Through a compromise deal: Council allows delinquent taxpayers to settle debts

Delinquent taxpayers may soon redeem their auctioned property from the government after the City Council has allowed them to enter into a compromise deal with the city government to settle their debts.

Councilor Edgardo Labella, chairman of the council committee on laws and ordinance, found legal basis the compromise deal under Section 192 of the Local Government Code, which outlined the granting of tax exemptions, incentives or relief under terms and conditions.

Earlier, Councilor Joey Daluz III, who chairs the council committee on real property, introduced an ordinance giving chance to tax delinquents to redeem their properties auctioned off by the city through installment, provided that complete payment is made within the redemption period.

"The city is not after the acquisition of these properties, but for the collection of taxes," Daluz said. The city, according to him, is looking for a win-win solution to the situation by finding ways to collect taxes and raise revenue while affording taxpayers a convenient way to redeem their properties.

Labella supported Daluz's explanation in a committee report he submitted to the council last Wednesday, saying that the proposal is not disadvantageous to the city government and should be given due course.

The proposal, which was hatched by city treasurer Tessie Camarillo, institutionalizes the payment scheme on installment basis provided that complete payment is made within the redemption period.

Under the condition set by the ordinance, the owner of the auctioned property shall be allowed to redeem his property through installment payments within the redemption period without interest. The payments shall be considered as deposits, and shall be placed in a trust fund specially created for the purpose.

But in the event the owner cannot complete payment of the full amount within the redemption period, the accumulated deposits will be returned to him without interest, and the city shall proceed with the consolidation of the property in its name.

In connection, the city treasurer, with the concurrence of the Commission on Audit, is authorized to withdraw the total amount of deposits made, minus accrued interests and to deliver the amount to the delinquent taxpayer.

The accrued interest is then forfeited in favor of the city and the city treasurer endorses for the consolidation of the property in favor of the city government.

The scheme has an innovative tax collection method that works both ways as it gives the government the chance to collect taxes and or earn interest out of the deposits made while giving an option to the owners to conveniently redeem their property by installment.

"Through this scheme, the city does its avowed duty to raise much needed revenues, while affording the taxpayer a convenient way to redeem their property," Daluz said.

Under Daluz's proposal, the city treasurer is authorized to open a trust fund created in behalf of the delinquent taxpayer. - Garry B. Lao/LPM