The Davao City government padlocked on Thursday one of the biggest car distributors in Davao due to unpaid taxes.
Kar Asia Inc., the car distributor of Mitsubishi Motors, has pending tax obligations to the city from 2011 to 2013, according to Assistant City Administrator Tristan Dwight Domingo.
Domingo, did not reveal Kar Asia’s total unpaid taxes for that period.
He said that during the period 2011 to 2013 the city government and the management of Kar Asia did not agree on a common computation of the automotive distributor’s company total tax obligations.
Instead of settling its accounts, the car distributor contested the city’s computation..
“Initially they tried to contest, they tried to refuse to pay these tax obligations to the city,” he said. “According to them the amount that we have required them to pay was not the actual amount so they are contesting it.”
Domingo said that the city already informed the management of Kar Asia Inc. that based on the revenue code of the city it must still pay—under protest. But the company refused.
Under the local revenue code, if the company wants to contest its tax obligation, it should pay first before the city can consider the payment as under protest.
If the company pays under protest, it is obligated to pay what the city requires it to pay. But the city cannot touch the amount until the issue is settled.
“Unfortunately, they did not want to go through the process, so we were forced to close their establishment,” Domingo said.
He said that Kar Asia’s has been trying to convince the city that their computation is right based on their records.
Domingo however clarified that the city have not seen the documents that Kar Asia needs to present to prove their claim.
He said that before the company can reopen they need to pay the exact tax obligation first.
As for Kar Asia’s tax payables for the year 2014 to 2016, Domingo said that the company claimed that they are consigning the money in the court.
“Under the Civil Code of the Philippines, a debtor can pay in the court if the creditor refuses to receive their payment, that is their remedy,” Domingo said.
He explained that the city refused to receive their payment because their payment does not include their penalty and surcharges.
Under the law, if a debtor will pay his credit, his payment will be subtracted first on his penalty and surcharges.
Domingo, though, said that they are willing to sit down with Kar Asia management, to settle the discrepancies of their tax obligation, but he clarified that the city will not compromise on their actual bill.
As of press time, the Kar Asia’s management has not yet issued a statement regarding the issue.
