Mass consultation on tax increase set

By Aileen P. Refuerzo

BAGUIO CITY – The city council will proceed with panned mass consultation on tax increase soon to explain the proposal and get sentiment of sectors on proposed adjustments in business and real property taxes.

This after Councilors Betty Lourdes Tabanda and Richard Carino reiterated the body’s action in October last year tasking the council committee on ways and means cluster B under Vice Mayor Edison Bilog to schedule a general public hearing on the issue instead of pocket consultations to save on time and resources.

The consultation will be held either in the last part of March or early part of April depending on the availability of the venue at the Baguio Convention Center. 

The aldermen earlier opted for a common hearing to also ensure that complete facts will be presented to the public to avoid confusion and misconceptions.

Mayor Mauricio Domogan last year sought a speedy consultation for the city and the people to “strike an agreement on what is reasonable to both the city and the taxpayers.”

He said the city is now obliged to implement the increase after years of stalling to make the antiquated rates attuned with the times and with the requirements of the law.

The city is eyeing a 10 percent increase in business taxes under Tax Ordinance No. 2000-01 including city market rental and fees and garbage charges which were last adjusted in 2001 or 13 years ago. 

The mayor said the rates are now outdated and must be revised to keep up with the  prevailing charges now being levied by nearby cities like Urdaneta and Dagupan in Pangasinan and San Fernando City in La Union which impose business taxes higher by as much as 500 percent than the city.

For instance the city charges P15 for certifications and clearances while other areas collect as much as P100.  For stall rentals at the fish section, the city charges P20 a month but other cities collect P78 a day.  

The city also needs to update its schedule of fair market values of real properties which remained unchanged since 1996 making the city non-compliant with the New Local Government Code or the Republic Act No. 7160 provision mandating local government units to undertake a general revision of real property tax valuation every three years.  

It was assured that a minimal assessment level will be recommended to temper the expected huge increase in the market value as a result of the city’s passing up on several revision terms since 1996.

At present, the city’s assessment levels are pegged at 12 percent for residential and 35 percent for commercial properties.

This, as the proposed updated schedule of market values for real property taxation in the city has passed review by the Bureau of Local Government Finance and has been submitted to the city council for adoption and enactment into an ordinance.

City assessor Nilda Navarro, in an endorsement dated Feb. 13, reported to Mayor Mauricio Domogan that the proposed updated schedule of fair and current market values for land, buildings and machinery in the city for the period 2015-2017 was reviewed by the BLGF and was issued a certification that it complied with the Local Assessment 1-04. 

Domogan endorsed the schedule to the city council last March 12.

Navarro said that in the preparation of the schedule, her office considered the taxation principles the provide that real properties will be appraised at their current and fair market value, classified for assessment purposes on the basis of their actual use, assessed on the basis of a uniform classification within each local government unit; and that the appraisal, assessment, levy and collection shall not be let to any private persons and the appraisal and assessment shall be equitable.

She said that as expected, there was a huge increase in the schedule of market values as a result of the city’s failure to implement increases during several revision terms since 1996.

But she said they have suggested lower assessment levels for adoption by the city council and staggered implementation of the increases to temper the effect of the adjustments.

Domogan has time and again pointed out the need for the city to update its schedule of real property tax valuation to comply with the New Local Government Code or the Republic Act No. 7160 provision which mandates local government units to undertake a general revision of real property tax valuation every three years. The last time the city implemented the revision was in 1996 and this was met by protests from taxpayers prompting the city government to instead impose the increase on a staggered basis spread out from 1997 to 1999.

In 2001, the city government adopted Tax Ordinance 2000-001 which imposed lower assessment levels for real properties that tempered the increase and eventually appeased the taxpayers.

Since then, the city has not implemented another revision due to humanitarian considerations.

As a result of the city’s failure to comply with the revision every three years, the city was named as among those non-complying LGUs by the Bureau of Internal Revenue (BIR) while the city assessor’s office has been given a poor rating by the BLGF.

“Since real property tax is the most fixed source of the city’s revenue, it is therefore strongly recommended that the proposed schedule of market values for real property taxation be approved and enacted in an Ordinance for its implementation by the city council,” Navarro said.