August 22, 2001
Ponente: Mendoza, J.
FACTS
The City of Davao withheld PLDT’s application for a Mayors Permit pending PLDT’s payment of the local franchise tax.
PLDT refused to pay and sought a refund of the franchise tax it had paid before, insisting it was exempt from the payment of franchise tax based on an opinion of the Bureau of Local Government Finance.
Davao City denied PLDT’s protest and claim for tax refund.
RULING
The SC ruled in favor of the City of Davao.
The Local Government Code withdrew all tax exemptions previously enjoyed by all persons. It also authorized local government units to impose a tax on businesses enjoying a franchise notwithstanding the grant of tax exemption to them. Exemptions from taxation are highly disfavored, so much so that they may almost be said to be odious to the law.
He who claims an exemption must be able to point to some positive provision of law creating the right.
