Unlike mayor, council committee favors waiving Veco’s P2.5M fee

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Monday, December 30, 2013


THE Visayan Electric Co. (Veco) may no longer have to pay the Cebu City Government P2.5 million in surcharges and interest for their late payment of franchise tax in 2009.

The City Council’s committee on laws headed by Councilor Sisinio Andales reported that it found Veco’s request to waive the penalty valid.

Andales added that Section 458 of Republic Act 7160, otherwise known as the Local Government Code, allows the council to grant tax exemptions, incentives or other forms of relief provided that majority of its members concur.

Andales belongs to the majority bloc in the council, who are allied with former mayor and former congressman Tomas Osmeña.

His committee recommended for the council to pass a resolution waiving the P2.5-million surcharge and interest that Veco owes the City.

Vice Mayor Edgardo Labella, however, said that the resolution should be sponsored by the council’s committee on energy headed by Councilor Nestor Archival.

Last Aug. 20, the City Treasurer’s Office (CTO) sent a notice of assessment to Veco regarding the P2.5-million surcharge and interest.

The amount serves as a penalty to the power utility after it failed to remit on time a P20-million franchise tax covering the third and fourth quarters of 2009.

The P20 million was supposed to be paid by Veco on July 20, 2009, but it was only paid nine days after the deadline.

In a earlier letter sent to the council, Veco’s assistant vice president for finance and accounting Nelson Perez explained that the prompt payment of their franchise tax was “inadvertently overlooked” due to personnel movements in 2009.

He added that Veco has been “conscientious” in remitting the taxes due to the City and that has no intention to postpone or evade payment of taxes. He assured the oversight will not happen again.

Mayor Michael Rama earlier said, though, that he is not inclined to waive the surcharge and interest for Veco’s delayed payment.

He said that Veco can easily afford to pay it.

Published in the Sun.Star Cebu newspaper on December 30, 2013.

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