Private schools demand tax refund
“ILLEGAL EXACTION” BY CITY HALL
ALL private schools in Dagupan decided to take a united stand against the city government for the latter’s alleged illegal collection of business taxes.
In a meeting of all presidents of private schools in the city on August 9, the group agreed to stop paying business taxes with a demand for the city government to refund all the business taxes they had paid from 2001 to this year.
“We are uniting against any attempt to collect illegal taxes from us,” said Atty. Gonzalo Duque, president of Lyceum Northwestern University.
Also present in the meeting were Dr. MacArthur Samson, president of University of Luzon, Edna Torio Gonzales, president of Ednas School, among others.
Dr. Voltaire Arzadon, president of the Colegio de Dagupan, did not attend but sent his representative.
Saying they have “a good leg to stand on” in adopting the consensus to fight city hall, the private schools asserted that there is no ordinance enacted by the city government imposing business taxes on them.
Earlier, former Councilor Michael Fernandez admitted that when the Sangguniang Panlungsod enacted the Dagupan tax code, contained in Ordinance No. 1855, in 2005, private schools were not intended to be taxed.
Fernandez, the author of Ordinance 1855 and the SP chairman on ways and means at that time, said representatives of private schools were not even invited during public hearings conducted on the measure because they were not contemplated to be covered.
“I think we have a strong case against the city government because there was no ordinance imposing business tax from 2001 to 2006 and that Ordinance No. 1855 just codified all ordinances that were earlier passed,” said Duque.
Duque, a lawyer, said the imposition of business tax by the city is “illegal exaction”.
“They earlier called us tax cheats, then what are they collecting from us without an ordinance?” he added.
TAX REFUND
Nonetheless, Duque said they are giving the city government a chance to correct itself by reimbursing the business taxes they have paid over the last 11 years.
As an example, Duque cited that LNU paid the city government some P3 million from 2001 to 2006 and up to P2.9 million from 2007 to 2011 on the assumption that there was an ordinance enacted by the SP imposing business taxes on private schools.
Duque said he is withholding the plan to bring the city government to court, pending the response of the city government to their demand letter. The letter was addressed to Mayor Benjamin Lim.
The UL already filed a civil case before the Regional Trial Court against respondents Dagupan City Government, Mayor Benjamin Lim, City Administrator Vladimir Mata and City Treasurer Romelita Alcantara seeking to declare their imposition of business taxes as illegal.
Duque said it is incumbent upon the city government to reimburse the full amount paid to it, invoking a principle in civil law which states that where there was error in the imposition of taxes, reimbursement should therefore be made.
On the contention that taxmen of the city government were collecting business taxes from the private schools on the basis of the general provision of the Local Government Code, Duque merely chuckled and said this cannot be done without the necessary ordinance.
He said such contention is untenable as Rep. Act 7160 or the Local Government Code of 1991 merely sets the guidelines for Local Government Units on how they can impose taxes.
“The code sets the limitation, defines who should be subject to tax and the necessary requirements of a valid ordinance and does not impose the tax itself,” Duque said.
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