Cebu City

Cebu Mayor Mike Rama vetoes revised city tax code over valuation issues

John Sitchon

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Cebu Mayor Mike Rama vetoes revised city tax code over valuation issues

VETO. Cebu City Mayor Mike Rama at a press conference on February 13 explains his veto of the city's revised tax code, citing issues over valuation.

John Sitchon

A review by the Cebu City Local Finance Committee (LFC) finds that the vetoed tax code would raise less than what the city needs for its programs, including a massive socialized. housing project

CEBU, Philippines – Cebu City Mayor Mike Rama threw into disarray the city council’s efforts to revise the real property tax (RPT) code, announcing on Sunday, February 12, a veto on the new measure.

“I am taking full responsibility in this revision and secondly, in this business tax appreciation,” Rama said during a press conference at the Cebu City Hall on Monday, February 13.

The mayor gave two reasons for his veto of  City Ordinance No. 138 or “An Ordinance Enacting The Revised Real Property Tax Code For The Taxing Jurisdiction Of The City Of Cebu”: 

  1. The ordinance didn’t conform to the property values presented by the city assessor’s office and some of the values didn’t reach half of their expected rates. 
  1. The ordinance was prejudicial to public welfare because, without the true valuations of the real properties being fully expressed, the city would be deprived of a proper source of funding in implementing its programs, projects, and plans for the benefit of the people of Cebu City.

The Sanngguniang Panlungsod had approved Rama’s proposed 2023 budget of more than P51 billion, the city’s biggest approved annual budget, premised on the vision of  a “Singapore-like” Cebu City.

A large chunk of the budget, nearly P27 billion, was allocated for the construction of socialized housing units for families affected by the city’s river-clearing operations.

To make ends meet, the city council approved City Ordinance No. 138 through Resolution No. 16-1479-2022 on December 30, 2022, which would allow the city to raise its RPT rates by 2024. 

The measure was expected to help raise P40.2 billion from RPT collections.

Cebu City Vice Mayor Raymond Alvin Garcia in a press conference on December 20, 2022, explained that the tax collections would be staggered to soften the blow on businesses still recovering from the pandemic.

Not enough funds

However, a review by the Cebu City Local Finance Committee (LFC) found that only a net amount of P1.5 billion in RPT collections would be generated by the approved ordinance.

This would not be enough for the defray the cost of its ambitious socialized housing program.

“The poor cannot wait,” Rama said during the press conference,

For comparison, the previous RPT would generate only P700 million.

“Ang kanang schedule of market value giprepare na sa atoang office assessor unya klaro man nga ang schedule wala sad siya natuman. Dili maoy gigamit, naay lain gigamit nga mga value,” Lawyer Collin Rosell, the mayor’s executive secretary told reporters during the press conference.

(The schedule of market value is prepared by our office assessor and it’s clear that the schedule wasn’t followed. It was not the one used, there were other values used)

Rosell said that the LFC and office of the mayor would reintroduce property values that include appraisals from national government agencies and affected stakeholders in order “to clear things out” with the city council.

Rama stressed the urgency of the tax revisions to be made, noting that the city’s tax code has not yet been changed since it was last revised in 2003.

Rama pointed out that the city is mandated by law to adjust the valuation of properties every three years.

“I will move heaven and earth to revise according to the law,” Rama said.

As of this writing, the Sangunniang Panglungsod is set to have a meeting to decide whether or not to override the mayor’s veto or reintroduce the true valuations of the city’s real properties. –

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