Cebu City collects P7.3B in taxes amid pandemic

Parts of Cebu City are seen in this photo taken on September 26, 2020. CDN Digital photo | Brian J. Ochoa

CEBU CITY, Philippines — Cebu City collected a total of P7.347 billion in taxes for 2020 amid an economically devastating Coronavirus Disease 2019 (COVID-19) pandemic.

Mayor Edgardo Labella said in a press conference on Tuesday morning, March 9, 2021, that this collection during a pandemic proves the economic strength of Cebu City to withstand a global calamity.

He also said that the city was awarded among the Top Ten highest nominal locally sourced revenue for 2019 and took second place in the year-on-year growth in locally sourced revenue in the country. It was also the fourth most efficient city in the collection of taxes.

“Dako akong kalipay nga we are recognized for our tax collection even if wala ta nag-increase sa atong taxes,” said the mayor.

(I am very happy that we are recognized for our tax collection even if our taxes hasn’t increased.)

The tax collection in 2020 is still 50 percent lower than that in 2019, but that year, much of the earnings of the city, or at least P6 billion, came from the consigned proceeds of the 2015 sale of a 45-hectare lot at the South Road Properties (SRP).

In 2018, the city collected more or less P8 billion, which is still higher than the latest collection in 2020.

Still, the mayor said that considering the number of establishments that closed and the decline in the national economy from the second to the last quarter of 2020, reaching more than P7 billion in taxes is still an achievement.

With this, Labella is hoping that with the recovery of the economy this 2021, the tax collection would also increase.

Incentives

But the mayor is determined not to raise the rate of taxes, as it has been the policy under his administration since 2019. He said that as long as the collection is efficient, the city will have enough collection per year.

“I am hopeful and optimistic that our collection this year will be big, especially that our vaccines have arrived. I am confident that our collection of taxes will be bigger without necessarily increasing the rate of taxes,” said the mayor.

To encourage the business sector to pay their taxes, Labella is mulling providing incentives to them. This will need the support of the City Council, which, in the past, has already provided tax amnesty to delinquent taxpayers.

The tax amnesty has been cited as one of the reasons for the increased tax collection as many establishments or entities opted to pay their taxes in 2020 to avail of the amnesty for incurred penalties.

Labella said that if businesses who pay their taxes on time are provided incentives, this would encourage many more to follow suit.

Extension for tax deadlines can also be done, especially since the economy is barely recovering and many establishments may still need some time to earn a profit.

The mayor said the key to a good collection is a good economy, and he assured the business sector that the city will assist the establishments to help revive the economy.

/bmjo