CEBU City will be implementing tax amnestry for real property taxpayers for two years, as delinquent tax receivables ballooned to P4 billion.
Mayor Raymond Alvin Garcia issued on Monday, Nov. 18, 2024, Executive Order (EO) 22 series of 2024, which grants tax amnesty on penalties, surcharges and interests for unpaid real property taxes, including unpaid special education fund, idle land tax and other special levy taxes in Cebu City.
The amnesty will last for two years, commencing on July 5, 2024, and ending on July 4, 2026.
Garcia believed that the EO would foster greater tax compliance in the future while simultaneously boosting the government’s revenue collection effort.
He said the initiative not only provides relief to taxpayers burdened by accumulating liabilities but also encourages them to settle their accounts, creating a more efficient and sustainable tax system.
Encouraging taxpayers
Garcia explained that many taxpayers had been delinquent due to exorbitant penalties, exceeding the principal amount of the tax debt.
“I hope this will encourage taxpayers, and I encourage those who are delinquent to come and pay their taxes because their penalties are already waived,” said Garcia.
He added that the amnesty will cover any year of the delinquent taxes.
Garcia said the amnestry will increase the City’s revenue since more people will pay and “take advantage” of the amnesty.
Meanwhile, Councilor Noel Wenceslao, who chairs the committee on finance, told SunStar Cebu in a phone interview that the total delinquent tax receivable by the City amounts to P4 billion.
However, the councilor cannot specify how much the figures will be considering the amnesty that will be implemented by Garcia.
He said the City Treasurer’s Office still has to compute these.
SunStar tried to reach out to City Treasurer’s Office head Marie Vae Reyes, but to no avail.
Wenceslao agreed with Garcia that the tax amnesty, which waives penalties, surcharges and interest on unpaid real property taxes, will boost the City’s revenue.
“It will lessen our accounts receivable, but it will add to the cash flow of the City since there will be cash going in,” said Wenceslao.
Tax amnesty ordinance
Garcia recalled that when he was still a councilor, taxpayers took advantage of his tax amnesty ordinance in which the City ended up collecting P400 million.
“P1 today is better than P10 tomorrow,” he said.
“It’s good that you have the cash now so you can allocate it for public service rather than wait 10 years for them to pay. Yes, the amount is big, but you are not sure if they will pay or not,” Garcia said in a mix of Cebuano and English.
To recall, the City Council approved the tax amnesty ordinance of Garcia on Aug. 14, 2020.
To avail themselves of the amnesty, taxpayers have two options: pay the principal amount of their tax dues in full before Dec. 15 without penalties, or pay in staggered amounts within one year and pay only 10 percent of total penalties.
“If the taxpayer will avail (himself) of the one-year installment basis, then he has to pay a down payment of 25 percent. He must enter into a promissory note with the City of Cebu as to his balance and pay the 10 percent (penalty) good for one year with 12 monthly installments,” Garcia explained.
If the taxpayer fails to pay the installment even for just a month, the amnesty will be forfeited and the taxpayer will have to pay his original delinquency.
Garcia introduced the ordinance in 2019, but it was deferred a number of times. He reintroduced the measure in July 2020 to help taxpayers get through the Covid-19 crisis.