Cebu mayors back proposed law to let LGUs tax business sales

January 17, 2012 11:18 pm 

CEBU CITY, Jan. 17 – Six Cebu mayors expressed their support for Senate Bill 42, which is aimed at declaring 90 percent sales of businesses as taxable by the city or municipality where the factory, project office, plant or plantation is located.

Mayors Valdemar Chiong of City of Naga, Aurelio Espinosa of Toledo City and Celestino Martinez Jr. of Bogo City, Mayors Democrito “Aljon” Diamante of Tuburan, Ricardo Ramirez of Medellin and Ace Binghay of Balamban said it will increase the income of the local government units (LGUs).

They said they are happy that Sen. Vicente Sotto III introduced the bill so their localities will be prioritized in the sharing of sales tax from investors who have existing business or for businesses that will locate in their towns and cities in the future.

In his explanatory note, Sotto said that before the enactment of Republic Act (RA) 7160, otherwise known as the Local Government Code, the common concern of local officials was the practice of the National Government of allowing business to pay their sales tax in the locality where their principal office is located.

This means that even if the manufacturing firms have branches and plants in Cebu, they are paying sales tax in Manila or Makati where their headquarters are based. The localities, which are hosting the plans and are providing the transportation facilities such as roads, are holding an empty bag.

Sotto wants to reverse the situation wherein the LGUs hosting the plans and branches shall collect 90 percent of the sales tax while the cities and municipalities where they are holding principal office shall only be entitled to tax 10 percent of the sales.

These businesses include manufacturers, assemblers, importers and plantations, whose earnings mostly come from the operations in the provinces, cities or municipalities outside Metro Manila.

Chiong said the City of Naga will benefit if Senate Bill No. 42 will be passed into law, considering that it is hosting the plant of Apo Cement Corp., which is selling cement products nationwide and its principal office is in Manila.

Toledo City, on the other hand, will benefit from the passage of the bill because it is hosting Carmen Copper Corp., a mining firm that is exporting copper and gold, but with principal office in Manila.

Bogo City will soon host Robinson's Mall, hence, Martinez said his administration will benefit if the bill is enacted into law. (PNA) LAP/EB/re

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