Impact of increase in biz tax studied

THE DAVAO City Chamber of Commerce and Industry Inc. (DCCCII) has started comparing the business tax rates of the city with other key cities in the country to see if it is still attractive to investors.



DCCCII president Arturo M. Milan said the study is aimed at know if it is at par or not with other cities such as Cagayan de Oro, Cebu, Bacolod, and Iloilo. The city government recently implemented a 10% increase in business taxes.

The implementation of the increase in taxes, he said, would impact on investment promotion as well as business climate of the city.

“With the study, we can compare on why the investments are going to a certain area and see if it offers attractive packages to investors,” Milan said. The result of the study of the city, which started earlier this month, would be submitted to the city council by the end of the month.

The business group commissioned the study after some of its members like those in poultry industry and car dealers complained about the increased business tax, which already reflected when they renewed their business permits last month.

The imposition of the hike on the business taxed is part of the implementation of the amended local revenue code approved by the city council last year. The last time that it was revised was 12 years ago.

Mayor Sara Duterte-Carpio created the Davao City Tax Research and Action Team (Tract) that drafted the amendments on the revenue code.

In a statement released by the City Information Office, Erwin P. Alparaque, head of the Tract, said the amended code provided that the tax fee imposed on establishments like restaurants, cafés and eateries, for instance, is now P1,497.38 from P1,261.25 for businesses with less than P50,000 in annual gross income.

Businesses that earn P1 million to P2 million a year, meanwhile, have to pay a business tax of P9,160.31, which rose from about 10%.

“The amendment of our tax code is for the city to generate more funds to support the projects and services that the city offers,” Alparaque said in a statement. He said the revised code will help boost the income of the city government.

While the increase may impact on businesses, Milan said it was high time that it was implemented because it has been over a decade since the city government imposed tax increases.

“We should appreciate this because our local government is also looking for ways on how they can build money to finance the social services. Without that, nothing will happen. I look taxes as our share on providing services for the people,” Milan said.

Posted in Business