Cagayan de Oro boosts collections by 36% with tax amnesty program

CAGAYAN DE ORO, Philippines – The implementation of a tax amnesty ordinance in the city has led to a significant increase in business tax collections, the highest seen in half a decade. 

Cagayan de Oro City treasurer Jasmin Maagad said city hall collected P704 million as of January 26, P185 million more than the P519 million it raised during the same period in 2022 when the effects of the COVID-19 pandemic were still hurting the local economy. 

Before the pandemic and the public health restrictions that came with it, city hall had registered an average of 10% increase in business tax collections. 

The city government had seen a 21% increase in January 2020 compared to the same month in 2019. Data showed that the collections in January 2019 reached P600 million, which then increased to P724.4 million in 2020.

But the local government’s collections plummeted to P488,827,765 in January 2021 due to the economy-crippling pandemic and restrictions.

Maagad attributed the 36% growth in business tax collections in January to the improvement in the gross sales of businesses as they recover from the economic slump caused by the pandemic. 

“The increase was the highest in the last five years,” she said.

BenCyrus Ellorin, one of city hall’s spokespersons, said city hall’s financial managers were optimistic about meeting or even surpassing pre-pandemic revenue collection levels in 2023. 

The president of the Cagayan de Oro Chamber of Commerce and Industry Foundation, Ray Talimio Jr., attributed the substantial increase in city hall’s business revenue collection to the local government’s tax amnesty ordinance.

“This is the direct effect of the city’s tax amnesty ordinance. It gave local businessmen relief. Many businesses in the city availed of it. This increase in collection validates the ordinance,” Talimio said.

The ordinance allows businesses to pay only 30% of the principal arrears, encouraging many to pay local taxes and renew their permits. 

Aside from the condonation of fines imposed on delinquent taxpayers, the tax amnesty ordinance also provides a 20% discount for those who pay their real estate taxes in advance.

“With the way things are going, I think the city will reach its target in tax collection this year,” Talimio said.

Nearly half of the 29,000 registered business establishments in the city have already availed of the tax amnesty program, and renewed their business permits, said Cagayan de Oro Business Permits and Licensing Office chief Jason Adaza.

Of the 14,616 business establishments that renewed their permits, 969 were completed online, he said.

Cagayan de Oro Mayor Rolando Uy attributed the collection increase to the local business sector that has been supporting the city hall’s economic recovery efforts. 

Cagayan de Oro City administrator Roy Hilario Raagas said business establishments in the city can avail of the program only until February 28. – Rappler.com

Cong Corrales is a fellow of the Aries Rufo Journalism Fellowship