Erap shoots down 40% property tax hike

MANILA residents and businessmen can finally take a breather after Mayor Joseph Estrada decided against increasing the city’s real property taxes for this year.

In a surprise move, Estrada signed into law on January 23 Ordinance No. 8516, cancelling the 40-percent increase in real property tax rates that was supposed to take effect this month.

“We are debt-free now, that’s why I ordered the stopping of the increase of our real property taxes. We have paid our debts,” he said in a press conference on Monday.

Estrada earned the ire of businessmen after raising real estate taxes by as much as 150 percent during his first term as Manila city mayor.

The move had been necessary, according to the mayor, to enable the local government to pay the P5.5-billion debt the city owed during the administration of former mayor Fred Lim.

Back then, he said he had no choice but to increase the taxes. “We had a bankrupt city, so we have no option but to raise taxes,” he recalled.

Now that the debt has been successfully paid, Estrada said the tax increase is no longer necessary.

 

Majority Vote

With Manila’s financial burdens finally solved, the city council had voted on an overwhelming majority on Councilor Anna Katrina Yupangco’s proposed ordinance to freeze the 40-percent real property tax on January 10.

The tax hike was supposed to pick up from the 60-percent increase that had been collected starting Jan. 1, 2014 because of Ordinance No. 8330, the city’s new revenue code.

Before that, Yupangco said Manila had been operating under a 20-year-old revenue code, and was being pressured by the Department of Finance and Commission on Audit to revise the code.

With the 40-percent increase permanently shelved, Manila will just continue collecting real property taxes using the old 2013 schedule, he added.

“The considerable increase in tax collection enabled and capacitated the city government of Manila to pay and settle its debt obligation. The previous debt servicing payments done by the city throughout the years are already eradicated,” the ordinance stated.

“Considering there is no more debt servicing in its funds, the city government of Manila can now allocate its funds for the further improvement of its projects and programs without further burdening the public with additional tax increases,” it added.

During the series of public hearings on the RPT increase in the barangays, Yupangco recounted that several property owners were concerned that any additional tax increase would be too much for them.

“So our intention was to remove that added financial burden to taxpayers. Of course, additional funds for the city will be good, but we saw that maybe we could stop this or put this on hold,” Yupangco pointed out.

“We’ve proven that with the additional revenues from the adjusted tax rates, the city government was able to implement new projects. And the people saw our service such as improved health services,” she added.

 

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