THE Mandaue City Treasurer’s Office has reminded business owners to settle their taxes on or before the Jan. 20, 2024 deadline to avoid incurring heavy penalties.
The CTO also urged real property taxpayers to take advantage of a 10 percent discount by paying early.
The CTO has reported an increase in the collection of business tax and the real property tax for 2023.
Payment deadline
Regal Oliva, head of the Mandaue CTO, said Tuesday, Jan. 9, that they would not grant any extensions after the deadline, unlike in the previous years, particularly during the height of the Covid-19 pandemic and in 2021 when the City was affected by Typhoon Odette (Rai).
She said as the situation returns to normal, it is high time to implement the rules strictly, especially in collecting taxes.
A business tax refers to the taxes businesses must pay as a usual part of their business operations. Whether a business is a sole proprietorship, partnership, part of a limited liability company, or a corporation, it is responsible for adhering to the tax regulations of the state where it belongs.
Local governments, such as provinces, cities and municipalities, impose local business taxes and fees on corporations and individuals residing or carrying on business within their jurisdiction.
According to August Lizer Malate, executive secretary of Mayor Jonas Cortes and head of the City’s Business Permit and Licensing Office, Mandaue has around 16,000 registered business establishments.
Of these, 93 are big players or big corporations that can generate from P100 million up to P500 million in monthly net income.
Oliva said business owners who fail to pay their business taxes on time would pay a 25 percent surcharge on the basic tax as well as interest of two percent per month.
“So, for example, a business owner has a P1 million payable business tax (and) he failed to pay on time, which would mean he has to pay an additional P250,000 as a surcharge and P20,000 for the two percent interest,” she explained.
“It is very important that you pay your taxes on time because even if it is just one day that the check is late, that is no excuse. Once the check is late, it is already negligence on the part of the establishment of the taxpayer, and it will be charged against you. It’s hard, to be honest, a very expensive mistake,” she added.
Business taxpayers can settle their tax payments by visiting the CTO or paying online through its portal iBPLS.
Discount incentive
Oliva also encouraged real property taxpayers to settle their payments early to avail themselves of the 10 percent discount provided by the City.
Mandaue’s real property tax (RPT) payment deadline is March 31, and payments are made directly at the CTO.
RPT is an ad valorem tax (according to value) levied on real estate properties, such as lands, buildings, machinery and other improvements, except educational, health, and Philippine Economic Zone Authority (Peza) accredited institutions.
As of Jan. 9, Oliva said the City had 135,000 real property units, of which 90 percent, or 121,500 properties, were taxable and 10 percent, or 13,500, were non-taxable.
Oliva warned RPT payers that the City would impose a 25 percent surcharge and two percent monthly interest for late payments.
Protest
On the other hand, Oliva assured business owners who have complaints about the increase in gross sales (total amount of sales without any deductions) and gross receipts (the total amount of revenue a business collects during the year) that they can submit a protest with their stamped payment order and attached documents, such as income tax return records, book of accounts (book of recorded business transactions) and open receipts for the office to reassess their tax calculations.
However, she warned that the chance for recomputation may be forfeited if they receive even just one complaint from a protestor’s clients that it did not provide a receipt for a transaction.
“(If that’s the case,) we will not honor whatever you declared and tag it as a fraudulent transaction. To the taxpayers, this (tax calculations) is mathematically arrived at. We got the imprimatur (license) from the Neda (National Economic and Development Authority) that we pro-rate the calculations on those businesses that boomed in Mandaue,” said Oliva.
She, however, assured that should there be a reasonable protest from a business taxpayer and proof that the City collected excess tax, the CTO would return it as a tax credit that the payer could use for his next tax payment or accumulate for future use.
Collections up
The CTO collected P1.2 billion in business tax in 2023, an increase of about P157 million from the P1.096 billion collected in 2022.
Meanwhile, Mandaue City generated around P300 million in RPT in 2023—an increase of about P42 million from the 2022 RPT collection of around P258 million.
Oliva also announced that the City continues to have growth in real property units, particularly condominium establishments, to which she attributed Mandaue’s increased RPT.
She explained that the prompt payment of taxes will allow for the correct and accurate implementation of the Mandaue City government’s various projects and programs.
Local taxes go to a local government unit’s general fund to support government services, including police and fire services, education and health services, libraries, road maintenance, and other programs and projects that benefit the community.