Centro Escolar, STI join universities opposing Manila’s 1% tuition tax

The Centro Escolar University and computer school chain STI have quietly joined the University of the East, Far Eastern University and Mapua Institute of Technology in opposing Manila City Hall’s imposition of one percent business tax on tuition.

“CEU had been paying that tax for several years, but paid under protest last year,” said Ana Maria Abad, legal counsel of the Philippine Association of Colleges and Universities, quoting a top CEU official.

The Manila-based branches of the STI computer school have likewise quietly joined the opposition led by the University Belt schools against the revenue measure, said a top STI official, who declined to add more details so as not to jeopardize the school’s relations with Mayor Joseph Estrada.

According to FEU, the City of Manila has retroactively charged the university a business tax of one percent on tuition fees from 2009, even before Estrada became mayor in 2013.

“The university’s protest is grounded on the following premises: the lack of specific provision in the Local Government Code and in the Local Tax Code authorizing the City of Manila to impose a business tax of one percent on tuition fees, prescription, and violation of due process,” FEU said in a regulatory disclosure.

For still unclear reasons, the specific ordinance imposing the one percent tax on tuition could not be found in the official City of Manila website.

Requests for a copy of such ordinance, or any City Hall directive on the said issue, have gone unanswered.

On the K-12 front, FEU reported that it had decided to lease the ground floor up to the sixth floor of the Nursing building in the Morayta campus to the expanded FEU High

School in view of the shrunken college enrollment and the corresponding increase in high school enrollment.

STI, on the other hand, said the students and faculty of the shuttered De Los Santos-STI College along E. Rodriguez Avenue have been transferred to the STI Quezon Avenue branch, also in Quezon City.

The De Los Santos-STI campus has applied for a two-year closure while it awaits the return of college enrollment to normalcy.

The University of Santo Tomas, meanwhile, said it had to temporarily suspend its journalism and legal management programs for the next two school years because of low enrollment.

Davao’s taxing times: One court, two contrary rulings

Two divisions of the Court of Tax Appeals have just issued contrary rulings on Davao City’s drive to tax cash dividends received by Davao-based coco levy companies.

The first division, headed by Presiding Justice Roman del Rosario, voted against the Duterte administration; the send division, headed by Justice Juanito Castaneda Jr., voted in favor of City Hall.

The tax cases involved the estimated P1.4 billion dividends received from San Miguel Corp. in 2010 by four corporate shareholders of Legaspi Oil, a member of the CIIF Group of coconut oil mills.

The Davao City Hall, represented by City Treasurer Rodrigo Riola, in turn imposed over P7.3 million in local business taxes to the four Legaspi Oil shareholders -- ASC Investors, Anglo Ventures, and Fernandez Holdings and Soriano Shares -- for the cash dividends, representing the 0.55 percent annual business tax, Davao’s share of the pie.

To make the long story short, the Castaneda division ruled that Fernandez Holdings and Soriano Shares are “financial institutions” and are thus covered by the contested tax.

The Del Rosario division, on the other hand, ruled that Anglo Ventures is a “holding company,” not a non-bank financial intermediary and thus is not covered by the Davao percentage tax.

The fourth company, ASC Investors, lost the appeal for late filing.

CA orders new arraignment of Araneta

Mike Arroyo cousin Benito Ramon Araneta was arraigned anew for estafa last Tuesday after the Court of Appeals nullified his earlier arraignment before Makati Regional Trial Court (RTC) Judge Maximo de Leon for irregularity and grave abuse of authority.

The erring judge had pushed through with Araneta’s 2014 arraignment even in the absence of the complainant, the Philippine Deposit Insurance Corp., said Associate Justice Elihu Ybanez.

In addition, the judge “failed to send a written notice of arraignment to the offended party,” Ybanez said, with associate justices Leoncia Dimagiba and Victoria Isabel Paredes concurring.

Araneta, who pleaded not guilty, is accused of helping trigger the collapse of LBC Bank for borrowing P230 million against non-existent collateral.

The case has been re-raffled to Makati RTC Judge Josefino Subia.

A retired officer and director of the Bank of the Philippine Islands, Araneta last served as director of listed gaming firm PhilWeb.

Heard through the grapevine

Foreign Secretary Perfecto Yasay Jr. has managed to convince the PDIC to drop the criminal complaint against him in connection with the collapse of Banco Filipino, where Yasay served as vice chairman and chief legal counsel.

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