Biz tax rate hike 'merely stories’

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Thursday, January 23, 2014


WITH the recent talks on business tax rate increases, Cagayan de Oro City Treasurer Glenn Bañez said those are just purely “stories,” and that the buzz about tax rates increase is just a misconception.

Bañez said the business community should not believe in ‘stories’ that there is a rate increase in the business taxes because his office only follows the local government code.

Bañez furthered they (businessmen) should not go to radio stations to report.

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“They should go to the city treasurer’s office for clarifications and adjustments,” said Bañez.

Meanwhile, city councilor President Elipe accused the collection of business tax of the present administration as “illegal and immoral.”

Elipe said it is illegal because the tax code doesn’t require businessmen to submit documents like the annual income tax return (ITR) and the value added tax (VAT) returns.

He added that the previous administration based the tax rates on the assessment of the City Hall and not the ITR.

“Way back in 2003 up to 2013, the capacity of a businessman to pay is one of the top considerations,” Elipe said adding that the present ‘increase’ has a great effect to the businessmen.

He added the present tax rates do not consider the capacity of the businessmen to pay.

Elipe accused the city hall immoral since taxpayers are not consulted on the effects of the tax collection method.

“They should be morally obliged to at least tell the tax payers about the effect of the collection,” Elipe said.

Increase?

Bañez cited that the inconsistency between the business tax declaration records and gross receipts could have been misinterpreted by the businessmen as an increase.

“When we use the annual income tax return as the basis for their business tax, the businessmen thought there is an increase,” said Bañez.

He added that in the previous administration they computed the business tax solely from the income declarations of the businessmen.

Bañez said gross receipts are the basis for the business tax rates according to taxation section in the Local Government Code of 1991.

He added the submission of businessmen of documents like the annual income tax return (ITR), financial statement and VAT returns are supported by the local government code.

Bañez said that through the documents the gross receipts are included which determines their business tax rate.

He added that with the ITR the city treasurer’s office can check the consistency of a businessmen’s tax declaration with the Bureau of Internal Revenue.

“The city treasurer is not allowed to implement increases in the business tax,” said Bañez adding that increases should be approved by the city council.

Bañez added that not declaring what is in the gross receipt is tantamount to fooling the local government which could surely affect its revenues.

Meanwhile, Maria Childie Capul, a business tax payer said her taxes increased to almost P1,000.

Capul owns a convenience store in Macahambus-Capistrano streets, this city.

She added although it is hard for the businessmen who are working hard to gain profit, but they were expecting it.

Capul said that amid the “increase” her views regarding the present administration did not change because they are just following what is in the guidelines.

However, she noticed the business registration and renewal process is disorganized.

Capul suggested that the renewal for big businesses should be separated from small businesses to make it even better.

Tax rates

Bañez said the percentage of taxes based on the gross receipts depends on the industry a businessman is engaged in.

He said if one is a lessor or a retailer, two percent from his gross receipt will be the business tax rate.

Bañez furthered if the gross receipt exceeds P400,000, one per cent of it will be the business tax rate.

He also urged the businessmen who have questions to visit the city treasurer’s office for consultation and reassessment.

“I am also thankful to councilor Elipe for the extension of the business registration and renewal schedule,” said Bañez.

Published in the Sun.Star Cagayan de Oro newspaper on January 23, 2014.

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