War on educational tax Velez College: City Hall has no legal basis

CEBU, Philippines - The Velez College Incorporated insisted on its stand on being a non-profit corporation during a pre-trial conference yesterday, aside from saying that the Cebu City Government has no power to collect educational tax.

Velez College had filed a civil case against the City of Cebu, Mayor Michael Rama and the City Treasurer for collecting taxes for the years 2000 to 2010 amounting to P20 million.

Lawyer Lyndon Basan of the City Government said Velez did not pay the business tax, but lawyer Rester John Nonato claimed they paid the business tax on 2010.

But Basan said Velez paid national taxes but not to the Cebu City Government.

The president of the Velez College Incorporation, Dr. Carmen Velez, told the court that they were a non-profit incorporation.

Judge Gabriel Ingles of Branch 58 who is handling the case said the issue is to determine whether Velez is indeed a non-profit corporation.

Velez filed a petition for review for annulment and cancellation of Cebu City’s deficiency tax assessment after the City Treasurer sent a notice of assessment.

The City asked Velez to pay P20,503,618.20 for the last ten years.

Velez asked the court to issue a temporary restraining order (TRO) or writ of preliminary injunction against Cebu City, which the court granted.

The 20-day TRO took effect last January 12 to stop the City of Cebu from collecting taxes from the Velez College.

Velez claims that prior to the enactment of Tax Ordinance No. CTO CXIII on August 30, 2006 by the City of Cebu, which they said was approved “without notice, hearing and publication,” there was no ordinance by the City specifically taxing educational institutions.

They also said the City of Cebu, in imposing local taxes, must have a valid tax ordinance which is non-existent in the case.

The petitioner added that based on Section 151 of the Local Government Code, the cities were not granted power to tax educational institutions. – (FREEMAN)