Smart asks House for tax exemption

TELECOMMUNICATIONS giant Smart Communications Inc. wants the House of Representatives to exempt it from paying local taxes, the same incentive that it granted to Bell Communications, the 25-year franchise owned by businessman Ramon Ang and San Miguel Corp.

But the members of the House committee on ways and means led by Rep. Miro Quimbo in the previous Congress said they were not aware how Bell was granted a franchise without going through the Quimbo panel.

Ray Espinosa, head of the regulatory affairs of PLDT, Smart’s mother company, along with fellow Smart executive Enrico Español, made the revelation before the House committee on ways and means now led by Rep. Dakila Karlo Cua.

Smart and PLDT are owned by businessman Manuel V. Pangilinan.

“Smart invoked that they should be given the same tax privileges as those contained in Bell Tel’s franchise,” Quimbo said.

“The members, including myself, were surprised to find out that the franchise had been approved without passing through my committee,” said Quimbo, now House Deputy Speaker.

“It’s a requirement that all measures that contain tax provisions should pass through the [committee] on ways and means before it goes to the Senate. And this did not, and that effectively makes this tax privilege dubious and with deep legal infirmity. It violated the basic procedures of our rules.”

Bell Tel’s legislative franchise is valid until mid-2040, and it was approved as Republic Act 10900.

House Deputy Speaker Raneo Abu said the anomaly was discovered when Smart, which is in the process of renewing its franchise this year, asked for tax incentives similar to those granted Bell Tel during last week’s deliberations before the Cua committee.

“There was a lapse in the approval of the franchise of Bell Tel. It appears that it was approved without the knowledge of the members of the ways and means panel,” Abu said. 

“The approval of this franchise is highly irregular.”

It was not clear if Globe Telecoms, owned by the Ayalas, would also demand fair treatment.