Cebu City Mayor Michael Rama is taking a “second look” at the city’s real property values after repeated calls were made to update the city’s schedule of market values (SMV) which has remained untouched since 2006.
Rama said the Cebu City government can’t put off a general revision of real property values especially after the Bureau of Local Government Finance (BLGF) called the city’s attention on it.
“The need for general revision has been highlighted in the BLGF report and the people should be made aware of that. This has been a concern that we have been trying to avoid for quite a time now,” he said.
The Commission on Audit also called Cebu City’s attention in its 2012 annual audit report about the need for a general revision of property assessments and classification, which is required every three years under the Local Government Code.
Mayor Rama, who has been reluctant to raise property taxes, said revisions won’t be done outright.
Rama yesterday directed the Local Finance Committee and the city assessors office in a meeting to consult with real property owners in the barangays aside from the business sector and civic organizations.
Revision
The mayor said he doesn’t want to set a time frame for this.
The SMV will be a basis in the computation of real property taxes.
“We will be taking this as a challenge. It’s not really intended for 2015 but we recognize there is already the need to do it,” he said.
He said city councilors should help the executive department in the process.
Rama has opposed hiking real property taxes in the past, directing the city treasurer’s office (CTO) to find other ways to increase revenue through efficient collection and spending.
As of yesterday, the CTO collected P1.5 billion to fund this year’s budget of P5.4 billion.
Classification
The BLGF said the cities of Cebu, Mandaue, Danao and Toledo need to update and increase their SMVs.
Cebu City’s debt servicing reached P1.12 billion in 2010 which is 45 percent of its annual budget of P3.1 billion, according to the BLGF.
Debt servicing totaled P596.4 million in 2011 or 22 percent of its budget of P3.5 billion which is in excess of 20 percent of the city’s income.
In doing a general revision, the city assessor’s office updates their records on fair market value of properties and locations.
The FMV is an important part of the formula in computing real property tax. The tax is based on fair market value x assessment level x basic tax rate.