SOUTHWESTERN University (SWU) is set to enter into a compromise agreement with Cebu City Hall over the taxes it owed to the city.
Councilor Nendell Hanz Abella authored the resolution authorizing Cebu City Mayor Tomas Osmeña to enter into an agreement with SWU in the payment of its taxes.
The proposed agreement called for SWU to pay 3/4 of one percent of their total gross revenue for the school and hospital operations from 2007 up to the present. No specific amount was stated.
SWU and eight proprietary schools and hospitals filed a case against the city government which sought to require them to pay business taxes based on an amended tax ordinance.
The schools refused to pay P155 million worth of business taxes, arguing that they are exempted from business taxes since they are non-stock, non-profit institutions.
Pending the resolution of the case at the Regional trial Court (RTC) Branch 236, SWU said it was willing to enter into a compromise agreement with the city, Abella said.
The total amount incurred will be divided into two. Half of the amount to be collected by the city will be in cash while another half will be through scholarship grants to the city’s scholars.
The same proposed agreement said one-half of the amount covering a nine-year period shall be given in cash in two equal installments.
The first installments will be given upon the approval of the agreement by the City Council and the court.
The second installment will be given within the third month following the date of payment of the first installment.
The City Council deferred the proposed agreement. Councilor Jocelyn Pesquera said there has to be an amendment of the existing tax ordinance “especially on the definition of gross receipts.”