ILOILO City – The revision of the assessment of the Real Property Taxes (RPT) was not taken from thin air, nor was it imposed to create an additional burden on the business community, but solely based on the findings of the Commission on Audit (COA).
Mayor Jerry P. Treñas emphasized this point in his written explanation addressed to business sector members, whom the city government considers partners in development.
“The findings of the Commission if left unacted would create serious implications for the Iloilo City Government. Thus, the Iloilo City Government humbly submits to the findings and recommendations of the Commission,” Treñas underscored.
As cited by the COA Report, the city government has long been violating the mandate of Section 219 of the Local Government Code (LGC), which requires local government units (LGUs) to periodically review and update the assessment of real property.
Based on its findings, the Sangguniang Panlungsod (SP) did not approve the City Assessor’s proposed revision of the real property assessment due to economic considerations related to intervening calamities that transpired. As a result, the Schedule of Fair Market Values (SFMV) has not been updated since 2006, leading to understated RPT values and lower revenue generation.
“We recognize the efforts of the ICG to efficiently generate local revenues, but this should be periodically reviewed and consistent with the provisions of the LGC. Although the amount of RPT and SET collected is substantial, regular revision of the real property assessment should still be carried out in order to maximize the local revenue generation activities,” the COA emphasized in its Audit Report.
It added, “The increase in local taxes will not only finance additional programs, projects, or activities but could also be used to supplement any gaps or decreases from the National Tax Allocation (NTA). Hence, management should endeavor to materialize the revision of the SFMV for 2024.”
Meanwhile, Treñas acknowledged that taxes are the nation’s lifeblood through which government agencies continue to operate and which the State discharges its functions for the welfare of its constituents.
“Rest assured that the Iloilo City Government will continue to prioritize the well-being and welfare of every Ilonggo while striving to improve our local economy,” he assured.
RPT: SECOND MAJOR SOURCE OF INCOME FOR ICG
The RPT plays a significant role in the projects, programs, and enhanced social services currently enjoyed by the residents of the city. This is because RPT is the second-largest income source for the city government, contributing 17.46% to the total revenue.
The NTA ranks first, accounting for 40.03%, while tax revenue from goods and services comes in third at 17.09%.
When combined, locally generated revenues total P2.4 billion or 58.87%, which is higher compared to national taxes. This highlights the Iloilo City Government’s efficient collection of local taxes and revenues.
DISCOUNTS AND INCENTIVES
Currently, the city government is imposing a 40% discount on RPT payments on land until 2026 as part of its continued efforts to address the concerns of property owners and taxpayers in light of the adjustments to RPT based on updated market values. Additionally, there is a 10% discount for taxpayers who pay their RPT in advance for the next succeeding year.
The move was welcomed by established business organizations in Iloilo, such as the Philippine Chamber of Commerce and Industry-Iloilo Chapter, Inc. (PCCI Iloilo).
The group’s described this as “a testament to Mayor Treñas’ and the city officials’ dedication to responsive governance and their proactive efforts to address the needs of property owners and taxpayers. We recognize that taxes are vital to sustaining government operations and public services.”
The discount, which initially took effect 2024, was originally until 2025 only but the city government extended it until 2026.
“The extension of the RPT discount provides much-needed relief while encouraging taxpayers to meet their obligations promptly. This collaborative effort strengthens our shared goal of a more vibrant and resilient Iloilo City,” read PCCI-Iloilo’s statement, through their president, Engr. Fulbert Woo.
Moreover, Treñas also met with property owners, developers, and business leaders to discuss proposed ordinances aimed at boosting Iloilo City’s investment climate.
Key proposals include RPT incentives for developers building for BPO operations, amending the Iloilo City Economic Recovery Incentives Ordinance of 2021, and updating investment incentives for key development areas such as the Corazon Aquino Avenue, the Coastal Road, the entire stretch of the radial road, Sen. Benigno Aquino Jr. Avenue, the Iloilo Sunset Boulevard, and Pison Avenue.
Developers of BPO-specific buildings may qualify for RPT exemptions while awaiting PEZA accreditation, with a maximum availment period of five years or until registration is issued.
Businesses in designated development zones may receive a reduction in business and RPTs for five years, as well as tax reductions on infrastructure, machinery, and business taxes based on gross sales or receipts.
The proposed incentives are: 100% tax reduction on the first year and second year; 75% reduction on the third year; 50% reduction on the fourth year; and 25% reduction on the fifth year.
The business sector has responded positively, seeing these measures as vital for enhancing Iloilo City’s economic potential and creating a thriving business environment.
On the other hand, the city government also vowed to comply with the aim to standardize the valuation of real property in the country.
In June 2024, President Ferdinand Marcos Jr. signed this measure into law. Among its provisions is a two-year amnesty on interests, surcharges, and penalties for unpaid real property taxes (RPT).
“At the heart of this new law, we have adopted a strategy that will instill and encourage long-term and consistent tax compliance by providing a two-year amnesty on interests and penalties for taxpayers with unpaid real property tax,” said Marcos./PN
