Issue of July 9, 2017
Mt. Province

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City expects modest income from real property tax hike
by Aileen P. Refuerzo / PIO

The city government expects the income to be derived from the increase in real property tax as a result of the proposed adjustment of the market values of lands to be modest.

Mayor Mauricio Domogan said this is because of the decision to reduce assessment values and to divide the proposed increase into three tranches in an effort to cushion the effect of the increased market values.

“The way we see it, the income to be generated as a result of the proposal will not reach P200 million for the first year so it will not be that much,” the mayor said.

Although not excessive, the additional income will still boost the city’s budget in the coming years and will fund various priority projects the city has in the pipeline like the construction of a parking building and other service facilities, according to the mayor.

Due for deliberation on second reading after publication by the city council, the proposed revised schedule of market values for lands is targeted for approval within the year and for implementation in 2018.

Another public consultation on the proposal will be conducted on July 14, 2 p.m. at the sangguniang panlungsod session hall to allow more sectors to air their sentiments on the proposal.

Big business groups earlier criticized the proposed adjustment saying it is “unrealistic, unreasonable, burdensome and confiscatory.”

City officials led by Domogan, city council appropriations committee chair Councilor Elmer Datuin, and City Assessor Alamaya Addawe, however, maintained that the proposed increase is fair and realistic as the schedule was based on actual conditions in the city and comparable to zonal valuation of the Bureau of Internal Revenue which is still in the 1998 level.

“For 21 years, there had been no movement in the schedule of fair market values in the city despite the law mandating us to revise it every three years.  This is because we have been considering the plight of our taxpayers to the extent that we are now being castigated by the Bureau of Local Government Finance for being remiss in our duty,” Domogan said.

“But now it is high time to correct this and impose the correct market values as required by the law.”

Just the same, the city will not allow the taxpayers to bear the brunt of the increased market values by lowering the assessment levels so that it will not result to confiscatory taxes.

In computing the real property taxes, the market value (the price of the lot at which the seller is willing to sell and the buyer is willing to buy) of the property is multiplied with the assessment level to get the assessed value. The assessed value is then multiplied with the tax rate to get the actual tax due.

The lower the assessed value, the lower the property tax is so the city proposed to reduce the assessment levels from the current assessment levels of 12 percent to just six percent for residential lands; 35 percent to eight percent for commercial and industrial lands; and from 12.5 percent to just five percent for cultural, scientific and hospital lots.

To further cushion the impact of the increase, the city will implement the adjustment in three tranches for three years.  This is on top of the 20 percent prompt payment discount being given by the city every year, the city officials said.

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FOX Visus Immigration Consultancy
GMS Technology
Lepanto Consolidated Mining Company
Mother Earth Deli Basket
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