City gov’t told to prove first taxes will go to right projects

Cebu city’s bid to hike biz taxes

Increasing taxes should be worthy and reflective of the services of local government, some business leaders in Cebu said.

Cebu Business Club (CBC) President Gordon Alan Joseph said that while increasing taxes is not necessarily a bad thing per se, the local government should prove that taxes are going to the right projects and programs.

“I do not mind increasing taxes if the city were able to deliver the required services to enable business competitiveness and improve the quality of life in the city. Cebu City doesn’t achieve this and the city seems incapable of solving problems,” he said.

Cebu City Hall is planning on imposing a flat rate of 1.5 percent of gross sales and receipts as business tax on businesses in the city.

This is expected to increase the city’s business tax collection, which has been cited by state auditors as lacking, but would also mean businesses will have to pay more to the local government.

But for Joseph, the city government should at least demonstrate first that they could improve the business environment and other major concerns of the city before asking for more taxes.

“Cebu City seems incapable of being able to transform the city into a world class, liveable place to work and live. We are mired in traffic, garbage, peace and order problems, illegal settlers, flooding, etc.,” he said.

“It’s all talk and posturing. No action. It’s sad,” he added.

CCCI’s move

For their part, the Cebu Chamber of Commerce and Industry (CCCI) is currently reviewing the proposed amendatory ordinance by Cebu City Councilors Margarita Osmeña and Alvin Arcilla.

CCCI President Antonio Chiu said that they would be coming up with a formal position paper on the proposal, which they would send to the city government.

However, he said he thinks the proposed amount is too high.

“While the business taxes were not adjusted for the past more than 20 years, we feel that the new business tax rate as proposed is too high,” Chiu said, without elaborating.

Welcomed

Meanwhile, Councilor Osmeña, who chairs the Cebu City Council’s committee on budget and finance, said they welcomed and appreciated the business sector’s sentiments on their proposed amendatory ordinance.

Other business organizations like the Philippine Retailers Association (PRA) – Cebu Chapter and the Hotel, Resort, and Restaurant Association of Cebu (HRRAC) had earlier expressed reservations on the proposed tax rate which would amend the city’s Revised Omnibus Tax Ordinance.

Fair comment

“Of course, I think that’s a very fair comment. And why not, and I’m very glad to hear that and that’s what (increasing business tax rates) is exactly — to provide better services to the residents of Cebu City,” Osmeña said.

She also pointed out that there would be a public hearing where the business sector could express their opinions or submit position papers and suggestions.

In line with COA

Councilor Osmeña said in a press briefing on Monday (Sept. 3) that their proposal was in line with the recommendations of the Commission on Audit (COA) to update the city’s tax rates as means to earn more income.

P1.6 billion

In their audit observation for 2017, COA noted that the city government had not made any amendments to the Revised Omnibus Tax Ordinance of Cebu City since 1994, missing an opportunity to collect at least P1.6 billion from taxes.

“It’s been decades, not only years, since we adjusted … You know, it’s never easy to impose additional taxes. It’s never a welcome news, but I’m glad that I heard how they (business sector) felt about it,” Osmeña said.

“It wasn’t done also before all these years. And it’s never easy to do that, and it just has to be done now,” she added.