MANILA, Philippines - The Quezon City government has vetoed a city council-approved ordinance that seeks to provide tax exemptions to home-based businesses operating in the city.
“The intention of the proposed ordinance is commendable such that it attracts businesses or economic activities,” said Vice Mayor Joy Belmonte in her veto message, under the letterhead of Mayor Herbert Bautista, dated June 27.
“However, the law dictates the judicious use of the power to grant tax exemption,” she said.
In an interview with The STAR, Belmonte said yesterday she issued the veto in her capacity as acting mayor, under the authority of Bautista, who was out of the country at the time.
As vice mayor, her main function is to preside over the city council, which passed the measure on third and final reading in May.
Belmonte said she preferred not to sign the veto message due to the possible conflict, but said the ordinance would lapse into law and that the executive branch would not want it passed due to a number of issues.
Citing precedence, the veto message said “tax exemptions should be granted only by clear and unequivocal provision of law on the basis of language too plain to be mistaken. They cannot be extended by mere implication or inference.”
It said the definition of “home-based” under the proposed ordinance is a vague standard.
The measure stated that home-based businesses are those “residential and the persons operating the said business must be actual occupants.” It further said that the businesses must be “engaged in such small-scale commercial endeavor (managed by people) related with each other within the fourth degree of consanguinity or affinity.”
The veto added that the proposed ordinance further failed to consider the visitorial powers of the city’s economic development cluster to examine the books of accounts and records of the so-called businesses.
In a letter to Bautista, business permits and licensing office head Garry Domingo said the proposal would be prejudicial to the public welfare as it would result in loss of revenue.
Address the issue
Belmonte said fourth district Councilor Raquel Malañgen, who authored the ordinance, understands the executive branch’s decision to veto the measure.
“She can re-style the measure to address the issues raised by the executive,” Belmonte said.
The vice mayor said the provisions in the measure may also be incorporated in two other pending measures in the city council, which involve the creation of an office handling small and micro enterprises in the city and the provision of support for informal settlers who have small businesses.