THE Cebu Chamber of Commerce and Industry (CCCI) has expressed opposition to the proposal of the Cebu City Government to impose a flat rate of 1.5 percent on the city’s business tax.
In a statement sent to legislators, CCCI President Antonio Chiu said the proposed rate is ‘excessive.’
“CCCI fully understands the need of the city to increase its tax base. However, this should not be excessive,” said Chiu.
He added that their own computations showed that the 1.5 percent flat rate exceeds the allowable maximum amount of up to 50 percent increase in the rates that cities could levy on business establishments.
“Furthermore, CCCI believes that the proposed ordinance is excessively high for the business community in Cebu City to absorb considering the effects of recent TRAIN (Tax Reform Acceleration and Inclusion) law, increase in minimum wage and the current high inflation rate,” he added.
The proposal endorsed by Councilors Alvin Arcilla and Margarita Osmeña seeks to update the current tax rates of Cebu City by amending its Revised Omnibus Tax Ordinance.
CCCI’s statement was submitted in line with the public hearing the council conducted on Tuesday for the proposed ordinance, which was filed days after the Commission on Audit (COA) suggested to the city government to amend its tax ordinance.
In the annual audit observation they made for Cebu City’s fiscal year of 2017, state auditors found out that the city government could have earned up to P1.6-billion in additional income if amendments in the city’s Revised Omnibus Tax Ordinance were inacted.
For her part, Osmeña, who is the chairperson on the council’s committee on finance and budget, said they welcomed CCCI’s stand on their proposed ordinance.
She added that they will make sure to ‘consider all possible factors’ on coming up with the final decision on the matter.
“We’re looking forward for CCCI’s detailed position paper, and we do know that this is a complicated issue,” added Osmeña.
CCCI is the largest business group in Cebu City, and is composed of over 800 business establishments.
On the other hand, Acting City Treasurer Veronica Morelos said the city government’s proposal was in line with the recommendations made by COA.
“COA already even brought this up in the 2012 findings, and they reiterated it in their 2017 audit findings. That’s why we have to amend the tax ordinance, with the compliance of COA,” said Morelos.