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Wednesday, December 10, 2003
More groups oppose tax exemption for SM
By Harley F. Palangchao
MORE groups have opposed a request for tax exemption filed by ShoeMart (SM) City Baguio.
This developed even as the City Finance Committee rejected the request of SM for exemption from paying business, real property and amusement taxes saying it will be a bad precedent for potential investors in the city.
Among those who expressed objection are students of the Saint Louis University College of Law, who informed Baguio officials that a grant of tax exemption "would be a form of taxation injustice."
They claimed that while existing businesses in the city religiously pay taxes, big investors like SM City Baguio should also pay taxes that could be used to fund urgent city projects.
Last week, the City Local Finance Committee, through Budget Officer Letecia Clemente, said the proposed tax holiday has no legal basis, as there is no law that grants any commercial establishment tax exemptions.
"Existing law and tax ordinances do not allow grant of tax exemptions of this nature, which is why other malls put up in the city were not given tax exemptions. This being the case, all those similarly situated should have the same treatment," the committee noted in its memorandum submitted to Mayor Bernardo Vergara.
In a report, the committee also said it cannot grant SM's request on the basis of the benefits the SM operations will contribute to the city.
"We do not dispute the benefits that SM Baguio has brought the city but these benefits are not without consequences. The more people coming to Baguio (the more it will) affect its peace and order situation, not to mention its effect on waste generation. The City Government will have to put in more resources to address these concerns."
It added the City has also included the taxes, fees and charges expected to be derived from SM operations in next year's budget of P700 million.
"To grant a tax exemption will reduce the budget and, therefore, some of its priority programs will have to be put on hold. With the projection of the (mayor) of P1 billion budget for 2005 or 2006, surely, we need to collect taxes, fees and charges we could get without exception," the finance team said. Harley F. Palangchao
(December 10, 2003 issue)
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