Making Democracy Work

Real property tax hike a burden to SMEs

By admin ⋅ June 19, 2008 ⋅  Email this post ⋅  Print this post ⋅ Post a comment

THE proposed increase in real property taxes (RPTs) in Iloilo City will add burden to small and medium enterprises (SMEs) which make up majority of businesses.

This was the concern raised by 11 major business groups here amid tight operating costs, urging the City Government to implement a moratorium on RPT hike.

“…More than 90 percent of business establishments here are micro, small and medium enterprises highly dependent to wholesale and retail businesses,” the businessmen argued.

To highlight their opposition to the RPT increase, they sent a position paper to the City Council committee on ways and means chaired by Councilor Antonio Pesina during Monday’s public hearing on the proposed schedules of base units on market values of lands and construction costs of buildings and other improvements effective 2009 to 2011.

RPTs are one of the LGU’s main sources of locally generated revenues.

The City Government is enjoying an increasing trend in RPT collection in the last five years.

City Planning and Development Office’s Statement of Revenue and Expenditures showed the City Hall amassed over P65 million in RPT in 2002, P80 million in 2003, P98 million in 2004, P102 million in 2005, P142 million in 2006 and P141 million in 2007.

Business leaders said Iloilo City needs to be competitive especially in areas of computerized LGU services including licensing/permits system, quality road network and updated drainage facilities but increasing the RPT is not the answer.

“That is why, increasing the revenue options of the City Government has been emphasized in order to sustain its commitment to ensure the delivery of basic social services and infrastructure projects necessary for the development of economic activities.”

“While this is so, we are equally concerned over the increasing cost of doing business in here. Just recently, the City Government has also increased its business taxes and fees. Not to mention the debates on double imposition of VAT on goods and services and clamor for its removal in utilities and fuel because of the multiplier effect,” the business executives explained.

They were also saddened by the move of the Regional Tripartite Wage and Productivity Board (RTWPB-6) approving a P15 emergency relief allowance for workers despite calls of the business sector for a lower rate.

Businesses are also suffering the brunt of costly power in the metropolis.

“It is also a known fact that Iloilo City has one of the highest electricity rates in the country being dependent on a diesel-fired power plant. With the cost of fuel going up in the world market threatening to hit the $200 mark per barrel before the close of 2008, operational activities/expenses like movement of goods, utilities and services will inevitably absorb the crunch of this world market trend,” they lamented.

Among the major business groups that signed the position paper are the Iloilo Economic Development Foundation, Inc.; Iloilo Business Club, Inc.; Filipino-Chinese Chamber of Commerce of Iloilo, Inc.; Chamber of Commerce and Industry of Iloilo; Federation of Filipino-Chinese Chamber of Commerce of Panay, Inc.; Iloilo Multi-sectoral Business Organization; Iloilo Convention and Visitors Bureau (ICVB); Ilonggo Producers’ Association (IPA); Philippine Retailer’s Association (PRA-Iloilo); Chamber of Real Estate and Builders’ Association (Creba); and Iloilo City Realtors’ Board.

Jeehan Fernandez, The Daily Guardian