3 schools protest city taxes
THE presidents of three leading private schools in Dagupan are questioning the city government’s continued imposition of business tax on their institutions despite a tax exemption given them by the Department of Finance (DoF).
A letter of protest, dated February 18, 2011, was signed jointly by Dr. Mac Arthur Samson, president of the University of Luzon; Atty. Gonzalo Duque, president of Lyceum-Northwestern University; and Dr. Voltaire Arzadon, president of Colegio de Dagupan.
The letter was addressed to Mayor Benjamin Lim, Vice Mayor Belen Fernandez and the members of the Sangguniang Panlungsod in reaction to the innuendoes uttered by the city mayor chiding “three schools” for underpaying business taxes in the city.
In a speech last February 14, the mayor said “All of these x x x are of the same size, and more or less, have similar student populations. In 2010, one of the schools declared gross sales of P275 million and paid about 2 million in Business Taxes. The second school declared gross sales of P46 million and paid approximately 342,000 pesos in business taxes; while the third school declared gross sales of P1.5 million, and paid 50,000 pesos in business taxes.”
The three acknowledged the need of the city government to generate funds with the best intentions, but cited that the Constitution itself, under Section 28 (3) Article best that provides for exemptions which the DoF has cleared to include permit and other license fees for educational institutions, among others.
The three schools have requested for the “writing-offs of previously imposed business tax of and kind and for the city to cease the imposition of business taxes in all private schools.”
They cited the law that states: “Charitable institutions, churches and parsonages or convents appurtenant thereto, non-profit cemeteries, and all lands, buildings and improvements, actually, directly and exclusively used of religious, charitable or educational purposes shall be exempt from taxation.”
Also citing a ruling of the Department of Finance in 1992 on the San Beda College’s case, the three contend that “local government units cannot impose Mayor’s permit fees and other license fees in educational institutions similarly situated as San Beda College”.
Moreover, they asserted that educational institutions are not subject to business tax under the local Government Code (Book II, Local Taxation and Fiscal Matters) and the City Revenue Code of Dagupan City (City Ordinance No. 1855).–LM
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