Council to correct 'defective' tax law

The city council will conduct a public hearing to correct the acknowledged defect of a city ordinance that requires owners of proprietary schools and hospitals to pay taxes to the city government.

Mayor Tomas Osmeña announced it yesterday when reporters asked him of his move after the Department of Justice declared the city ordinance illegal.

Justice Secretary Raul Gonzalez said the city government violated the constitutional rights to due process of the schools and hospital owners when it approved the tax ordinance without holding a public hearing first.

The ordinance will not be enforced, and it would be subjected to a public hearing where officials of concerned hospitals and schools would be invited to air their sentiments over the city tax law.

If the ordinance is eventually carried out, the city government expects to collect business taxes of P0.75 for every P100 income from every non-stock non-profit schools and hospitals in the city.

The move of the city to hold a public hearing on the issue would be delayed, however, because city officials said they have yet to receive a copy of the DOJ legal opinion on the matter.

Since proprietary schools and hospitals were not specified in the Cebu City Omnibus Tax Code as taxable entities, the owners of these firms have refused to pay business taxes to the city.

It prompted the city government to introduce an amendment to the ordinance requiring the owners of proprietary schools and hospitals to pay taxes, but they failed to hold a public hearing before approving such amendment.

The latest amendment, although it was declared highly questionable, provides that these schools and hospitals are subject to three-fourths of one per cent of their annual gross income, on top of their fixed tax amount. -Rene U. Borromeo/RAE