VECO asks city to waive tax surcharge, interest

CEBU, Philippines - The Visayan Electric Company (VECO) is requesting Mayor Michael Rama to waive the surcharge and interest of its 2009 tax amounting to P2.51 million.

The power firm incurred the charges after its payment for franchise tax for the third quarter of 2009 was delayed for nine days. VECO's franchise tax was P22.24 million.

Nelson Perez, VECO's AVP for Finance, said in a letter to Rama that the franchise tax was inadvertently overlooked, but the company still managed to pay the amount on July 29, nine days after the due date.

"We would like to inform Honorable Mayor (Michael Rama) that prior to 2010 VECO has been paying its franchise tax due for the 1st and 2nd quarters on January 20, and the 3rd and  4th quarters on July 20. In effect, VECO has been paying in advance the taxes due for the 2nd and 4th quarters, which are supposed to be due on April 20 and October 20, respectively. However, due to personnel movements in 2009, the franchise tax due on July 20 was inadvertently overlooked and was paid only on July 29," Perez explained.

The mayor received the letter on October 8, 2013.

Perez said it was only in August this year that they received a Notice of Assessment from City Hall. Prior to the notice, VECO was reportedly unaware that the city had imposed charges and interest.

While admitting that it had lapses in the payment of  the tax in 2009, VECO said it never had any other tax deficiency and has paid business taxes, regulatory and permit fees regularly.

"Please understand that VECO has always been conscientious in remitting the taxes due to the City of Cebu and it is not VECO's intention to postpone or evade payment of  taxes. The late payment in July 2009 was an oversight that will not happen again," Perez said. 

The City Council, which was furnished with a copy of the letter, had referred the matter to the committees on energy and laws, and as well to the City Legal and City Treasurer's office for further study and review.

In a text message, city treasurer Diwa Cuevas said her office is yet to receive a copy of VECO's letter.  (FREEMAN)