Iligan City to forego P1-B real estate taxes of steel firm
Source: IPBee2000 – Philippine Real Estate News
The local government of Iligan City is willing to forego half of the P2 billion real estate tax covering the land on which the NSC steel plant stands.
The land is owned by the state holding firm National Development Corp. and the tax arrears have piled up since 1999.
Before it closed in 1999, the government-owned NSC was paying almost P1 billion in taxes every year to the national government and P200 million in real estate tax to Iligan City.
The NSC went bankrupt and closed operations in 1999. The facility was reopened in 2004 after Global Infrastructure Holdings Ltd. of India took over its ownership and assigned it to Global Steel International Inc.
City mayor Lawrence Cruz said that some other companies owe the city real estate taxes but the biggest debtor is the steel firm.
GSII president Lalit Sehgal said he tried to settle the backtaxes but the city government told him, "You don’t have an account with us."
The mayor explained that the tax liabilities from 2004 onwards should be the responsibility of GSII while the taxes due for the period 1999 to 2004 should have been the responsibility of the NSC or its liquidator.
Cruz also noted that until now less than 10 percent of the total properties of the NSC had been transferred to the GSII. Ninety percent is still with the NSC.
Cruz said that with the willingness of GSII to assume the tax liabilities, "Penalty and interests will be waived but we will not condone the basic tax.”
Trade and Industry Secretary Peter Favila said, “From what I have heard, it was the National Steel Corp. which owes the city government and not Global Steel.”
Earlier, Global Steel threatened to hold back its grand plan to expand in integrated steel project pending the resolution of the tax issue with Iligan City.