City needs to improve local tax collection to attain self-sufficiency

BAGUIO CITY – The city needs to establish more sources of local revenues and improve tax collection to wean itself from external fund dependence and attain self-sufficiency, a member of the local finance committee stressed on Monday.

City accountant Antonio Tabin, addressing City Hall’s flag-raising rites, said that while the city continues to improve its internal or local tax collection which for 2016 reached the P700-million mark as against its P610 million target, it remained dependent on external or national government sources.

“If analyzed, the percentage of our external fund sources represents 52 percent of our annual revenue so we are still dependent on national sources,” Tabin stressed.

He said that new developments demand that the city adopt more aggressive tax reform policies to realize this aim.

He said that for the last three years there has been a significant decrease in the city’s share from the Philippine Economic Zone Authority (PEZA) collections, one of the external fund sources of the city.

In 2014, the city’s share amounted to P224 million which was reduced to P196 million in 2015 and to P160 million in 2016.

Tabin said that if the decline continues, the city has a cause to worry since this constitutes a big chunk of the budget.

He also cited the possible effect of the America First policy of US President Donald Trump which may mean the pull out of American companies from the PEZA and loss of local government shares from their earnings.

For 2016, the city targeted a collection of P850 million from its external or national government sources but realized only P785 million mainly due to the decrease in the shares from PEZA and the Philippine Amusement and Gaming Corporation and the Internal Revenue Allotment (IRA). The latter two were cut down by P2 million each.

He said the city has to address the external fund decline by further strengthening its internal revenue sourcing and collection to sustain the delivery of services to the public.

He appealed to the city council to consider all the tax reform proposals which will boost the city’s revenue collection.

The pending proposals include the proposed amendments to Tax Ordinance No. 2000-001 which seek to impose an average increase of ten percent on the antiquated business tax rates and the proposed schedule of market values which underwent another revision resulting to a general lowering of the tax rates than those proposed in 2014.

Tabin also pointed out the need to improve the collection in garbage and sewerage fees.

Mayor Mauricio Domogan who has been appealing to the city council to hasten approval of the tax measures said the city council also should consider pending proposals to allow the city government to bid out other revenue generating projects that will boost the city’s income.

At present, the city’s top three sources of internal revenues are business taxes with a total collection in 2016 of P257,158,000, real property with P97,700,000 and interest income amounting to P30,998,000.

The others are market stall rentals, garbage fees, real property transfer fees, rent income, community tax, sewage treatment, night market, slaughterhouse, parking and amusement tax./Aileen P. Refuerzo#


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