Mayor: Tax code crafted with best intentions

Monday, January 30, 2012

BACOLOD City Mayor Evelio R. Leonardia said the revised Revenue Code of Bacolod was done with the best of intention.

He said the code has gone through a legal and right process and that it was thoroughly studied by the City Legal Office.

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Leonardia said his administration is not going to be the biggest beneficiary of this tax implementation.

“I only have one year and a half to go. If I want political convenience, I would have just sat down and waited for my term to end,” he said.

“We are looking at the welfare of the city in general. When you talk about a tax code that is 19 years old, that shows to a degree of some lapses on the part of governance.

It’s the city, which will benefit from this new tax code and the future administrations. It comes timely because this year, the new 16 cities would mean a reduction of about 45 million in our budget and also a reduction of P35 million from our Internal Revenue Allotment (IRA). More or less, Bacolod will be losing P80 million this year,” he said.

He added that if the new tax code is implemented, it can minimize the impact of the city’s financial difficulties.

“Our tax code implemented in 1993 was regressive. It means that the more income our businessmen have, the lesser they pay taxes to the government, which should not be the case. A healthy taxation principle should be progressive, which means that if the income is less, then taxes will also be less and if the income is high then the taxes will also be high,” he explained.

Oppositors to the revenue code assailed the increase in taxes as high.

“When this was presented by City Treasurer Anabelle Badajos to our businessmen, comparing it to the taxes of the cities of Bago, Talisay, San Carlos and Kabankalan and Iloilo, our new tax code is quite similar to them and it appears more competitive. We have even items where the taxes of Candoni are even higher than ours,” Leonardia said.

Leonardia added the last Revenue Code was passed in 1993. Under the Local Government Code, the LGUs are required to amend the tax code every five years.

“In 1998, if we have amended the tax code, businessmen should have been paying as early as 1998. In 2003, another 5 years and taxes should have been increased by that time and they should have been paying increased tax rates,” he pointed out.

But on the business side, businessmen who should have been paying more before were not paying it for so long and, if summed up, they are still on the advantageous side, according to the mayor.

He said that 19 years ago, jeepney fare was only P1 but now it’s P7. The population was lesser then but now it is in the range of 540,000 people.

“Naturally, when the city grows, the needs and the demands would also grow and we need to catch up with that. The DILG called our attention because, even in the EXCEL awards, the taxation is part of our weak points because our taxes were not updated. During the final deliberation in the contest for the Most Business Friendly city in Manila, Dr. Roger Balo was asked this question why Bacolod, in spite of its growth and fast development, they were impressed that Bacolod is unrecognizable compared 10 years ago, though it not able to update the tax code,” he said.

“In terms of local governance, this is not already healthy. But on the other side, the businessmen have concerns and complaints, we will listen to them. The issues and concerns that they raise, we have tried to dialog with them. Some of these business leaders were advised by me that they should not allow themselves to be used as propaganda materials or political tools by others…The more appropriate move is to sit down with the incumbent officials because this is where the solution is,” the mayor said.

“This is all about governance and we have agreed to hold a series of dialogues. Hopefully, we can come up with a common ground. I would like that the consultation meeting would be an exploration and whatever comes out of this, let nature takes its course and follow it,” he said.

“The businessmen have 30 days to file their protest. If they cannot do that, they will be deprived of their right to protest. Go ahead, no problem with that. That is the right thing to do for them. Among the regulations we have is that they cannot protest if they have not paid and that is why there were businessmen who paid their taxes but under protest. That is perfectly alright,” Leonardia said.

“The Department of Justice is given 60 days to resolve that. If no resolution, the people aggrieved may go to court. This is the process of exhausting administrative remedies. They agreed that, in case the group of the city and different sectors can come up with an agreement, they are willing to withdraw that. We will see how things will run. I don’t want to preempt and speculate.

If there is a need to amend, we are open. We will just sit down, discuss and explore things and come up with one reasonable solution on this,” Leonardia said.