VERA FILES FACT CHECK: Duterte makes false claim on ABS-CBN’s tax ‘violation’

In his sixth and final State of the Nation Address (SONA) on July 26, President Rodrigo Duterte claimed that media giant ABS-CBN has not been paying its taxes properly, adding that the network pays only a small percentage of its supposed property tax.

This is false.

STATEMENT

An hour and 40 minutes into his almost three-hour long address, Duterte deviated from his prepared speech and turned attention to the media network, saying:

"[ABS-CBN is] cheating [the] government by the billions [of pesos] in taxes. And they still want that frequency because 'yan ang pinapag-awayan (that’s what’s being fought over). No ... They still owe [the] government billions.”

He added:

“In the contract diyan sa nakalagay doon four hectares (In the contract, it says four hectares). So ang binabayaran nila (what they are paying is [only] for the four hectares sa (in) property taxes. Supposed (sic) they are occupying 40 hectares, that complex there. Pero ginamit nila na papel 'yung (but the paper they used is) four hectares. Iyon lang ang binabayaran nila (That’s the one they are only paying for)."

Source: Presidential Communications Operations Office, State of the Nation Address of Rodrigo Roa Duterte, President of the Philippines to the Congress of the Philippines (Archived Transcript), July 26, 2021, watch from 2:25:21 to 2:26:28

FACT

Bureau of Internal Revenue (BIR) officials who testified during congressional hearings on the ABS-CBN franchise bill in early 2020 have cleared the media network of tax deficiencies, contrary to Duterte's claim.

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On Feb. 24, 2020, Simplicio Cabantac Jr., then head of the BIR Large Taxpayers Audit Division 3, told the Senate committee on public services that ABS-CBN was “regularly filing and paying [its] taxes for the past number of years."

In the same hearing, Commissioner Ephyro Luis Amatong of the Securities and Exchange Commission (SEC) said he was “not aware of any violation or ongoing complaint” against ABS-CBN before the regulatory agency.

After the network was shut down on May 5, 2020 following the issuance of a cease and desist order by the National Telecommunications Commission (NTC), the House committee on legislative franchises conducted 12 congressional hearings on pending ABS-CBN franchise bills. (See VERA FILES FACT CHECK: NTC backpedals on ABS-CBN franchise)

In a hearing on July 1, 2020, BIR Assistant Commissioner Manuel Mapoy echoed Cabantac’s statement to the Senate four months earlier that ABS-CBN paid its taxes “regularly” and “in a lawful manner.”

Mapoy said that while BIR found lapses in the taxes filed by ABS-CBN, the network complied with the letters of authority sent to them by paying tax deficiencies.

In the same hearing, Mapoy said: “For the year 2016, as far as our records are concerned, ABS-CBN Corporation ranked No. 65 [among corporate tax payers]. For 2017, No. 275, and for taxable year 2018, No. 339.”

(See VERA FILES FACT SHEET: What’s next for ABS-CBN after losing franchise bid; Remember 70 in the 2022 elections)

In his SONA, Duterte said ABS-CBN owes the government billions of pesos in real estate taxes because it has been paying only for four hectares of land although it was occupying a 40-hectare property. (See #SONA2021 VERA Files’ live fact check)

According to the annual report submitted by ABS-CBN to SEC for 2016, which was uploaded in the Philippine Stock Exchange website, the ABS-CBN Broadcasting Center compound on Mother Ignacia St., Quezon City is only “44,000 square meters” or 4.4 hectares. The same is indicated in the 2020 annual report uploaded in the Lopez Holdings Corp. website, and in a fact check report published by the network.

(See VERA FILES FACT CHECK: FB post’s claim that ABS-CBN owes gov’t billions NEEDS CONTEXT)


Sources

RTVMalacanang, President Rodrigo Roa Duterte’s 6th State of the Nation Address, July 26, 2021

ABS-CBN News, WATCH: Senate hearing on ABS-CBN compliance with franchise terms and conditions, Feb. 24, 2020

ABS-CBN News, ABS-CBN to go off air in compliance with NTC order, May 5, 2020

CNN Philippines, ABS-CBN goes off air following NTC order, May 5, 2020

Rappler, ABS-CBN goes off-air after NTC order, May 5, 2020

Rappler, BREAKING: The NTC issues a cease and desist order vs ABS-CBN, May 5, 2020

House of Representative, Comm on Legislative Franchises Joint with Comm on Good Government and Public Accountability Day 10, July 1, 2020

Philippine Stock Exchange, Annual Report, April 3, 2017

ABS-CBN Corporation, Annual Report, June 2021

NTC Cease and Desist Order vs ABS-CBN, May 5, 2020.

Manila Bulletin, ABS-CBN a good taxpayer – BIR, July 21, 2020


(Guided by the code of principles of the International Fact-Checking Network at Poynter, VERA Files tracks the false claims, flip-flops, misleading statements of public officials and figures, and debunks them with factual evidence. Find out more about this initiative and our methodology.)

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Founded in March 2008, VERA Files is published by veteran Filipino journalists taking a deeper look into current Philippine issues. Vera is Latin for “true.”

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