Taguig increases revenue by P2.92 billion despite outmoded tax code; COA suggests updates

Published July 13, 2019, 5:47 PM

by Rica Arevalo

By Ben Rosario

Despite a significant P2.92 billion increase in revenue income in 2018, the city government of Taguig City still has not maximized its “revenue-raising power” by increasing tax impositions on real property and other fees and charges mandated under the law, the Commission on Audit has revealed.

Commission on Audit (MANILA BULLETIN)
Commission on Audit (MANILA BULLETIN)

Under the leadership of then-Mayor Lani Cayetano, the city government’s net increase in revenues was placed at 40.68 percent in 2018 as compared to the previous year, the COA revealed in the recently-released 2018 annual audit report for the city.

On her last year as local chief executive in 2018, Cayetano, now a congresswoman representing the city, was able to post huge increases in 16 revenue sources compared in the previous year.

Among the increases are in the collection of fines and penalties with an increase of 1,451.5 percent; tax on delivery trucks and vans, 8,395.20percent; interest income, 133.86 percent, and real property tax, 60.66 percent.

“Notably, income from business taxes registered a remarkable increase of P1,996,025,263 or 52.48 percent collection with that of the previous year,” COA said.

Business tax collection in 2018 totaled P5,799,271,614 while the 2017 total was P3,803,246,351.

However, state auditors said the city government must still maximize its revenue-raising authority by updating or increasing tax impositions on all real property and other fees and charges as authorized under the Local Government Code.

“Thus, tax rates used are no longer appropriate in the current times and can have an impact in the increase in revenue generation,” auditors said.

According to COA, the city government’s tax efforts are based on the outmoded Revenue Code of Taguig passed by the city council in 1993.

“Taxes imposed on RPT (real property tax) for land was City Ordinance NO. 113 enacted in CY 2008 while for real property for building, machineries and other improvements is [a] 2001 Municipal Ordinance,” the audit agency lamented.

COA said the city should exercise its inherent power to increase/adjust tax” as prescribed in Section 191 of the Local Government Code.

Under the law, local government units must adjust taxes every five years.

“The City has not come up with its own Revenue Code as ready reference for implementers and users. As such, the City relied on rules and regulations embodied in 34 ordinances issued from CYs 1993 to 2018,” auditors noted as they recommended the immediate codification of imposable taxes.

Further, the audit agency recommended that unclear provisions of the City Tax Ordinance of 2018 be clarified.

Meanwhile, COA revealed that a total of 5,146 business establishments in 28 barangays of the city may have been operating without the required business permits.

“On the other hand, 11,035 businesses were granted permits to operate in the city but were not included in the barangay list of establishments which could mean that barangay clearances as required under Section 152 © of the Local Government Code (LGC) were not issued,” the audit body revealed.

To address the issue, COA said the city treasurer and the business permits and licensing officer should conduct an inspection of the 5,146 business establishments believed to be operating without the required permits and licenses.