CEBU City Hall voiced concern over the planned transfer of the headquarters of two Aboitiz companies to Luzon.
Acting City Treasurer Tessie Camarillo said the city may lose P5.4 million in business taxes and other taxes the company pays to Cebu City.
“Exactly how much the city would actually lose in terms of taxes would be known when they file their application for retirement. By then we will know what business they transfer to Manila,” she said.
Businesses are required to file a retirement application fore they could formally cease operations in the city.
“The retirement application is like a clearance that informs a local government unit to be prepared to lose income from a certain company,” Camarillo said.
Xavier “Txabi” Aboitiz, chief human resource and quality officer, announced last Tuesday that they are transferring the corporate headquarters of Aboitiz Equity Ventures (AEV) and Aboitiz Power Corp. to Manila, a move that would affect some of their 700 employees when the transfer is completed by June 2013.
He said 70 percent of their profits now come from businesses in Luzon, where their market and customers for electric power are located.
But Aboitiz and Co., the mother company, will stay in Cebu with their corporate office in Banilad while core teams will continue services to other Aboitiz Group units based in Cebu and Mindanao.
Camarillo said the transfer would mean a loss of tax revenue.
For this year alone, AEV paid Cebu City P3.7 million in business taxes while Aboitiz Power paid P1.7 million.
“Taxes from these two companies are among the revenue sources that the city identified to fund its 2012 budget,” said Camarillo.
Mayor Michael Rama said he was more worried about lost employment opportunities. Rama said he understands the decision of Aboitiz executives and the difficulty of having to travel from Cebu to Manila to run their business.