Rama to start review of real property taxes

Aside from aggressive tax collection, Cebu City Mayor Michael Rama said he will spend time on tax mapping and initially conduct a review of real property taxes in the city.

“This year, this administration is treating revenue raising as if we are in a crisis situation,” he told reporters yesterday.

He said the city’s attention has already been called by the Bureau of Local Government Finance (BLGF) which said the city’s schedule of market values (SMV) is outdated by 11 years.

The SMV is the basis for computing real property tax a landowner needs to pay to the local government.

But Rama said new rates won’t be implemented at least until next year or in succeeding years.

In 2013, Rama opposed a proposal from the City Assessor’s Office to implement a revision of real property taxes to increase revenue for the city.

Computation
He said he would rather have the City Treasurer’s Office intensify its tax collection efforts.

The last general revision was done in 2006. Under the Local Government Code, a revision should have been made every three years.

Rama earlier said he would not authorize any tax increase during his administration.

The city recently passed  a P13.4 billion annual budget, the biggest so far.

Aside from the sale of lots at the South Road Properties (SRP), which was identified as one of the major fund sources for the budget, the city will also depend on increased regular tax collection.

Target
Last Monday, the mayor challenged city treasurer Diwa Cuevas to collect P5 billion in renewal and new business permit applications and real property taxes alone or nearly a five-fold increase from the P1 billion collected by the CTO last year.

“We will be working hard and do our best to collect the target. As long as it will increase from last year,” Cuevas said.

A one-stop shop is set up at the SM City Cebu Trade Hall 3 to cater to 30,000 businesses in the city which have to renew their business permits.

Avoidance
It started last Monday and will run until January 23. In previous years the CTO only collected an average of P700 million and P1 billion for real property tax and business tax respectively.

Rama also warned that the city will be actively going after tax evaders.

“I am very clear to those who are hiding, we will look for you. Those avoiding taxes, we will be looking for you, encourage you, do not avoid. Avoidance is good, but we need taxes,” Rama said.

The mayor said he ordered the City Legal Office to go after tax evaders.

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