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Schools and hospitals who now oppose Cebu City’s Tax Ordinance had a chance to voice out their concern over revisions to the tax law, a city official said.
Councilor Jose Daluz III said representatives of schools and hospital were among those invited to the public hearing to amend the tax code, contrary to one school’s claim that there was never a public hearing on the amendment.
“There was a public hearing and they were heard but they did not bother to question the rate of the tax. So how were we supposed to know what they wanted? They could have voiced out,” Daluz said.
It was because of this lack of objection that the tax amendment was approved by the City Council, Daluz said.
Before the amendment, schools and hospitals were exempted from taxes due to their non-profit nature.
However, the amendment justified that taxes be collected from schools and hospitals because they were still receiving basic services from the city government.
After the city implemented the amended tax ordinance, seven schools and hospitals filed a case against City Hall for collecting taxes from them.
The legal counsel of one school said a public hearing on the ordinance amendment was never held.
Councilor Edgardo Labella, chairman of the City Council’s committee on laws, said the schools and hospitals submitted position papers on the matter.
However, only the court could decide whether the schools and hospitals or City Hall was doing what is right.
“Let it be decided by the court if (tax collection from schools and hospitals) is constitutional or not,” Labella said.
Apart from filing a case, the seven schools and hospitals have also asked the court to restrain the city from implementing the amended ordinance until the case was decided.
The court, however, denied the petition for a restraining order.
City Hall and the seven schools and hospitals are also trying to work out a settlement.
In the amended ordinance, the city will collect .75 percent of an institute’s gross sales if their annual income is more than P1 million.
Daluz said this rate favors hospitals in particular, because it would mean they would pay a lower rate than other kinds of businesses in the city.
