COA to Alegria: Impose tax on collection of canyoneering activity fees

Canyoneering in Alegria (CONTRIBUTED PHOTO)

CEBU CITY, Philippines – The state’s auditing body is recommending to the local government of Alegria town in southwestern Cebu to impose tax on the collection of canyoneering activity fees.

“We recommended that the Municipal Mayor agreed to direct the Municipal Accountant to determine the appropriate taxes, if any, to be imposed on the collection of Canyoneering Activity Fees or the taxes to be withheld on the share of income to other stakeholders in accordance with the National Internal Revenue Code,” said the Commission on Audit (COA).

In their 76-page audit report dated June 11, 2020, the COA found out that the municipality has collected and disbursed a total of P42.6 million and P43.2 million from canyoneering activities for 2018 and 2019, respectively.

However, state auditors said the figures did not include computation of taxes payable nor income taxes withheld from the sharing of the net proceeds among landowners, accredited people’s organization, tourist guides, and tourist motorcycle drivers.

“There were no separate books of accounts prepared that would show the financial performance and position of said operations. No computation of taxes payable nor income taxes withheld from the sharing of the net proceeds among landowners, accredited people’s organization, tourist guides, and tourist motorcycle drivers,” the COA stated.

They also said the local government unit (LGU) of Alegria, a fourth-class municipality located 113 kilometers southwest of Cebu City, was not able to properly record and appropriate income and expense accounts from their canyoneering activities.

“In our review of the transactions disclosed that the cash collections and disbursements pertaining to operations were accounted in the Trust Fund books and directly recorded in the Other Payables account as credit when collected and debited the same when disbursed,” said the COA.

“The less than transparent reporting of the actual financial condition and profitability of this enterprise may have some adverse effect on decisions taken by LGU officials.  Likewise, the taxes that may be derived therefrom may have a great impact on nation-building,” they added.

Canyoneering is a popular tourism activity in southwestern Cebu that covered the towns of Alegria and its neighbor in the north, Badian.

According to COA, the local government of Alegria collects entrance and users’ fees from tourists who want to try canyoneering in Kanlaob River in Barangay Compostela.

While barangay officials have already laid down an ordinance that served as the basis for the canyoneering operations there, COA reported that Alegria’s LGU is coming up with a similar one to be adopted in the municipal level. /bmjo