Friday, September 20, 2019

Car dealers disagree with Davao's graduated tax

CAR dealers are seeking amendments on the proposed graduated tax on business under the proposed 2017 Davao City Revenue Code.

Finance Ways and Means and Appropriation chair Davao City Councilor Danilo Dayanghirang in an interview with SunStar Davao said the representatives of Kar Asia and Toyota-Davao expressed their concerns over the graduated tax on business provided for those who establish, operate, conduct or maintain their respective business within the city.

"Based on the proposed revenue code, the amount of tax per annum will be taxed at the rate of 66 percent of 1 percent of gross sales of operations but they wanted to separate the cost from spare parts, and services because the variances of the per unit income is minimal," he said.

Dayanghirang said the committee is open to revisit and amend the provisions should they find merit in it.

"It will be difficult for them so we have to adjust the taxes with separate units for spare parts and services, which is now lumped as one. We have to separate or else it will be difficult for them to pay taxes," Dayanghirang said.

Dayanghirang said they have already required the companies to submit their income on spare parts and services to identify the difference.

He said they are also studying the 2013 Revenue Code of Quezon City, which Toyota-Davao dealer Boyet Lim proposed before the City Council as an example of tax code with separate graduated tax for services and spare parts.

"The Quezon City repressive taxation, the more you dispose care the lower taxes to pay. So the dealers are forced to dispose more, we are still studying it," he said.

Dayanghirang said that during the meeting with the car dealers Wednesday that with the Tax Reform Action Team of the executive council, they are also considering a separate graduated tax on business schedule for heavy equipment.

The proposed revenue code bill is now being heard under second reading by the City Council.
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