Monday, June 16, 2008 [ sunstar.com.ph ]
By Linette C. Ramos
CEBU CITY -- City officials are studying the possibility of seizing properties from the owners of seven proprietary schools and hospitals that have not been paying business taxes, after attempts to reach a compromise have failed.
The City Treasurer's Office continues to collect taxes from the schools and hospitals after they failed to secure an injunction on the tax ordinance subjecting them to business tax.
City Hall, however, still has not collected any amount from the eight institutions that owe the City at least P255 million in taxes from 2000 to 2004 alone, excluding penalties.
City Councilor Jose Daluz III said the uncollected taxes could go a long way in improving and increasing the basic services for the City's constituents.
"Although the amount has not hampered or stopped the delivery of services, it could certainly improve the services we give the people if we can collect this," he told Sun.Star Cebu.
City Treasurer Tessie Camarillo said the taxes due and the penalties have ballooned in the last four years. But the amount due from 2005 to the present could not be assessed because the schools and hospitals have stopped submitting their financial documents.
For the interest and penalties alone, the City will collect 24 percent of the principal amount per year.
Some of the schools that refuse to pay business taxes are the same ones that increased their tuition this school year.
"I don't understand why they refuse to pay taxes when they make money from their operations, otherwise they would be non-stock. They are using all the facilities of the city, from garbage collection, peace and order and traffic management services, yet they don't pay taxes," Camarillo lamented.
Daluz, a lawyer and chairman of the City Council committee on budget and finance, said one of the options they are planning to take is to seize properties from the owners.
"They filed a petition for injunction but it was not granted, which means we can continue to implement the tax ordinance and collect taxes from them, but they still refuse to pay," he said.
"One option we are studying is the distraint of property. We can apply legal remedies provided for in the Local Government Code, one of which is to seize properties and put them up for auction, and we don't even have to seek court approval for that," he said.
To distrain means to "appropriate somebody's property as a pledge or guarantee that a certain obligation will be fulfilled," according to The Plain Language Law Dictionary.
Daluz has asked the City Attorney's Office to study the matter, and find out if the pending court case filed by the institutions has any bearing on their plans.
Last year, the City Council amended the Omnibus Tax Code and reduced the tax collected from proprietary schools and hospitals.
From 2.5 percent of the annual gross sales, the City is now collecting P15,000 for the first P1 million in gross sales, and three-fourths of one percent for sales in excess of P1 million.
Cebu Doctors' University (CDU), Cebu Institute of Technology (CIT), Southwestern University (SWU), Sacred Heart Hospital, Cebu Doctors' Hospital (CDH), Cebu North General Hospital and Velez General Hospital filed a civil case against the City in June 2007, and asked the court to declare the City's amended tax ordinance null and void.
Their refusal to pay taxes has resulted in lost income for the City, amounting to at least P155 million from the seven institutions alone from 2000 to 2004.
Although the University of Cebu did not file a case against the City, it has an unpaid tax of P91.5 million from 2000 to 2004.
In an interview last Friday, Camarillo said they have set several out-of-court meetings with the representatives of the schools and hospitals but these did not push through because of conflicting schedules.
"We wanted to sit down with them to discuss possible arrangements on the payment but nothing came out of it. And since they still refuse to pay, we will be forced to exercise administrative and judicial remedies," she said. (Sun.Star Cebu)
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