Zamcelco director deplores city’s ‘exorbitant’ franchise tax PDF Print E-mail
Tuesday, 05 April 2011 11:48

NEA appointee Engr. Santiago “Sonny” Navarro from the multi-sectoral group over the weekend sought a clear-cut explanation from the city government as he branded as excessively “exorbitant” the penalty charges( surcharge/interest rates) it imposes upon  the already cash-strapped Zamboanga City Electric Cooperative, Inc.(Zamcelco) over the  payment of its annual franchise tax to the city.

“We urge the city to explain (to the member-consumers) as to why such an enormous increase (in penalty). Imagine, 32% in interest rate,” the engineer lamented.

He also noted that the city doesn’t even give or at least issue prior notice before collecting such franchise tax from the coop.

“The city should at least give a grace period notice,” he suggested.
Navarro gave his adverse comments during the coop’s weekly board meeting last Saturday.
Navarro sits as the NEA observer recommended by the multi-sectoral group.
He even described as “usurious” such imposed penalty rate/s on Zamcelco. 

The blue-blooded Zamboangueno engineer, who spent vast years in the United States, likewise urged the city to also pay on time their roughly P14 million obligations to the coop “just as the city wouldn’t like any such delay on the part of Zamcelco to pay the coop’s franchise.”
“I think this is fair enough,” Navarro said.

A communication-letter to Zamcelco dated March 28, 2011 coming from the office of the city treasurer explicitly cites the coop’s incurred penalty for its failure to declare on time its preceding year’s gross sales/ receipts to the city.

”This is what happened in your case. You have not made any declaration of the gross receipts derived from your operations in 2009 and 2010 despite the fact that you are aware of your tax obligation and the schedule for its payment,” it stated. 

Penalty alone (as cited), the city stands to collect from Zamcelco the total amount of P989,606.50 on the basis of the city’s own computation: Surcharge(25%)—P434,037.94; Interest( 32%)—P555,568.56.

The city is supposed to collect from Zamcelco based on its Statement of Franchise Tax for CY 2010 (as released by the Office of the City Treasurer duly signed by Soledad Li on same date) the total amount due of P2,725,758.26.

The letter was addressed to Zamcelco General Manager Reinerio R. Ramos.