“Win-win’ solution for proposed tax hike eyed

The executive and legislative branches of the local government are looking into the possibility of having a ‘win-win’ solution in the proposed increase of taxes being pushed by the city’s finance officers as the existing tax rates are already antiquated.

Mayor Benjamin B. Magalong advised the members of the local finance committee to study the proposal of the members of the City Council for minimal and staggered increase in the existing tax rates so that the taxpayers will not be caught by surprise when settling their obligations with the local government.

Local finance committee members informed the new set of local officials that the local government could not significantly increase its annual budget primarily because there was no increase in taxes in the city for over two decades now.

In the case of the schedule of market values for real property taxes, the last increase that was approved was in 1996, while the latest increase in business taxes was in 2000 when Tax Ordinance No. 001, series of 2000 was enacted.

Vice Mayor Faustino A. Olowan claimed the problem with the proposed increase in taxes being proposed by the local finance committee is that it is allegedly beyond the reach of taxpayers, thus, something must be done to address the situation that will ensure its acceptability once it will be implemented.

Under the provisions of the Local Government Code, local governments are mandated to increase their schedule of market values for real property taxes every three years while business taxes should be updated every five years.

Earlier, the Department of Finance (DOF) included Baguio city in its list as one of the local governments that has an antiquated tax ordinance as the city failed  to update its revenue ordinance pursuant to the provisions of existing law, rules and regulations.

During an earlier briefing with department heads of the local government, Magalong vowed to pursue the implementation of programs, projects and activities that will be for the greater welfare of the people even if the decision to do so will be unpopular.

The new local chief executive underscored that his leadership will be decisive on the matter as he is not mindful of his image as a politician as he projected that he will be in the city for a 3-year term only.

For this year, the local government has an annual budget of P2.179 billion where more than P1.9 will come from internal and external sources and over P20 million will come from the beginning balance or the unspent appropriations of the previous budget.

Last year, the local government operated on a P2.056 billion annual budget which was the first time that its budget reached the P2 billion mark.

Local officials admitted that taxes are the lifeblood of government because it is the source of funds that bankroll the implementation of high impact development projects to improve the economic activities and sources of livelihood, and enhance the basic services for the people, especially those living in the countryside. - Dexter A. See