The Cebu South Bus Terminal (CSBT) and Cebu North Bus Terminal (CNBT) are not subject to the taxing authority of the Cebu City Government because of at least two reasons: 1) they are operated by the Capitol and 2) they are not a form of business but part of legitimate Capitol operations. 

This was the gist of the comments made by Capitol lawyers and legal consultants in a press briefing at the Governor’s Office on May 6 in relation to the show cause order issued by the City Hall’s Business Permit and Licensing Office (BPLO) to both CSBT and CNBT for allegedly violating Sec. 4 of its Omnibus Tax Ordinance, or operating a business without City Hall registration. 

“The Show Cause Order has no legal basis to stand on. The bus terminals are not businesses. These are public services nga ang Province maoy naghatag para sa publiko,” said Capitol legal consultant Atty. Rory Jon Sepulveda during the presser. 

The same ordinance, or the “Omnibus Tax Ordinance of the City of Cebu” defines a “business” as “a commercial activity customarily engaged in as a means of livelihood and typically involving some independence of judgment and power of decision.”

“Dili man ni livelihood ang amoa. This is service, public service. Kinsa may gi-cater ani? Ang publiko nga gikan sa Probinsya, ang taga Syudad nga mongadto sa Probinsya,” said Provincial Legal Officer Atty. Donato Villa Jr., adding that if ever the bus terminals turn out profits, these are incidental to the operation of a terminal but not its main consideration. 

The order, signed by BPLO OIC Andrew Borres, gave the Capitol 72 hours or three days to explain in writing why the said bus terminals should be ordered closed and/or sanctioned for operating without city hall registration. The said city ordinance provides: 

“SECTION 4. City Taxes, Fees and Other Charges. Incidence of. - No person shall be issued a permit or license to engage in or purpose of any occupation or calling or conduct and maintain any business, or exercise any privilege within the territorial limits of the City without first having paid the corresponding taxes, fees or charges therefor.” 

However, Atty. Villa pointed to Section 133 (o), Chapter I, Title One, Book II, of the Local Government Code of 1991 which provides for the limits of the taxing power of LGUs. The said provision provides: 

“SECTION 133. Common Limitations on the Taxing Powers of Local Government Units. - Unless otherwise provided herein, the exercise of the taxing powers of provinces, cities, municipalities, and Barangays shall not extend to the levy of the following:

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“(o) Taxes, fees or charges, of any kind on the National Government, its agencies and instrumentalities, and 𝗹𝗼𝗰𝗮𝗹 𝗴𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁 𝘂𝗻𝗶𝘁𝘀.”

“From the Local Government Code pa lang daan, they are not allowed to collect taxes here sa Province of Cebu as an LGU also. Their Show Cause Order doesn’t have a leg to stand on because an LGU cannot tax another LGU,” said Atty. Angelica Arnaiz of the Provincial Legal Office. 

It is settled rule that for an ordinance to be valid, it must not contravene the Constitution or any laws promulgated by Congress, such as the RA 7160 or the Local Government Code of 1991. 

In this case, the city ordinance did not really envision that other LGUs will be covered by its taxing authority, as the BPLO’s Show Cause Order presumes; otherwise it will contravene RA 7160. 

𝐖𝐇𝐎 𝐁𝐔𝐈𝐋𝐓 𝐓𝐇𝐄𝐒𝐄 𝐓𝐄𝐑𝐌𝐈𝐍𝐀𝐋𝐒?

Moreover, Capitol lawyers also questioned the timing of the notices since this is the first time that these issues are raised by the City Hall for all the years that the bus terminals have been operational. 

In fact, Cebu City passed Ordinance No. 1784 in August 1999 during the incumbency of Mayor Alvin Garcia “requiring all public utility buses including minibuses from the south to load and unload passengers at the south bus terminal.” 

This is proof that the city recognizes the significance of the bus terminal because it serves not just Cebuanos from the province but also city residents who would like to travel to the other parts of the province as well. 

The CSBT was built as part of the project components under the Metro Cebu Development Project Phase 1 (MCDP I) wherein the Regional Development Council, through the National Government, entered into a loan agreement with Japan’s Official Development Assistance (JODA) to fund the said project. 

It was completed by August 1992 with the number of loading bays reduced from the proposed 48 to just 40. It was turned over to the Cebu Provincial Government in February 1993.

For its part, CNBT’s old location in Mandaue City was built as part of the Phase 2 of MCDP, funded once again by a loan obtained by the National Government from JODA. 

The construction was completed by October 1994 with 24 bus lanes and 27 jeepney lanes. It was supposed to be a project for Mandaue City, but then Mayor Alfredo Ouano wanted to have the facility converted into a school. 

This prompted then Cebu City Mayor Tomas Osmeña to offer a lease agreement in operating the terminal for a period of 25 years with an annual rent of ₱2 million. The lease agreement between the two cities was signed on January 11, 1995. 

With the Cebu City Government leasing the site, it then entered into a memorandum of agreement with the Cebu Provincial Bus Operators Multi-Purpose Cooperative, Inc. (CPBOMCI) to manage the terminal’s operations for a period of 25 years. Despite the terminal’s jeepney lanes, the number of jeepneys using it were below the initial target of 1,331. Only 70 jeepneys utilized the terminal in 2000.

In 2012, the Cebu Provincial Government, under Gov. Gwen Garcia, proposed that the province takeover the terminal’s operations.

If the Cebu City Hall pushes through with the closure of these terminals, at least 10,000 travelers using CSBT and 5,000 using CNBT who will be affected on a daily basis, said Gov. Gwen. These figures are significantly higher on weekend especially during the summer season when tourists are really travelling to the Province for rest and relaxation. 

“Let us not let these artificial boundaries of political jurisdiction confuse our minds nga lahi ta. The fact remains that we are one; we are all Cebuanos. Ang naggamit ana nga terminals, majority Cebuanos, regardless kon botante ba siya sa Cebu City, o botante ba sa Samboan, o botante ba sa Isla sa Bantayan,” Atty. Sepulveda said. | IPA