Rama: Cebu city’s approved real property tax code violates law

CEBU. Cebu City Mayor Michael Rama holds a press conference at the Cebu City Hall on Monday, February 13, 2023. (Photo by Ivan Rey Tan)
CEBU. Cebu City Mayor Michael Rama holds a press conference at the Cebu City Hall on Monday, February 13, 2023. (Photo by Ivan Rey Tan)

MAYOR Michael Rama will move heaven and earth to achieve the lawful revision of the real property tax (RPT) code that has not been updated since 2004, saying the recently approved revision violated the law.

On Feb. 6, 2023, Rama vetoed an ordinance approved by the City Council revising the RPT code, saying that it does not express the true values of properties and deprives the City Government of a proper source of funds.

In a press conference Monday, Feb. 13, Rama said the local finance committee (LFC) will reintroduce another proposed revision of the RPT code in the coming days.

The mayor lamented that the value of the properties in Cebu City is still the same as it was 20 years ago since no revision has happened until the City Council approved an ordinance in 2022.

However, Rama said the approved ordinance does not express the true current value of the properties as the schedule of increases in the Council’s revision is too small.

The approved ordinance will not be able to allow the City Government to collect the appropriate taxes, resulting in the deprivation of the delivery of basic services to the poor, Rama added.

“I will move heaven and earth to revise according to the law, lahi nang to increase. I am not on the thinking of increasing. I am just performing the job to make the meaning of the Local Government Code alive, particularly in the area of revision,” said Rama.

Rama said the approved ordinance violates Article 201 of the Local Government Code, which provides that real property shall be appraised at the current and fair market value prevailing in the locality.

Lawyer Jerone Castillo, special assistant for fiscal matters, told reporters that the current RPT code can generate net income of P700 million.

Meanwhile, the approved RPT code revision ordinance passed by the City Council on Dec. 30, 2022, can generate only a net tax collection of P1.5 billion, Castillo said.

Castillo further said the proposed RPT code revision of the LFC that was submitted to the council was expected to produce around P20 billion of net income annually.

Lawyer Collin Rosell, secretary of Rama, said the approved ordinance was forwarded to the mayor’s office last Jan. 31; therefore, the approved revised RPT code will take effect only in January 2024.

With this, the veto action of Rama did not hamper the implementation of the ordinance and there is still enough time for the reintroduction of another RPT code revision, Rosell said.

“A veto is the way the executive side can stop that ordinance from taking effect... We’ve decided to reintroduce another RPT code revision so that this change in the values ​​of our real properties can come smoothly,” Rosell said in Cebuano.

Despite the delay in achieving the desired revision of the RPT code, Rosell said the City Government can still attain the P50 billion annual budget.

Rosell explained that Cebu City has a lot of potential when it comes to the money that can be generated through taxes.

“There are many avenues where the City of Cebu can generate revenues. We will just fortify and revisit those,” said Rosell.

Business sector

Cebu Chamber of Commerce and Industry (CCCI) president Kenneth Co told SunStar Cebu in a text message that they had not received the report on Mayor Rama’s veto of the ordinance revising the real property tax code.

Thus, Co said it is still premature for the business community to comment on the mayor’s move, specifically on how this will impact the business community in the city.

“We (have) sent our official position paper already, in which (we) did not ask (for) a revision of the values but only to retain the assessment percentage and a staggered implementation of the increase,” Co said.

He added that affected realty firms also already presented their position papers on the proposed revision during the public consultation.

“Let’s just wait (for) what the mayor and City Council will finalize. It’s already up to them as the public hearing has already been conducted,” he added.

Under the approved ordinance, the assessment levels were retained at their original rates.

Residential lots will have an assessment level of two percent; commercial lots, 10 percent; industrial lots, 10 percent; agricultural lots, 4.8 percent; and special lots, 10 percent.

Only a 50 percent hike in the base value as prescribed in the schedule of the fair market value would be made the basis for the appraisal and computation of the RPT due.

The initial version of the ordinance during its deliberation carried higher assessment levels, making it “excessive and oppressive,” according to some city councilors. (With EHP)


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