Tuesday, December 9, 2008

City business chamber objects to new revenue ordinance

JONG CADION
Chief of reporters

PAGADIAN CITY--City officials pushing for the increase of real property taxes may have rubbed hardly on the surface after no less than the most influential group of businessmen aired their protest.

The Pagadian City Chamber of Commerce and Industry Foundation Inc. (PCCCIFI), in a position paper forwarded to this paper, said that the increase of real property taxes should be deferred at the moment because “it is too heavy, inappropriate and not timely,” among others.

The strongly worded statement added that the city has more unpaid and delinquent taxes that need to be collected and that most of the local businesses have shrink in incomes due to the unfavorable peace and order condition in Mindanao.

“That tax payment must have a premise that taxpayers must be willing and eager to pay their tax obligations because tax revenue are spend for the welfare of the citizens,” PCCCIFI said.

The group then commented that new entrants are given tax holidays while the existing small old and current traders “are being whipped by increasing their tax liabilities and left to fend off the onslaught of the local government.”

To recall, a draft ordinance adopting a modified schedule for the implementation of the rates of fees in the schedule of market values, assessment levels and the classification of real properties has been passed last Nov. 25.

Councilor Arnulfo Garcia explains City Ordinance No. 2K8-266 is a new schedule in the application of the rate of fees in the payment of the real property taxes, which shall be applied gradually within seven years from Jan. 1, 2009 up to Jan. 1, 2015.

For example, a percentage rate of the old rate plus 10 percent of the difference between the old rate and the revised rate will be imposed for year one, that Jan. 1, 2009.

This will increase 15 percent gradually in the subsequent year up until Jan. 1, 2014 wherein the old rate plus 85 percent of the difference between the old rate and the revised rates have been achieved.

Garcia added this ordinance was introduced as a “win-win solution” with the PCCCFIC objecting to the implementation of the 40 percent increase of the devisor of basic tax from 1.25 to 1.75 percent to be implemented within three years from July 1, 2009.

“As of now the city government collects 2.25 percent tax devisor. One percent of this will go to the Special Education Funds (SEF), which the School Board will decide the implementation budget and 1.25 percent will become as basic tax for the operations of the City Government,” Garcia said.

“What we are increasing is the basic tax from 1.25 to 1.75 percent. We need to increase because the LGU is given every five years to have a new revenue code. It’s been 15 years already and the city still does not have the new revenue code,” was also Mayor Samuel Co’s statement to the media.

“We have a lot of projects to be implemented, one is the full transfer of regional offices in Balintawak and we need funds for it. Two major projects are still to be implemented in the next three years,” Co added.

Some of the recommendations from the PCCCIFI are the increase the tax collection efficiency, prosecute and auction off unpaid Real Property Taxes within the bounds of the law. Long and tedious legal process is not an answer to avoid legal process; patronize, protect and give incentives to the old and current businesses; allow staggered payment of delinquent real property taxes upon payment of a down payment of 50 percent and the balance payable for six months.

“Invite the business sector for a dialogues and foras on issues regarding taxations and other business related activities since, revenues of the City government come largely from the said sector and correct information is vital for effective tax collection;”

“Consult and include business sector representatives before coming out of proposals so that it will have more understanding of the issue and greater acceptance. Crafting tax legislation need inputs from those who will be affected and bear the brunt of such legislation,” PCCCIFI concluded.