Lim welcomes threat of suit by private schools
ILLEGAL EXACTION?
BRING it on!
This was the terse reply of Mayor Benjamin Lim to the threat of a lawsuit by private schools based in Dagupan even as latter demanded that the city government refunds the business tax they have paid in previous years
“We welcome it (lawsuit) so that by the end of the day, the issue will be resolved by the proper court,” said Lim, speaking during the ‘Media in Action’ forum of the Pangasinan Press Club (PPC) on August 17.
Lyceum Northwestern University sent the demand letter for refund two weeks ago, with a threat to go to court if the city government refuses.
The PPC is headed by Atty. Gonzalo Duque, president of LNU.
Duque, however, was in Manila last week and was not present during the weekly forum.
The LNU president earlier called the imposition of business tax on them as “illegal exaction” after former Councilor Michael Fernandez, author of Ordinance No. 1855 or the City Tax Code of 2006, admitted that private schools were not contemplated to be covered by the ordinance.
In the forum, Lim maintained that based on their interpretation of Ordinance No. 1855, the city government should collect business takes from the private schools, notwithstanding to the claim of the author of the ordinance.
Lim stressed the city government is out to collect taxes “because that is our job”.
Private schools have been paying business taxes since 2001 on the assumption that they are covered.
However, questions on the tax code came to the fore after the mayor labelled some private schools as “tax cheats” and demanded higher contributions from them.
NON-STOCK, NON-PROFIT
Lim cites the ordinance as the city’s basis in imposing business tax to the private schools, while City Treasurer Romelita Alcantara maintains that under Republic Act 7160 or the Local Government Code of 1991, private schools are under obligation to pay the business tax unless they are registered as non-stock, non-profit corporations.
Lim mentioned that Colegio de Dagupan is the only collegiate institution that is non-stock, non-profit and therefore is exempted from paying business taxes.
Other examples are Catholic Schools and some sectarian schools whose registrations with the Securities and Exchange Commission (SEC) state that they are non-stock and non-profit.
Lim said the other private schools are paying dividends to stockholders, which means they are earning and therefore must pay business taxes to the city government.
Schools, he added, can change their articles of incorporation with SEC and convert themselves into non-profit, non-stock corporations.
“But for as long as they are earning and paying dividends to their stockholders, the city government will collect business taxes from them”, he said.
At the same time, Lim belittled the claim of some of the private schools that they bring a significant contribution to city by attracting students and establishing Dagupan as the center of education in Pangasinan.
“This is not necessarily so since everybody else has a role to play in bringing people to Dagupan,” said Lim, adding “even the smallest balut vendor and bibingka vendors are doing this in their own way.”
Alcantara was reported as saying that the decision of the private schools not to pay business taxes will have a big implication on the finances of the city government next year as the expected revenues from them are already included in their assessment.
Lim added that if there is a gray area in the ordinance, the private schools could appeal to the city council to repeal it to have them exempted if that is not construed as a class legislation.
Lim also said that the city government has no plan of putting up a public college or university as a means of helping those who cannot afford to pay the tuition fee rates in private schools.
He said, however, that there are plans of providing vocational training, which will give opportunities for employment.
Share your Comments or Reactions
Powered by Facebook Comments
