‘Upped Baguio land valuation won’t result to increased taxes’

By Aileen P. Refuerzo

BAGUIO CITY – The proposed increase in market values for land in the city is realistic and reasonable and will not result to confiscatory taxes.

Mayor Mauricio Domogan and city council appropriations committee chair Councilor Elmer Datuin maintained thus in a riposte to the business groups’ opposition to the proposal.

The Chamber of Real Estate and Builders' Associations Inc. (CREBA), the Philippine Chamber of Commerce and Industry Inc. (PCCI) Baguio-Benguet Chapter and the Hotel and Restaurant Association of Baguio (HRAB) submitted their position papers on the proposed revised schedule of market values for lands which due for deliberation on second reading after publication by the city council.

All groups opposed the proposed adjustment claiming that the new rates are “unrealistic, unreasonable, burdensome and confiscatory.”

Domogan and Datuin reminded the groups that the city’s failure to revise the schedule for 21 years has rendered the market values outdated and unrealistic.  

The city officials said that the resulting increase in the market values which as defined are the prices of lots at which the seller is willing to sell and the buyer is willing to buy was expected to reach high proportions but this cannot be deemed as unfair and unreasonable as this was based on actual conditions prevailing in the city at present.

They cited the current market value of lots in Session Road which is pegged at P5,500 per square meter but in reality  the lots in this area at present fetch a price of as much as P150,000 per square meter.  The city has proposed to raise the market value in this area at P110,000 per square meter which is still lower that the prevailing price.

“Under the law, the city is duty-bound to impose the correct market value of the properties in our area of jurisdiction and we have been negligent and remiss on this duty since we did impose any adjustments for 21 years,” the mayor said.

“But now, it is high time to correct this and also address the falsehood bred by our outdated market values which the city unwittingly tolerated with its failure to update the market values.  Dapat itugma natin sa kung ano ang totoo,” he intoned.

Furthermore, the city made sure that the new market values are comparable to zonal valuation of the Bureau of Internal Revenue (BIR) which is still in the 1998 level so the new rates cannot be dismissed as unreasonable.

The officials also assured that this will not result to confiscatory taxes as they have proposed to lower the assessment levels to temper the effect of the increased market values from the current assessment levels of 12 percent to just six percent for residential lands; 35 percent to eight percent for commercial and industrial lands; and from 12.5 percent to just five percent for cultural, scientific and hospital lots.

“That to me is already going down nearly to the bottom just to ensure that the resulting taxes will not go beyond what is reasonable,” the mayor said.

Citing examples, city assessor Almaya Addawe said a 100-square meter lot along Benin road in Pinsao Proper barangay commands a P25.20 annual tax at present.  With the proposal, this tax will increase to just P270 annual tax.

Residential lots within subdivisions in certain barangays are presently charged P212.40 per 100 square meters annual tax and after the proposal, they will be paying P864 per 100 square meters after the 20 percent prompt payment discount. 

This tax rate applies to most subdivisions and residential areas as per the proposal, Addawe said.

As to commercial areas like Session Road, they pay P5,775 per 100 square meter annual tax and with the proposal, they will be assessed P21,120 per 100 square meter or a 357 percent tax increase for these profitable businesses, Addawe added.

To further cushion the impact of the increase, the city is willing to implement the adjustment in three tranches for three years.  This is on top of the 20 percent prompt payment discount being given by the city every year, the city officials said.

The officials reiterated that the adjustment is long overdue as the city has for years been berated by no less that the Bureau of Local Government Finance for its failure to comply with section 219 of the Republic Act 7160 or the Local Government Code which mandates the city assessor to undertake a general revision of real property assessments within two years after the effectivity of the code in 1992 and every three years thereafter.

If religiously followed, then the city should have implemented the realty tax revisions for seven times now since 1996.

“But of course we do not want our people to bear the brunt of the seven-year absence of tax increase in one blow so we made sure that this proposal will not result to confiscatory taxes,” the mayor said.

The mayor appealed to the people to “understand what is reasonable” for both the city government and to them.

“By now, our people should have realized that we do not want to impose the new rates just for the sake of increasing taxes.  This and other humanitarian considerations are the reasons why we have stalled on imposing the increase that long,” he said.

“We want to impose what is reasonable for both the taxpayers and the city government and we believe that this proposal is as fair as it gets.”

The city officials also assured that the proceeds of the increase in taxes will not be squandered and will be used for its intended purpose in the form of basic services to the public.