‘No need for telecom franchise, tax exemption for US forces’

MANILA, Philippines - There is no need for Congress to grant a franchise to US forces to operate a telecommunications system and exemption from paying local taxes under the Enhanced Defense Cooperation Agreement (EDCA), legal experts in the House of Representatives said yesterday.

Deputy Speaker and Isabela Rep. Giorgidi Aggabao and Marikina City Rep. Romero Quimbo were responding to criticisms that the move to allow visiting US forces to operate their own telecommunication system and exempt them from paying taxes usurped the power of Congress to grant telecommunication franchises and tax exemptions.

“My opinion is if the grant of telecommunication rights to the US forces and their exemption from any taxes are among the stipulations in EDCA, I would think that stipulation becomes part of the supreme law of the land binding upon the legislature and the judiciary, and the assent of Congress is no longer required,” Aggabao said.

He cited statements from Malacañang that the EDCA is neither a new treaty nor an executive agreement, but is part of the Visiting Forces Agreement (VFA) between the Philippines and the US.

“I would add that the VFA is not only a law. It is a contract. Consequently, all its provisions, clear and definite, are binding to the entire branches of the contracting governments,” he said.

Quimbo said the country’s tax code provides a clear exemption of governmental functions of other nationals validly visiting the Philippines.

“If the grant of exemptions under EDCA is similar to what I have mentioned, then it is not outside of the authority of the executive branch. They are not giving a grant but effectively carrying out an edict which Congress has delegated to the executive,” he said.

Bayan Muna Rep. Neri Colmenares earlier scored the government for granting the US a franchise to operate a telecommunication system and all the radio band spectrums it requires.

Colmenares noted the granting of tax exemption for the US for its troops and contractors of water, electricity and other public utilities.

“While ordinary Filipinos pay value-added taxes and other fees for the use of electricity and other public utilities, we are subsidizing the taxes of the Americans,” Colmenares said.

“While the Bureau of Internal Revenue goes after Filipino taxpayers, Malacañang has given tax exemptions to the US. The grant of franchise and tax exemption is not within the power of the executive but is a power of Congress,” he said.