Saturday, July 07, 2007 Nalzaro: Is Mayor Osmeña pressuring Globe? By Bobby Nalzaro Saksi
CEBU City Mayor Tomas Osmeña refused to issue a permit to Globe Telecom for the construction of a new cell site in Barangay Guadalupe, claiming that the Ayala-owned telecommunications firm failed to pay franchise tax to the City Government.
A few years ago, City Hall insisted on collecting franchise taxes from various telecom companies operating in the city. But industry stakeholders resisted it.
They claimed that local government units (LGUs) can no longer collect franchise taxes from them because they are already paying the same to the national government. They described it as double taxation.
Telecom firm owners leaned on the opinion by the Department of Justice and the Bureau of Local Government Finance of the Department of Finance that they are exempted from paying local franchise tax. The fear is that if telecom firms give in to the demand of the Cebu City Government, other LGUs might also collect franchise tax from them. Operation of telecom firms encompasses many other LGUs in the country.
The mayor threatened to close the business offices of telecom companies if they refuse to give in to his demand. Thinking that it cannot fight City Hall, Globe signed a memorandum of agreement (MOA) with the City Government in 2003. Some of its pertinent provisions are:
--Globe shall pay to the City P10 million yearly, effective the date of the signing and every year thereafter during Osmeña’s term, for its real property and franchise taxes.
--Globe shall give P15 million for real property and franchise taxes and any other tax that may be due to and/or assessed by the City as taxes in arrears, with the City accepting the amount as full payment.
--Globe’s payment shall not in any way be construed by the parties or anybody as an admission by Globe of real property tax or franchise tax liability due to the City or any entity, as the agreement is essentially one of and for the purpose of compromise only.
--Upon the expiration of Osmeña’s term, both parties may opt to continue with the agreement with the same terms and conditions or under new ones mutually agreed upon.
The mayor is into his last term after he was reelected last May 14. The MOA has not been renewed yet. Is his latest act his way of pressuring Globe to renew the MOA? If so, it is tantamount to hostage-taking. *** I received complaints about the service of Sun Cellular. Again, the problem for the network's subscribers is the signal coverage and the difficulty of contacting other parties, even Sun to Sun, especially during peak calling hours. Despite its aggressive marketing strategy and its attractive offers to its subscribers, Sun Cellular failed to expand its coverage by putting up more cell sites.
My teenage son is using Sun because he was attracted by its unlimited call and text messaging package. But he gets frustrated because he cannot easily get through to the other party he is calling. Worse, he goes outside our apartment every time he uses the phone because there is no signal inside. I hope this Gokongwei-owned cellular network will improve its service.
