CEBU, Philippines - The Cebu City Government may not give in to the request of Lexmark Research and Development Corporation to be exempted from paying real property taxes.
This is after City Councilor Edgardo Labella, chairman of the committee on laws, ordinances, public accountability and good government, upheld the opinion of the city attorney’s office that the company is required to pay real property taxes for its two buildings in the city.
Ordinance 2016 states that Peza-registered enterprises operating within the special economic zones are exempted from all local taxes, except real property tax. Peza stands for the Philippine Economic Zone Authority.
Lexmark counsel contends that the City Government’s claim contradicts provisions of the Special Economic Zone Act of 1995, citing 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.
But in the committee report signed by Councilors Labella, Sisinio Andales, Roberto Cabarrubias and Joey Daluz III, City Ordinance 2016 is presumed valid until it has been stricken down as invalid or unconstitutional by a court.
“It is well-settled that the constitutionally of a law or executive order may be collaterally attacked. They shall, therefore, be deemed valid unless declared null and void by a competent court,” Labella said in his report to the council.
The real property tax dues of Lexmark date back to 2001, when it first operated in the city. Lexmark’s real property taxes form part of the City’s estimated P4.4-billion collection that will be used to fund this year’s budget.
“The request for reconsideration of Lexmark should be denied,” Labella added. –(FREEMAN)