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Tuesday, September 28, 2021

‘Where’s the law on tax break?’

WHAT happened to the proposed ordinance in Cebu City that sought to remove business taxes but only regulatory fees on proprietary schools and hospitals operating within the city?

This was the question raised by Velez College Inc. and Cebu Velez General Hospital Inc.

Their legal counsel, lawyer Rester John Nonato, lamented that the proposed ordinance, authored by Councilor Noel Wenceslao, was introduced in the last quarter of last year yet.

“We hope that this measure be considered as a priority by the City Council and we hope that said proposed measure be enacted soon,” he said in a letter to the City Council.

According to Nonato, the last update they heard about the proposed legislation was on the public hearing called by the legislative body in October 2015.

Nonato were among those who attended it and expressed support for the passage of the ordinance.

Nonato said they are hoping that the proposed measure will progress and be approved soon.

The lawyer’s letter was already endorsed by the council to Wenceslao for his perusal.

Sought for comment about this, Wenceslao told Sun.Star Cebu yesterday that he has not yet submitted for final deliberation his proposal as he is still awaiting for the recommendations and suggestions of other schools.

He said he will collate all their suggestions so it will be considered in the final draft.

Among the many suggestions made during the public hearing was to remove the provision that seeks to penalize those who failed to pay their tax obligations in the past 10 years and filed charges against the City instead.

The penalty is supposed to be a surcharge of 25 percent plus interest at two percent per month, at most.

The proposed ordinance intends to repeal Section 59 (g) of the Omnibus Tax Ordinance of Cebu City, which imposes a business tax on proprietary schools and hospitals equivalent to three-fourths of one percent of their gross receipts.

A regulatory fee will just be collected by the City Government from them.

For proprietary hospitals or those operated as profit-making businesses, the proposed ordinance states that they will pay a regulatory fee of P10 per bed, which will be computed per day for 365 days (one year).

The charity beds, however, will not be included in the computation.

For proprietary schools or educational institutions operated for profit, the regulatory fee is P15 per classroom computed per day for 288 class days in a year.

It will be applicable to tertiary education. Exempted from the regulatory fees are secondary or high school, intermediate school, middle school, elementary and kindergarten.

The passage of the said ordinance is being asked by the proprietary schools and hospitals so that the tax case they had previously filed against the City will already be settled.

To recall, Velez along with Cebu Doctors’ Hospital, Cebu Doctors’ University, Cebu Institute of Technology, Southwestern University (SWU), Sacred Heart Hospital, Cebu North General Hospital and Perpetual Succour Hospital filed a case against the City in 2007 and asked the court to stop the latter from imposing business taxes on them.

The school’s believed the City should not collect business tax from them because they are non-stock, non-profit establishments.
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