City to strike deal on tax case

Friday, July 15, 2011

THE Cebu City Government will negotiate with the heirs of Fr. Vicente Rallos on the civil case that the Supreme Court (SC) concluded in favor of the family.

However, Vice Mayor Joy Augustus Young said this does not mean they are going to pay the heirs, who have computed that the City owes them P224.5 since June and a million every month thereafter.

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“We will give the executive a free hand,” said Young immediately after the Council called for an executive session yesterday.

The Council met with City Treasurer Ofelia Oliva, City Legal Office (CLO) lawyers Joseph Bernaldez and Jerone Castillo, City Administrator Jose Marie Poblete and City Planning and Development Office Chief Alipio Bacalso.

Negotiation

The session was open to the media when the background of the case was presented, but was later closed for coverage when Oliva and the lawyers talked about the City’s plan for the negotiation.

Young said the Council gave the City Treasurer’s Office (CTO) and the CLO 15 days from today, to get back to them about the progress of the negotiation.

“We want this settlement within 15 days,” said Young.

The Council believes the more the case will drag on, the more the payment will balloon because of the interest.

Young was not just talking about the part of the City because according to the computation of the CTO, the Rallos heirs actually owe the government some P88,000 in taxes.

Bacalso showed a Google map of the subject of the civil case.

The case was filed in 1997 when 27 heirs of Fr. Rallos asked the Regional Trial Court (RTC) to forfeit in their favor two parcels of land in Barangay Sambag II that the Cebu City Government allegedly developed as road-right-of-way without the clan’s consent.

All levels

In almost all levels of the case, from the RTC all the way to the SC, the City lost, as narrated by city lawyer Castillo. The City was ordered to pay the heirs for the lots.

But last Tuesday, Oliva revealed to Sun.Star Cebu that the Ralloses have tax liabilities to the City, which resulted in the lots being auctioned off last May. In the absence of bidders, the lots were forfeited in favor of the government.

The Ralloses have a year to redeem the properties at close to P300,000 subject to a two percent interest per month.

The tax is also subject for adjustment because the price was based on a lower assessment when the RTC ruling was for a price of P9,500 per square meter.

With the computation of local treasury operations assistant Arnold Binondo, the City only has a balance of over P200,000 to the Rallos heirs after the City was able to pay P56 million in two separate occasions.

The original payable was at P44.213 million with 12 percent interest per annum.

Debt

In the end, the Rallos heirs would owe the City since the clan has a liability of P297,199 from the City compared to the City’s debt of P209,024.

But this is as far as the City is concerned, because the Ralloses, through lawyer Fortunato Veloso, contend that the City has a payable of P224.5 million for the 4,654 square meters of lot.

The amount ballooned because of an annual 12 percent interest, which was computed when the lower court gave a ruling in favor of the heirs in 2001.