DAVAO City Tax Code amendments will potentially increase the city's budget from P7 billion to P8 billion next year.
Davao City Councilor Danilo Dayanghirang, who heads the committee on finance, ways, means, and appropriations, told reporters during Monday's Kapehan Sa Dabaw at SM City Davao-Annex that the move is necessary as the demand for public services skyrocketed this year.
"Population of Davao City presently reached to an estimate of 1.5 to 1.7 million. With that, demand for services really will increase, but where will we get the money? Our present tax code was designed over ten years ago when the population was still some 600,000," he said.
He said now is the right time to implement the changes and impose higher taxes adding that the Commission on Audit (COA) had already called their attention regarding the low real property tax of the city despite its thriving property developments in comparison to the nearby cities of Panabo and Tagum.
"We haven't agreed yet on the maximum increase, especially for the Real Property Tax, but we are looking at 10 percent based on inflation, but we will be splitting the payment into maybe four to six years," Dayanghirang said adding that he will complete the committee report this week.
At present, the revised tax code is 80 percent complete with all the committee hearings and is eyed to be passed by July.
"We are positive as we also get majority of the support of the business community," Dayanghirang said.
However, in a previous interview, Davao City Chamber of Commerce and Industry, Inc. (DCCCII) Ronald Go said the reform should not be implemented now as efforts to invite more investors are still on-going.
"We realize that they have not made any commitments to locate or invest here at the present time. It may not be the right time to institute reforms considering we still want to convince investors to come to the city. Let us allow them to come in initially then later we can begin with reasonable increases in real property taxes. In this connection, we would like to request for a forum with our beloved councilor to tackle the details of this proposal," Go said earlier.
Meanwhile, Davao City Mayor Sara Duterte-Carpio signed last October an executive order creating the Tax Research and Action Team (Tract).
Tract was tasked to "conduct massive tax campaign, monitor the operations and activities of all who are doing business in the city, and take necessary and appropriate action against erring business firms to require them to pay their taxes, fees and charges in the City of Davao."
The EO underscored that tax policy should be based on sound revenue projections of the city's financial requirements and an understanding of the existing and potential revenue base in its territory.