The (Tacloban) city government here expects to increase revenue collections this year, as it raises business taxes by an average of 10%, city Treasurer Edgardo Macion said in a recent interview.
Under Ordinance Number 2007-10-16, signed by Tacloban City Mayor Alfredo Romualdez early last month, the higher taxes are expected to affect over 3,700 business establishments operating in this city. The Local Government Code allows the local government to adjust taxes by not more than 10% every five years.
With the increase, a firm with gross sales of P20 million, for instance, will now have to pay an annual business tax of P72,600, 10% higher than the P66,000 specified in the old tax code in 2000. For every P500,000 in excess of P20 million annual gross sale, a businessman has to add P907.50.
For every P750,000 to P1 million gross sale, a wholesaler, distributor or dealer will have to pay P14,520 annual tax. The rate is higher than the P13,200 tax under the old ordinance.
Also affected by the new tax code are restaurants, soda fountains, bars, cafeterias, refreshment parlors and fastfood outlets. Under the old ordinance, they are required to pay a tax of P1,250 when they record a gross sale of P50,000. This increases to P1,375 starting this year.
Contractors with P1 million to P2 million annual gross income, are obliged to pay P16,485 in the new ordinance, higher than the P14,950 under the old ordinance.
The city government collected a total of P235.14 million of local taxes last year. While this is about 2% higher than the 2006 collection of P230.43 million, Mr. Macion said this is 5% short of their P246-million collection target for 2007.