Mandaue to hike tax rates to 300% in January

CEBU, Philippines - The tax rate in Mandaue City will increase to as high as 300 percent starting January next year.

The city, nevertheless, assured that the implementation of the tax increase will be on a staggered basis, wherein the maximum increase will be fully implemented in the next three to five years.

During yesterday’s public hearing attended by representatives of the business sector at the Mandaue City Hall, city treasurer Regal Oliva, city administrator James Abadia and city councilor Diosdado Suico tackled the city’s proposed ordinance updating its schedule of fair market value and the revision of the city’s revenue code.

Oliva, a lawyer, said there is really a need to update the city’s revenue code considering that the city’s real property tax has not been updated since 1989 while the business tax has not also been updated since 1999.

But even with the increased rate, it will still be lower compared to the cities of Cebu and Lapu-Lapu, Oliva said, saying that they based the increase in the Local Government Code of 1991.

The proposed increase of the city’s fair market value will be from 20 percent up to 300 percent depending on the classification of real properties.

Business tax, on the other hand, is expected to increase from 10 percent to 60 percent.  Oliva yesterday explained the city government needs to start implementing the tax increase in January next year because being the treasurer, she will be held criminally and administratively liable if she will not do any move to update the city’s real property tax and business tax rate.

He explained that the law allows the tax revenue code of an LGU to be upgraded every five years, but it has never been done during the past administration, wherein the responsibility to increase the tax rate lies on the city treasurer and the city council.

“It’s long overdue, so I have to step in kay nagkataas ang demand sa taxpayers but we are still earning so less,” said Oliva.

He said that the demands of taxpayers of Cebu and Lapu-Lapu cities are the same with the demands of the taxpayers of Mandaue City, “but how can the city fully deliver its social services and infrastructure projects when the city earned less income compared to the two neighboring cities?”

However, the city officials assured the business sector that they plan to have the full business tax increase within the next three years while within the next five years for the real property tax.

For Abadia, he said they have to implement the increase so the city can deliver the demands like road projects, garbage collection equipments, and others.

Abadia hopes that this would not discourage businesses and potential investors as they are just upgrading the tax system.

The city officials further announced that there will be no tax increase in the city’s manufacturers as the city also aims to become the source of high quality manufactured products.

In fact, Abadia said, the city even provided the manufacturers with tax incentives such as tax holidays as they wanted them to expand their businesses in the city.

After the public hearing, Suico said the City Council will now have to approve a draft ordinance on its third and final reading.

With the proposal to increase the city’s tax rate, businessmen in the city also hope that the city will fully deliver the basic services.

“Ang amo lang sad hangyo nga matarong sad ang dan sa Mandaue ug matarong sad ang drainage nga wa g’yud intawo’y kasulbaran,” Philip Tan, former Mandaue Chamber of Commerce and Industry president, said. — /NSA (FREEMAN)