TOM TO DO AWAY WITH BUSINESS PERMITS
CEBU CITY Mayor Tomas Osmeña announces he would be getting rid of business permits and would instead focus on business tax collection in a speech during the Digitize Cebu Conference held at the Cebu Marriott Hotel on Wednesday, August 30, 2017. CDN PHOTO/JUNJIE MENDOZA)
The Cebu City government will no longer run after establishments operating without a business permit for as long as they are paying the right taxes, Mayor Tomas Osmeña announced on Wednesday.
During a digital marketing conference for micro, small and medium enterprises (MSME), Osmeña said in a speech that he will “get rid” of the term “business permit” and that the city government will only be issuing a “taxes paid” certificate to establishments for them to operate.
“So people can do business right away. I’m interest only in raising money. I’m not interested in being the policeman or the GSIS (Government Service Insurance System), fire department and all that,” he told reporters on the sideline of the event after he gave his message for Digitize Cebu at the Cebu City Marriott Hotel.In his speech, the mayor lamented the headache business owners experience when securing business permits, which requires them to run all over the city and secure various clearances from different agencies before getting the document.
The mayor, in a separate text message to Cebu Daily News, said that while he intends to do away with business permits, the City Treasurer’ s Office (CTO) will prioritize going after businesses that don’t pay taxes.
He also stressed that even if a business permit would no longer be a requirement to do business in Cebu City, it would not mean that the business would be exempt from securing permits or clearances from the Office of Building Officials (OBO), the City Fire Department, the City Health Office, City Environment and Natural Resources Office (Cenro), Social Security System (SSS), among others.
Asked if his pronouncement could mean that the Rico’s Lechon restaurants, which were shut down by the city government for its failure to secure a business permit, could not reopen, the mayor’s response was:
“Does this exempt Rico’s? Rico declared in (two) radio interviews that his loss in sales from the closure is P500 thousand a day. So that’s P180 million a year. He owes the treasurer taxes on that for at least 5 years.”
Councilor Joy Pesquera, who opposed the mayor’s plan, however, maintains that if Osmeña no longer wished to require the business permits, then the closure order of Rico’s Lechon was “ill-advised” because Rico’s Lechon paid its taxes and was issued with a temporary (business) permit.
‘Discretionary’A business or mayor’s permit is only one of the requirements that business owners need to operate their establishments.
At the same time, Cebu City Legal Officer Joseph Bernaldez stressed it is the prerogative of the mayor to loosen or tighten regulations on business permits in the city.“It is the judgment of the mayor.
The power to issue business permits is discretionary on the part of the mayor. It is not ministerial.
It goes along with it the idea that he can be strict about it or not,” said Bernaldez in a separate interview with CDN yesterday.Bernaldez, however, pointed out that the city has an existing ordinance that still requires all businesses in the city to apply for business permits at the City Hall.
“This is on the assumption that those businesses that have not complied with the permit will comply later on. Probably, it should be taken in the context that for now, the mayor will not be strict in going after them,” he said.
While requirements may vary across local governments, what business owners generally need to secure for the mayor’s permit are the certificate of registration with the Department of Trade and Industry (DTI, for sole proprietorship) or Securities and Exchange Commission (SEC, for corporation); barangay clearance; authorization letter of owner with ID; contract of lease or land title; sketch of location; occupancy permit; locational clearance; public liability insurance; community tax certificate; fire permit; and sanitary permit.
Osmeña earlier announced that he will go after more than 1,000 establishments in the city operating without business permits, but this time around, he said the CTO will have to focus on its core function — raising money.He said bureaucracy stands in the way of achieving just this because “we cannot bring in money because the sari-sari store cannot get SSS permit.”
“You want to start a business? Just show that you are paying your taxes. Put this up there. You can still be arrested, but we will not run after you. You’re not the priority,” the mayor said.
The mayor stressed that they will prioritize running after 14,000 establishments that are not paying the correct taxes to the city government.
What makes this plan controversial, he added, was that people think the government has to be everything for everybody.
“The treasurer’s office should not be the police — for the fire department, for the City Office of the Building Official (OBO), GSIS, SSS and Department of Health, that’s not your business. Forget all of that basta ang imong tuyo (your goal is to) collect taxes. That’s it,” Osmeña said.
‘Tax paid certificate’He said that establishments previously ordered closed by City Hall may soon apply for a tax paid certificate in lieu of the business permit, but that “they can still be arrested for not complying with the fire department.”
While the city government ordered the closure of two Rico’s Lechon outlets, as well as the restaurant’s commissary for failing to secure a business permit, it was later found to be operating without an Environmental Compliance Certificate (ECC) from the Department of Environment and Natural Resources (DENR).
The mayor said this is the kind of focus he is trying to achieve to make City Hall more efficient.Asked when this plan will be implemented, he said he will have to talk to the treasurer’s department, but that it will be effective almost immediately.
“I will just tell them not to run after people, unless I give a specific order, like if you’re a violator and I can see the absence of you business permit is violation. But that should not be the treasurer’s office doing that,” said Osmeña.
Sought for comment on this development, Cebu Chamber of Commerce and Industry (CCCI) Vice President for External Affairs Teodoro Locson Jr. said he has yet to look into the ramifications of the mayor’s plan.
No more red tapesFor Cebu Business Club President Gordon Alan Joseph, this is an excellent plan to improve the ease of doing business in Cebu City.
“There is too much bureaucracy at the moment and the process is tedious,” he told Cebu Daily News in a text message.
To recall, Cebu City slipped to ninth place this year from sixth place last year in the National Competitiveness Council’s (NCC) Cities and Municipalities Competitiveness Index (CMCI) 2017.CMCI 2017 ranks competitiveness of cities and municipalities in four key areas including economic dynamism, government efficiency, infrastructure, and resiliency.
The city recorded a huge drop of 77 notches in government efficiency, which, according to the NCC, refers to the quality and reliability of government services and government support for effective and sustainable productive expansion.
It fell four levels in economic dynamism, but went up one spot in infrastructure.DTI Cebu Provincial Director Maria Elena Arbon, who was in the same event as the mayor on Wednesday, said it was up to the local government to decide on this matter.
“Actually, if you look at it closely, if a business is paying their taxes, then their registration should be updated,” she told CDN.She said registration with the local government is done every January, the same time local government units compute their taxes due.
Arbon said businesses start processing their requirements by October so that by January of next year, their requirements will be complete.
“Others issue a conditional mayor’s permit on the condition that the business complies with requirements within, say, three months. Maybe that’s what the mayor means.
He will not run after those who have not completed their requirements beyond the time allowed them,” she said.Based on records from the CTO, there are 34,234 registered businesses in Cebu City.
City Treasurer Tessie Camarillo said that they are now finalizing the review of businesses that have been operating without a mayor’s permit and would have to meet with Osmeña on what to do next given his recent pronouncement.
The lawCouncilor Joel Garganera, meanwhile, warned that Osmeña’s decision to do away with business permits could create confusion in the city’s business sector.
“Wala nay balaod. Mao tingali na iyang gusto aron siya na lang ang balaod (There will be no law. Maybe that’s what he wants so that he will be the law). E
verything will depend on his whims and caprices,” Garganera said. But Councilor Joey Daluz III said he will fully support the mayor’s move and would back any proposal to amend the city ordinances that have provisions pertaining to securing business permits.
“We can start by listing businesses that do not need a permit as an amendment to the ordinance,” Daluz added.
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