Cebu City's franchise tax collections now P42M

CEBU – Cebu City’s collection of franchise taxes from different public utility companies has already reached P42 million and is still expected to increase with the utilization of the Electronic New Government Accounting System, said acting city treasurer Renee Empaces.

Empaces was instructed by the City Council to submit a report about the collection of franchise taxes after it noted that an earlier report it received did not indicate an actual franchise tax collected.

But Empaces, who is also the regional director of the Bureau of Local Government Finance in Central Visayas, explained that the franchise taxes collected was actually incorporated into the business tax collections.

He said while the records sent to the council did not reflect the franchises tax collected, information on how much in franchise taxes are being paid by what companies can be extracted from the records of the Management Information and Computer Services.

“Our report submitted to the BLGF as of June 2006 showed that the City Treasurer’s Office had collected P42,008,867 in franchise tax, which is 210 percent of the P20 million estimated revenue for franchise tax in 2006 annual budget,” the acting city treasurer said.

Empaces said that with the adoption and implementation of the Electronics New Government Accounting System (E-NGAS) since 2007, the city is closely coordinating with the city accountant’s office for the proper recording and accounting of franchise taxes collected.

It was council committee on budget and management chairman Councilor Joey Daluz III who requested the personnel of the city treasurer’s office to intensify their collection of franchise tax from the utility companies operating in the city.

The Visayan Electric Company is one of the utility companies paying franchise taxes to the city. Other utility companies, including Globe Telecom, opposed paying additional franchise taxes to the local government.

But they were eventually compelled to give millions of pesos as a “donation” to the city, although they maintained that they are not obliged to pay local franchise taxes contrary to the opinion of the BLGF in Manila. – Rene U. Borromeo/BRP (THE FREEMAN)