TWO proprietary schools and a hospital are ready to settle their tax obligations to the Cebu City Government, but the Cebu City Council wants the memorandum of agreement (MOA) reviewed further.

Cebu Institute of Technology (CIT) is backing out of the case that some schools and hospitals filed against the City for collecting taxes from them. Instead, CIT will settle their dues, along with the University of Cebu (UC) in Barangay Banilad and St. Vincent Hospital.

Lawyer Augusto Go, also the president of UC and St. Vincent Hospital, said their lawyers are just finalizing the contract, which they will submit to the court for approval.

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Go assured that starting this year, they will pay their taxes on time.

A copy of the draft agreement was submitted to the council for deliberation yesterday, but Councilor Edgardo Labella deferred for two weeks the resolution authorizing the mayor to sign the agreement.

He asked that the MOA be reviewed further, and for the city treasurer and city attorney to discuss the matter with the council.

As stated in the draft MOA, the payment will be made “in the spirit of civic cooperation.”

The contract states that “as an aid to the City Government, out of beneficent munificence and goodwill and without necessarily admitting the power of the City to tax the second party (UC and CIT),” the latter will pay the City three-fourths of one percent of their gross receipts as proprietary entities.

Based on the records of the City Treasurer’s Office, UC-Banilad’s unpaid taxes from 2002 to 2008 amounted to P15.5 million, while CIT’s dues from 2000 to 2008 reached P48.5 million.

Half of the schools’ and hospital’s tax dues will be paid in cash while the other half will be paid in kind, or through scholarship grants and hospital services for the City’s indigents.

“We will condone all the penalties of UC and CIT and allow them to pay half of their tax dues in kind. The other half will be paid in cash in two installments,” City Treasurer Ofelia Oliva said.

Although UC is not a party to the tax case, Go said they need to seek the court’s approval of the compromise agreement because CIT is one of the proprietary schools that questioned the City’s taxing power in court.

“We’d like to have it approved by the court because CIT is part of that case and in this agreement, its president and I are the signatories... Once it is approved by the City Council, then the compromise agreement will have to be approved by the court. After that, we will pay every year,” he said.

Meanwhile, Treasurer Oliva said they are finalizing the list of taxpayers that City Hall will award during the Charter Day celebration.

This year, the City will award the top 100 real property taxpayers and top 100 business taxpayers.

It will also award the top 20 highest taxpayers and the 20 best taxpayers, or those who have no delinquencies, who pay their taxes on time and agree with the CTO’s tax assessments.

The top 10 market vendors will also be awarded.

“It’s not just the big taxpayers who will get awards. We will also recognize the vendors who have been diligently paying their taxes on time, to give everyone a chance to get an award,” Oliva added. LCR