■ BANKERS OPPOSE CITY’S BIZ TAX HIKE PLAN

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. /