BUSINESSES leasing commercial or office spaces will have an option to have their taxes reduced if they waive the rental fees of their tenants.
The Davao City Council has passed an ordinance that provides relief to businesses to mitigate the adverse economic effects of coronavirus disease (Covid-19). The City Government of Davao will deduct from the businesses' gross sales the equivalent amount they waived from their lessees' rental fee.
"The gross sales/receipts less the aforementioned deductible amount shall be the basis for the computation of business taxes for calendar year 2021," the ordinance stated.
However, during the deliberation of the City Council, committee chair of ways and means and appropriation Danilo Dayanghirang said the decision of the business establishments to waive rental fees is voluntary.
Aside from the waived rental fees, businesses may also be able to avail themselves of deduction in business tax if they have offered their spaces as quarantine facilities or have donated to help the local government in responding to the Covid-19 situation.
The government also waived the rental fees for real properties under the City Economic Enterprise such as stalls in public markets and terminals which are mandated to be temporarily closed during the period of community quarantine (CQ) and enhanced community quarantine (ECQ).
Business establishments mandated to close during the period of CQ and ECQ may also avail of the reduction of their annual garbage fee which will be based on the number of months the establishment was closed within the said period.
"The proportional reduction of the amount of garbage fee is considered as advance payment and shall be applied only during the renewal period for calendar year 2021," the ordinance read.
The last tranche of the real property tax payments due in 2021 was also moved to 2022.
On Monday, May 8, Davao City Mayor Sara Duterte-Carpio said the deadline for the payment of real property and business tax payment is extended until June 30, 2020.
She assured that no interest and surcharges will be charged to taxpayers within the extended period.
She also offered property owners with tax discounts depending on their payment of the Real Property Tax (RPT).
"Kung magbayad ka in full, 20 percent ang imohang discount. Kung first quarter lang imong bayaran 10 percent lang ang imohang discount (If you pay in full, you will be given a 20 percent discount and if you pay only for the first quarter, your discount is 10 percent)," she said.
Duterte-Carpio added that business taxpayers can also pay their second quarterly installment within the given grace period free of any charge.
With all the tax reliefs given to businesses affected by the Covid-19 pandemic, Dayanghirang said the city will be losing about P206 million, citing estimates from the City Treasurer's Office (CTO).
"The City Treasurer came up with its own estimates. In the reduction of garbage, the effects could have been approximately P16 million. On the gross sales, out of the rentals, lessor, lessee, [we will lose] around P10 million. The waiver in the economic enterprise is around P5 million. The suspension on the final collection of the increase of the real property tax is around P174 million," he said.