Baguio execs in tiff over taxation, fund proposals

By Ramon Dacawi 

BAGUIO CITY -- Two contrasting taxation proposals are up in the city council amidst the continuing strain on the city’s finances by the need to haul Baguio’s garbage to Capas, Tarlac until it can develop its own engineered sanitary landfill.

As early as April this year, the Local Finance Committee led by city budget officer Leticia Clemente urged the city council to upgrade the fair and current market values of real properties that “have stagnated since 1996” despite provision in the Local Government Code for the revision of the same every three years.

Also pending in the local legislature are a proposal of vice-mayor Daniel Farinas for a tax amnesty on delinquent real property taxes and a similar one of councilor Edison Bilog to include delinquent business taxes.

The city council’s committee on ways and means and finance (Cluster B) headed by Farinas has recommended approval of the two proposals on second reading. 

Committee members who signed the endorsement were councilors NicasioAliping, Richard Carino, ErdolfoBalajadia and Karminn Cheryl Dinney Yangot.

The LCF, however, said a tax amnesty, coming only four years after it was granted in 2008, would be counterproductive as “taxpayers are encouraged to be delinquent to the detriment of compliant and good taxpayers.This is utterly inequitable as we are giving the impression that delinquency deserves an incentive, which should be the other way around, where premium should be for good taxpayers”.

The committee cited Sec. 276 of the Local Government Code that provides that condonation or reduction of real property tax and interest may be done “ in case of general failure of crops or substantial decrease in the price of agricultural or agri=based products, or calamity in any province, city or municipality”.

Records of the city treasurer’s office show that in the 2008 tax amnesty, 309 o0f those who availed or 29 percent stopped paying after the amnesty and are again tax delinquents to the present.

The present LCF, also composed of city accountant Antonio Tabin, city administrator Carlos Canilao, acting planning officer Evelyn Cayat,  acting city treasurer Alice Onoza and acting city assessor Nilda Navarro, said there is no legal basis for the grant of amnesty covering business taxes.

In recommending the upgrade of the fair and current market values of real properties, the LCF  said: “With the growing concerns of the city needing financial support, it is imperative that we take advantage of the power of taxation granted under R.A. 7160 to ensure continuous delivery of basic services to our residents in the most effective and efficient way.”

Then city assessor Augusts Medina in September, 2010 submitted to the city council the proposed revised schedule of values for land, buildings, machineries, plants and trees. He cited a Department of Finance order for all city assessors to undertake the mandatory general revision in accordance with provisions of the Local Government Code.

“The schedule of values for land reflects an increase of 298.60 (percent) over the schedule of values approved in 1996 that was fully implemented in 1998 under Tax Ordinance 2000-01,” Medina said. The schedule, he said “ was derived form data gathered from advertisement, mortgage and value sales transition from the monthly report of the Register of Deeds”.

The LCF recommendation came as an addendum to its endorsement of the applications of two establishments here to register as information technology centers under the Philippine Economic Zone Authority.

The committee said it is “interposing no objection” to the application of Abanao Square and Neutrinos IT Center for accreditation with the Philippine Economic Zone Authority that would allow them to operate as information technology centers.

City councilor Peter Fianza, however, expressed reservations on the conversion of Abanao Square, which is operating as a mall, into an ITC, saying the PEZA should first conduct a study based on the criteria for ICTs.

“Are we ready to absorb development in the area?,” he asked, referring to the increased in traffic volume in the area and other needs of the ITC employees such as housing.

To clarify these points, the city council agreed to invite in its meeting the LFC, the city building official and representatives of the PEZA and the Department of Labor and Employment.

Only recently, the city council realigned P26.2 million originally earmarked for city projects for the payment of truck rentals in the hauling of the city’s garbage and tipping fees for its dumping into a landfill in Capas, Tarlac.