GMA Network Inc. petitioned the Quezon City Regional Trial Court to stop the city treasurer from enforcing against the broadcast giant its P823.97 million assessment of taxes. The petition for prohibition said QC treasurer Edgar Villanueva’s assessment lacks basis and authority.
In the Notices of Assessment issued by QC Treasurer Villanueva last June 17, 2011, the City Government imposed upon GMA taxes worth P823,973,981.21 for “business tax as contractor"; and P3,154,607.71 for “dividends" based on actual sales from 2005 to 2010 plus surcharge and interest.
According to the Network’s legal counsel Atty. Gener Asuncion of Belo Gozon Elma Parel Asuncion and Lucila (BGEPAL), GMA is not legally liable to pay the contractor’s taxes because GMA does not fall under the definition of “contractor" in either Section 131 of the Local Government Code or Section 3, Article 1 of the QC Revenue Code.
GMA Network clarified that it does not produce or sell advertisements but merely broadcasts the advertisements produced by the advertising companies. Hence, it is not covered by the definition of “contractor" for “advertising services."
The broadcaster also finds no legal basis for the QC Government’s imposition of the business tax on the Company’s dividends either in the Local Government Code or in the QC Revenue Code.
GMA said it is protected by the income tax provision of the National Internal Revenue Code, which says that local government units have no authority to impose taxes thereon, except for local transfer tax on real property.
Ronnie Mastrili, GMA vice president for finance, said, in a letter to the QC Treasurer’s Office dated last July 6, that the firm diligently paid P266,190,773.43 for its local franchise tax from 2006 to 2010, in accord with the QC Revenue Code.
Mastrili noted in that same letter how GMA’s diligence in paying taxes even won for it several awards from the City Government . — ELR/VS, GMA News
Information Courtesy of GMA News
http://www.gmanews.tv/story/230448/business/gma-network-challenges-qc-treasurers-tax-assessment
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