DIGITAL TELECOMMUNICATIONS, INC. vs.

CITY GOVERNMENT OF BATANGAS- Real

Property Tax

FACTS:
Petitioner was granted a 25-year franchise to install telecommunications systems
under a law which states that “The grantee shall be liable to pay the same taxes on
its real estate, buildings, and personal property exclusive of this franchise x x x.” As
they were not being issued a Mayor’s permit, Petitioner paid the Real Property Tax
under protest arguing that the phrase “exclusive of this franchise” means that only
the real properties not used in furtherance of its franchise are subject to Real
Property Tax while those real properties which are used in its telecommunications
business are exempt from Real Property Tax.
ISSUE:
Are Petitioner’s real properties used in its telecommunications business exempt from
Real Property Tax?

HELD:
NO. Petitioner’s real properties, whether or not used in its telecommunications
business, are subject to Real Property Tax. The phrase “exclusive of this franchise”
qualifies the term “personal property.” This means that Petitioner’s legislative
franchise, which is an intangible personal property, shall not be subject to taxes. This
is to put franchise grantees in parity with non-franchisees as the latter obviously do
not have franchises which may potentially be subject to realty tax. There is nothing
in the first sentence of Section 5 which expressly or even impliedly exempts
Petitioner from Real Property Tax. Petitioner’s reliance on the BLGF’s opinion stating
that real properties owned by telecommunications companies are exempt from Real
Property Tax is without basis as the BLGF has no authority to rule on claims for
exemption from Real Property Tax.