Issue of January 15, 2017
Mt. Province

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Council grants 6 months amnesty on delinquent real property taxes

In its session last Monday, the city council approved Ordinance 1, s. 2017 or “The 2017 Real Property Tax Amnesty Ordinance in the City of Baguio,” which grants amnesty or relief on penalties, fines, surcharges, interests, and/or arrears to delinquent real property taxpayers.

The action is based on the principle that “taxes are the lifeblood of the government” and the legislative prerogative of the council as provided in Section 192 of the Local Government Code of 1991 that “local government units may, through ordinances duly approved, grant tax exemptions, incentives or reliefs under such terms and conditions as they may deem necessary.”

Its implementation is expected to boost the city’s continuous collection effort on the substantial unrealized revenue in the form of delinquent real property taxes.

The general amnesty covers all delinquent real property taxes as of Dec. 31, 2016 and shall include properties which are: 1. undeclared and subject to taxes; 2. declared but the real property taxes thereon have not yet been paid; 3. included in public auction conducted by the city but have not yet been purchased by private persons or entities; 4. with pending cases in court regarding question of ownership; and 5. sold through public auction whose ownership has not been officially transferred due to non-issuance of final bill of sale by the city.

The amnesty is for six months to take effect 30 days from the publication of the ordinance. Payments shall be made either in cash or installment basis, provided that it will be paid during the amnesty period and applied as of Dec. 31, 2016. Only after delinquencies are settled may tax payments be credited to the current period.

The ordinance further provides that no public auction of real properties due to non-payment of tax delinquencies will be held and initiated by the city during the amnesty period. However, said properties “after the expiration of the amnesty shall be offered for sale at public auction to the highest bidder for the sole purpose of satisfying payment of accumulated delinquent taxes, with the corresponding penalties, arrearages, surcharges, and interests pursuant to existing laws or ordinances.”

The application for amnesty shall be filed with the City Treasury Office, which is responsible in the preparation and processing of any compromise agreement, such as installment basis, together with the related documents signed by the taxpayers and the mayor in behalf of the city.

Should any installment will not be paid on its due date, the total unpaid balance of the delinquent real property taxes and the entire amount of penalties shall become automatically due and demandable and enforced.

While the relief is favorable to concerned taxpayers, the ordinance stressed that the grant should not be misinterpreted as giving premium for delinquent taxpayers but for the purpose of generating funds to increase the city’s revenue collection to be able to fulfill its mandate and meet the demand for public service delivery or operation.

Meanwhile, the council approved the application of DM Capital Venture Corporation (DMCVC) to develop and operate an information technology center at Legarda Road.

According to OIC-Zone Administrator Atty. Rene Joey Mipa of the Philippine Economic Zone Authority, PEZA Board has approved the application for registration of DMCVC as a developer of an IT building or center to cater to future business process outsourcing companies with international clients.

In its recommendation, the committee on urban planning, lands and housing stated that based on interview with PEZA-Baguio Economic Zone Department Manager Modesto Agyao, there are 210 IT centers in the Philippines registered with PEZA, 11 are presently operating in the city and there are eight prospective investors.

Like the DMCVC, the IT companies although mostly foreign-owned provide employment to residents, and generate local businesses such as retail outlets, restaurants, cafes, convenience stores, and promote the transport industry. From barely employing 40 employees in 2004, the companies employed 9,099 as of October 2016.

The city government would get a two percent share from the five percent gross income tax paid by the IT companies to PEZA.

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