Councilor: Tax increase not sufficient

A MEMBER of the Cebu City Council believes the proposed increase in taxes is still not sufficient to help achieve the P50 billion proposed budget of Mayor Michael Rama for 2023.

Councilor Noel Wenceslao, chairman of the committee on budget and finance, told SunStar Cebu Monday, November 21, 2022, that the City Government should also look into other "windows of opportunity" to help raise its revenue and generate sources of funds for next year.

During the public hearing on Wenceslao's proposed ordinance for the revision of the city's tax code on Monday, some councilors expressed their concerns on what they called "excessive and oppressive" increase in taxes.

Wenceslao said the new tax rates came from the recommendation of Rama's executive department through the local finance committee.

The councilor previously explained that the increase on the real property tax is dependent on the fair market value wherein some properties may experience up to 7,000 percent increase on their taxes.

Despite this increase, Wenceslao said the P50 billion proposed budget to help fund the vision of Rama for a Singapore-like Cebu City cannot be achieved.

"Kaning P50 billion nato nga target, kung ang increase (of taxes) lang nato maoy basihanan, dili gyud kaya nato na. It is extravagance. Dili nato ma achieve ang P50 billion," said Wenceslao.

Wenceslao proposed that the City Government should look into the principle called "situs of taxation," wherein a local government unit (LGU) can impose and collect taxes for transactions that happened within its jurisdiction but the "booking" of the transaction was reported in other LGU.

He used financial institutions as an example wherein an individual would take a loan in Cebu City but the one who released the loan would report that the transaction happened in their head office outside the city.

Under the law, 70 percent of the tax due for the transaction goes to the LGU where the transaction was consummated and only 30 percent will be given to the LGU where the head office is located, said Wenceslao. (IRT)