THE collection of taxes from multinational companies without branches in Davao City is included among the proposed amendments of the revenue code of the city.
Erwin Alparaque, chair of the technical working group of the Tax Research Action Team, during the I-Speak media forum on Thursday, May 18, said they have consolidated the recommendations of income generating offices of the city and that include the suggestion to require all multinational corporations to pay their taxes to the city.
"All multinational corporations or even local corporations doing business in the city, if they do not have a branch or physical presence or existence in the city, they are supposed to pay taxes here as long as they are deriving their income or gross receipts from the city of Davao," he said.
Alparaque said that there is a long list of multinational corporations within the city that are already paying their taxes religiously, however, this provision targets those who are insisting that they are not subject to local taxes.
"Most of them are paying the city of Davao but there are those who still insist that they are not subject to tax and they are not taxable within the city because they are declaring their income in their principal office in Makati or Manila," he added.
He said these companies should also declare the income they got from Davao City and should be taxed.
Alparaque said for local taxation purposes, the income they have generated from the city must also be declared in the city.
He said what these multinational companies are doing is the total income they generate in all their branches are reported to their main office.
Alparaque said the provision of the amendment will be among the topics for the public hearing which will be conducted by the City Government.
Proposed increases in local taxes, fees, and charges will be discussed with various stakeholders.
"The Track team through the TWG prepared the compilation of proposals coming from Income Generating Office of the city," he said.
These income generating offices include the City Treasurer's Office, Business Bureau, City Health Office, City Assessor’s Office, City Tourisms Operations Office, City Environment and Natural Resources, Local Civil Registrar, City Transportation and Traffic Management Office, City Social Services and Development Office.
In a separate interview with SunStar Davao, Alparaque said the 2017 proposed revenue code is enclosed in a 210 page book with 453 provisions and sections in 10 chapters.
He said that under the lLocal government code, the City can adjust the rate of the taxes once in every five years but should not exceed to 10 percent.
He added though the regulatory fees can be adjusted higher because section 147 of the local government code said that it can be adjusted commiserate to the licensing cost, regulation, inspection and other services.
He said the last adjustment was in 2005, and there is a need to revise the revenue code to address the increasing demand of public services and to improve the facilities of the city.
"With increased population, we have to maximize our revenue to address all of these needs," he added.
Alparaque said they hope that all the public hearing will be conducted even before the end of the third quarter and hopefully it will be approved by October as the executive department wants the implementation of the new revenue code as soon as possible.
He said the initially agreed schedule for the hearing will be on May 24 at the City Council conference room for first district stakeholder, on May 25 at Buhangin Gym for second district stakeholders and on May 26 in Calinan for third district.
Alparaque said though that the schedule might change depending on the decision of Finance, Ways and Means chair Davao City Councilor Danilo Dayanghirang.
The first public hearing was conducted last May 12 at the Office of the Davao City Chamber of Commerce and Industry, Incorporated and was attended by various members of business sector. (KVC)