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Monday, January 30, 2006
Nalzaro: Is Tomas bullying investors?
By Bobby Nalzaro
CEBU City Hall did not issue a business permit to one of the country’s leading manufacturers of well-known household brands, the International Pharmaceuticals Inc. (IPI), because the company refused to pay the City Government the 70 percent share of sales tax on IPI goods sold outside the city. The company claimed it was already paying 100 percent of the sales tax to other local government units where it has branches.
The Castillos, who are full-bloodied Cebuanos, own IPI. The company has been operating here for quite sometime. Its main office and plant are in Mabolo. It has contributed to the booming economic activity in this part of the country by employing thousands of local residents. I am sure the company has religiously been paying its tax obligations to local and national governments because its owners are very religious.
So does the City Government have the right to collect sales tax for IPI goods sold outside the city? This move is still debatable and only the court can settle this issue. And why is the City doing it only now, considering that IPI has been operating here for years? Is Mayor Tomas Osmeña’s trying to “arm-twist” IPI, like what City Hall has done to other companies and establishments because it needs a lot of money to pay off its financial obligations to the idle South Reclamation Project?
For me, the refusal of City Hall to issue a business permit to IPI is tantamount to taking the company hostage so it will be forced to succumb to the whims and caprices of the powers that be.
The mayor did a similar thing to telecommunication companies, when he demanded a local franchise tax. Now, he is “bullying” another company. This is not good for the city’s investment climate. Companies may be obliged to pay taxes to the government, but the imposition of additional taxes will only trigger dire consequences for consumers.
If IPI is forced to bow to the City Government’s will, then it will surely be forced to raise its prices. Worst, it might go ahead with its plan to close operations here and transfer somewhere else. Can Tomas Osmeña provide employment to displaced employees? What the mayor is doing to IPI is the highest form of extortion.
(bgnalzaro@gmanetwork.com)
For Bisaya stories from Cebu. Click here. (January 30, 2006 issue)
Write letter to the editor.Click here.
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