Biz groups against 1.5% flat rate tax

CEBU, Philippines — Several business groups and organizations have expressed objections on the proposed 1.5 percent flat rate on gross sales or receipts on business taxes in Cebu City.

During last week’s regular session, the City Council received position papers from PhilExport Cebu, Chamber of Real Estate and Builder’s Association (CREBA) of Cebu, Cebu Federation of Rural Banks, Inc. (CFRBI), and Philippine Retailers Association-Cebu Chapter expressing their opposition on the proposed ordinance imposing 1.5 percent flat rate on business taxes.

Philexport Cebu President Nelson Bascones said the group supports the stand of the Cebu Chamber of Commerce and Industry on the opposition of the imposition of “excessive” flat rate.

“We fully support you (CCCI) on your position to amend anti-business practices by the local government which in the long run is going to hurt the local economy,” Bascones said in his letter to CCCI President Antonio Chiu.

Also, groups of CREBA Cebu, CFRBI, and PRA-Cebu Chapter expressed that they support the stand of CCCI that the proposed ordinance would not make Cebu a competitive area for business and investors.

City Councilors Alvin Garcia and Margarita Osmeña proposed that the existing ordinance on taxes should be amended since it has not been updated for 24 years already.

The councilors proposed an imposition of 1.5 percent flat rate on business tax after the Commission on Audit (COA) called the attention of the city government for its failure to collect possible P1.6 billion increase in revenue should the tax rates have been updated.

CREBA of Cebu supported the stand of the CCCI to counter the proposed ordinance seeking to amend revised Omnibus Tax Ordinance No. LXIX of the City of Cebu.

The CFRBI also consulted its members during their general meeting on December 11, 2018 and decided to support CCCI.

As for PRA-Cebu Chapter President Robert Go, over 104 member companies are against the imposition of hefty taxes.

“We support the stand of CCCI regarding the increase of 1.5 percent tax collection that this should not be excessive and should be in accordance with the provisions of the LGC (Local Government Code) as this is counterproductive at this time since MSMEs cannot afford any increase while some sectors may grant adjustments but should be based on productivity and no more than what the law prescribes,” reads a portion of Go’s letter to the City Council.

The proposed ordinance is not yet submitted for final deliberation. (FREEMAN)