Makati renews plan to cut property taxes
Makati Mayor Abby Binay. PHOTO FROM OFFICIAL FACEBOOK PAGE
Makati Mayor Abby Binay again pushed city plans to reduce real property tax (RPT) rates after the city reached 80 percent of its 2024 tax collection target of P18.4 billion in April, reaching P14.76 billion.
“Given our robust revenues and strong cash position, I believe we can afford to reduce current tax rates, especially real property tax,” Binay said. “It would make the city more attractive to local and foreign investors, thus increasing Makati’s competitiveness as a premier investment destination in Asia.”
READ: Makati attains 80% of its 2024 revenue target as of April
Makati exceeded its 2023 revenue target by 39 percent without raising taxes. The city has P33.6 billion in cash reserves.
Binay said the robust revenues ensure funding for the city’s enhanced health, education, and social programs this year.
“Our robust revenues provide us with the financial stability we need to continuously implement programs that go well beyond the basic needs of our constituents,” she said in a press statement, crediting taxpayers, especially the business sector, as the largest contributor to city coffers.
Best incentive
Binay first announced plans to cut RPT rates in January when she said in her State of the City Address that tax cuts were the best incentive for investors in the city.
She said lowering taxes would make it easier for businesses to operate, in turn boosting the city’s economic performance, even with the loss of 10 barangays to Taguig City.
On Jan. 5, the city removed the 10 enlisted men’s barrios, or “Embo” villages, from its books after the settlement of its dispute with Taguig City.
Makati also removed subsidies to the Embo villages, which the mayor said amounted to P7.9 billion.
In April last year, the Supreme Court ruled with finality on the dispute and found in Taguig’s favor the ownership of the 729-hectare Bonifacio Global City Complex.
Binay did not specify details of the planned tax cut, but Makati imposes a basic RPT of 2 percent on the assessed value of commercial property, 2 percent on industrial property, 1.5 percent on residential property, and 1.5 percent on special property, plus a 1 percent levy for the city’s special education fund.
With a 21.1-billion-peso budget for 2024, the social development sector received the biggest allocation at 10.4 billion pesos, including 4.5 billion for education, 4.1 billion for health, and 1.8 billion for social welfare.
Makati provides free education benefits like uniforms, shoes, school supplies, and smart classrooms. Health services offered at no cost include checkups, hospitalization, medications, dental care, dialysis, and vaccines.
The city issued 1,820 new business permits from January to April, with over 16.3 billion pesos in combined capital investment. Existing businesses that renewed permits reported over 1.8 trillion pesos in total gross sales.
Along with Quezon City, the wealthiest city in the country, Makati is one of the few cities in the Philippines not dependent on national tax allotments. Business taxes have accounted for nearly P8.2 billion, and real property taxes have accounted for P5.2 billion so far.
According to the Department of Finance’s Bureau of Local Government Finance, Quezon City, headed by Mayor Joy Belmonte, has been the top-earning city in the country since 2018 without raising taxes.
The Quezon City Revenue Code of 1993 imposes a 1.5 percent tax on the assessed value of residential properties and a 2 percent tax on the assessed value of commercial, industrial, and special real properties.
