Capitol eyes to raise tax on real properties

The Cebu provincial government is eyeing to increase the real property tax to 10 percent this year.

Provincial Treasurer Manny Guial said the last real property tax increase was in 2008.

Although there were provincial taxation amendments in 2012, it only covered amusement taxes and on extractive products like sand and gravel.

Guial explained that a local government unit can amend its real property taxation after at least five years from the last amendment. The collected tax is part of the income of the provincial government.

"Makapataas ra ta ana sa atong collection sa real properties kung mag-change ta og schedule of market values which is kinahanglan gihapon og ordinance," he said.

Under the Local Government Code, a provincial government is allowed to increase up to 10 percent. Guial said that they will be proposing a 10 percent real property tax because it is the limit provided by law.

At present, the Capitol uses the amended 2008 Revenue Code of Cebu. Under it, real property tax is less than 10 percent.

A team is drafting the proposal to amend the code which will be forwarded to the Provincial Board (PB) for approval.

Guial clarified that this has nothing to do with the Tax Reform for Acceleration and Inclusion (TRAIN) Law.

"This is not in line with the TRAIN Law. We are working under the Local Government Code of 1991," he emphasized.

Vice Governor Agnes Magpale said that with the passage of TRAIN, this year is not a good time to increase real property tax.

"I don't know if the timing is good kay mosaka man ang presyo ron with the TRAIN.

I still need to talk with the chairman (of the team drafting the proposal)," she said.

On the other hand, Governor Hilario Davide III said that it is worth looking into since it has been so long since the real property taxation has been updated.

"We're looking into it kay taod-taod na (since the last time the Capitol updated its revenue code). It's also one of the sources of income of the Province. I think it's about time," he said.

He reiterated that a thorough review must also be undertaken before raising the tax.

In 2017, the Capitol collected P74.5 million worth of real property tax. This is 18.66 percent higher compared to 2016's P62.8 million collection. This contributes around 20 percent to Capitol's total income.