Iloilo braces for 30% land tax hike

ILOILO CITY, Philippines – The people of this city should brace for higher prices of commodities, services and housing starting next year after the city council passed on Wednesday an ordinance that increases real property taxes.

The council passed the ordinance, which would increase taxes on land  by at least 30 percent, after the measure was delayed by opposition from business groups that warned of the new law’s impact on the city’s economy.

City Councilor Plaridel Nava, chair of the council’s ways and means committee, said the increase would be implemented starting on January 1 next year and would generate additional revenue for the city. The estimated additional take from the tax increase is P67 million a year.

Nava said in a committee report that the additional revenue would help cover the P90-million deficiency in the city’s internal revenue allotment share that resulted from the creation of more cities.

Other taxes

The council also approved an increase in taxes on buildings and structures ranging from 6.67 to 23 percent.

If implemented, an owner of a 500-square-meter residential land in La Paz District would have to pay P4,875 in real property tax, up from P3,750 at present.

Iloilo City Mayor Jed Patrick Mabilog earlier appealed to businessmen to reconsider their opposition to the tax increase.

The mayor said the increase was necessary for various projects of the city including the upgrading of drainage systems, installment of more street and traffic lights and the delivery of services.

Iloilo business owners said they relented in their opposition to the proposal of the city government “with a heavy heart.”

Eight business groups earlier protested the increase and called on the city government to instead improve tax collection.

They warned that an increase in real property taxes would dampen investments, slow down economic growth and raise expenses that will be passed on to consumers.

Alternatives

“We want a status quo for the protection of the public so that prices of goods, services and rent would not move up next year,” said the business groups.

“We want our city to be competitive and business-friendly, where the standard of living is cheap and [the cost of doing] business is moderate since we are an emerging city,” said Joemarie Agriam, Western Visayas governor of the Philippine Chamber of Commerce and Industry.

But Agriam said business owners were “united” with the city government in its objective to bring development and progress to the city.

The urban poor group Katilingban sang mga Imol sa Syudad decried the tax increase.

“Ultimately, it is the poorest sectors, not the businessmen, who will suffer the brunt of the increase,”  the group said.

“Instead of increasing taxes, the city government should have cut back on spending and looked for other sources of revenues and not squeeze dry the people,” the group said in a statement.