Wenceslao unsure of tax holiday EO

CEBU, Philippines — Although he agrees that waiving tax penalties will boost the city’s revenues, Councilor Noel Wenceslao yesterday expressed skepticism over Mayor Raymond Alvin Garcia’s Executive Order (EO) that grants a holiday for taxpayers.

He said this is because of the absence of an Implementing Rules and Regulations (IRR) for the order.

The councilor, who heads the City Council’s committee on budget and finance, said that before the Real Property Valuation and Assessment Reform Act (RPVARA) was signed into law, Wenceslao, he already authored a proposed ordinance to revise the city’s Real Property Tax (RPT) rates.

Now that the RPVARA superseded this proposed ordinance, Cebu City Mayor Raymond Alvin Garcia issued an EO that grants a two-year amnesty period, waiving the penalties and surcharge charges for RPT payers. The EO was officially announced last Monday. The two-year amnesty began on July 5, 2024, and will last until July 4, 2026.

However, in an interview yesterday, Wenceslao said that although the RPVARA was signed into law last July, the IRR has not yet been released. The IRR is supposed to serve as the basis for the law’s implementation.

“Ako lang, I just want to be sure that the executive order will hold, even though there’s no IRR yet; or, I don’t know if the IRR has already been acted upon or released under the RPVARA law,” he said.

“So akong take lang ana is we need to know if there is already an implementing rules and guidelines regarding the law itself,” he added.

Wenceslao also stated that while he understands the motivation behind the EO, he wants to ensure that the RPVARA can be implemented immediately, even without the IRR. He clarified that, as far as legislation is concerned, they have not received the IRR yet.

“I really don’t know if the executive order will hold without the IRR... because the basis of the EO is the national law,” said Wenceslao.

He added that, as of now, there is no certainty whether the EO on waiving penalties will proceed without the IRR, which is supposed to be released at the national level.

“So far, wala pa (IRR). There has been no formal communication yet from the national government,” Wenceslao said.

Although speaking in his capacity as a legislator and chairman of the committee on budget and finance, Wenceslao said he would recommend examining the legal basis for the EO, in the absence of an IRR.

Garcia had previously stated that the two-year amnesty period for the penalties is part of the RPVARA’s mandate, and that the revision of the RPT tax rates will follow after the two-year amnesty period.

According to Wenceslao, the revision of the RPT tax rates may proceed, but it will no longer be the responsibility of the City Council and the city assessor to implement the new valuation. Instead, it will be the burden of the Bureau of Local Government Finance (BLGF).

He, however, noted that the City Council could still make revisions by adjusting the assessment levels and tax rates set by the BLGF. He emphasized that they must evaluate whether the new tax rates will negatively affect taxpayers and ensure that the business community remains in Cebu City.

He admitted that one of the factors delaying the implementation of the revised RPT rates were the concerns raised by the business sector, which he identified as the “bread and butter” of the city.

“We have to understand that they are our driving force for the development of the city,” said Wenceslao.

He said that they would need to strike a balance when implementing the revised RPT, as Cebu City needs to increase its revenues to fund the city’s basic services.

Wenceslao said Cebu City currently faces “high demands” in terms of budgetary proposals, and admitted that the failure to implement the RPT in 2024, contributed to the city’s inability to meet its target collection of P20 billion.

The amount is needed to support the approved P25-billion budget for 2024. The revised RPT rates were expected to generate higher tax revenues, but the revision was put on hold due to the RPVARA.

Wenceslao said that as of October, the city collected around P8 billion, which is expected to reach P9 billion by the end of the year—still a significant shortfall from the approved annual budget.

Wenceslao added that most of the unutilized budget were capital outlays.

He further explained that they would need to implement control measures to avoid a budget deficit, similar to the measures taken in 2023 when the approved annual budget was P50 billion. He noted that they need to carefully evaluate requests and prioritize them before releasing funds.

Wenceslao admitted that several approved items in the annual budget were not utilized or implemented due to a lack of funds.

“But and gibuhat sa departments, they are prioritizing katong mga tan-aw nila nga which really needs, or kinahanglan gyud, na released gyud to,” said Wenceslao.

Wenceslao said that this year, for the proposed budget, they have already taken into account the availability of funds to avoid the same issues as the previous annual budgets. He said they must align the proposed annual budget for 2025 with a realistic revenue collection for the coming year.

“At least mao mao ra gyud atong i-budget, kay bisan pag atong i-approve more than what we have like we did before, ang mahitabo, di man sad nato magamit, so ang mahitabo, i re-rebudget ra sad nato the next years,” he said.

This year, the executive department is proposing a P17-billion annual budget for 2025. This proposal is currently undergoing a series of budget hearings, which are set to conclude this month. — (FREEMAN)