Cebu City falls short on collection of taxes

A glimpse of the skyrise buildings at the Cebu Business Park in Cebu City. CDN Digital photo | Brian J. Ochoa

CEBU CITY, Philippines — The Cebu City Treasurer’s Office (CTO) reported a lower tax collection from March 31 to July 1, 2020 compared to the same period in 2019 due to the Enhanced Community Quarantine (ECQ).

Councilor Raymond Garcia, the chairman of the committee on the budget and finance, said that the decreased collection was expected because of the limited operations of the Cebu City Hall and the temporary closures of many businesses in the city due to the quarantine.

The CTO said that the city only collected P297,035,603.01 from March 30 to July 1, 2020 for the duration of the ECQ. This is far from its previous collection in the same time period in 2019, which reached P910,588,574.53.

Garcia said the collection of taxes was important as this would determine how much the city could spend for the year.

Although the 2020 annual budget and three supplemental budgets have been approved, a total of almost P14 billion, this amount was proposed with respect to the forecasted collection or income of the city for the year.

“If the city will fall short of its collection, then the mayor can choose to stop certain projects that were allotted budgets in the annual budget. That is if we really fall short of our target,” said Garcia in a phone interview with CDN Digital.

For Garcia, the more prudent action would be to intensify the collection after the ECQ is lifted. Since the deadline for business taxes and real property taxes have been pushed to July 31, 2020, the city can expect that taxes will pour in by then.

It is also important that the City Council can pass the Tax Amnesty Ordinance, which would provide establishments incurring tax penalties to pay only 10 percent of these penalties instead of the full 70 percent.

“Dako na kaayo nagtabang sa atong mga businesses. (That is already a huge help for the businesses). If they don’t have to pay the full penalty, they will want to pay their taxes, then we collect more,” said Garcia.

The councilor said that while there was still no guarantee of hitting the target of P9 billion tax collection this year due to the economic impacts of the pandemic, the mayor might opt to slow down expenditures on projects that might not be considered urgent.

Read more: Cebu City Council approves P1.9 billion supplemental budget

This is also the view of the council, which passed a P1.9 supplemental budget on June 2020 instead of the proposed P3.4 billion by slashing off all budgets allocated for infrastructure.

Garcia said he hoped the city could recover after the pandemic so the businesses sector could bounce back after a three-month-long ECQ./dbs