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Wednesday, May 03, 2006
Power firm files suit v. Capitol
By Lizanilla J. Amarga
THE power distributor Cagayan Electric Power and Light Co., Inc. (Cepalco) has recently filed a civil suit against Provincial Government of Misamis Oriental for trying to collect franchise tax from their company.
Cepalco has just filed a petition for declaratory judgment regarding the validity of the 205 Revenue Code of the Province of Misamis Oriental.
Also, on the validity of the Provincial Government's Notice of Assessment and Billing to make them pay franchise taxes.
The charges were filed against respondents Provincial Board of Misamis Oriental and the Municipal Treasurer of Tagoloan, Misamis Oriental.
The board committee on ways and means chairman Pepito Gambe said Cepalco is crying foul because the Provincial Government has finally sent them a bill to pay their franchise tax.
He said they welcomed the charges filed by Cepalco.
"At least this time we will be clarified as to the legality of billing them for franchise tax," he said.
Gambe said there was no such franchise tax collection in the past, as the same was not thoroughly studied until the administration of Misamis Oriental Governor Oscar Moreno.
"But this time it is being duly studied and given attention to by Governor Moreno," he said.
Moreno worked as a top corporate lawyer for the huge and prestigious Ayala Corp. and also teaches corporate law subjects at Xavier University College of Law.
Sun.Star Cagayan de Oro failed to contact Cepalco for comment Tuesday.
Gambe pointed out Section 137 of the Local Government Code as the basis for their franchise tax collection.
This provision reads, "Notwithstanding any exemption granted by any law or either special law, the province may impose a tax on businesses enjoying a franchise."
This "at a rate not exceeding 50 percent of one percent of the gross annual receipts for the preceding calendar year based on the incoming receipt, or realized, within its territorial jurisdiction."
"Cepalco is operating under congressional franchise, hence, it is subject to the taxing powers of the provincial government," Gambe said in the dialect.
(May 3, 2006 issue)
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