Skycable and Skyfiber services continue, ABS-CBN denies tax avoidance charges

Published July 2, 2020, 2:57 PM

by James A. Loyola

SKY Cable Corporation’s announced that SKYcable and SKY Fiber services continue to operate and serve its subscribers nationwide, as they are not covered by the cease and desist order issued by the National Telecommunications Commission.

“We wish to reiterate our assurance to our cable and broadband subscribers that they will continue to enjoy our services,” SKY Head of Programming James Dumlao said.

The company issued the clarification as confusion arose among subscribers as news of the National Telecommunications Commission’s issuance of a cease and desist order stopping the operations of its direct broadcast satellite service, SKYdirect, spread.

In a statement, SKY appealed to the NTC “to extend the same privilege given in the past to other companies whose franchises have expired but are currently pending in Congress to continue its operations until a resolution is passed.”

SKY also assured its subscribers that it will seek available legal remedies so that it could bring back SKYdirect’s service.

The company stressed that it will attend to the concerns of subscribers, including the refund of unconsumed prepaid loads as well as advance postpaid payments, in compliance with the order.

ABS-CBN has stopped its digital TV transmission of its TVplus channels CineMo, Yey, TeleRadyo, Jeepney TV, Asianovela Channel, and KBO in all other areas outside Metro Manila. 

It said Viewers can still watch their favorite programs on CineMo, TeleRadyo, and Jeepney TV on SKYcable. TeleRadyo and Jeepney TV are also available in other cable TV operators nationwide.

“We hope Congress approves our franchise and gives us the opportunity to return our service to all our TVplus viewers.  We thank our viewers for their support and understanding,” the firm said.

Meanwhile, ABS-CBN stood by its claim that it is paying the right taxes to the government as it disputed allegations that it has used its subsidiary Big Dipper Digital Content and Design Inc. and the ABS-CBN Foundation Inc. (AFI) as tax shields.

“Big Dipper is not a tax avoidance scheme. We applied for and qualified for the PEZA incentives that were set in 2009. There were specific requirements there in terms of investment and export and over the years we’ve met those requirements,” said ABS-CBN Group chief financial officer (CFO) Ricardo Tan.

Big Dipper, which is engaged in digital archiving and repurposing of content for export, is entitled to tax incentives as an IT enterprise registered with the Philippine Economic Zone Authority (PEZA).

Among these incentives are a six-year tax holiday, which already ended in 2015, and tax and duty free importation. Currently, Big Dipper pays taxes worth five percent of its gross income.

Tan said Big Dipper’s investment in equipment will exceed P1 billion by the end of the year. He added that it has generated “over $237 million in foreign exchange inflows, created jobs, and helped bring Filipino content to a global audience.”

ABS-CBN Corporation CFO Aldrin Cerrado also maintained that ABS-CBN, which wholly-owns Big Dipper, does not use or share the equipment of Big Dipper.

Meanwhile, ABS-CBN also belied accusations that the network has used AFI, which is a BIR-registered foundation, as a tax shield.

Cerrado argued that any tax relief the network receives due to the donations it makes to AFI is prescribed by the law. “Donations, under the revenue code, is a deductible expense,” he said.

AFI managing director Susan Afan shared that ABS-CBN donated P129 million from 2015 to 2019 to AFI for its various programs such as Sagip Kapamilya, Bantay Bata 163, and Bantay Kalikasan. 

She added ABS-CBN also recently gave P52 million for ABS-CBN Foundation’s “Pantawid ng Pag-ibig” campaign that provides relief goods to Filipinos affected by the community quarantine due to the COVID-19 pandemic, and delivers personal protective equipment (PPE) to medical frontliners.