Cebu City will have to scrounge for funds if BIR chief’s proposal pushes through

The Cebu City government will lose at least P50 million if a proposal to scrap the collection of community taxes, popularly known as cedula, gets approved and implemented.

Emma Villarete, OIC city treasurer, said collections made from the payment of community taxes and the issuance of community tax certificates (CTC) go to the city’s general fund.

“It would be a waste if we they stop the community tax collection because that’s  P50 million revenue,” she told Cebu Daily News.

If Congress heeds the  proposal of Internal Revenue Commissioner Kim Henares, local government units like Cebu City will have to double its tax collection efforts  elsewhere to cover for the loss.

“Smaller LGUs that only rely on their Internal Revenue Allotment share and local taxes will be hit harder,” said Villarete.

Henares broached the idea as she said that the cedula has already become “useless” and “irrelevant.” She said the cedula, which was a Spanish colonial era imposition, is no longer recognized as a valid identification document.

Henares  said that while the Bureau of Internal Revenue (BIR) spends for the printing of the cedula forms, they do not get a share of the revenue collected.

Villarete however, disputed the BIR commissioner’s claim. “We buy the forms from the BIR,” she said.

Cebu City issues around 10,000 pads of cedula per year.  There have been instances when neighboring local government units (LGU) would run out of cedula forms  and get supplies from the Cebu City government.

Villarete said the city government pays P57.50 per cedula pad or booklet and defrays the additional charges for shipping and handling.

Cebu City  used to share community tax revenues with the barangays under a 50/50 sharing scheme a few years back when barangays were still deputized to help issue  community tax certificates.

The  collection of community taxes is provided for under the Local Government Code and the Omnibus Tax Code.  Presentation of the employees’  community tax certificates is one of the requirements in the application for the renewal of business permits.

She admitted however, that there are instances where  the issuance of community taxes is prone to abuse. Some  Cebuanos who are already living outside of Cebu City would just send representatives to secure a community tax certificate from the city treasurer’s office for use in their application legal documents.

“But we’ve never caught an actual case of that because we don’t require proof of identity when we issues the certificates,” she said.

Added Burden

James Mendoza, 20, said the cedula is just an added burden for job applicants like him. A fresh graduate, Mendoza said he had to ask P50 from his mother to pay for the certificate.

Counters at the City Treasurer’s Office on the second floor of  the city hall executive building where cedulas are issued would normally have the longest lines. Extension counters are put up at the Plaza Sugbu grounds every January when most employees apply for them for their employeer’s business permit application.

Regional Trial Court Judge Meinrado Paredes said he is not in favor of  scrapping the cedula as a s means to identify a person in some remote areas. While they don’t always  reflect the correct income of the person, he said  inaccuracy alone  is not enough basis to scrap the cedula.

“There are those who don’t know their actual income. Therefore, what they declare in securing a cedula is not factual. That is, however, no reason to remove the cedula,” Paredes told Cebu Daily News.

He said the country hasn’t adopted the national ID system so some individuals don’t have any other means to manifest their identities other than the cedula.

Court of Appeals Justice Gabriel Ingles agreed with observations that the cedula doesn’t provide  accurate  data about someone.

“First, the CTC no longer provides a reliable information on residency because one can get it anywhere,” Ingles said.

“Second, the amount which someone ought to pay equivalent to his or her income is incorrect,” he added.

Former Cebu City Judge Donato Sotero Navarro agreed.

“The community tax certificate is still a source of income for the local government (LGUs). Until LGUs can find other sources of income, I shall oppose the abolition of the CTC,” he said.

But veteran lawyer Democrito Barcenas said it’s high time to scrap the cedula.

“I’m all for scrapping of cedula. It is a leftover of the colonial imposition of the Spanish regime,” he said.

Barcenas explained that the present notarial laws do not require a person to present a cedula.

“What is required is the Deed of Sale and other necessary proof of identification like IDs from the SSS (Social Service System) and the driver’s license. The cedula is no longer required,” he said.

“The move of Henares is a step in the right direction. (But) it’s up to Congress (to scrap the community tax),” he said. /Doris C. Bongcac, Chief of Reporters with a report by Ador Vincent S. Mayol