On real property tax hike Bizmen seek gradual enforcement

DUMAGUETE CITY, Philippines – The Negros Oriental Chamber of Commerce and Industry has asked the city government for a gradual imposition of the adjusted real property tax assessment, beginning next year, to allow taxpayers ease payment.

The business’s groups plea was an offshoot to the City Council’s ordinance, approved in October last year, on the general revision of property assessments, the first since it was done in 1993.

Ed Du, president of NOCCI, on Monday admitted that the revised schedule will impact mostly on the private owners of property in Dumaguete who may not be prepared yet to pay a higher tax rate. Businesses are not as quite affected by this as the tax adjustment will be passed on to their customers, he said.

The City Treasurer’s Office late last year announced it would be implementing the new law beginning January this year but, due to public clamor, this was put on hold until next year and made an assurance instead to go easy on taxpayers.

The approved easy payment scheme would see the imposition of a 25 percent tax adjustment based on the new assessment in 2016, 50 percent in 2017, 75 percent in 2018 and finally, a 100 percent collection of the latest real property tax assessment in 2019.

A source at the City Assessor’s Office said a study done years back, to support the revision of the real property assessment, showed about 87 percent increase in residential and 1,800 percent increase in commercial property taxes.

The source cited as an example of “unrealistic valuation” in the areas along Perdices Street, the main commercial district of the city, as having real property still pegged at P1,200 per square meter when, in reality, this would command as much as P17,000 per square meter.

Du said Dumaguete’s new real property tax assessment was “long overdue” and it is about time that the local government should make adjustments considering that the city is now more stable with investors continually coming in.

The Tax Code of the Philippines mandates that a revision be done every three years, something that the LGU of Dumaguete City had not done for the past 22 years since 1993. Dumaguete is one of the cities in the country whose attention was called by the national government for failure to revise its real property assessment.

Du explained that, at the time, the late mayor Agustin Perdices, had decided, in consultation with the business sector, to stall the revision of real property assessment to make Dumaguete City competitive to investors. The city’s economic environment was not as favorable as it is now, Du further said, such that what made it more attractive to potential investors was its low real property taxes.

In 2001, when Perdices was elected again as mayor for another three terms, the city was just starting to boom and it was only a few years later that big businesses came in, such as call centers, business process outsourcing centers and the first shopping mall ever, Du said.

By 2010, Mayor Manuel Sagarbarria started discussions on the general revision of the real property tax assessment. A technical working group, including the NOCCI, was then created but city officials had to wait for the Bureau of Internal Revenue to finish its own zonal valuation of real properties before the City Council finalized the ordinance for the revision of real property market values.

Du said on Monday he recommended to the CTO for a massive information drive this year to prepare the taxpayers in Dumaguete for the implementation of the revised real property taxes beginning next year.