For Refusing To Pay Taxes: City to tag 'delinquent' schools and hospitals

CEBU, Philippines - Cebu City acting treasurer Ofelia Oliva will issue today certificates of delinquency to the management of some private hospitals and schools in the city for not paying their taxes because of their claims that they are non-profit institutions.

Oliva already informed Mayor Tomas Osmeña yesterday of the city’s move to send certificates of delinquency to the concerned schools and hospital and to give them five days to settle their obligations, otherwise City Hall will be forced to sell their establishments through auction.

Osmeña has given Oliva the go signal to send the notices to the schools and hospitals and to sell their establishments if they continue to ignore the city’s demand for payment of the unpaid taxes worth millions of pesos in order to serve as a lesson to other taxpayers.

The mayor, however, said the University of Cebu and Chong Hua Hospital may be excluded because its management have already signified their intention to settle their obligations with the city.

Among the establishments that will be auctioned if its owners continue to ignore demands to settle their accountabilities are the Southwestern University, Cebu Doctors Hospital, Sacred Heart Hospital, Cebu Velez General Hospital and some others.

Oliva said it is clearly provided by the law that the local government units have the power to collect taxes from business establishments in its territorial jurisdiction, but the lawyers of the said schools and hospitals insisted they are exempted from paying the taxes because they are non-profit institutions.

The management of the concerned schools and hospitals insist that as proprietary institutions the government cannot compel them to pay business taxes.

But the mayor earlier argued that it is just legal for the city to collect business taxes from these schools and hospitals because these establishments have contributed much to traffic congestions and other problems that needs to be attended to by the city.

In 2005, the City Hall records showed that the University of Cebu has an unsettled business tax of P87 million, Southwestern University, P33 million; Sacred Heart Hospital, P2 million; Cebu Velez General Hospital, P8 million; Cebu North General Hospital, P29 million and Cebu Doctors Hospital, P37 million.

The argument of the schools and hospitals is that their establishments are not for profit because their proceeds go directly to the trust fund intended for different projects, among them is to improve the education of those who take medical-related courses and others.

But Oliva said City Hall even reduced the original 2.5 percent business taxes out of the yearly gross sales to only P15,000 tax for the first P1 million of gross income of the proprietary schools and hospitals and 75 centavos for every P100 of excess from the first P1 million gross income. — Rene U. Borromeo/BRP (FREEMAN NEWS)