Mandaue City Mayor Jonas Cortes took pains yesterday to explain to Gov. Gwen Garcia that he didn’t authorize or have an interest in collecting business taxes from the Capitol for the operation of th Cebu International Convention Center (CICC).
The demand letter sent by the Mandaue City Treasurer’s Office put Cortes in an awkward position.
The CICC is a joint venture of the Province of Cebu, which built the structure in 2007, and Mandaue City, which owns the land.
“Perhaps it was just not presented clearly,” said Governor Garcia after she was seen in a huddle with Mayor Cortes at yesterday’s lunch hosted by Cebu Archbishop Jose Palma for the Reproductive Health bill.
“My understanding is that it’s not not the position of the Mandaue City government to collect taxes from the CICC,” she said.
Regal Oliva, acting Mandaue city treasurer, said he was just doing his job in sending demand letters to “delinquent taxpayers” since no taxes were ever paid by the CICC, which is run as a business enterprise, renting out space and function rooms for conferences and exhibits.
When Mandaue City uses the facilities, it still has to pay but enjoys a 50 percent discount.
He said his office discovered after the demand letter was sent last Thursday that the CICC is operated by a private corporation, and not the Cebu provincial government.
The Cebu International Convention Center (CICC) Management Board that was formed to run the center is not registered with the Securities and Exchange Commission (CICC) and therefore has no no legal personality, he said.
Based on audit documents, it is the Philippine Exhibitors Trade Corp. (PETCO) that manages the CICC.
The demand letter was signe by Oiva.
Oliva said a preaudit notice no. 2010-019 from the Commission on Audit (COA) stated that the center’s management board wasn’t registered with the SEC.
“The CICCMB has not been registered, even after more than four years after its creation, thus it has no legal personality to date… Both LGUs are co-owners of the project and the payment of one to the other is not stipulated in the JVA (joint venture agreement),” said COA.
Oliva said the Supreme Court already ruled that public instrumentalities are exempted from taxes.
But since the CICC is run by a private corporation, it owes taxes to the Mandaue City government, he said.
“They are not a public instrumentality, yet they are still an institution doing a proprietary function and these are corporate/private functions, so that’s taxable,” Oliva said.
Oliva said a PETCO representative went to their office yesterday to ask for requirements and forms.
He said the representative told them that they are waiting for their financial income statement from their Manila office.
Regal said he estimates that the CICC earned a gross income of P24 million for the past five years from which Mandaue City can levy P2.4 million in taxes plus 72 percent interest.
He said once the CICC operator shows their books, Mandaue will assess their taxes.
Oliva said PETCO didn’t pay regulatory fees for garbage collection and other needs which costs them P6,000.
Oliva said he didn’t see the need to ask the mayor’s permission to send out a demand letter.
“When you hear the mayor say it did not have his consent, it’s true. Do we need to get his consent? No, not anymore. This is purely a treasury function. Do I have to inform him that I have to inform the mayor when I have to collect from a sari-sari store?”
Oliva said if he had the mayor sign more than 8,000 demand letters for unregistered businesses, the task would not get done or would be delayed.
He said the treasurer’s office is starting with big establishments first.
In a meeting with Cebu officials yesterday, the governor said Mandaue City Mayor Jonas Cortes explained their side on the issue.
“They explained that apparently there was misquotation. Probably the way it was presented wasn’t clear,” Garcia said.
The governor’s archcritic, Rep. Tomas Osmeña of Cebu City’s south district, said it is high time that the CICC was taxed.
He said while the property is worth P800 million, it has not contributed anything to Mandaue City’s coffers.
Osmeña said the CICC should be converted into a public hospital or a funeral parlor so it would be put to better use.
Osmeña said the provincial government failed to live up to its promise that the CICC would bring revenues and jobs for Mandaue City residents.
He said the CICC pales in comparison to the neighboring Parkmall, which pays taxes to Mandaue City and provides employment to residents. With Chief of Reporters Doris C. Bongcac and Correspondent Carmel Loise Matus