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Friday, March 29, 2024

Manila shelves property tax hike

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Manila will not increase its real property taxes this year, Mayor Joseph “Erap” Estrada announced on Tuesday.

In one of his first acts as mayor for 2017, Estrada signed into law Ordinance No. 8516, cancelling the 40-percent increase in real property tax rates that was supposed to take effect this January.

Estrada said the tax increase is no longer necessary.

“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 after signing the ordinance on Monday.

Mayor Joseph “Erap” Estrada

Estrada was referring to the city government’s P5.5-billion debt that he inherited from the previous administration when he assumed office in 2013.

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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.

With an overwhelming majority vote, the city council on Jan. 10 voted to freeze the tax hike, saying the city government can do without the second period increase because Estrada has already rescued Manila from its financial burden.

The ordinance was authored by Councilor Anna Katrina Yupangco and co-sponsored by Committee on Ways and Means chairman Councilor William Irwin Tieng, both from District 5.

The RPT increase 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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