Capitol questions legal basis: ‘City can’t tax bus terminals’

CEBU, Philippines — Cebu Provincial Government lawyers said the two bus terminals that the Capitol operates are not subject to the taxing authority of the Cebu City Government.

Besides, they said, the Cebu North Bus Terminal (CNBT) and the Cebu South Bus Terminal (CSBT) are not a form of business but part of legitimate Capitol operations.

This came in the wake of a show-cause order issued by the Business Permit and Licensing Office (BPLO) to both CSBT and CNBT for allegedly violating Sec. 4 of the Cebu City Omnibus Tax Ordinance, or operating a business without City Hall registration.

In an interview yesterday, BPLO Head Andres Borres, on the other hand, said that the issuance of the order was just part of their routine inspection and came about as part of their normal and regular procedure, after the business permit renewal period.

“After gyud sa atong renewal period sa January, mag-conduct ta og inspection…. Kining amo, mag-regular inspection,” he said.

He, however, said he has yet to get the details of the findings of his inspection team.

Capitol Legal Consultant Rory Jon Sepulveda, on the other hand, said the order has no legal basis to stand on.

“The bus terminals are not businesses. These are public services nga ang Province maoy naghatag para sa publiko,” he said in a statement posted on Sugbo News, the official Facebook news page of the Cebu Provincial Government

Sepulveda said the same “Omnibus Tax Ordinance of the City of Cebu” defined a “business” as “a commercial activity customarily engaged in as a means of livelihood and typically involving some independence of judgment and power of decision.”

“Dili man ni livelihood ang amoa. This is service, public service. Kinsa may gi-cater ani? Ang publiko nga gikan sa probinsya, ang taga-siyudad nga mongadto sa probinsya,” also said Provincial Legal Officer Donato Villa, Jr.

He said that if ever the bus terminals turn out profits, these are incidental to the operation of a terminal but are not its main consideration.

The order, signed by BPLO OIC Andrew Borres, gave the Capitol 72 hours (three days) to explain in writing why the bus terminals should not be closed and/or sanctioned for operating without City Hall registration.

Section 4 of the Tax Code “provides that no person shall be issued a permit or license to engage in or purpose of any occupation or calling or conduct and maintain any business, or exercise any privilege within the territorial limits of the City without first having paid the corresponding taxes, fees or charges therefor.”

Villa, however, said that Section 133 (o), Chapter I, Title One, Book II, of the Local Government Code of 1991, which provides for the limits of the taxing power of LGUs (Local Government Units), states that unless provided, the city’s taxing powers does not include local government units.

“From the Local Government Code pa lang daan, they are not allowed to collect taxes here sa Province of Cebu as an LGU also. Their show-cause order doesn’t have a leg to stand on because an LGU cannot tax another LGU,” likewise said Atty. Angelica Arnaiz of the Provincial Legal Office.

The Capitol lawyers questioned the timing of the notices since this is the first time that these issues are raised by the City Hall for all the years that the bus terminals have been operational.

The CSBT was built as part of the project components under the Metro Cebu Development Project Phase 1 (MCDP I), wherein the Regional Development Council, through the National Government, entered into a loan agreement with Japan’s Official Development Assistance (JODA) to fund the said project.

It was completed by August 1992, with the number of loading bays reduced from the proposed 48 to just 40. It was turned over to the Cebu Provincial Government in February 1993.

The CNBT, on the other hand, was built in Mandaue City as part of Phase 2 of MCDP, funded once again by a loan obtained by the National Government from JODA.

Governor Gwendolyn Garcia had said that if Cebu City pushes through with the closure of these terminals, at least 10,000 travelers using CSBT and 5,000 using CNBT would be affected on a daily basis.

These figures, she said, are significantly higher on weekend, especially during the summer season, when tourists travel to Cebu for rest and relaxation.

“Let us not let these artificial boundaries of political jurisdiction confuse our minds nga lahi ta. The fact remains that we are one. We are all Cebuanos. Ang naggamit ana nga terminals, majority Cebuanos, regardless kon botante ba siya sa Cebu City, o botante ba sa Samboan, o botante ba sa Isla sa Bantayan,” Sepulveda said.

Gov. Garcia and City Mayor Michael Rama are currently not in good terms.

Borres said it was not just the CNBT and the CSBT that the BPLO inspected and sent notices, as they also checked as well other public transport terminals around Cebu City.

Asked for legal basis for the issuance of a show-cause order, he said it was just a protocol inspection, right after the renewal of business permits.

“Tan-awon sad nato na renew ba ilang permit,” he said.

And while he declined to divulge details of the order, he said the Provincial Government already sent its response.

“Lipay ra sad kaayo ko nga at least na-replied na and na-clarify na,” he said. — (FREEMAN)