Council thumbs down tax tradeoff

CEBU, Philippines - The committee on laws of the Cebu City Council has rejected the proposal of Vicsal Development Corp. —the owner of the Metro Gaisano chain of stores— to donate 70 units of computer notebooks to the city worth P1.4 million on condition that the amount will be deducted from their tax liability.

Councilor Edgardo Labella who heads the Committee on Laws explained that the proposal was that with the delivery of P1,428,000-worth of computer notebooks to the city, Vicsal Development Corporation shall be deemed to have paid the city part of its real property tax obligation.

After reviewing the draft of the proposed memorandum of agreement, Labella found out that it is just like a procurement contract whereby the City of Cebu will purchase from Vicsal Development Corp. the 70 laptop computers.

“As we have already observed above, the proposed transaction between the City of Cebu and Vicsal is in reality the purchase or acquisition by the city of equipment that it needs in the transaction of public business. As such it is considered as a procurement and therefore subject to the requirement of competitive bidding,” said the re-electionist north district councilor.

According to Labella there is no document in the proposed transaction that showed it passed a public bidding as required by law, meaning that the proposed transaction may go against the government procurement reform act.

Although Mayor Tomas Osmeña is not against to the proposal, he gave the City Council the right to study thoroughly the offer of Vicsal Development Corp. whether the prices of the products is fair.

A notebook computer can be bought for P20,000 to P80,000, depending on the brand and its specifications, and the ones offered by Vicsal is cost P20,400 each.

It was not known how much was Metro Gaisano’s real property tax obligations to the city for its six-story department store along Colon St. and another department store at the Cebu Business Park.  (FREEMAN NEWS)