Covid-19 pandemic cripples Cebu City’s tax collection

Covid-19 pandemic cripples Cebu City’s tax collection

THE Cebu City Treasurer’s Office (CTO) still has to collect P4.3 billion in taxes to reach its projected tax collection for 2020.

Before the coronavirus disease 2019 (Covid-19) pandemic hit Cebu City, the CTO had projected that the City would earn P9 billion for this year.

The City experienced its “lowest collection” of taxes in April and May—the months when Cebu City was placed on enhanced community quarantine status, which closed all businesses except for the essential ones, according to Jerone Castillo, who works as special assistant to Mayor Edgardo Labella on finance and business matters.

As Cebu City has been placed under general community quarantine (GCQ) since June 1, the CTO collection unit in SM City Cebu in Barangay Mabolo has opened, providing taxpayers from the northern part of the city a place to pay their taxes.

Castillo had said some programs and projects of the City might not push through because of the low tax collection.

Aside from loans, taxes fund projects of any local government unit in the country.

Realistic forecast

The CTO can give a “realistic forecast” on the City’s finances to the mayor after June 30.

"We need data and this will be available after the deadline set on June 30, 2020. From there, hopefully we can already draw our financial models to follow,” he said.

The deadline for the quarterly tax collection in Cebu City has been extended until end of June after the City Council approved an ordinance extending the deadline of tax payment.

Castillo already told Labella that the treasury office might not reach its target income for 2020.

“I already gave him insights on the possibility of us not reaching our target because of the dire effects of the pandemic to the overall economic activities of the country, the province and the City of Cebu. But the treasury will try its very best to cope and adjust during this difficult period,” he said.

City Councilor Raymond Alvin Garcia, budget and finance committee chairman, agreed with Castillo.

He said the City’s income is affected as some businesses were forced to close because of the crisis.

“If they have zero income, the taxes are also zero,” Garcia said.

Asked if the City plans to provide incentives to businesses who did relief efforts during the crisis, Garcia said the City cannot single out businesses that can receive incentives.

The extended deadline of tax payment is already a form of incentive that the City has given to the business sector and other taxpayers, Garcia said.

In 2019, the City collected P8.4 billion in all forms of taxes. In January 2020, the City collected P1.2 billion in business tax alone. / JJL

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