Imposition of flat rate for business taxes proposed

Two legislators in Cebu City proposed an ordinance to amend portions of the existing tax ordinance and impose a 1.5 percent tax rate on gross sales or receipts on business taxes.

City Councilors Margarita Osmeña and Alvin Arcilla said that the Ordinance LXIX or the Revised Omnibus Tax Ordinance of the city has been implemented on January 1, 1994.

For 24 years, this tax ordinance has not been amended and updated that caused the Commission on Audit to call the attention of the city government.

To recall, COA asked the city to update the tax ordinance as it could have collected P1.6 billion increase in revenue if the tax rate has been updated.

“A review over Chapter XVII (business taxes) of City Ordinance No. LXIX reveals that the said tax ordinance imposes higher taxes to small businesses compared to that of the larger business establishments, when viewed in proportion to their respective incomes,” reads a portion of the proposed measure.

The proposed ordinance was referred to the council’s committee on laws, ordinances, and styling for its comments and recommendations.

It will have to undergo public hearing to give stakeholders a chance to express their sentiments before the measure will be approved.

Under the existing ordinance, City Treasurer Veronica Morelos said the taxpayers will have to pay a fix business tax to the city government depending on the type of their businesses.