Specifically, the local government suspended a real property fair market value (FMV) hike until after 2019, is offering an amnesty for real property tax delinquencies, as well as exemption from audit of 2016, 2017 and 2018 books of account for those that pay 2019 business taxes that are at least 30% more than their 2018 payment.
The move comes amid elevated headline inflation and four months ahead of the May 13 local elections.
REAL PROPERTY TAX HIKE SUSPENDED
Ordinance No. SP-2778 Series of 2018 — signed by Mayor Herbert M. Bautista on Dec. 6 — states that collection of real property taxes based on SP-2556 Series of 2016 that raised Quezon City FMVs is “hereby suspended for two years, from the periods of 2018 and 2019”, ordering continued use of the lower 1996 FMVs.
The city government said that the ordinance was issued “to temper the effect of the significant increase in the prices of commodities on residents of Quezon City…” noting that inflation reached nine-year highs in the latter part of 2018.
The 2016 ordinance increases the FMVs of residential, commercial and industrial real properties by 400-733.33%, consequently raising tax payable by real property owners by 39-131%. New assessment rates, however, were cut to five percent for residential and 14% for commercial and industrial lands in order to temper the impact of FMV increases.
The updating of real property FMVs was planned in 2016 but was left unimplemented after the Supreme Court issued a temporary restraining order in favor of petitioners Alliance of Quezon City Homeowner’s Association, Inc. The high court lifted the injunction on Sept. 18 last year.
The city last adjusted FMVs in 1995, even as RA 7160, or the Local Government Code of 1991, requires adjustments every three years. This requirement is largely ignored, as local officials are elected very three years as well.
The city government projects an additional P700-million revenues in the first year of FMV hike implementation. Latest data from the Finance department’s Bureau of Local Government Finance showed that Quezon City contributed the most to total Metro Manila revenues in 2017, accounting for P15.161 billion of the National Capital Region’s P77.099-billion collections. Quezon City’s biggest tax source in 2017 was business tax with P9.204 billion followed by real property tax with P3.431 billion.
REALTY TAX AMNESTY
Ordinance No. SP-2779 Series of 2018, approved on Dec. 12, grants Quezon City residents condonation of payment of interest, surcharges, fines and other penalties on unpaid real property taxes on lands, buildings and machineries — except for those that have already been auctioned off, are being settled under compromise or similar agreements, and those with pending cases with the Quezon City Board of Assessment Appeal or in any regular court of law.
This amnesty, covering unpaid real property taxes up to 2018, runs from Jan. 1 to Oct. 30, 2019.
EXEMPTION FROM AUDIT
Ordinance SP-2780 Series of 2018, approved on Dec. 14, exempts those who have local business taxes payable in 2019 that are at least 30% more than the previous year from inspection and examination of their books of accounts “and other pertinent documents” covering calendar years 2016, 2017 and 2018.
This local business tax amnesty does not cover those with pending cases in courts of law or in administrative offices in relation to their business records.
The local law “shall make things easy, trouble-free, uncomplicated and simplify the procedure involved in payment of business taxes and… contribute to speedy, prompt facilitation of business permit and license renewal” and “will significantly… lessen the task of the employees of the Quezon City Treasurer’s Office whose invaluable time, effort and energy could be utilized and focused of other endeavors and activities geared towards revenue collection and mobilization.” —