Press Release
March 27, 2009


For being counterproductive to local autonomy, Senator Bong Revilla strongly opposed five House bills that seek to exempt telecommunication companies (telcos) from paying taxes except for a national franchise tax.

Revilla said he is dismayed that while the House is proposing an additional tax on text messaging that will most likely be passed on to the public, there are serious recommendations that seek to free telcos from paying taxes.

"It is very absurd that while there are moves to increase the burden of our countrymen with another tax, we are proposing to free the giant telcos of its tax obligations, especially local taxes. This will be sending a wrong signal that the government's tax policy is to tax small, ordinary citizens and favor big business, which should be taxed more because they are in a better position to shoulder a greater burden. We lawmakers are supposed to alleviate our people from poverty not further impoverish them," said Revilla, chairman of the Senate Committee on Public Services.

The senator was referring to House Bill no. 5847, amending RA 8337 or the franchise of Meridian Telekoms Inc. (renamed Smart Broadband Inc.); HB 5753, amending RA 7293 or the franchise of Pilipino Telephone Corp.; HB 5754, amending RA 7294 or the franchise of Smart Communications Inc.; HB 5755, amending RA 7082 or the franchise of Philippine Long Distance Telephone Co. (PLDT); and HB 5756, amending RA 9130 or the franchise of Connectivity Unlimited Resource Enterprise Inc.

"The government is badly in need of funds during this financial crunch. LGUs in particular are in dire need for revenues to spend for services they render to their constituents. I was once Governor so I understand their plight. These LGUs host the telcos' facilities. It is wrong that they are not made to benefit. These are the reasons why I cannot support this," he said.

Revilla stressed that moves to exempt telcos from local taxes would be trampling on the growth of LGUs, running counter to Article II, Section 25, of the 1987 Constitution mandating that "The State shall ensure the autonomy of Local Governments."

He also cited Article X, Section 5 of the Constitution which states that each local government unit shall have the power to create its own sources of revenues and to levy taxes, fees, and charges consistent with the basic policy of local autonomy.

"Instead of upholding our commitment to empower our LGUs, these legislative proposals will deprive them a source of huge revenues that could be used for development," the lawmaker warned.

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