Cebu City to hike business tax

CEBU, Philippines — Banks and other financial institutions are expected to pay additional taxes after the Cebu City Council has approved the amendment to the city’s tax ordinance increasing the business tax rate to 75 percent based on the one percent of their gross receipts.

The City Council approved on Wednesday the amendments to Sections 46 and 48 of the Omnibus Tax Ordinance No. LXIX (69) authored by Councilor Raymond Alvin Garcia.

The amended Section 46 provides that, “there shall be imposed, levied, and collected by the city a business tax on banks and other financial institutions like insurance companies and financing companies engaged in business within its territorial jurisdiction at the rate of 75 percent of one percent of the gross receipts of the bank, insurance company, financial company or other financial institution for the preceding calendar year derived from interest, commissions, and discounts from lending activities, income from financial leasing, dividends, rentals on property and profit from exchange or sale of property, insurance premium.”

On the other hand, the new Section 48 states that the "gross receipts for the preceding calendar year" as applied to banks and other financial institutions shall be limited only to those derived from interest, commissions, and discounts from lending activities, income from financial leasing, dividends, rentals on property and profit from exchange or sale of property, insurance premium.

Lawyer Jerone Cstillo, special assistant to the mayor, said the amendments will help generate additional revenues for the city government.

"That ordinance will generate additional funds for the city because now from one-half of one percent, we will get three-fourth of one percent from the gross income of financial institutions," Castillo said. /FPL (FREEMAN)