Wednesday, September 12, 2007 City Hall seeks remedy for BIR zonal tax system By Lizanilla J. Amarga
THE City Council of Cagayan de Oro will be looking for a "win-win solution" to the controversial new Zonal Valuation Tax System of the regional office of the Bureau of Internal Revenue (BIR).
This system of taxation increased the capital gains tax of local capital assets by more than 100 percent driving away investors even mall-giant SM Prime Holdings, Incorporated from putting up another SM City Mall right across Gaisano City.
City councilors now want to invite BIR Northern Mindanao Regional Director Mustapha Gandarosa, Oro Chambers and other stakeholders to revise this new tax scheme.
"Perhaps we can still find a win-win solution to this," said City Councilor Dr. Dante Pajo during their regular session last Monday.
He said there is a need to look into how the BIR arrived at the values under the new zonal tax system and compare this with that of those values assessed by the City Assessors Office.
"Dili maayo nga sila lang pirme ang masunod (It is not good that it will always be the BIR-10 that will decide on everything)," Pajo said.
City Councilor Monching Tabor, for his part, is interested to inquire how this zonal valuation tax system was arrived at and its basis considering the "astronomical difference" between the computation of the BIR compared with the city assessor's office.
Former Barangay Lapasan chairperson now City Councilor Teodulfo Lao said there was a public hearing three years ago regarding this zonal valuation tax system.
However, there was no representative from the City Council who attended the hearing for this new tax system.
"And nobody objected to it then," Lapasan said.
But considering there is no law passed that actually fixed the capital gains tax in every barangay in the city, Lao said there might still be hopes for reconsideration of the current rates.
City Councilor Ian Mark Nacaya said this matter should be referred to the committees on Finance, Ways and Means and to the Finance, Ways and Means and the Committee on Subdivision.
During their regular session last Monday Monday, City Councilor Alfonso Goking made a special report regarding this new zonal valuation tax system that took effect last July 4, 2007.
It has even discouraged mall giant corporation SM Prime Holdings, Incorporated owned by tycoon Henry Sy Sr. from purchasing a five hectare property to put up an SM City at Recto Avenue across Gaisano City as the original purchasing cost of the land property was supposed to be only P435 million but went up to P1.2 billion.
"Mi-backout na gani nga SM na kana unsa na kaha kadtong uban nga mga investors (The huge prestigious SM has even backed-out how much more the other investors)," he said.
City Councilor President Elipe suggested there is also a need to look and give "mild consideration" in granting of permits for the development of "simple subdivisions."
According to him, the putting up of subdivisions which includes small parcels of land still increases the market value of these land properties and those adjacent to them.
"It may be good for us for now but in the long run it will mean making development of the city more expensive than it should be," he said in the dialect.
