City to revalidate use of properties

CEBU, Philippines - The Cebu City government will do an intensified revalidation of all real properties, particularly those that are situated in the city’s urban barangays, as one way to increase the collection of revenues without imposing additional taxes.

Acting Cebu City Treasurer Ofelia Oliva explained that revalidation means her personnel will conduct massive tax mapping of all real properties and business establishments to determine whether its owners are paying the correct taxes.

Real properties are lands, buildings and machineries. Once the lands or building that are classified in the City Hall records as residential, but in reality are being used for commercial purposes, Oliva said, the city will impose additional taxes to its owners.

There are some instances that residential buildings have been converted into stores by its owners while the lots that are classified as residential had been rented out for commercial purposes.

If that will be the case, Oliva explained that the city tax collectors will investigate of when was the first time that such residential area has been converted for commercial purpose and the city will impose additional taxes to its owners retroactive from that specific year.

Oliva believes that the city’s tax collectors will accomplish the dream of Mayor Michael Rama to fund a P10 billion annual budget for 2012.

City Assessor Eustaquio Cesa also said he will recommend to the Cebu City Council that the existing real property tax rate will be increased by 20 percent, meaning if a taxpayer is currently paying P1,000 annual real property tax he pays an additional P200.

The last time the city adjusted the real property tax rates was back in 2004, but the law allows it to make adjustments every three years.

The officials of the Bureau of Local Government-Finance (BLGF) in Central Visayas said the local chief executives can increase the local income of their respective LGU although it will depend on their willingness and ability to use their taxing powers.

The BLGF officials had observed that several local government units have a “regretful situation” in the collection of real property taxes, which is below par from the total amount of business tax collection.

Felizardo de los Angeles, in-charge of the real property tax collection, said the net income of the city from the real property taxes last year was only P649.8 million while the business tax collection for the same period reached P1.3 billion.

Assistant city assessor Liezel Gonzaga said the total number of real property units in Cebu City had increased to 218,010 compared to only 207,979 in 2009. Cebu City is comprised of a total of 32,000 square hectares of land.

The good news is that unlike some other local government units, the Cebu City government is not depending on its share from the Internal Revenue Allotment (IRA) or its share from the national tax collections.

The revenue sources of the local government units are from taxes, fees and charges. Taxes are the enforced contributions made for purposes of revenue generation and redistribution, while fees is the imposed collections as a system of recovery for delivery of service and charges is for the rents of properties.

Among the revenues of the city is from the sales of lots, but it was reported that while Rama wants to sell lots at the South Road Properties (SRP), Vice Mayor Joy Augustus Young said majority of the Cebu City legislators are against his plan.

Former mayor and now South District Rep. Tomas R. Osmeña explained that if the city will just wait once the SM City and Filinvest Land Incorporated will finish their projects at the SRP, the price of the lots will become double. –/NLQ (FREEMAN)