MCIAA gets a demand letter

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Monday, May 26, 2014


LAPU-LAPU City Treasurer Elenita Catagcatag yesterday visited Mactan-Cebu International Airport Authority (MCIAA) General Manager Nigel Paul Villarete to demand for the MCIAA’s full payment of its real property taxes amounting to almost P1.8 billion.

Catagcatag handed a letter thanking the MCIAA for giving an initial payment of P88 million last Friday, but she also reiterated the City’s request for the latter to fully settle its unpaid taxes.

Villarete, however, main-tained that the MCIAA will wait for a legal basis to pay the entire amount the City is collecting, citing a pending case in the Supreme Court (SC).

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The MCIAA is appealing a court decision ordering it to pay tax for properties used as taxiways, runways and other aviation-related facilities, saying these are used by the National Government for public service.

While he assured the MCIAA is not avoiding taxes, Villarete said he and other MCIAA officials may be held liable if they release funds for taxes that the airport should not pay.

MCIAA’s promise

“If we pay now and the SC decides later in favor of MCIAA, then we will be sent to jail for paying what we’re not supposed to pay,” he told reporters.

“We have to be under the rule of law. I think everybody agrees with that,” he added.
Catagcatag, in a separate interview, said the MCIAA has promised to settle its unpaid taxes once funds are available.

Last April 23, the City Council adopted a resolution asking the MCIAA to pay its outstanding taxes, saying the latter no longer has reason to delay the payment having received P14.4 billion from the consortium that will take over the airport’s operation later this year.

In her letter, Catagcatag asked the MCIAA to pay in full “considering that the full amount of the taxes are quite small compared to the amount you have received (from the consortium) and the commitment MCIAA made to fully pay the taxes if it has enough funds to do so.”

She attached the council’s resolution in her letter.

Specific purpose

Villarete, however, clarified to reporters that the amount it received from the GMR-Megawide consortium is intended for a specific purpose, and that using it to pay taxes would be illegal.

“The money is placed in a blocked account. We cannot withdraw from it. We have not touched the money,” he said.

He added the amount was a premium paid by the consortium as part of its partnership with the National Government to expand the airport.

“It’s not income. It’s not a windfall,” he said.

While the SC has yet to decide whether the MCIAA has tax liabilities for properties used for aviation, Villarete said they will pay for properties leased to commercial establishments.

The payment given by the MCIAA last Friday only covered lots, Villarete said. Taxes for commercial buildings have yet to be paid.

He said the MCIAA and the City are discussing the former’s tax liabilities for properties used partially by the private sector.

The airport occupies almost 800 hectares, making MCIAA the largest landowner in Lapu-Lapu. It covers Barangays Basak, Ibo, Pusok, Pajac, Bangkal and Buaya.

Purpose

Some 30 percent of the initial payment given by the MCIAA will be shared among the barangays, while another 30 percent will go to the City’s Special Education Fund, Catagcatag said. The rest will go the City’s general funds.

Mayor Paz Radaza earlier said a portion of the taxes paid by the MCIAA will be used to build classrooms.

Apart from the real property taxes, which it stopped paying since 2003, Catagcatag said the MCIAA also owes the City almost P200 million in business taxes.

She said government-owned and controlled companies like the Mactan airport are not exempt from paying tax under the Local Government Code.

Catagcatag said the City will not give the MCIAA a tax clearance if it fails to settle its unpaid taxes this year.

Published in the Sun.Star Cebu newspaper on May 27, 2014.

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