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Saturday, July 16, 2005
CH pushes P34M tax write-off
By Gingging A. Campaña
Sun.Star Staff Reporter
The Cebu City Government will finally seek the City Council’s approval to condone some P34 million in accrued interest and penalties of the Philippine Long Distance Telephone Co. (PLDT) for the late payment of franchise taxes to the City.
Councilor Jose Daluz III submitted to the council secretariat a proposed ordinance condoning the penalties after Acting City Attorney Rodolfo Golez opined last May that the council should pass an ordinance for the purpose.
Quoting Section 192 of the Local Government Code, Golez had written that through “approved ordinances, the local government units (LGUs) may grant exemptions, incentives or relief under such terms and conditions as may deem necessary.”
PLDT owed the City P75 million in franchise taxes and penalties from 1996 to 2003. However, it paid the City in 2003 some P41.39 million as compromise for the accrued taxes, which was deposited in escrow.
Mayor Tomas Osmeña accepted the check and announced that the penalties will be waived even before the council could authorize him to negotiate, enter into a compromise, and condone the penalties.
Release money
According to Daluz’s proposed ordinance, once the penalties are condoned, the P41.39-million escrowed account will be immediately released to the City.
Also, PLDT has paid P6.5 million in franchise tax dues for 2004 and 2005 “to acknowledge their obligation and even assured of continued and prompt payment of future franchise and any other taxes.”
Daluz said there is a pending case between the firm and the City before Branch 12 of the Regional Trial Court, which hinges on the issue on whether the City has the right to collect franchise tax from PLDT.
But PLDT has “communicated its intention to settle the matter amicably with the request for the exemption/condonation of the accrued interest and surcharges,” Daluz said.
The City Government is confident it will win the case because of a Supreme Court decision ordering PLDT to pay franchise taxes to the Davao City Government.
The decision, city officials said, applies to other LGUs. It is also a basis for PLDT’s payment to Cebu City.
The council will tackle the proposed ordinance in its regular session on Wednesday.
(July 16, 2005 issue)
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