(PNA file photo by Liza T. Agoot)
BAGUIO CITY – The city government is now studying a possible hike in business tax rates by at least 40 percent to raise funds for its priority development projects.
City treasurer Alex Cabarrubias said on Tuesday the need to increase the city’s business tax rates is anchored on the mandate of local government units (LGUs) to implement not only the Salary Standardization Law but also to raise funds for the city's operations and its 51 priority development projects under the administration of Mayor Benjamin Magalong.
Magalong is pushing for several big-ticket projects like park, market, and road developments, among others, that are planned to be funded via the city’s funds, public-private partnership agreements or other schemes.
“It will be either a one-time increase or gradual,” Cabarrubias said.
He said the local government has not revised its business tax rates in the last 22 years and the city’s income from the source has stagnated.
He said the Local Government Code provides that LGUs undertake a general revision of their business tax table every five years.
“The city government will be able to correct its regressive tax table by increasing the rates up to 40 percent, considering the 22 years of lapsed tax table,” he said.
He said the city had proposed to the Bureau of Local Governance and Finance an increase in 2019 but it was overtaken by the coronavirus disease 2019 (Covid-19) pandemic.
He said the city’s failure to update its business tax table resulted in the city’s dependence on its Internal Revenue Allotment, which is now referred to as the National Tax Allotment.
Cabarrubias, however, clarified that theirs is a mere proposal as such requires an ordinance and a public consultation with the affected sector.
“We hope the needed ordinance for the business tax increase will be approved and ready for implementation by 2024,” he said. (PNA)
