TACLOBAN CITY – The city government will lose about P370 million from local taxes this year due to business financial woes in the aftermath of supertyphoon Yolanda.
City administrator Tecson John Lim said that after the storm, only about 10% of the actual revenue was collected by the City Treasurer Office (CTO) as business owners hold off plans to resume operations.
“During the first 10 days of January, the city government only earned 6% of what we have collected for the same period last year,” Lim said.
The CTO reported that for the first week of January, Tacloban earned only P2.1 million in real property and business tax. In January 2013, the city’s business tax collection has reached P15 million of the same period.
Only 151 registered businesses have renewed their business so far as of January 18 of the 15,000 business establishments in the city.
For November and December 2013, total revenue reached only P1.4 million and P3 million, respectively. Before the disaster, the city targeted P9.6 million revenue for November and P17.5 million for December.
“The first part of every year is where we earn a bulk of our collection. We usually get P200 million from January to March,” Lim added.
For the entire 2013, the city collected P301.9 million or 39% lower than the P495.7 million local taxes generated a year ago.
Due to typhoon, the city council approved a resolution extending the deadline for renewal of business permits to June 20, 2014 or five months later than the usual January 20 deadline.
Lim said that with the income loss, the city will likely reduce the number of about 1,000 employees to about half and cut other operational expenses.
“From P500 million to P550 million annual budget for maintenance and operation, we will scale it down to only P150 million this year since we will lose a significant amount. We even planned to turn off all air conditioning units and use fans. It’s just hard as that,” he added.
City Councilor Jerry Uy, chair of the city council’s ways and means committee, said the legislators have approved some ordinances that will give financial leeway to affected businesses.
“Aside from extending the deadline for the payment of business taxes, and renewal of business permits and licenses for 2014, the city council also approved the condoning of delinquent real property taxes and business taxes, including interests and penalties, for 2013 and prior years,” Uy explained.
The local government also suspends the collection of real property taxes for 2014. There is also a freeze in the adjustment of rates of taxes, fees and charges, and the collection of socialized housing tax, idle land tax and garbage fees for this year.
The council also approved the waiving of fees for electrical permits for reconnection of power lines; building permit fees and charges for reconstruction; rebuilding; demolition and repair of infrastructure and houses damaged by the storm.
Lim said the local government will suffer the consequence of being independent of the national government’s internal revenue allotment (IRA).
The city government has an IRA of P425 million this year. About 25% will be set aside for mandatory allocations mandated law, according to the city official.