City to lose P1.2M if amendment to tax ordinance is approved

CEBU, Philippines - The executive department has objected to the proposal to delist massage parlors under the Accelerated Amelioration Program because it would mean a loss of income for the Cebu City government.

City Administrator Lucille Mercado, who also chairs the Accelerated Social Amelioration Program Board, said the city may lose P1.2 million in revenue if the existing ordinance is amended.

At present the city government collects an average of P12 million from social amelioration taxes every year.

“With due respect, delisting the massage clinics and saunas from the list of the establishments required to pay amelioration tax is not advisable because the very reason to regulate these establishments from engaging in unlawful activities like flesh trade will be defeated,” Mercado said.

Mercado said it would also affect the implementation and performance of the programs for the socially-disadvantaged residents of the city. She said that a provision exempting establishments may be introduced rather than delisting.

“A massage clinic or sauna establishment may be exempted from the city’s amelioration tax provided that such establishment can present the unexpired accreditation issued by the Department of Health. Those massage parlors or sauna establishments which cannot present an active accreditation issued by DOH will be assessed for amelioration tax,” she said.

City Councilor Nida Cabrera pushed for the amendment of the Tax Ordinance strengthening the social amelioration program of the city and improving its collection and disbursement mechanism.

Cabrera said that she is pushing for the amendment following the request of Spa and Wellness Association of Cebu, Health and Wellness Organization of Cebu, and the Department of Trade and Industry-Cebu Provincial Office to delist massage parlors among the establishments covered in the Accelerated Social Amelioration program of the city.

She said that massage parlors are business establishments that offer therapeutic massage. She said that these massage parlors should be classified under wellness and not entertainment, stressing that establishments classified as wellness should not be assessed with amelioration tax.

Cabrera said that the city should stop collecting P10 for every client of the massage parlors as amelioration tax since these establishments are not covered under the tax ordinance.

Spa and Wellness Association of Cebu President Johnny Lim said that these massage parlors have been incurring additional expenses to pay the amelioration tax since they do not want to pass the burden to their clients.

Lim, who owns Body and Sole, said that Spa and Wellness Association of Cebu is in favor of the passage of the amendment of the ordinance since it would discontinue them to pay about P10, 000 a month to the city government for the amelioration tax.

“Cebu City has become an international destination for health and wellness because we have provided facilities that are at par with the world and has carried on with programs for the betterment of the life and well-being of the people,” he said.

DOH-7 representative Mark Johnuel Duavis, who was present during the public hearing, said that the DOH backs the proposed measure.— Jean Marvette A. Demecillo/FPL (FREEMAN)