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Cities not hiking business, property taxes this year

Vol. XXII, No. 142 [ BusinessWorld Online ]

Thursday, February 19, 2009 | MANILA, PHILIPPINES

A NUMBER of city governments are not hiking business and real property taxes this year, and will focus instead on infrastructure projects to help businesses and individuals cope with the economic downturn.

Quezon City Mayor Feliciano R. Belmonte, Jr. said his city would not be hiking local taxes, noting that the city government’s budget for this year is sufficient.

"The last time we raised business taxes was in 2001. It was our strategy at the time because the city government did not have funds," Mr. Belmonte said at the sidelines of the convention of the League of Cities of the Philippines yesterday.

Hiking business and real property taxes is not necessary this year as Quezon City was able to collect P10 billion worth of taxes for 2008 when the economic downturn began, officials said. In 2007, collections reached P9.067 billion.

Out of the P10 billion collected last year, P3.2 billion came from business taxes, an increase of more than P400 million from the P2.8 billion collected in 2007.

Real estate tax collections meanwhile hit P1.18 billion in 2008, an increase from P1.14 billion in the previous year.

Quezon City Treasurer Victor B. Endriga said January collections have in fact exceeded last year’s record. As of last month, the city government has collected P1.59 billion in business taxes.

The mayor of Mandaluyong, Benjamin C. Abalos, Jr. said his city won’t raise business and real property taxes as well.

"We have not hiked business and real property taxes for eight years and we have no plans of increasing it this year to help businesses as we face the economic crisis," he said.

Mandaluyong will instead focus on "pump-priming" through infrastructure projects such as road maintenance and school buildings. "These projects can provide jobs," he said.

Mr. Belmonte said Quezon City has increased its budget for infrastructure projects as part of measures in response to the economic crisis, to P4 billion from last year’s P3.5 billion.

"This year, we are working on the renovation of streets and sidewalks as well as the redevelopment of the Quezon City Circle and the construction of a new hospital on Commonwealth Avenue," he said.

Also increased were budgets for social programs such as livelihood training, education, and reproductive health.

Livelihood training will help individuals start their own businesses, Mr. Endriga said. "These individuals can also secure loans to start their own businesses," he added.

In any case, these cities, which are among the richest in the country, are entitled to hefty subsidies from the national government. Quezon City will get P2.5 billion this year and Mandaluyong, P405 million.

Makati, the country’s financial capital, will get P619 million. Manila, meanwhile, will get P1.6 billion.

Earlier, the Makati city government announced a three-year moratorium on business as well as real property taxes in response to calls from business groups.

It also set up a lending facility worth P300 million to help small and medium enterprises cope with the economic crisis. — Louella D. Desiderio


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