UV won’t open books of accounts

THE University of the Visayas (UV) has turned down the Cebu City Government’s proposal to open its books of accounts and financial statements to allow City Hall to examine and determine if the school should pay taxes.

Lawyer Teodoro Almase, counsel for UV, told City Treasurer Ofelia Oliva that the educational institution is not a “businessman” thus, its income is not subject to business tax.

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“It is clear…that only in cases where local government unit has the authority to impose business taxes that such local government unit be authorized to examine the taxes of the institution,” Almase told Oliva in a letter.

But City Hall officials insisted that under the existing law, the City Government is mandated to collect taxes. City Hall also asked the court to dismiss UV’s petition.

UV, represented by its president, Rep. Eduardo Gullas, has filed a petition for prohibition with the Regional Trial Court and insisted that the institution is a non-stock, non-
profit organization.

Almase had asked the court to issue a temporary restraining order and eventually, a writ of preliminary injunction, against the tax assessment.

Last Nov. 17, the City Treasurer’s Office notified UV about its allegedly unpaid business taxes amounting to P19,367,800 from 2004-2009.

During the hearing on the application for issuance of TRO at the sala of Generosa Labra yesterday afternoon, lawyer Lyndon Basan, who represents City Hall, assailed the university for its refusal to open its books to be examined by the City Hall.

“If we will not be allowed to examine their books (of accounts), what will be our basis whether to tax or exempt them from paying (business) tax?” asked Basan.

Oliva said that if City Hall is allowed to examine UV’s books of accounts and if found that the school is exempted from paying taxes, then the City Treasurer’s Office can issue a certification.

But UV maintained that the City cannot require them to open its accounts. Citing provision of the Local Government Code, Almase said the City Government cannot require a non-stock, non-profit institution to pay local taxes.

“It is clear…that only in cases where local government unit has authority to impose business taxes that such local government unit is authorized to examine the books of the institution,” said Almase.

Almase said that if the City Government is eager to impose taxes on UV, the City Council must first pass an ordinance that will allow it to collect taxes on non-stock, non-profit institutions like UV.

Nevertheless, UV and its board of trustees, “(have) complied and will continue to comply with local government laws and ordinances imposed by the City of Cebu,” Almase said.

City Hall contested UV’s argument.

Basan said the City Government can examine the books of accounts of UV.

Citing a law and the Supreme Court jurisprudence, Basan said the laws provide that one should pay first before he can question any assessment or imposition of taxes by a local government unit.

“A person can only be allowed to protest or question the tax only after he pays the same,” said Basan in his motion to dismiss the petition.

“The payment of taxes can’t be constrained as irreparable injury (will happen) because the law allows the tax payers to receive payment under existing status,” said Basan.

Basan said the delay in the collection of UV’s unpaid taxes can derail government projects and its “very existence and operations.”

“No government can exist if any person who questions the validity of taxes can be permitted to defy its collection,” the lawyer said.

But the university management opposed the City Hall’s motion to dismiss the case.

“There is urgency for the issuance of a temporary restraining order and preliminary injunction by this court to pressure the status quo and prevent from exercising any or all of the civil remedies,” Almase said.