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The city’s Local Finance Committee (LFC) crafted a proposed win-win solution on the issues raised by the business sector on the prevailing implementation of the revised schedule of market values on real property taxes under the pertinent provisions of Ordinance No. 16, series of 2020.
City Assessor Maria Almaya Addawe, a member of the LFC, stated that the city government crafted the proposed measures to balance in the city government’s need to collect the prescribed taxes and the heavy impact inflicted by the ongoing Coronavirus Disease 2019 (COVID-19) pandemic to the operation of businesses in the city.
Earlier, officials of the Hotel and Restaurant Association of Baguio (HRAB) and city officials led by Mayor Benjamin B. Magalong met to thresh out possible solutions on the issues and concerns raised by the former on the implementation of the revised schedule of market values on real property taxes that took effect this year.
During the aforesaid meeting, the city chief executive requested HRAB officers to come up with their counter proposal on how the city government can address the tax issues and concerns.
Under the LFC proposal, no surcharges or penalties will be charged and instead of the 2-year implementation of the increase, the same will be spread in 3 years with 50 percent of the increase taking effect this year and 25 percent each will be effective next year and 2023.
Based on the provisions of Ordinance No. 16, series of 2020, the revised schedule of market values on real property taxes will take effect in 2 years with 70 percent of the increase to take effect this year and the balance of 30 percent to be effective next year.
However, Addawe disclosed that the city government is still waiting for the HRAB position paper on the revised schedule of market values although there will be another meeting between both parties to continue the ongoing dialogue on how to address the issues and concern son the matter.
In an earlier position paper, HRAB called on the local government to provide reprieve in the implementation of the revised real estate tax measure taxes as the approved increase is allegedly excessive, oppressive and confiscatory, especially in the light of the impact of the pandemic on the economy that caused almost all businesses to either significantly reduce their operations or close their establishments.
The city had not been implementing the required increase in the schedule of market values on real property taxes since 1996 despite the mandatory adjustments that should be made every 3 years causing the finance department to issue negative advisories against the local government on the said matter.
In case the city implements the above proposal, the city government incur a 22.5 million deficit on its annual budget on the second year and another P27.25 million deficit on the third year of implementation, thus, the need for the city to consider the non-implementation of certain projects that are not important to have a sustained balanced budget in the next two years. By Dexter A. See