LEADERS of the House of Represen-tatives have recently questioned the franchise granted to San Miguel-owned Bell Telecommunication Philippines Inc. (BellTel) in the 16th Congress.
House Deputy Speakers Raneo Abu of Batangas and Romero S. Quimbo of Marikina said they are planning to investigate the approval of its franchise, after Smart Communications asked for tax incentives similar to those given to BellTel last year.
Smart Communications is now in the process of renewing its franchise. “There was a lapse in the approval of the franchise of BellTel. It appears that it was approved without the knowledge of the members of the ways and means panel,” Abu said.
“The approval of this franchise is highly irregular. The tax provisions in this franchise were never discussed by the panel,” he added.
BellTel’s legislative franchise, which is valid until mid-2040, was approved as Republic Act (RA) 10900 by House Committee on Legislative Franchise, chaired by former representative and now Marikina Mayor Marcelino Teodoro during the 16th Congress. Abu said applications for franchises should be referred jointly to the House franchise committee and the House ways and means committee.
Under Section 44 of the House Rules, whenever a bill or a resolution covers a subject matter that relates to the jurisdiction of more than one committee, the bill should be referred to the committee whose jurisdiction the subject matter directly and principally relates to.
“Smart said they should be given the same tax privileges as those contained in BellTel’s franchise. The members, including myself, were surprised to see that the franchise had been approved without passing through my committee,” said Quimbo, who was the head of the ways and means panel in the 16th Congress.
“It’s a requirement that all measures that contain tax provisions should pass through the [panel]. And this did not. It effectively makes this tax privilege dubious and with deep legal infirmity. It violated basic procedures of our rules,” he added. According to Quimbo, he will ask the current House leadership to investigate the franchise, particularly its tax provisions, granted to BellTel through RA 10900. Section 9 of RA 10900 exempts BellTel from paying taxes for expenses related to equipment and infrastructure used in its core business.
Abu said the incentives given to BellTel under RA 10900 would “adversely affect” local government units, as the company is exempted from paying many local taxes.
The lawmaker also said he is now drafting a bill that would provide “uniform incentives” to all telecommunications companies.
“These incentives should be uniform for all the telcos,” Abu added.
Before selling its telco assets to PLDT and Globe in May, San Miguel had planned to enter the mobile- phone business and become the fourth player in the local telecommunications industry.