City assessor eyes tax hike

To finance basic services of the Cebu City government, the City Assessor's Office is eyeing an increase in real property tax rates to achieve this year's projected P35-billion Taxable Assessed Value (TAV).

City Assessor's Office Officer-in-Charge Ferdinand Cañete said they are planning to raise the tax rates or assessment values of commercial land from 10 percent to 15 percent and residential property from two percent to 4.5 percent.

The P35 billion TAV is P6.2 billion higher than last year's P28.8 billion and is projected to earn for the city an additional revenue of P1.05 billion for the year.

The proposed increase represents a significant rise in TAV, which was P25.23 billion in 2011, P26.46 billion in 2012, and P28.89 billion in 2013.

Cañete, in a press briefing yesterday, said increasing the real property tax rates is part of their " strategic planning" to help fund the projects of the city, like the P1.2- billion infrastructure projects and financial assistance for senior citizens, persons with disabilities, city scholars, City Hospitalization Assistance and Medicines Program, among others.

The P1.05 billion revenue represents three- percent tax due of the TAV, broken down into two-percent basic tax rate ( P700 million) and one percent allocation for the Special Educational Fund ( P350 million).

The proposal, however, needs approval by members of the Cebu City Council.

This early, Vice Mayor Edgardo Labella and City Councilor Gerardo Carillo, the council's committee on social services chairman, opposed the increase in real property tax rates.

Carillo, a lawyer, stressed that any increase of taxes is not appropriate, especially that a super typhoon and a 7.2magnitude earthquake recently struck Cebu.

" Any increase at this point of time… is not palatable considering that major catastrophes were experienced in Cebu. Nagkalisod ang mga tawo ron ( People are hard up right now), many suffered and lost sources of income," he said.

Carillo said that is the matter for consideration right now and not the raising of taxes.

" At this point of time, I am not in favor of the real property tax increase because there were many calamities that occurred and now we are still facing difficulty," Labella, on the other hand, said, reminding the assessor's office to be prudent and careful on its plans and actions.

Labella and Carillo wanted the City Assessor's Office to instead conduct a survey or tax mapping to identify those lots and buildings that are yet to be taxed and assessed to increase revenue and be able to finance Cebu City Hall projects.

"We just have to incorporate effective and efficient approaches, like proper tax mapping, to achieve the projected P35 billion ( TAV of real properties). There are lots of ways to deal with this," the vice mayor said.

"This is a matter of efficiency on real property tax collection. This is the call and immediate job that should be done by the assessor's office," Carillo added.

Cañete, though, said Cebu City's real property tax rates are actually lower compared to its neighbors.

He said the cities of Talisay, Mandaue, and Lapu-Lapu are imposing a 10- percent residential tax and 15 percent for commercial real properties.

He also said they would likewise propose an " inspection fee" of P50 to P100 per property that his office checks to offset logistical expenses like gasoline.

Cañete also said that not all properties are taxable, as all lands and buildings used for charitable and educational purposes are exempted from real property taxes.

Likewise, churches, local water utilities, power generators and cooperatives are exempted under the Local Government Code.

Cañete said further that to achieve the P35 billion TAV, a Geographic Information System tax mapping must be done to cover the parcels of land that are yet to be taxed; correction of stripping of lots; apply "corner influence" in computations to impose an additional 15 percent for commercial properties and 10 percent for residential properties; tax mapping and property checking; and uniform grading for newly- declared buildings.

The City Assessor's Office would also require the declaration of machinery for five- storey and above buildings. The actual cost of machinery is 80percent taxable.

Idle land, Cañete said, should be taxed higher, or an additional five percent in the assessment value.

"This would introduce economic activity and generate employment as well," he said.

He likewise said that the market value of properties must be revised " to compete nationally."

" Every three years kinahanglan mag- revise sa market value kay ang last pag 2003 pa tapos na- implement last 2006 pa. We need to have the revision so we can compete with other cities," he said.