John Hay locators not exempted from paying taxes

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BAGUIO CITY – Businesses inside the John Hay Special Economic Zone (JHSEZ) are not exempted from the coverage of the local tax ordinance of the city and that they are mandated to annually settle their business taxes to the local government to avoid the imposition of surcharges and penalties as well as the subsequent closure of their operations in the future.

Mayor Mauricio G. Domogan said there was an initial inspection of the business establishments in the economic zone done by officials and employees of the city permits and licensing division but they were barred by JHMC officials and security guards considering that they believe that their locators are exempted from paying business taxes to the city because it is included as part of their incentives for operating in the zone.

“Yung business taxes ay separate from the 5 % net gross income na binabayaran nila sa gobyerno. In short, they are liable to pay business taxes,” Domogan added.

He also pointed out that the Legal Department should carefully study the next course of action of the City Government, which includes the rules, and regulations of the city when it comes to paying off the taxes in order to compel the locators to pay their business taxes to the city government.

Domogan added that there are three steps in the conduct of inspections of business establishments around the city, which include the checking of the business permit, securing the business permit, and the issuance of appropriate closure orders to those found without permits.

He cited BCDA questioned the authority of the city government to collect business taxes from the locators but they lost in the city’s Regional Trial Court (RTC), thus, the state-owned corporation was forced to appeal to the Supreme Court.

The city mayor explained considering that the High Court did not issue a temporary restraining order (TRO) or a writ of preliminary injunction barring the city government from collecting the required business taxes from the John Hay locators, the local government is mandated to pursue its responsibility of mandating the economic zone businesses to pay the taxes due to the city.

Domogan argued John Hay is still within the 57.4-square kilometer land area of the city and that it is government by the prevailing local law as and ordinances that includes the payment of appropriate business taxes by the nearly 200 business establishments doing business inside the declared economic zone.

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