Airport pays P88M

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Saturday, May 24, 2014

THE Mactan Cebu International Airport Authority (MCIAA) yesterday paid P88 million in real property taxes to the Lapu-Lapu City Government, exactly a month after the City Council adopted a resolution asking the former to settle its unpaid taxes amounting to P1.8 billion.

Mayor Paz Radaza said a portion of the amount will go to the City’s Special Education Fund and will be used to build classrooms, with schools in the city struggling to cope with the yearly increase in their student population.

“We are very thankful to the MCIAA Board for understanding our situation,” Radaza told Sun.Star Cebu.


She said the MCIAA will pay its overdue taxes in tranches, with the next payment likely to come next month. “This is just the start,” the mayor said.

The MCIAA is paying for real properties that are not included in a pending case in the
Supreme Court, which has yet to decide whether the former has tax liabilities for properties used as runways and taxiways.

“This (payment) is without prejudice to the existing case in the Supreme Court,” said Radaza.

Earlier, the MCIAA and the City Hall executive department came up with a draft agreement establishing a payment scheme for the airport’s overdue taxes.

But the proposed memorandum of agreement (MOA), which involved waiving tax penalties, was opposed by the City Council.

Under the proposed MOA, the MCIAA will pay the taxes for properties used wholly for commercial purposes. The City will waive tax penalties, provided the MCIAA extends financial assistance to the City for infrastructure projects in the amount not less than the penalties.

The council passed a resolution recalling the authority it earlier granted Radaza to sign the MOA, saying waiving tax penalties violates the Local Government Code and may require an ordinance.

On April 23, the council adopted another resolution demanding that the MCIAA settle its taxes.

According to the resolution, “there is no more reason for the MCIAA to refuse payment of their outstanding tax obligation,” having received P14.4 billion from the consortium that is set to take over the airport’s operations in October.

MCIAA General Manager Nigel Paul Villarete earlier said the amount the MCIAA received was part of its concession agreement with the GMR-Megawide consortium, and that it is intended to maintain and improve the passenger terminal’s facilities.

GMR-Megawide is the winner bidder for the project of upgrading the existing terminal and building a new one, for which it paid P14.4 billion upfront. The project itself is estimated to cost at least P17 billion.

Published in the Sun.Star Cebu newspaper on May 24, 2014.

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