There’s no truth to the talk that local businessmen are pulling up their stakes and moving elsewhere due to the alleged cost of doing business in Cagayan de Oro City.
Acting City Treasurer Glenn Bañez listens as Atty Cresencio P. Co Untian, Jr. expounds a point (photo courtesy of CIO)
“That is not what’s happening. In fact in 2013, we even had an increase of registered businesses in Cagayan de Oro,” said Eileen E. San Juan, local economic investment promotions officer, at a press conference held Tuesday at the City Mayor’s Office. “And until now, we still have a lot of inquiries.”
In fact, Mrs. San Juan said just last week, an American firm visited the city to prepare the ground work to set up a Business Process Outsourcing (BPO) professional coding center in the city.
“This is a big opportunity for Cagayan de Oro to venture into professional coding and tie up with schools and universities,” she noted. “We also have real estate and other projects coming in.”
Figures collated by the Cagayan de Oro Finance Department headed by Dr. Glenn C. Bañez appear to corroborate this.
Total revenues from business taxes in 2014 increased by 30 percent (+P220.2-million) to P950.54-million from the 2013 collections of P730.385-million.
The number of business permit registrations increased 20 percent (+3,587) from the 18,191 registrations in 2013 to 21, 778 in 2014.
Even more telling, the number of new business permits applications jumped by 50 percent from 3,477 in 2013 to 5,219 in 2014.
Dr. Bañez belied allegations floated by some critics of the Moreno administration’s enforcement of the 2003 Tax Code that the figures have been padded by multiple registrations of establishments operating previously with only one business permit.
“Certainly not true!” said the acting city treasurer when queried about it. “That’s an old practice that’s been there even before I assumed office and that’s specified by the tax ordinance of Cagayan de Oro.”
Some local business organizations previously aired concerns to that the administration’s “strict enforcement” of the 2003 Tax Ordinance was driving businessmen and investors to move elsewhere.
However, some personnel of the City Finance Department say taxpayers hardly make any negative comments about the “strict enforcement” of the 2003 Tax Ordinance but rather how quick and orderly it was now for them to renew their business permits.
Acting City Treasurer Glenn Baňez (left) shows CDO's business permit & licensing system to USAID Acting Asst Admin for Asia Denise Rollins (center) .
“This year, there will be no more requirements for business permit renewals,” Dr. Bañez said. “No bank statements, no financial statements, no VAT returns. Just go to the City Treasurer’s Officer Kiosk, input your mayor’s permit number and cellphone number of the owner.”
“As soon as you pay your business tax, we will inform you through text that the tax you paid for January is either for the 1st quarter, half year or entire year. However, you have to input what period you want to pay at the kiosk (quarter, half year or full year) otherwise, the default setting of the program will automatically bill you for a full year,” he added.
The administration remains open to business owners who want to reduce or adjust their business tax payments provided they bring with them pertinent documents related to their request for reduction of tax payment.
“My office is open from 8:00AM to 6:00PM Monday to Sunday the whole month of January to attend to all requests for discounts and adjustments for those whose businesses may have been adversely affected in the previous year,” Dr. Bañez said.
Business permit renewals for 2015 started Monday, Jan. 5 due to holidays. Under the Local Government Code, the deadline for business permit renewals has been fixed to January 20.
The acting city treasurer said they are still enforcing the 2003 Revenue Code because of some technicalities in publication and have not implemented the 2015 Revenue Code which is supposed to take effect on the second quarter of the year.
Atty. Cresencio P. Co Untian, Jr., a CPA/lawyer and professor who has authored three textbooks on taxation which are widely prescribed by top law schools throughout the country, advised businessmen to pay the full year now so they will not be affected by any future tax increase.
However , he clarified further that under the 2015 Tax Code passed by the city council last year, there is no decrease in the tax rate, just a change in the bracketing of the tax payable.
“If tax rates are reduced, tax collections do not increase because the people who have not been paying taxes will still not pay. Employees are automatically deducted so they have no choice. But businessmen will find all manner of ways to reduce their taxes: they pad their expenses and under report their revenues. If you lower the tax, I don’t think it will result to more payments.”
During the same press conference, Mayor Oscar S. Moreno said that as of November, 2014, Dr. Bañez reported that the city’s gross revenues already exceeded PhP 2.7-billion (B).
“In 2013, we proposed for 2014 a budget of PhP 2.6-B, but they suppressed this to PhP 2.3-B. However, our regular collection of taxes and revenues without new taxes still reached PhP 2.7-B as of November, 2014.”
With the continued vigorous collection of business and other taxes by the City Finance Department, the mayor said Cagayan de Oro can easily attain revenues of PhP 3-B for this year, given the robust growth in the Internal Revenue Allotment (IRA) for LGUs specified under the Local Government Code.
“IRA in 2015 will increase by not less than 12 percent because IRA is tied up with national taxes. With the phenomenal growth of the IRA, the LGUs share has now increased. Even without any increase in local revenues, because of the increase in IRA, we can safely budget PhP 3-B. That’s why we proposed a PhP 3.8-B budget because we knew if we just worked hard, we can attain that. Dr Bañez will tell you a budget of PhP 5-B in Metro Manila for a city comparable to Cagayan de Oro is insubstantial.”
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