Coun­cil looks into tax shar­ing of TSI

Mindanao Times - - NEWS - BY JULIANNE A. SUAREZ

THE CITY Coun­cil will dis­cuss a Mem­o­ran­dum of Agree­ment (MOA) on the tax shar­ing on the op­er­a­tions of Therma South, Inc.’s (TSI) Coal Plant, whose power plant is op­er­a­tional in the bound­ary of the city and Sta. Cruz, Davao del Sur.

In last Tues­day’s reg­u­lar ses­sion, coun­cilors for­warded the item to the Com­mit­tee on Fi­nance, Ways and Means, and Ap­pro­pri­a­tions chaired by Coun­cilor Danilo Dayanghi­rang to fur­ther study the mea­sure.

TSI’s prin­ci­pal of­fice is lo­cated in the city of Davao, while its coal plant is lo­cated in the bound­ary of the two ar­eas.

“The lo­cal gov­ern­ment units of Davao City and Sta. Cruz have agreed on a 60%-40% shar­ing of the 70% of Therma South, Inc’s (TSI) lo­cal busi­ness tax, re­spec­tively,” the TSI said in a state­ment sent to Times.

The higher per­cent­age goes to the city.

“The re­main­ing 30% will au­to­mat­i­cally go to Davao City be­ing the prin­ci­pal place of busi­ness of TSI,” it added.

The Mu­nic­i­pal­ity of Sta. Cruz al­ready en­acted an or­di­nance spec­i­fy­ing

that it will en­ter into a MOA with the City of Davao and TSI to clar­ify the ex­tent of TSI’s obli­ga­tions to the LGUs.

Based on Sec­tion 143 of the lo­cal gov­ern­ment code, 30% of all sales recorded in the prin­ci­pal of­fice shall be tax­able by the city or mu­nic­i­pal­ity where the prin­ci­pal of­fice is lo­cated; and 70% of all sales recorded in the prin­ci­pal of­fice shall be tax­able by the city or mu­nic­i­pal­ity where the fac­tory, project of­fice, plant, or plan­ta­tion is lo­cated.

“The MOA shall con­tain, among oth­ers, the sales al­lo­ca­tion and col­lec­tion shar­ing and the con­di­tion that every three years from the ef­fec­tiv­ity of the MOA, any of the City of Davao and the Mu­nic­i­pal­ity of Sta. Cruz may re­quest for the rene­go­ti­a­tion of the terms thereof, pro­vided that un­til and un­less a new MOA is en­tered into by the par­ties, the ex­e­cuted MOA and the col­lec­tion shar­ing therein agreed shall con­tinue to be in ef­fect,” the Sta. Cruz Mu­nic­i­pal Or­di­nance said.

The item was passed on first read­ing.

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