IN AN aim to alleviate the financial burden of delivery riders, a member of the Cebu City Council proposed an ordinance that seeks to exclude some delivery riders from payment of the annual fixed tax (AFT) on delivery.
Councilor Rey Gealon, chairman of the committee on laws, ordinances and Styling, told SunStar Cebu on Saturday, Oct. 14, 2023 that the City had already taken the step of amending Section 58 of City Tax Ordinance 69, commonly known as the Omnibus Tax Ordinance of the City of Cebu as amended by City Tax Ordinance 125.
His proposed ordinance, which is now up for the second reading, adds a subsection to exclude delivery riders “who are not employees of manufacturers, producers, wholesalers, dealers or retailers or their contractors/subcontractors/affiliates and those riders who are not employees of digital platform companies” from paying the AFT.
Gealon submitted his proposed ordinance to the council last April, several months before President Ferdinand Marcos Jr. issued his Executive Order (EO) 41 on Sept. 25.
With Marcos’ EO 41, all local government units (LGUs) are urged to suspend the collection of any form of fees from all types of vehicles transporting goods under Section 153 or 155 of Republic Act 7160 or the Local Government Code of 1991.
EO 41 prohibits LGUs from collecting toll fees or pass-through fees from all motor vehicles transporting goods and merchandise while passing through national roads and other roads not constructed and funded by LGUs.
“In the interest of public welfare, all LGUs are further strongly urged to suspend or discontinue the collection of fees, such as but not limited to, sticker fees, discharging fees, delivery fees, market fees, toll fees, entry fees, or mayor’s permit fees, that are imposed upon all motor vehicles transporting goods and passing through any local public roads constructed and funded by said LGUs,” read a portion of EO 41.
When asked whether the Cebu City Government had already followed the EO 41, Gealon said, “That remains to be seen,” as it is the call of the Office of the Mayor.
In light of the EO 41, members of the National Union of Food Delivery Riders-Cebu held a press conference last Thursday, Oct. 12, as they sought immediate suspension of delivery permit fees.
Annual fixed tax
Section 58 of the current Omnibus Tax Ordinance of Cebu City, which Gealon aims to amend, imposed an AFT on delivery trucks, vans, or any vehicles of manufacturers, producers, wholesalers, dealers, or retailers of certain products, delivering or distributing their products to sales outlets or selling to consumers, whether directly or indirectly, within Cebu City.
Section 58 (a) states that manufacturers, producers, wholesalers, dealers, or retailers of distilled spirits, fermented liquors, soft drinks, cigars, cigarettes, ice cream, juice or other drink concentrates per delivery truck, van or other delivery vehicle are required to pay an AFT of about P750.
Meanwhile, manufacturers, producers, wholesalers, dealers, or retailers in products other than those mentioned in Section 58 (a) shall pay an AFT of about P500.
The ordinance defines delivery riders as “natural persons using motorcycles with or without sidecars, excluding sedans and similar vehicles.” These individuals, accredited as independent contractors and freelancers by digital platform companies, receive orders or parcels from 1) merchants, 2) their respective digital platform company where they are accredited, or 3) customers. They are responsible for delivering the orders or parcels and receiving payment accordingly.
Under Gealon’s proposed ordinance, delivery riders eligible for exemption must use motorcycles they bought themselves, not those provided by digital platform companies. If companies provide vehicles, they are responsible for paying for the AFT.
Gealon’s proposed measure is now up for the second reading.
The councilor is confident that his proposed ordinance would be up for approval in due time after getting a “favorable” report from the committee on laws.
Earlier, in a press conference in Mandaue City on Thursday, members of the National Union of Food Delivery Riders of the Philippines, Sentro ng Prograsibong Manggagawa, and Partido Manggagawa expressed gratitude toward the President for the release of the EO 41, stating it is a great opportunity for riders to increase their income and provide more to the plates of their families.
The group urged LGUs and implementing offices to be informed of EO 41 and to follow it religiously.