CEBU, Philippines – Cebu City Treasurer Ofelia Oliva is demanding from the Sacred Heart School-Jesuits to open its book of accounts for examination after the school claims they are ex-empted from paying real property taxes under the Constitution.
The city government has sent a notice of delinquency of payment of real property taxes to SHS-J from 1980 to 1988 and 1997 to 2010 amounting to P57,682.20.
The school, through its legal counsel Perpetua Socorro Enriquez-Belarmino, however, informed Oliva that they are not paying the tax dues because they are not obliged under the law.
Belarmino, in a letter to Oliva, cited Section 28, Article VI of the 1987 Constitution, which provides that; "Charitable institutions, churches and parsonages or con-vents appurtenants thereto, mosques, non-profit cemeteries and all lands, buildings and improvements actually directly, and exclusively used for religious, charitable or educa-tional purposes shall be exempt from taxation."
According to Belarmino, there have been a long line of decided cases by the Supreme Court that uphold the said provision of the Constitution.
"Our client as a non-stock, non-profit educational institution is exempt from the payment of real property taxes on its properties actually, directly and exclusively used for educational purposes," Belarmino said.
Oliva, however, said she is not buying out the argument of Belarmino unless they will present their book of accounts for examinations.
"When you claim tax exemption, the burden of proof is in the taxpayers. Surrender your book of accounts and we will examine. If we found out that they are non-profit and non-stock, then we will issue a certification that they are exempted," Oliva said.
Belarmino claimed that since the school's incorporation in 1955 they had been exempted from paying real property taxes.
"We believe that this notice of delinquency was just a mistake on the part of your office," Belarmino stressed.
Aside from SHS-J, the University of the Visayas, Cebu Doctor's Hospital University and Southwestern University also refused to pay real property taxes to the city. In fact, they have filed a petition before the court against the city government.
They are asking the court to nullify the amendment to the Cebu City Omnibus Tax Code which reclassified schools and hospitals as "service-oriented industries" sub-ject to business tax based on their gross sales.
As such, the establishments are subject to business taxes equivalent to three-fourths of one percent of their annual gross sales, which would be collected on top of a fixed amount P15,000 for the first P1 million.
The original tax ordinance authorizes only the collection of a fixed rate of 2.5 percent of their gross sales. (FREEMAN)