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Saturday, January 14, 2006
No closure, despite P120M tax deal
By Gingging A. Campaña Sun.Star Staff Reporter
With Elias O. Baquero
Mayor Tomas Osmeña accepted from the Cebu Port Authority (CPA) a P120-million compromise tax payment last Thursday without the Cebu City Council’s authority to enter into the compromise agreement with port officials, said Vice Mayor Michael Rama.
But Rama said he witnessed the turnover of the check and the signing of the agreement between Osmeña and CPA general manager Mariano Martinez when President Arroyo arrived at the Mactan air base, because the mayor requested him to be there.
Asked if his presence at the signing already meant that the council approves of the compromise, Rama said the agreement “is still subject to ratification.”
“The element was so quick. The intention (to pay) came already without our authority for the mayor and the session was held the day before,” he told reporters yesterday.
Rama, the council’s presiding officer, also said the council may approve the agreement without objections, “if the payment is manageable and better than nothing.”
“It is more acceptable than going to court if the situation is reasonable,” he added.
Tax maps
For 2006, CPA general manager Martinez said a new tax mapping will be conducted by the Cebu City Treasurer’s Office to determine which of the CPA properties will be taxed.
In paying P120 million to the City Government, Martinez said they have proven that they are willing to pay whatever reasonable claims the local government makes.
The CPA Commission, during its board meeting last Jan. 11, passed a resolution authorizing Government Corporate Counsel Agnes Devanadera to negotiate with Osmeña on the payment. Devanadera attended the meeting.
CPA had offered P80 million as compromise settlement for its delinquent taxes for its properties. Osmeña had rejected the amount because he found it too small.
According to the City Treasurer’s Office, CPA is supposed to pay a total of P297 million (P186 million in realty taxes and P111.5 million in interest).
The compromise agreement stated that the CPA, a government-owned and controlled corporation, shall pay the City Government P120 million as “full, final and complete” settlement of the realty taxes due for 2005 and prior years.
Discussion
Both parties agree that for the realty taxes due for 2006 and succeeding years, the same shall be subject for discussion between the two entities.
The agreement, shall in no way, “prevent the parties from raising legal issues, which may have been raised in the aforesaid cases in the determination of the realty taxes for 2006 and succeeding years.”
City Councilor Sylvan Jakosalem submitted to the council secretariat yesterday a draft resolution and the signed compromise agreement, for inclusion in the agenda in next Wednesday’s session.
Jakosalem was “instrumental” in CPA’s payment, as it was he whom President Arroyo communicated with on the status of CPA’s real properties, which were auctioned separately in 2004 and last year.
Arroyo was the principal sponsor to Jakosalem’s wedding, when he was not yet a politician.
Jakosalem said the President Arroyo assured him last week that she will let with Government Corporate Counsel Devana-dera look into the case.
Loan payment
“She was concerned why it was not resolved. In fact in the coaster, GMA asked me what we would do with the P120 million, I couldn’t answer right away, so she said, “Oh, you need it to pay for the SRP loan. I said ‘yes’ right away,” Jakosalem said.
City Hall has accepted in the past compromise payments from Globe Telecom, Philippine Long Distance Telephone Co., Smart Communications and the Visayan Electric Co. (Veco).
Except for Veco and Globe, the council has not yet given Osmeña the power to negotiate and enter into a compromise with PLDT, Smart and CPA.
In 2003, Globe paid P35 million in franchise taxes. Although the agreement clearly states the amount was for the company’s full payment of their accrued realty taxes and franchise taxes, Globe officials insisted that they are not liable to pay franchise taxes.
Early last year, the City also collected P3.78 million “in miscellaneous taxes” from Smart. It was named such because the issue whether they should pay franchise taxes to local government units was not yet resolved.
Sometime during the middle of last year, Osmeña also accepted from PLDT a check worth P41 million, but it was deposited in an escrow account and the City Government cannot use the money unless an ordinance condoning PLDT’s P34-million penalties is passed.
For Bisaya stories from Cebu. Click here. (January 14, 2006 issue)
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