AN ORDINANCE AMENDING SECTION 28 (y) OF CITY TAX ORDINANCE NO. LXIX, OTHERWISE KNOWN AS THE OMNIBUS TAX ORDINANCE OF THE CITY OF CEBU, AS AMENDED

April 3, 2013 Excerpt from the Minutes of the Regular Session Held by the Sangguniang Panlungsod of the City of Cebu in its Session Hall on April 3, 2013. PRESENT: Hon. Joy Augustus G. Young Presiding Officer Hon. Rodrigo A. Abellanosa Presiding Officer Pro Tempore Hon. Augustus G. Pe Jr. Majority Floor Leader Hon. Lea O. Japson 1st District Asst. Majority Floor Leader Hon. Raul D. Alcoseba 2nd District Asst. Majority Floor Leader Hon. Sisinio M. Andales Member Hon. Alvin B. Arcilla Member Hon. Roberto A. Cabarrubias Member Hon. Ma. Nida C. Cabrera Member Hon. Ronald R. Cuenco Member Hon. Alvin M. Dizon Member Hon. Edgardo C. Labella Member Hon. Margarita V. Osmea Member Hon. Richard Z. Osmea Member Hon. John Philip E. Po II Member Hon. Michael L. Ralota Member Hon. Noel Eleuterio G. Wenceslao Member ABSENT: Hon. Jose C. Daluz III Member Hon. Eduardo R. Rama Jr. Member (Both on Leave) RESOLUTION NO. 12-5337-13 The Sangguniang Panlungsod of the City of Cebu, as moved by Member Labella and seconded by Member Cabarrubias; RESOLVED, to approve the following Ordinance: CEBU CITY TAX ORDINANCE NO. CXXX AN ORDINANCE AMENDING SECTION 28 (y) OF CITY TAX ORDINANCE NO. LXIX, OTHERWISE KNOWN AS THE OMNIBUS TAX ORDINANCE OF THE CITY OF CEBU, AS AMENDED WHEREAS, Tax Ordinance No. LXIX, as amended, had defined gross receipts to include all monies and properties received in consideration of services rendered or articles sold, exchanged or leased without any deduction, the whole amount of the receipts of the business before the cost of production is deducted therefrom; WHEREAS, the independent contractors supplying manpower to other companies had expressed their concerns on said definition considering that their real income is the administrative fee they charge to their clients; HTDCAS WHEREAS, the Bureau of Internal Revenue has already made clarification with regards to the basis in computing the gross receipts of independent contractors. It is provided in BIR Ruling No. M-016-2006 dated February 21, 2006, citing the case of Commissioner of Internal Revenue vs. Tours Specials, Inc. and the Court of Tax Appeals , 183 SCRA 402 that: ". . . gross receipts subject to tax under the Tax Code do not include monies or receipts entrusted to the taxpayer which do not belong to them and do not redound to the taxpayer's benefit; and it is not necessary that there must be a law or regulation which would exempt such monies and receipts within the meaning of gross receipts under the Tax Code." WHEREAS, in order to be consistent with the definition of gross receipts defined in the National Internal Revenue Code, there is a need to amend Section 28 (y); THEREFORE, the Sangguniang Panlungsod of the City of Cebu, in a regular session assembled, hereby ordains that: SECTION 1. Section 28 (y) of the City Tax Ordinance No. LXIX, otherwise known as the OMNIBUS TAX ORDINANCE OF THE CITY OF CEBU, as amended, is hereby further amended to read as follows: "SEC. 28. Definition of Terms . Whenever used in this Ordinance, the following terms shall convey the meaning indicated, viz. : ETCcSa (y) Gross Receipts include all monies and properties received in consideration of services rendered or articles sold, exchanged or leased without any deduction; the whole amount of the receipts of the business before the cost of production is deducted therefrom. The term gross receipts means the total amount of money or its equivalent representing the contract price, compensation, service fee, rental or royalty, including the amount charged for materials supplied with the services and deposits and advanced payments actually and constructively received during the taxable quarter for the services performed or to be performed for another person, excluding value-added tax. (NLRC Section 108). It does not include monies or receipts entrusted to the taxpayer which do not belong to them and do not redound to the taxpayer's benefits. (BIR Ruling No. M-016-2006)." SECTION 2. Repealing Clause . Any and all ordinances, orders, rules, regulations or parts thereof, which are inconsistent with the provisions of this Ordinance are hereby repealed, amended, or deemed modified accordingly. SECTION 3. Effectivity Clause . This Ordinance shall take effect fifteen (15) days from its publication. CARRIED UNANIMOUSLY. I hereby certify to the correctness of the aforequoted resolution/ordinance. (SGD.) CYNTHIA M. KAHULUGAN Acting Secretary to the Sangguniang Panlungsod ATTESTED: (SGD.) JOY AUGUSTUS G. YOUNG Presiding Officer APPROVED: (SGD.) MICHAEL L. RAMA City Mayor