Firm appeals vs. San Fernando tax ordinance

CEBU, Philippines - A cement factory warned the municipal government of San Fernando, Cebu, of the bad effect of its new Municipal Revenue Code that was approved last December 5, 2011 raising permit fees and taxes on businesses.

Taiheiyo Cement Corp. made an appeal to the Sangguniang Bayan of San Fernando, Cebu, after their position paper was not given due consideration during the public hearing conducted last November 14, 2011 for the amendment of its Tax Ordinance 01-98.

“We sincerely hope you will consider our appeal as the subject taxes and fees we believe would unduly create a chilling effect and would unwittingly drive or scare away present and potential investors,” said Toshiyuki Nono, senior vice president for finance of Taiheiyo Cement Phils. in South Poblacion, San Fernando.

The said amended Municipal Revenue Code is still subject to review by the Provincial Board.

Among the relevant amendments of the new Code include the permit and regulatory fees, service fees and taxes on business.

On the imposition of permit fees, the company argued that it is invalid as it contravenes Section 153 of the Local Government Code of 1991 which provides that local government units may impose and collect such reasonable fees and charges for services rendered.

“In order to justify the imposition of a permit fee, it is basic that the local government concerned must perform acts of regulation, inspection, or surveillance in connection with the business or occupation subject thereto,” the company said.

It said that the municipality is not expected to render any service in consideration for such impositions and assuming it will render service, the amount of the fee is unreasonable, excessive and confiscatory in the circumstances.

Under the new code, service fees such as secretary’s fee is increased from P5-P10 to P50-P100, police clearance fees for business purposes increased from P25 to P600, sanitary inspection fee from P25 to P800, health examination service fees from P25 to P75, and garbage collection fees from P300 to P3,000.

The company argued that the amount of the increase up to 310 percent from Old Revenue Code is “unjust, excessive and oppressive.”

“There appears to be no justification for this exorbitant increase as there is no corresponding change in the services to be rendered by the Municipality in relation to these fees and charges,” the position paper said.

The new code also imposes the ten percent increase in business tax rates which the company argued as also excessive.

The company is asking the local government of San Fernando to retain the rates provided under the old Revenue Code. — (FREEMAN)