Improved tax collection to cushion IRA cut
July 12, 2011
THE Baguio City Government is eyeing on improved revenue collection through enhanced real property and business taxes collection to counter impending decrease of internal revenue allotment (IRA).
Mayor Mauricio Domogan said they are now expecting surplus revenue from business taxes because of improved collection process this year and this will also be done in terms of real property tax collection in the city.
Domogan said many are still not paying real property taxes because they are still applicants and not awarded lands since, according to the Public Land Act, they are not yet obligated to pay taxes.
“This is what we want to be upgraded and processed through computerization of real property taxes to realize an increased income,” Domogan said.
Domogan is also eyeing collectibles from the Philippine Export Zone Authority amounting to P125 million to control the decreased IRA.
He said the City Government remains hopeful negotiations between Bases Conversion and Development Authority (BCDA) and the Camp John Hay Development Corporation (CJHDevCo) for the latter to start paying their obligations to the city.
A representative from CJHDevCo assured the mayor the company is ready to pay.
Domogan said P200 million should have been paid to the city in May but BCDA claimed the delay in coming up of a one-stop for payments and in processing of permits resulted to losses in business, income and opportunities on their for the corporation.
In an earlier Sun.Star report, CJHDevco has P2.4 billion in restructured arrears plus another P382 million of unpaid lease to the city due from December 2009 to June 2011.
CJHDevco’s non-payments have also resulted in the City Government’s failure to meet its annual payments to the Government Service Insurance System intended for the purchase of the Baguio Convention Center plus the P128 million additional interests.
Also, the mayor remains optimistic the City Council will finally approve the terms of reference for the bidding of Asin resort. In addition, terms of reference are now being prepared for the Treasury Cottage at Upper Session Road, another City Government property, for it to become an income-generating property.
Domogan added once the Convention Center is rehabilitated, it will also add to the city’s income, freeing the city heavy dependence on the internal revenue allotment.
Since the Supreme Court’s final decision to uphold the cityhood of the 16 new cities, including Tabuk City in Kalinga, around P5 billion is expected to be cut from all local government units’ IRA.
Meanwhile, P15 billion will be also be decreased from the IRA of local government units next year based on the 2008 revenue collections, while P10 billion will be reduced due to the implementation of the third tranche of the salary standardization law of government workers, DILG Secretary Jesse Robredo earlier said.
If the Supreme Court will allow the recently filed request of the 16 cities for a back pay by the Department of Budget and Management to release the portions of the 16 cities’ IRA that were not given, this will further reduce LGU shares of IRA by 2012, Tabuk Mayor Ferdinand Tubban said.
The 16 cities asked the SC for their unreleased previous IRA through their lawyer Estelito Mendoza because they were treated as municipalities while the case against their conversion was pending, making them stall several projects due to reduced allotment.
The other request is for their adjusted IRA rate to be made retroactive to the dates when voters approved the new cities’ charters way back in 2007.
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