Meetings held with representatives of the business sector last month eventually resulted in lower than proposed tax rate adjustments.
City Secretary Rogelio Marasigan said the Council seriously considered and studied proposals from the business sector and approved a more "reasonable" version of the original proposal for the new Makati Tax Code.
He pointed out that old rates for lessors, the franchise tax, amusement tax, and those on printing and publication were maintained.
"We promised the business sector that we would lower the proposed tax adjustments. The City Council kept that promise and even decided to retain existing rates for some businesses," he said.
Marasigan noted that under City Ordinance 2004-A-025, which was approved last week, several proposed increases have been reduced by as much as 50 percent.
He said certain rates, including those on banks and financial institutions were cut down to .20 percent from the original proposal of .30 percent.
Proposed tax rates on real estate dealers, hotels, shopping centers and eateries as well as retailers were likewise lowered.
Marasigan stressed that the general weighted average increase in tax rates on the 16 business activities was only 20 percent.
"With these adjustments, we aim to be more competitive with other local government units," Marasigan said.
He pointed out that Makati’s advanced information technology (IT) infrastructure, the high telephone density rate, and the increasing number of buildings certified as IT zones by the national government will help the city attract more investors.
"We feel that Makati has advantages in the areas of peace and order, the availability of schools, hospitals and other amenities, and the state of public services," he said.
Marasigan also revealed Makati City’s plans of developing satellite business centers outside the Central Business District (CBD).
The city government plans to invest in latest technology systems for its frontline services and undertake skills training programs that match the manpower needs of Makati-based companies.
Marasigan said the new Makati Revenue Code is set to take effect Jan. 1, 2006, which will be followed by the implementation of a new Investment Code.
The Makati Business Club, which has a membership of some 400 corporations, had earlier opposed the proposed tax rate increases.
It even warned of an exodus of businesses to other localities where taxes are lower and doing business would not cost as much.