DAVAO CITY—The City Government of Davao will raise business taxes by 10 percent in 2018 for the first time in 12 years.
Erwin Alparaque, head of the city Tax Research and Action Team or TRACT, said the Davao City Revised Revenue Code has been stagnant for over a decade, and reason why there is a need to amend it.
Under the Local Government Code of 1991, a local government unit may amend its tax revenue code once every five years.
“The amendment of our Tax Revenue Code is for the city to generate more funds to support the projects and services the city offers,” Alparaque said.
The tax increase is minimal, he said, compared to other highly urbanized cities who have strictly amended their revenue codes every five years.
“We only just implement a 10-percent increase, we have not considered a cumulative increase in our local taxes, though it took us more than a decade to amend our revenue code,” the TRACT head said.
Last year, the city council approved the amendments to the revenue code. Through this, Davao expects to boost its tax collection and increase the city’s annual budget for 2019.
Next year, the city will also implement the amendments to the General Market Value tax table that will impact its real property tax collection.
Despite the General Market Value amendments, Alparaque explained the city will still use the current 1.5-percent real property value instead of the maximum 2 percent as prescribed by law.
Earlier, the city government reported new records with more than 40,000 businesses registered and a total investment value of P270 billion for 2017.
Mayor Sara Duterte said the city surpassed its 2016 mark of 39,238 business establishments and total investment value worth P230.83 billion.
Duterte announced this before 300 delegates of the 50th Annual Installation of Officers and Board of Trustees of the Davao City Chamber of Commerce and Industry at the SMX Convention Center Davao on Jan. 28.
She said 2017 was “an interesting time” for the local business community, which went on a rollercoaster ride after her father, President Rodrigo Duterte, declared martial law in Mindanao last May 23.
The mayor assured executives that Davao remains safe, but admitted that the city “took a temporary dip” after the President placed the island region under military rule owing to the terrorist-led siege of Marawi City.
Duterte said the city hit its two-million target for tourist arrivals in 2017, higher than the 1.86 million recorded in 2016.