Iloilo City gov’t offers 40% discount on RPT in response to public outcry

INQUIRER FILE PHOTO

ILOILO CITY — The local government here is set to increase its property taxes this year only to offer a 40-percent discount later following widespread concerns.

Iloilo City Mayor Jerry Treñas said that while taxes may be the lifeblood of the government, he understood the sentiments of businesses and residents in the wake of the recent increases in Real Property Tax (RPT).

“We need the funds but I understand our businesses,” Treñas said in a recent press conference.

The decision to offer a discount on RPT for 2024 and 2025 was made following a meeting between Treñas and key officials, including City Administrator Melchor Tan, City Assessor Cesar Jalbuena Jr., City Treasurer Jinny Hermano and Executive Assistant Nelson Parreño.

The city government approved a new schedule of values for lands and buildings for real property assessment on June 27, 2023. The adjusted rates include an increase from 1.5-percent to two percent on all lands based on the assessed value of the real property.

The tax on idle lands was adjusted with residential lands facing a two percent rate (up from one percent) and agricultural, commercial, and industrial lands facing a three percent rate (up from two percent).

However, concerns from the business community also surfaced, particularly from a local business owner who disclosed that rental fees for city-owned establishments in the city proper were set to increase by 200 percent.

One of the business owners learned about the impending increase with their rental fee projected to rise from P56,000 to P140,000 per square meter.

The business owner, who requested anonymity, shared the impact of this significant hike in rental fees.

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In addition to the potential financial strain on businesses, the owner highlighted that these increases could lead to closures and a surge in unemployment.

Treñas explained that the revenue generated from taxation was crucial for the operation of the local government, especially with the additional responsibilities following the Mandanas-Garcia ruling.

The ruling stipulates that 40 percent of the income-share of local governments should come from taxes collected by the Bureau of Internal Revenue and the Bureau of Customs.

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The proposed reduction will require an amendment to the real property tax ordinance through the city council. Excess payments made by taxpayers during the discounted period will be considered tax credits for subsequent years, according to Hermano.

The increase in real estate property taxes for 2024 is the first in Iloilo City since 2006.

Treñas justified the decision, citing the Mandanas ruling and the devolution of functions to local governments.

The Iloilo City Government conducted consultative meetings and public consultations with the business community and other stakeholders in May 2023 in preparation for the higher RPT.#