Tomas ready to ask BIR for tax exemption

CEBU, Philippines - Cebu City South district Rep. Tomas R. Osmeña will only accept the request for him to be the one to ask Bureau of Internal Revenue (BIR) Commissioner Kim Jacinto-Henares to waive the payment of close to P1 billion taxes related to the sale of the 30.4 hectares at the South Road Properties if Mayor Michael Rama surrenders and will admit that he cannot do the job.

Vice Mayor Joy Augustus Young said now that the BIR Commissioner denied Rama’s request for exemption of the payment of the Capital Gains Tax and Withholding tax for the sale of the SRP lots to SM Prime Holdings Incorporated, he will ask Osmeña and Cebu City North district Rep. Rachel “Cutie” Del Mar to take over.

“No, I will not involve myself into the issue unless Mike Rama will surrender and admit that he cannot solve it,” said Osmeña in a separate interview.

Rama had already visited the BIR Commissioner twice and he requested that the city be exempt from the payment of taxes for the P2.7 million sale of the 30.4 hectare lot sold to SMPHI.

Jacinto-Henares denied the mayor’s request in a final order dated December 19, 2011 and said that although the City of Cebu has been accredited by the Philippine Export Zone Authority, it cannot be exempted from the payment of Capital Gains Tax and Withholding tax if it will sell the SRP lots to persons or companies that are not PEZA registered, particularly if the purpose is commercial.

Jacinto-Henares said the SMPHI was not accredited by PEZA when it purchased the SRP lot from the city.

“The factual finding of the BIR regional director is also noted that the area sold to SMPHI is classified and would be utilized for commercial purpose,” said the BIR Commissioner who explained that only those intended for industrial purposes may be accepted for PEZA accreditation.

“I cannot assure that I can convince the BIR Commissioner to exempt the city from the payment of Capital Gain Taxes and Withholding Taxes, but if Mike Rama will surrender, I will try my best,” Osmeña said.

SMPHI had already started the construction of its giant mall at its purchased lot in SRP and is expected to be completed on 2013.  (FREEMAN)