Call it a double whammy.
Just days before he signed into law an ordinance imposing an annual garbage fee on residents, Quezon City Mayor Herbert Bautista also approved a 10 percent increase in business taxes.
Both ordinances were authored by Councilor Victor Ferrer Jr. of the first district.
In the ordinance signed by Bautista on Dec. 20, amendments were made in certain items in the city’s revenue code regarding how much taxes should be paid by traders who have until Jan. 20 to meet the first quarter deadline.
A copy of the ordinance, disseminated on the first week of January to the different departments at city hall, cited the Local Government Code of 1991 which it said gave each local government unit the power to levy taxes, fees and charges and create its sources of revenue.
It also referred to a provision which allows LGUs to adjust tax rates not exceeding 10 percent of those fixed by the Local Government Code once every five years.
Ferrer told the Inquirer that the tax base adjustment was long overdue because the city has not raised taxes since 2001. He added that funds were badly needed to implement the K-12 program in Quezon City through the construction of more classrooms.
“We raised the rates only for specific items or businesses while the others remained unchanged. Business taxes are supposed to be adjusted or modified every five years but Quezon City has stuck to the same rates for 12 years,” Ferrer said.
The 10 percent increase in business taxes, he estimated, would generate P1 billion for the construction of 500 to 600 classrooms for Grades 7 and 8 students.
Ferrer further told the Inquirer that during the public consultation for the proposed amendments to the Quezon City Revenue Code, traders involved in big businesses and car dealers were in favor of the increase while only a handful voiced opposition. “The rates they (big businesses) approved were actually included in the ordinance,” he claimed.
“This is for the long term. There may be flak now but I am sure the result will speak for itself,” he said, adding that he was confident the city’s finances would continue to be properly maintained.
The 10 percent tax increase applies to manufacturers, assemblers, repackers, processors; wholesalers and distributors; retailers; contractors, including tollway operators; banks and other financial institutions; car dealers; vehicular spare parts dealers; service providers; restaurant; and business franchises.
The tax bases for retailers and car dealers were raised and an amendment of Chapter 3 of the local revenue code provides a specific schedule of payments for them as well as automobile spare parts dealers.
Apart from the increase on business taxes, Bautista approved on Dec. 26 an annual garbage fee which residents should pay simultaneously with their real property taxes.
The rates which range from P100 to P500 depend on the size of a homeowner’s lot and a condominium or apartment resident’s unit. The garbage fee is projected to generate between P50 million to P60 million in additional revenues for the city government.
The amount, Bautista told the Inquirer in a previous interview, would be used for the city’s environmental projects such as urban reforestation, waterway cleanup operations and disaster risk reduction and management.
Some residents have criticized the garbage fee as the city government does not seem to be lacking money. A check of its website showed that the city’s gross revenue collection for 2012 totaled P13.69 billion, up by P750 million compared to that of 2011. The figure was above the P11.37 billion total revenue in 2012 of Makati, traditionally the country’s richest city.