■ BANKERS OP­POSE CITY’S BIZ TAX HIKE PLAN

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The pro­posed or­di­nance to raise the business tax rate on banks and other fi­nan­cial in­sti­tu­tions in Cebu City is fac­ing re­sis­tance from the Cebu Bankers Club (CBC). CBC pres­i­dent Mario Fritz Palileo, in a pub­lic hear­ing dur­ing yes­ter­day City Coun­cil ses­sion, said that banks are still cop­ing with their cap­i­tal ex­pen­di­tures fol­low­ing their move to­wards dig­i­ti­za­tion. He said banks are cur­rently spend­ing a lot on im­ple­ment­ing the check im­age clear­ing sys­tem and for switch­ing to Euro-Pay Mastercard Visa tech­nol­ogy for au­to­mated teller ma­chines and cards. He said that the pres­ence of fi­nan­cial tech­nol­ogy com­pa­nies has also re­sulted in the drop of banks’ in­come.

Cit­ing in­crease in cap­i­tal ex­pen­di­tures, the Cebu Bankers Club (CBC) has ex­pressed its op­po­si­tion on a pro­posed or­di­nance im­pos­ing an in­crease of the business tax rate on banks and other fi­nan­cial in­sti­tu­tions in Cebu City.

In a pub­lic hear­ing dur­ing yes­ter­day’s City Coun­cil reg­u­lar ses­sion, Mario Fritz Palileo, CBC pres­i­dent, said banks are still cop­ing with their cap­i­tal ex­pen­di­tures fol­low­ing their move to­wards dig­i­ti­za­tion.

“In­crease in tax­a­tion will in­crease to­tal ex­penses for the banks. Bank ex­penses have in­creased these past few years due to cap­i­tal ex­pen­di­tures, which are aimed at in­creas­ing the safety and ef­fi­ciency of the bank’s de­liv­ery of ser­vices and oper­a­tions,” he said.

Palileo said banks are spend­ing a lot on the im­ple­men­ta­tion of the check im­age clear­ing sys­tem and for switch­ing to Euro-Pay Mastercard Visa tech­nol­ogy for au­tomat- ed teller ma­chines and cards.

He said that emerg­ing threats, such as the pres­ence of fi­nan­cial tech­nol­ogy com­pa­nies, re­sulted to a down­trend of bank in­come.

Last Septem­ber, Councilor Ray­mond Alvin Gar­cia filed a draft leg­is­la­tion, amend­ing Sec­tions 46 and 48 the Cebu City Om­nibus Tax Or­di­nance.

If ap­proved, the City will in­crease the business tax rates from 50 per­cent of the one per­cent of the gross re­ceipts to 75 per­cent of one per­cent of the gross re­ceipts of the banks.

Once amended, Section 48 of the or­di­nance will be re­vised and will de­fine “gross re­ceipts for the pre­ced­ing cal­en­dar year” to be lim­ited only to those de­rived from in­ter­est com­mis­sions and dis­counts from lend­ing ac­tiv­i­ties, in­come from fi­nan­cial leas­ing, div­i­dends, rentals on prop­erty and profit from ex­change or sale of prop­erty, and in­sur­ance pre­mi­ums.

In an in­ter­view, Gar­cia said the in­crease of tax rates and es­tab­lish­ment of a con­crete def­i­ni­tion on what gross re­ceipts cover will help the City Gov­ern­ment in its oper­a­tions. City Bud­get Of­fi­cer Ma­ri­etta Gu­mia sup­ported Gar­cia’s stand.

Gar­cia’s pro­posed amend­ments will still go through a fi­nal de­lib­er­a­tion. /

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