CEBU -- Mactan Airport is offering to pay Lapu-Lapu City P23 million in real property taxes, but in return, the City should drop its pending case before the Supreme Court (SC).
The Mactan-Cebu International Airport Authority (MCIAA) also offered P10 million in financial assistance for projects of the City Government that will be implemented adjacent to the airport.
MCIAA General Manager Nigel Paul Villarete wrote Mayor Paz Radaza last July 4 and presented drafts of the two memoranda of agreement (MOA).
The proposed P23 million is a fraction of what the City believes it is owed in realty taxes by the airport authority, about P1.7 billion.
However, Mayor Radaza declined the proposal, calling it “misleading.”
Radaza, in her reply to Villarete dated July 5, said the MOA states their payment of real property taxes is limited to MCIAA properties that are totally used for commercial purposes.
“MCIAA is willing to pay real property tax for its commercial lots or those leased to private properties for the period of 2004 to 2013,” a part of the memorandum read.
It broke down its proposed payments into P12.4 million for 2004-2012 realty taxes, P8.27 million for the Special Education Fund and P2.93 million for socialized housing.
Section 1 of the draft MOA says that after the agreement is signed, the City should pass an ordinance approving the deal.
The City Council will then submit the ordinance to the Supreme Court, “with a prayer for the dismissal of the pending case between the MCIAA and the Lapu-Lapu City Government.”
COA’s reminder
The Commission on Audit (COA) has pointed out that the Lapu-Lapu Government failed to record in its books the amounts the MCIAA owes as real property tax.
These include P982.12 million in unpaid real property taxes from 1992 to 2012; P582 million in accumulated penalties; and P217.22 million in taxes from the commercial establishments functioning in the airport from 1998 to 2012.
The other draft MOA refers to the City’s numerous projects and programs implemented near the airport.
“Whereas, the Lapu-Lapu City Government requires additional funds to finance the said projects and programs; whereas, MCIAA is proposing to contribute financially as its corporate social responsibility to the various projects and programs of the local government of Lapu-Lapu City,” the draft MOA read.
Just like the first proposed agreement, it also requires an ordinance from the city council.
As a condition, however, the projects or programs supported by the MCIAA should be done within one year.
Authority
Mayor Radaza, in her reply to Villarete, proposed that the City Government be granted the “general authority” on how and when to use the financial assistance the MCIAA is offering.
She also pointed out that during their previous meetings, the MCIAA representatives said that the financial assistance is a substitute for tax penalties.
“Of course, we declined much of their proposal,” Radaza told reporters.
In her letter, the mayor questioned the inclusion of a general waiver, which means the City would give up all potential tax earnings on other MCIAA properties.
Lapu-Lapu City Legal Officer Yuri Benluan said everything should be considered step by step. He said the local court and the Court of Appeals were in favor of letting the City Government collect real property taxes from the MCIAA.
However, the MCIAA appealed the decision before the Supreme Court. (Sun.Star Cebu)
