City Hall to continue collecting real property tax from Lexmark

CEBU, Philippines - For Cebu City Treasurer Ofelia Oliva, the City Government will continue to collect real property taxes from Lexmark Research and Development Corporation even if City Ordinance 2016 will be amended.

Ordinance 2016 states that Philippine Economic Zone Authority (Peza)-registered enterprises operating within the special economic zones are exempted from all local taxes, except real property tax. 

“Yes, they are exempted in all kinds of taxes but not on real property taxes on land,” Oliva said.

She added that they will collect P4.423 million from Lexmark for real property taxes on land.

But lawyer Rita Fernandez, in a letter to Oliva, said the City Government’s claim contradicts provisions of the Special Economic Zone Act of 1995. She cited Section 24 of RA 7916, which states that except for real property taxes on land owned by developers, no taxes, local and national, shall be imposed on business establishments operating within an ecozone.

In requesting the City to reconsider its decision to tax the company, Fernandez insisted that the provisions of RA 7916, a national law, should prevail over the city ordinance.

“The provisions of the law leave no room for interpretation that Peza-registered enterprises are exempt from national and local taxes, including real property taxes,” Fernandez said.

She added, “Our jurisprudence is replete with a long line of decisions where the Supreme Court has uniformly held that a municipal ordinance must not contravene the Constitution or any statue, otherwise it is void.”

The real property tax dues of Lexmark date back to 2001, when it first operated in the city.

Oliva, however, said it is up to the City Council to decide on the request from Lexmark although as far as she is concerned, she will not recommend for exemption. —(FREEMAN)