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CEBU CITY, Philippines – The city government of Cebu will implement a staggered real property tax (RPT) collection once the city’s tax code is revised, Vice Mayor Raymond Garcia said in a press conference on Tuesday, December 20.
In November, some councilors expressed concern over the possible steep RPT increases that would greatly affect the city’s constituents and businesses. The proposal to increase RPT was announced by the local finance committee in a press conference on August 8.
“We discussed that because of the effects of the pandemic and the businesses are still recovering, we will not [collect] all at once…. We will have it on a staggered basis,” Garcia said.
According to the vice mayor, this was the suggestion by the Cebu Chamber of Commerce and Industry (CCCI) and other business entities.
Cebu City Mayor Mike Rama, in his P50-billion budget proposal for 2023, intends to use a large bulk of the revenue from the RPT increase to build 200 medium-rise buildings (MRBs) for socialized housing.
“It’s just a matter of getting and sitting down together and asking how much the increase would be and when would we do it,” Garcia said.
The P50 billion for 2023 is the city’s biggest annual budget proposal in recent history. Before this, the city’s budget averaged between P8 billion and P11 billion.
Big properties, bigger values
Garcia said the city needed to revise its tax rates due to the disparities in market values of real properties, especially those owned by private companies.
At present, the RPT rates reflect the rates from Cebu City’s Tax Code that, according to Garcia, was last revised in 2003 and implemented in 2006.
“If you go to the assessor’s office, the market value of a property in the South Road Properties (SRP) is still P1,250 per square meter (sqm),” Garcia said.
Garcia cited offers from private developers that priced the properties at P300,000/sqm.
“These land owners are paying at a very huge discount for the past 20 years because we haven’t revised [the rates], so I think that’s what is important: that the people should understand that we should revise our schedule of market values because it’s so outdated,” Garcia added.
Garcia hopes that the city council would increase the market value of the properties in SRP to about P100,000/sqm.
As of this writing, public hearings for the revision of the tax code are ongoing.
On Monday, December 19, Councilor Noel Wenceslao, chairman of the committee on budget and finance, ended the city council’s budget hearings.
“Now, the committee will meet and will deliberate on the P50-billion budget on whether or not we will recommend it for approval or not to the entire Sangguniang Panglungsod,” Garcia said.
According to Garcia, the officials have agreed to have the approval of the budget within 2022.
“Either me or the mayor will call for a special session just to approve the budget, and if you ask me when, most probably it will be on the 23rd [of December],” Garcia added. – Rappler.com