BAGUIO CITY—The city government wants to increase real estate and business taxes again to raise enough money to solve its garbage problem.
Leticia Clemente, city budget officer, informed taxpayers during a July 9 consultation meeting that the proposed 2015 tax code would generate enough funds to build a P1-billion facility using garbage as fuel to generate electricity. Baguio spends as much as P100 million a year to haul its trash to a landfill in Pangasinan province, she said.
The proposed waste-to-energy facility and landfill would be built in government property on Mount Sto. Tomas. It is expected to be operational in 2017, according to documents.
For the last two weeks, the offices of the city treasurer and assessor outlined in successive public hearings the proposal to increase business taxes by an average of 10 percent, and a proposed new schedule of property values to match market values.
Three previous proposals to raise the property values were not passed by the city council, compelling the city government to collect real estate taxes using 1995 rates, officials said.
In the central business district, for example, lots on Session Road are still being taxed at P5,550 per square meter even as real estate brokers have been able to sell lots along the main thoroughfare for as much as P250,000 per sq.m., said city assessor Nilda Navarro.
The proposed increase would peg Session Road property at P120,000 per sq.m., according to the city assessor’s office.
“We are correcting a discrepancy between what Baguio earns and what people actually spend for Baguio real estate. By setting the unit value of the property closer to the market value, the Baguio government can properly tax these transactions,” Navarro said.
During the consultation, taxpayers complained about the new property schedule which would bring up values by as much as 500 to 1,000 percent. That could be cushioned by reducing the assessment level imposed by the city government from the prevailing 12 percent down to 3 percent, Navarro said.
The assessment level represents the percentage that a local government applies to the real estate market value in order to determine how much taxes must be collected from a property.
Clemente said the waste-to-energy facility is one of many projects the city government intends to pursue between 2015 and 2017.
She said the city government needs to raise P250 million to improve and rehabilitate the sewage treatment plant, which discharges recycled water down the Balili River in neighboring La Trinidad, Benguet province.
The city also needs P3 billion to rehabilitate parks and other open spaces, P300 million to repair roads, and P2 billion to repair or build schools due to demands created by the Kindergarten to Grade 12 (K to 12) Enhanced Basic Education Program, Clemente said.