Saturday, October 11, 2008 CH asks ‘non-profit’ firms to show books By Linette C. Ramos Sun.Star Staff Reporter
CEBU City Administrator Francisco Fernandez asked for a thorough review of the financial records of non-stock and non-profit schools and hospitals to find out whether they are subject to business taxes.
Fernandez said that non-stock, non-profit and proprietary schools and hospitals should present their books to the City so these can be checked.
“Some claim they are non-stock and non-profit institutions. So let’s review your books and let’s check if you really did not make any profit. Let’s open their financial records and let’s discuss if they are subject to tax or not,” he told Sun.Star Cebu.
University of Cebu (UC) president Augustus Go earlier said they will not pay the business taxes the City is collecting from them because UC is a non-stock and non-profit institution and is not subject to a business tax.
No injunction
“We will not say yes or no to UC until we clear this with SEC (Securities and Exchange Commission). We will investigate this first, if they are non-stock and non-profit, and we will take a look at the SEC guidelines on non-stock corporations and see if they are in compliance with that,” Fernandez said.
Meanwhile, Acting Mayor Hilario Davide III said the City Treasurer’s Office (CTO) can proceed to collect business taxes from schools and hospitals because there is no injunction order issued by the court.
Based on the CTO’s tax assessment using the rates prescribed in the amended Cebu City Omnibus Tax Code, eight proprietary schools and hospitals have unpaid taxes of at least P123.5 million from 2000 to 2004.
The institutions include Cebu Doctors’ University (P10.2 million), Cebu Doctors’ Hospital (P37.9 million), Cebu North General Hospital (P265,181), Cebu Institute of Technology (P14.93 million), Cebu Velez General Hospital (P20.3 million), Southwestern University (P12.1 million), UC-Banilad (P6.4 million) and UC-Main (P29.5 million)Except for Velez and UC Banilad, the tax dues of the schools and hospitals from 2004 and 2007 could not be computed because they have not submitted their financial records.
Filed case
Cebu Doctors’ University, Cebu Doctors’ Hospital, Cebu North General Hospital, Cebu Institute of Technology, Cebu Velez General Hospital, Southwestern University and Sacred Heart Hospital filed a case against the city officials and asked the court to stop the City from collecting taxes from them.
They argued that the nature of their businesses is service-oriented, and they are, therefore, not subject to business tax.
Last Wednesday, Regional Trial Court Judge Generoso Labra dismissed the complaint because the lawyer representing the schools and hospitals did not make it to the pre-trial hearing.
A motion for reconsideration was filed last Thursday.
Under the amended tax ordinance, the City is collecting three-fourths of one percent of the annual gross sales of the proprietary schools and hospitals.
Fernandez said the City is open to an ex-deal arrangement if the schools and hospitals cannot make a one-time payment of the tax due.
“We are only asking for three-fourths of one percent. That’s only P75 for every P10,000 in sales, and that would be their share for garbage collection, peace and order, traffic management, etcetera. If they think it’s too much, then show us your books and we will study it. We are open to an ex-deal if they can’t afford a one-time payment,” he said.
Instead of paying, the City will be willing to accept payment in terms of hospital services and scholarships, which can be given to indigent patients and poor students, respectively. (LCR)
