Councilor Danilo Dayanghirang, chairperson of Committee on Finance. (Maria Patricia C. Borromeo/davaotoday.com)
DAVAO CITY, Philippines — A city councilor proposed to increase the city’s real property tax by 2,000 percent after a recent review showed that it has been stagnant since 2005.
Councilor Danilo Dayanghirang, chairperson of Committee on Finance, said that it is high time to to revisit the city’s real property tax code, noting that there was no increase imposed for nine years since its enactment.
Dayanghirang said the city government may impose an increase of 2,000 percent on the real property tax.
The figure, he said, was submitted to the City council after the Davao City Assessor’s Office and the Bureau of Local Government Support Fund (BLGF) conducted a thorough review of the real property tax figures.
“For example, a tower of a television company pays P100,000 per year in real property tax so you multiply it by their five towers at 2,000 percent so that is maybe P5 million per year already which is very high,” he explained.
Dayanghirang said they would find means to ease the impact of the increase to the public. This comes after Commission of Audit here called their attention because of its stagnant real property tax.
Per COA’s advise, he said, Davao City should impose a 10 percent increase on its real property tax every three years which the city failed to perform during the previous years.
No increase due to investors
Dayanghirang noted that the city government did not impose an increase of tax on real property in order to encourage more investors
In Davao, companies that sought investment promotions are exempted to pay for business tax and real property tax for a period of three years.
“That is the reason why there is no increase of real property tax and I think it is already the right time to revisit it,” he said.
Compared to Tagum City, Dayanghirang said that most investors wanted to invest in the city due to its low real property tax.
Proposal
Dayanghirang proposed that instead of paying the new tax rate outrightly, tax payers can pay it for a span of 10 years.
“Maybe we can stretch it out, assuming there is 100 percent increase, maybe you can pay 10 percent of it in the first year then another 10 percent on the next year so after ten years they already comply the 100 percent of the now doubled amount of real property tax,” he said.
Based on the comparative study, it showed that there was only a 3.5 percent increase of real property tax. In 2016, the city collected P6.3 billion while in 2017, P6.9 billion tax collection is the target.
“There is only an increase of P600 million. If only the local taxes increased then maybe we now have P7 billion funds,” he said.
But if the increase will be implemented, Dayanghirang said that by 2018, the city’s fund might increase up to P8 billion already.
Dayanghirang said the appeal for the increase was given back to Engr. Jaime Adalin, former head of City Assessor’s Office since Mayor Sara Duterte-Carpio created a tax tracking team to study further the proposed increases on real property tax and business taxes. (davaotoday.com)
