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RMC No. 46-2017: Publishes the full text of RA No. 10926, which extends for 25 years the franchise granted to Smart Communications, Inc. to establish, maintain, lease and operate Integrated Telecommunications/Computer/Electronic Services and Stations throughout the Philippines for public domestic and international telecommunications and for other purposes

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Summary

RMC No. 46-2017 publishes the full text of RA No. 10926, which extends for twenty-five (25) years the franchise of Smart Communications, Inc. for public domestic and international telecommunications.

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Key points

  1. Term and revocation. The franchise is in effect for twenty-five (25) years from the effectivity of the Act, unless sooner revoked or cancelled. It is deemed ipso facto revoked if the grantee fails to operate continuously for two (2) years.
  2. Taxes on property. The grantee, its successors or assignees pay the same taxes on real estate, buildings and personal property, exclusive of the franchise, as other persons or corporations. Radio telecommunications and electronic communications equipment, machinery and spare parts needed for the business are exempt from customs duties, tariffs and other taxes, as are items declared exempt in Section 9 of RA No. 10926.
  3. VAT in lieu of other taxes. The grantee pays Value-Added Tax on all gross receipts of the business under the franchise in the Philippines, in lieu of all other taxes levied by any authority, from which it is expressly exempted effective from the Act’s effectivity. It remains liable for Income Taxes unless the latter enactment is amended or repealed.
  4. Return and past liabilities. The grantee files the tax return and pays the tax with the Commissioner of Internal Revenue or an authorized representative, and the return is subject to BIR audit. Valid and existing liabilities, fines, penalties, surcharges and unpaid tax assessments from March 27, 1992 until the effectivity of the new law remain valid and enforceable under RA No. 7294.

Who is affected

  • Smart Communications, Inc., its successors or assignees

Deadlines and effectivity

  • Franchise: twenty-five (25) years from effectivity of RA No. 10926
  • Franchise deemed revoked if no continuous operation for two (2) years
  • Past liabilities from March 27, 1992 until effectivity remain enforceable

Summary by Tax Resources PH. It is not a substitute for the full text of the issuance or professional advice.

Copies of BIR issuances are hosted here for reference. For the official version, check bir.gov.ph. Summaries by Tax Resources PH are not a substitute for the full text or professional advice.