government has lost anew in its fight to tax cell phone towers.

In a pre-Christmas decision, the Court of Tax Appeals upheld a 2016 victory of Smart Communications to exempt the telecom company from paying local business tax to the city government.

The Manila City Treasurer's Office had assessed Smart nearly P60 million in local business taxes from 2011 to 2015, and an additional P42 million in regulatory taxes for the telecom company's 208 cell sites within the city.

To prevent disruption of service, Smart in 2015 forked out the payments under protest, and then challenged the city government's imposition before the Manila Regional Trial Court.

The Manila City hall lost the first round at the RTC level, with Judge Paulino Gallegos ruling that Smart's legislative franchise exempts the telco from being levied any local business tax.

Instead of refunding Smart, the city government appealed the judge's ruling to the tax appellate court, which last week dismissed the appeal for lack of jurisdiction.

The tax appellate court said Manila had filed the petition for review beyond the 30-day window for appeal, in addition to failing to furnish the Manila RTC with a copy of the petition for review.

“It is well emphasized that the right to appeal is not a natural right and is not part of due process, but merely a statutory privilege to be exercised only in accordance with the law,” said Associate Justice Esperanza FabonVictorino, quoting a 2014 Supreme Court ruling.

Associate Justices Lovell Bautista and Ma. Belen Ringpis-Liban concurred.

Coco levy firms saved from Davao bite

And in what could be the final blow against Davao City’s persistent attempt to tax the so-called coco levy companies, the Court of Tax Appeals again ruled that the 14 target firms are “beyond the scope of the Davao City’s taxing power.”

Voting 7-2 before the Christmas break, the tax appellate court reminded the Davao City Hall that the Supreme Court in 2012 had already ruled that the national government own the 14 coco levy firms, which, therefore, exempt them from any local tax.

The Davao government, since then-mayor Rodrigo Duterte, had wanted to tax the cash dividends received by the 14 companies from their San Miguel Corp. shares, as well as their earnings from money-market placements.

The two dissenters, Associate Justices Juanito Castaneda Jr. and Caesar Casanova, agreed with the Davao City government’s claim that the 14 firms, by placing their deposits in money-market placements, supposedly became de-facto non-bank financial intermediaries, thus making their interest income subject to local business tax.

Heard through the grapevine

Even while in the United States for the holidays, resigned Comelec chairman Andres Bautista could not resist the lure of social media, and created a second Facebook account.

In the new FB page, Bautista identified himself as “Andy” from “Harvard Law School” and showed himself with a wide grin while holding a champagne flute, along with his US-based brother, Martin, and his kids.

Among the first messages to him was from brother Gavin: “Would you like to get a massage...this weekend?”

In addition, Bautista’s Twitter account is still active, with one of his latest postings being ‘Age is just a number, but mine is unlisted!’

E-mail: moneygoround.manila@yahoo.com