TO PROMOTE a more business-friendly environment, the Mandaue City Council has passed an ordinance temporarily lifting the requirement for a realty tax clearance when securing business permits for 2024.
Authored by Councilor Marie Immaline Cortes-Zafra, the measure was passed on third and final reading on Monday, Sept. 16.
City Treasurer Regal Oliva said during the “Storya Ta! A Move to Good Governance and Transparency” forum on Thursday, Sept. 19, that the initiative addresses challenges faced by businesses, particularly those leasing properties or dealing with delinquent taxes from previous tenants.
“Not all businesses are real property owners. Many are just leasing properties, and it’s unfair to impose penalties on them,” she said.
Mandaue City has 16,000 registered businesses. Most operate in wholesale and retail, transportation, real estate, and manufacturing.
Of these businesses, 13,494 are micro businesses; 1,677, small businesses; 409, medium-sized businesses; and 68, large businesses.
The moratorium suspends the provision in Mandaue City’s Revenue Code that mandates a realty tax clearance for all properties within city limits. This change benefits businesses across various industries, especially those leasing their premises.
The clearance requirement applies to business owners operating in Mandaue, whether they are sole proprietors, partners in firms, or part of corporations.
Collection
As of the second quarter of 2024, Mandaue City has collected P402 million in real property taxes, and officials expect this to increase to more than P600 million by the end of the year.
In 2023, the City collected P584 million in real property taxes. For business tax collections, the City has already collected P1 billion as of February 2024. Last year, the City’s total business tax collection was P1.4 billion.
The ordinance also recognizes the struggles faced by the manufacturing sector, which operates large machinery and has historically faced challenges in paying realty taxes, according to Oliva.
Many manufacturing businesses have not been taxed on their machinery since 2001 due to lapses in tax collection efforts by previous assessors.
However, with the new ordinance, the City intends to rectify these errors and ensure all machinery is properly taxed.
The City has also implemented an amnesty program covering penalties and surcharges on late real property tax payments from 2020 to 2024.
Business owners who avail themselves of this amnesty before the end of 2024 will be exempt from paying surcharges for late payments made during that period, offering a significant financial reprieve.
“We hope this will encourage taxpayers to pay before the deadline since they won’t have to worry about surcharges on late payments from 2020 to 2024. Real property taxes for 2019 and earlier have already been forgiven,” said City Budget Officer Giovanni Tianero, who also spoke at the forum. / CAV